Exhibit 99.4
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CWHEQ, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK GRANADA LLC,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2007
------------------------------
HOME EQUITY LOAN ASSET BACKED CERTIFICATES, SERIES 2007-S3
Table of Contents
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Page
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ARTICLE I. DEFINITIONS...........................................................................................5
Section 1.01 Defined Terms...................................................................................5
Section 1.02 Certain Interpretive Provisions................................................................45
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.........................................45
Section 2.01 Conveyance of Mortgage Loans...................................................................45
Section 2.02 Acceptance by Trustee of the Mortgage Loans....................................................53
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the Sellers...............59
Section 2.04 Representations and Warranties of the Depositor................................................76
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases................77
Section 2.06 Authentication and Delivery of Certificates....................................................78
Section 2.07 Covenants of the Master Servicer...............................................................78
Section 2.08 Sponsor Loss Coverage Obligation...............................................................79
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS......................................................79
Section 3.01 Master Servicer to Service Mortgage Loans......................................................79
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer................................81
Section 3.03 Rights of the Depositor, the Sellers, the Certificateholders, the NIM Insurer, the
Certificate Insurer and the Trustee in Respect of the Master Servicer..........................82
Section 3.04 Trustee to Act as Master Servicer..............................................................82
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
Pre-Funding Account; Capitalized Interest Account; Premium Account.............................83
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow Accounts............................87
Section 3.07 Access to Certain Documentation and Information Regarding the Mortgage Loans...................88
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution Account, Carryover
Reserve Fund and the Principal Reserve Fund....................................................88
Section 3.09 [Reserved].....................................................................................91
Section 3.10 Maintenance of Hazard Insurance................................................................91
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................92
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain Mortgage Loans; Auction of Charged-off Mortgage
Loans..........................................................................................93
Section 3.13 Trustee to Cooperate; Release of Mortgage Files................................................97
i
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be Held for the
Trustee........................................................................................98
Section 3.15 Servicing Compensation.........................................................................99
Section 3.16 Access to Certain Documentation................................................................99
Section 3.17 Annual Statement as to Compliance..............................................................99
Section 3.18 The Corridor Contract.........................................................................100
Section 3.19 [Reserved]....................................................................................101
Section 3.20 Prepayment Charges............................................................................101
Section 3.21 Swap Contract.................................................................................102
ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER...................................................104
Section 4.01 Advances; Remittance Reports..................................................................104
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls.........106
Section 4.03 [Reserved]....................................................................................106
Section 4.04 Distributions.................................................................................106
Section 4.05 Monthly Statements to Certificateholders......................................................112
Section 4.06 Certificate Insurance Policy; Rights of the Certificate Insurer...............................113
Section 4.07 Termination of the Credit Insurance Policy....................................................116
Section 4.08 Carryover Reserve Fund........................................................................117
Section 4.09 Swap Trust and Swap Account...................................................................118
Section 4.10 Swap Reserve Fund.............................................................................119
ARTICLE V. THE CERTIFICATES.....................................................................................120
Section 5.01 The Certificates..............................................................................120
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates...................120
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.............................................125
Section 5.04 Persons Deemed Owners.........................................................................125
Section 5.05 Access to List of Certificateholders' Names and Addresses.....................................125
Section 5.06 Book-Entry Certificates.......................................................................126
Section 5.07 Notices to Depository.........................................................................127
Section 5.08 Definitive Certificates.......................................................................127
Section 5.09 Maintenance of Office or Agency...............................................................127
ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS..................................................128
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Sellers..................128
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the Sellers..................128
Section 6.03 Limitation on Liability of the Depositor, the Sellers, the Master Servicer, the NIM
Insurer and Others............................................................................128
Section 6.04 Limitation on Resignation of Master Servicer..................................................129
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds................................................130
ii
ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER 130
Section 7.01 Events of Default.............................................................................130
Section 7.02 Trustee to Act; Appointment of Successor......................................................132
Section 7.03 Notification to Certificateholders............................................................134
ARTICLE VIII. CONCERNING THE TRUSTEE............................................................................134
Section 8.01 Duties of Trustee.............................................................................134
Section 8.02 Certain Matters Affecting the Trustee.........................................................136
Section 8.03 Trustee Not Liable for Mortgage Loans.........................................................137
Section 8.04 Trustee May Own Certificates..................................................................138
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses............................................138
Section 8.06 Eligibility Requirements for Trustee..........................................................138
Section 8.07 Resignation and Removal of Trustee............................................................139
Section 8.08 Successor Trustee.............................................................................140
Section 8.09 Merger or Consolidation of Trustee............................................................140
Section 8.10 Appointment of Co-Trustee or Separate Trustee.................................................141
Section 8.11 Tax Matters...................................................................................142
Section 8.12 Access to Records of the Trustee..............................................................145
Section 8.13 Suits for Enforcement.........................................................................145
Section 8.14 Monitoring of Significance Percentage.........................................................145
ARTICLE IX. TERMINATION.........................................................................................146
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans..............................146
Section 9.02 Final Distribution on the Certificates........................................................147
Section 9.03 Additional Termination Requirements...........................................................149
Section 9.04 Auction of the Mortgage Loans and REO Properties..............................................150
ARTICLE X. MISCELLANEOUS PROVISIONS.............................................................................153
Section 10.01 Amendment.....................................................................................153
Section 10.02 Recordation of Agreement; Counterparts........................................................155
Section 10.03 Governing Law.................................................................................155
Section 10.04 Intention of Parties..........................................................................156
Section 10.05 Notices.......................................................................................157
Section 10.06 Severability of Provisions....................................................................159
Section 10.07 Assignment....................................................................................159
Section 10.08 Limitation on Rights of Certificateholders....................................................159
Section 10.09 Inspection and Audit Rights...................................................................160
Section 10.10 Certificates Nonassessable and Fully Paid.....................................................160
Section 10.11 Rights of NIM Insurer.........................................................................160
ARTICLE XI. EXCHANGE ACT REPORTING..............................................................................162
Section 11.01 Filing Obligations............................................................................162
Section 11.02 Form 10-D Filings.............................................................................162
iii
Section 11.03 Form 8-K Filings..............................................................................163
Section 11.04 Form 10-K Filings.............................................................................163
Section 11.05 Xxxxxxxx-Xxxxx Certification..................................................................164
Section 11.06 Form 15 Filing................................................................................165
Section 11.07 Report on Assessment of Compliance and Attestation............................................165
Section 11.08 Use of Subservicers and Subcontractors........................................................166
Section 11.09 Amendments....................................................................................167
Section 11.10 Reconciliation of Accounts....................................................................168
Exhibits
EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-2 Certificate
EXHIBIT A-3 Form of Class A-3 Certificate
EXHIBIT A-4 [Reserved]
EXHIBIT A-5 [Reserved]
EXHIBIT A-6 [Reserved]
EXHIBIT B Form of Class P Certificate
EXHIBIT C Form of Class C Certificate
EXHIBIT D-1 Form of Class A-R Certificate
EXHIBIT D-2 Form of Class E-P Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedule
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a
Portion of a Related Mortgage File is
not Delivered to the Trustee on or
prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee (Initial
Mortgage Loans)
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 Form of Initial Certification of Trustee (Subsequent
Mortgage Loans)
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1 Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Form of Request for Document Release
EXHIBIT N Form of Request for File Release
EXHIBIT O Copy of Depository Agreement
EXHIBIT P Form of Subsequent Transfer Agreement
EXHIBIT Q [Reserved]
EXHIBIT R [Reserved]
iv
EXHIBIT S-1 [Reserved]
EXHIBIT S-2 [Reserved]
EXHIBIT T Officer's Certificate with respect to Prepayments
EXHIBIT U [Reserved]
EXHIBIT V-1 [Reserved]
EXHIBIT V-2 [Reserved]
EXHIBIT V-3 [Reserved]
EXHIBIT W Form of Monthly Statement
EXHIBIT X-1 Form of Performance Certification (Subservicer)
EXHIBIT X-2 Form of Performance Certification (Trustee)
EXHIBIT Y Form of Servicing Criteria to be Addressed in Assessment
of Compliance Statement
EXHIBIT Z List of Item 1119 Parties
EXHIBIT AA Form of Xxxxxxxx-Xxxxx Certification (Replacement Master
Servicer)
SCHEDULE I Prepayment Charge Schedule and Prepayment Charge Summary
SCHEDULE II Collateral Schedule
v
POOLING AND SERVICING AGREEMENT, dated as of March 1, 2007,
by and among CWHEQ, INC., a Delaware corporation, as depositor (the
"Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller
("CHL" or a "Seller"), PARK GRANADA LLC, a Delaware corporation, as a seller
("Park Granada" or a "Seller"), PARK MONACO INC., a Delaware corporation, as a
seller ("Park Monaco" or a "Seller"), PARK SIENNA LLC, a Delaware limited
liability company, as a seller ("Park Sienna" or a "Seller", and together with
CHL, Park Granada and Park Monaco, the "Sellers"), COUNTRYWIDE HOME LOANS
SERVICING LP, a Texas limited partnership, as master servicer (the "Master
Servicer"), and THE BANK OF NEW YORK, a New York banking corporation, as
trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. As provided herein, the Trustee will
elect that the Trust Fund (excluding the Carryover Reserve Fund, the assets held
in the Pre-Funding Account and the Capitalized Interest Account and the Trust
Fund's rights with respect to payments received under the Corridor Contract) for
federal income tax purposes will consist of three REMICs (the "Swap-IO REMIC,"
the "Strip REMIC" and the "Master REMIC"). Each Certificate, other than the
Class A-R Certificate, will represent ownership of one or more regular interests
in the Master REMIC for purposes of the REMIC Provisions. The Class A-R
Certificate will represent ownership of the sole class of residual interest in
the Swap-IO REMIC, the Strip REMIC and the Master REMIC. The Master REMIC will
hold as assets the several classes of uncertificated Strip REMIC Interests
(other than the STR-A-R Interest). Each Strip REMIC Interest (other than the
STR-A-R Interest) is hereby designated as a regular interest in the Strip REMIC.
The Strip REMIC will hold as assets the several classes of uncertificated
Swap-IO REMIC Interests (other than the SWR-A-R Interest). Each Swap-IO REMIC
Interest (other than the SWR-A-R Interest) is hereby designated as a regular
interest in the Swap-IO REMIC. The Swap-IO REMIC will hold as assets all
property of the Trust Fund (excluding the Carryover Reserve Fund, the assets
held in the Pre-Funding Account and the Capitalized Interest Account and the
Trust Fund's rights with respect to payments received under the Corridor
Contract) The latest possible maturity date, for federal income tax purposes, of
all REMIC regular interests created herein shall be the Latest Possible Maturity
Date.
The Swap Trust, the Swap Contract, the Swap Account and the Swap
Reserve Fund will not constitute any part of any REMIC created hereunder.
The Swap-IO REMIC Interests will have the principal balances and
pass-through rates as set forth below.
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ---------------------------- -----------------
SWR-23A $4907783 (2)
SWR-23B 4907783 (3)
SWR-24A 5710544.5 (2)
SWR-24B 5710544.5 (3)
SWR-25A 5551733.5 (2)
SWR-25B 5551733.5 (3)
SWR-26A 5397304 (2)
SWR-26B 5397304 (3)
SWR-27A 5247136.5 (2)
SWR-27B 5247136.5 (3)
SWR-28A 5101112.5 (2)
SWR-28B 5101112.5 (3)
SWR-29A 4959120.5 (2)
SWR-29B 4959120.5 (3)
SWR-30A 4821048 (2)
SWR-30B 4821048 (3)
SWR-31A 4135971 (2)
SWR-31B 4135971 (3)
SWR-32A 4369431 (2)
SWR-32B 4369431 (3)
SWR-33A 4247690 (2)
SWR-33B 4247690 (3)
SWR-34A 4129313 (2)
SWR-34B 4129313 (3)
SWR-35A 4014206 (2)
SWR-35B 4014206 (3)
SWR-36A 3902281 (2)
SWR-36B 3902281 (3)
SWR-37A 3793449 (2)
SWR-37B 3793449 (3)
SWR-38A 3687626.5 (2)
SWR-38B 3687626.5 (3)
SWR-39A 3584730 (2)
SWR-39B 3584730 (3)
SWR-40A 3484679 (2)
SWR-40B 3484679 (3)
SWR-41A 3387395.5 (2)
SWR-41B 3387395.5 (3)
SWR-42A 3292803.5 (2)
SWR-42B 3292803.5 (3)
2
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ---------------------------- -----------------
SWR-43A 3200829 (2)
SWR-43B 3200829 (3)
SWR-44A 3111400 (2)
SWR-44B 3111400 (3)
SWR-45A 3024446.5 (2)
SWR-45B 3024446.5 (3)
SWR-46A 2939900.5 (2)
SWR-46B 2939900.5 (3)
SWR-47A 2857695.5 (2)
SWR-47B 2857695.5 (3)
SWR-48A 2777767.5 (2)
SWR-48B 2777767.5 (3)
SWR-49A 2700053.5 (2)
SWR-49B 2700053.5 (3)
SWR-50A 2624493 (2)
SWR-50B 2624493 (3)
SWR-51A 2551027 (2)
SWR-51B 2551027 (3)
SWR-52A 2479596 (2)
SWR-52B 2479596 (3)
SWR-53A 2410146.5 (2)
SWR-53B 2410146.5 (3)
SWR-54A 2342622.5 (2)
SWR-54B 2342622.5 (3)
SWR-55A 2276971.5 (2)
SWR-55B 2276971.5 (3)
SWR-56A 2213141 (2)
SWR-56B 2213141 (3)
SWR-57A 2151082.5 (2)
SWR-57B 2151082.5 (3)
SWR-58A 2090745.5 (2)
SWR-58B 2090745.5 (3)
SWR-59A 2032083.5 (2)
SWR-59B 2032083.5 (3)
SWR-60A 1975050.5 (2)
SWR-60B 1975050.5 (3)
SWR-61A 1919601 (2)
SWR-61B 1919601 (3)
SWR-62A 1865691.5 (2)
SWR-62B 1865691.5 (3)
SWR-63A 1813280 (2)
SWR-63B 1813280 (3)
SWR-64A 1762325 (2)
SWR-64B 1762325 (3)
3
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ---------------------------- -----------------
SWR-65A 1712785.5 (2)
SWR-65B 1712785.5 (3)
SWR-66A 1664624 (2)
SWR-66B 1664624 (3)
SWR-67A 1617801.5 (2)
SWR-67B 1617801.5 (3)
SWR-68A 1572281 (2)
SWR-68B 1572281 (3)
SWR-69A 1528027 (2)
SWR-69B 1528027 (3)
SWR-70A 1485004.5 (2)
SWR-70B 1485004.5 (3)
SWR-71A 1443178.5 (2)
SWR-71B 1443178.5 (3)
SWR-72A 1402518 (2)
SWR-72B 1402518 (3)
SWR-73A 1362989 (2)
SWR-73B 1362989 (3)
SWR-74A 1324561 (2)
SWR-74B 1324561 (3)
SWR-75A 1287204 (2)
SWR-75B 1287204 (3)
SWR-76A 1250887 (2)
SWR-76B 1250887 (3)
SWR-77A 1215583 (2)
SWR-77B 1215583 (3)
SWR-78A 1226321.5 (2)
SWR-78B 1226321.5 (3)
SWR-79A 1196975.5 (2)
SWR-79B 1196975.5 (3)
SWR-80A 1163156.5 (2)
SWR-80B 1163156.5 (3)
SWR-81A 1130281 (2)
SWR-81B 1130281 (3)
SWR-82A 1098322.5 (2)
SWR-82B 1098322.5 (3)
SWR-83A 1067256 (2)
SWR-83B 1067256 (3)
SWR-84A 34177935.5 (2)
SWR-84B 34177935.5 (3)
SWR-Support (4) (5)
SWR-P (6)
$ 100.00
SW-A-R (7) (7)
------------------
(1) Scheduled principal, prepayments and Realized Losses will be allocated
first, to the SWR-Support Interest and second, to the numbered classes
sequentially (from lowest to highest). Amounts so allocated to a numbered
class shall be further allocated between the "A" and "B" components of
such numbered class pro-rata until the entire class is reduced to zero.
(2) Prior to the 85th Distribution Date, a rate equal to twice the Pool Tax
Cap less 10.40% per annum. On and after the 85th Distribution Date a rate
equal to the Pool Tax Cap. The "Pool Tax Cap" means the weighted average
of the Adjusted Net Mortgage Rates of all the Mortgage Loans.
(3) Prior to the 85th Distribution Date, a rate equal to the lesser of (i)
10.40% per annum and (ii) twice the Pool Tax Cap. On and after the 85th
Distribution Date, a rate equal to the Pool Tax Cap.
(4) On the Closing Date and on each Distribution Date, following the
allocation of Principal Amounts and Realized Losses, the principal balance
in respect of the SWR-Support Interest will equal the excess of (a) the
sum of (i) the principal balance of the Mortgage Loans (as of the end of
the related Due Period, reduced by principal prepayments received after
such Due Period that are to be distributed on such Distribution Date) and
(ii) the amount, if any, on deposit in the Pre-Funding Account in respect
of the Mortgage Loans over (b) the principal balance in respect of the
remaining Swap-IO REMIC Interests other than the SWR-P and the SWR-A-R
Interests.
(5) A rate equal to the Pool Tax Cap.
(6) On each Distribution Date the SWR-P Interest is entitled to all Prepayment
Charges collected with respect to the Mortgage Loans. It pays no interest.
(7) The SW-A-R Interest is the sole class of residual interest in the Swap-IO
REMIC. It has no principal and pays no principal or interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the Mortgage Loans shall be payable
with respect to the Swap-IO REMIC Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each
Swap-IO REMIC Interest at the rate, or according to the formulas, described
above.
(2) Principal. Principal Distribution Amounts shall be allocated among
the Swap-IO REMIC Interests as described above.
(3) Prepayment Penalties. All Prepayment Charges are allocated to the
SWR-P Interest.
The Strip REMIC
The Strip REMIC Regular Interests will have the principal balances,
pass-through rates and corresponding Classes of Certificates as set forth in the
following table:
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Pass-Through Corresponding
Strip REMIC Regular Interests Initial Principal Balance Rate Class of Certificates
------------------------------------------------------------------------------------------------------------
STR-A-1........................ (1) (2) A-1
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STR-A-2........................ (1) (2) A-2
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STR-A-3........................ (1) (2) A-3
------------------------------------------------------------------------------------------------------------
STR-Accrual.................... (3) (2) N/A
------------------------------------------------------------------------------------------------------------
STR-C-Swap-IO (4) (4) N/A
------------------------------------------------------------------------------------------------------------
STR-$100....................... $100.00 (4) N/A
------------------------------------------------------------------------------------------------------------
STR-P.......................... $100.00 (4) P
------------------------------------------------------------------------------------------------------------
STR-A-R........................ (5) (5) N/A
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(1) The Class STR-A-1 Interest, Class STR-A-2 Interest and Class STR-A-3
Interest (the "Accretion Directed Classes") will each have a principal
balance that is equal to 50% of its Corresponding Class of Certificates
and on each Distribution Date, interest, principal payments and Realized
Losses shall be allocated so as to cause each of the Accretion Directed
Classes to continue to equal 50% of its Corresponding Class of
Certificates.
(2) On each Distribution Date, the pass-through rate for this Strip REMIC
Interest will be the "Strip REMIC Cap," which will equal the weighted
average of the pass-through rates of the Swap-IO REMIC Interests (other
than the SWR-P, and the SWR-A-R Interests) treating each "B" Interest the
cardinal number of which (for example, XX-0X, XX-0X, XX-0X, etc.) is not
less than the ordinal number of the Distribution Date (first Distribution
Date, second Distribution Date, third Distribution Date, etc.) as capped
at a rate equal to the product of (i) 2 and (ii) LIBOR.
(3) The STR-Accrual Interest shall have an initial principal balance equal to
the sum of (a) 50% of the Cut-off Date Principal Balance of the Mortgage
Loans and (b) 50% of the Overcollateralized Amount. On each Distribution
Date, interest, principal and Realized Losses shall be allocated so as to
cause the STR-Accrual Interest to equal the excess of the Stated Principal
Balance of the Mortgage Loans as of the end of the related Due Period
(appropriately adjusted for prepayments) over the aggregate Certificate
Principal Balance of the Accretion Directed Classes (after taking into
account distributions for such Distribution Date).
(4) For each Distribution Date, the STR-C-Swap-IO Interest is entitled to
receive from each Swap REMIC "B" Interest the cardinal number of which
(for example, XX-0X, XX-0X, XX-0X, etc.) is not less than the ordinal
number of the Distribution Date (first Distribution Date, second
Distribution Date, third Distribution Date, etc. ) the interest accruing
on such interest in excess of a per annum rate equal to the product of (i)
2 and (ii) LIBOR. (5) The STR-$100 Interest and the Class STR-P Interest
do not pay any interest. All Prepayment Charges are allocated to the Class
STR-P Interest.
(6) The Class STR-A-R Interest is the sole class of residual interest in the
Strip REMIC. It has no principal balance and pays no principal or
interest.
On each Distribution Date, the Interest Funds, the Principal
Distribution Amount and the Prepayment Charges payable with respect to the
Swap-IO Interests will be payable with respect to the Strip REMIC Regular
Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each Strip
REMIC Interest at the rate or according to the formulas described
above.
(2) Prepayment Charges. All Prepayment Charges are allocated to the
Class STR-P Interest.
(3) Principal. Principal shall be allocated among the Strip REMIC
Interests according to the formulas described above.
The Master REMIC
The following table specifies the class designation, pass through rate,
and principal amount for each class of Master REMIC Interest:
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Class Original Certificate Pass-Through
Principal Balance Rate
------------------------------------------------------------------------------------------------------------
A-1................................. $298,454,000 (1)
------------------------------------------------------------------------------------------------------------
A-2................................. $242,359,000 (1)
------------------------------------------------------------------------------------------------------------
A-3................................. $159,187,000 (1)
------------------------------------------------------------------------------------------------------------
C................................... (2) (3)
------------------------------------------------------------------------------------------------------------
A-R................................. $ 100 (4)
------------------------------------------------------------------------------------------------------------
P................................... $ 100 (5)
------------------------------------------------------------------------------------------------------------
(1) The Pass-Through Rates for the Class A-1, Class A-2 and Class A-3
Certificates for the Accrual Period for any Distribution Date will be equal to
the lesser of (a) One-Month LIBOR plus the related Pass-Through Margin, and (b)
the applicable Net Rate Cap. For federal income tax purposes, including the
computation of the Class C Distributable Amount and entitlement to Net Rate
Carryover the pass-through rate in respect of each Class A-1, Class A-2 and
Class A-3 Certificate will be subject to a cap equal to the Strip REMIC Cap
rather than its applicable Net Rate Cap.
(2) For federal income tax purposes, the Class C Certificates shall
have a Certificate Principal Balance equal to the Overcollateralized Amount.
(3) For each Interest Accrual Period the Class C Certificates are
entitled to an amount (the "Class C Distributable Amount") equal to the sum of
(a) the interest payable on the STR-C-Swap-IO Interest and (b) a specified
portion of the interest payable on the Strip REMIC Regular Interests (other than
the STR-$100, STR-C-Swap-IO and STR-P Interests) equal to the excess of the
Strip REMIC Cap over the weighted average interest rate of the Strip REMIC
Regular Interests (other than the STR-$100, STR-C-Swap-IO and STR-P Interests)
with each such Class subject to a cap equal to the Pass-Through Rate of the
Corresponding Master REMIC Class. The Pass-Through Rate of the Class C
Certificates shall be a rate sufficient to entitle it to an amount equal to all
interest accrued on the Mortgage Loans less the interest accrued on the other
interests issued by the Master REMIC. The Class C Distributable Amount for any
Distribution Date is payable from current interest on the Mortgage Loans and any
related Overcollateralization Reduction Amount for that Distribution Date.
(4) The Class A-R Certificates represent the sole class of residual
interest in each REMIC created hereunder. The Class A-R Certificates are not
entitled to distributions of interest. On the first Distribution Date, the Class
A-R Certificates are entitled to receive $100.00 from the Principal Reserve
Fund.
(5) For any Distribution Date, the Class P Certificates are entitled to
all Prepayment Charges collected during the related Prepayment Period and the
Master Servicer Prepayment Charge Amount. On the Class P Principal Distribution
Date, the Class P Certificates are entitled to receive $100.00 from the
Principal Reserve Fund.
The foregoing REMIC structure is intended to cause all of the cash from
the Mortgage Loans to flow through to the Master REMIC as cash flow on a REMIC
regular interest, without creating any shortfall--actual or potential (other
than for credit losses) to any REMIC regular interest.
For any purpose for which the interest rate in respect of any
Subsidiary REMIC regular interest created hereunder is calculated, the interest
rate on the Mortgage Loans shall be appropriately adjusted to account for the
difference between the monthly day count convention of the Mortgage Loans and
the monthly day count convention of the regular interests issued by each of the
REMICs. For purposes of calculating the interest rates for each of the interests
issued by REMIC, such rates shall be adjusted to equal a monthly day count
convention based on a 30 day month for each Interest Period and a 360-day year
so that the Mortgage Loans and all regular interests will be using the same
monthly day count convention.
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Acceptable Bid Amount: Either (i) a bid equal to or greater than the
Minimum Auction Amount or (ii) the highest bid submitted by a Qualified Bidder
in an auction if the Directing Certificateholder agrees to pay the related
Auction Supplement Amount.
Account: Any Escrow Account, the Certificate Account, the Distribution
Account, the Pre-Funding Account, the Capitalized Interest Account, the Swap
Account, the Swap Reserve Fund or any other account related to the Trust Fund or
the Mortgage Loans.
Accrual Period: With respect to any Distribution Date and each Class of
Adjustable Rate Certificates, the period commencing on the immediately preceding
Distribution Date (or, in the case of the first Distribution Date, the Closing
Date) and ending on the day immediately preceding such Distribution Date. With
respect to any Distribution Date and the Class C Certificates, the calendar
month preceding the month in which such Distribution Date occurs. All
calculations of interest on the Adjustable Rate Certificates will be made on the
basis of the actual number of days elapsed in the related Accrual Period and on
a 360-day year. All calculations of interest on the Class C Certificates will be
made on the basis of a 360-day year consisting of twelve 30-day months.
Adjustable Rate Certificates: The Class A-1, Class A-2 and Class A-3
Certificates.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
less the related Expense Fee Rate.
Advance: The aggregate of the advances required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section 4.01,
the amount of any such advances being equal to the aggregate of payments of
principal of, and interest on the Stated Principal Balance of, the Mortgage
Loans (net of the Servicing Fees) that were due on the related Due Date and not
received by the Master Servicer as of the close of business on the related
Determination Date including an amount equivalent to interest on the Stated
Principal Balance of each Mortgage Loan as to which the related Mortgaged
Property is an REO Property or as to which the related Mortgaged Property has
been liquidated but such Mortgage Loan has not yet become a Liquidated Mortgage
Loan; provided, however, that the net monthly rental income (if any) from such
REO Property deposited in the Certificate Account for such Distribution Date
pursuant to Section 3.12 may be used to offset such Advance for the related REO
Property; provided, further, that for the avoidance of doubt, no Advances shall
be required to be made in
5
respect of any Liquidated Mortgage Loan and no Advances shall be made in respect
of a Charged-off Mortgage Loan after the related Charge-off Date.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of business on the
immediately preceding Determination Date on account of (i) all Scheduled
Payments or portions thereof received in respect of the Mortgage Loans due after
the related Due Date, (ii) Principal Prepayments received in respect of such
Mortgage Loans after the last day of the related Prepayment Period and (iii)
Liquidation Proceeds and Subsequent Recoveries received in respect of such
Mortgage Loans after the last day of the related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which, the aggregate Certificate Principal Balance of the
Certificates (after all distributions of principal on such Distribution Date)
exceeds the sum of (x) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (y) the amount on deposit in the
Pre-Funding Account.
Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made for the originator of the related Mortgage Loan by an
independent fee appraiser at the time of the origination of the related Mortgage
Loan, or the sales price of the Mortgaged Property at the time of such
origination, whichever is less, or with respect to any Mortgage Loan originated
in connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing.
Auction Supplement Amount: As defined in Section 9.04(c).
Auction Period: With respect to a Charged-off Mortgage Loan, the period
commencing on the related Charge-off Date and ending one year after such date.
Bankruptcy Code: Title 11 of the United States Code.
Bid Determination Date: As defined in Section 9.04(b).
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Interest-Bearing Certificates constitutes a Class of
Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which either the Certificate Insurer or banking institutions in the State
of New York or California or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
6
Capitalized Interest Account: The separate Eligible Account designated
as such and created and maintained by the Trustee pursuant to Section 3.05(e).
The Capitalized Interest Account shall be treated as an "outside reserve fund"
under applicable Treasury regulations and shall not be part of any REMIC. Except
as provided in Section 3.05(e), any investment earnings on the amounts on
deposit in the Capitalized Interest Account shall be treated as owned by the
Depositor and shall be taxable to the Depositor.
Capitalized Interest Deposit: $1,413,930.73.
Capitalized Interest Requirement: With respect to each Funding Period
Distribution Date, 1/12 of the product of (1) the sum of (a) the Trustee Fee
Rate and (b) the weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans (excluding any Subsequent Mortgage Loans conveyed to the Trust Fund during
the calendar month preceding such Distribution Date) as of the first day of the
related Due Period (after giving effect to Principal Prepayments received during
the Prepayment Period, if any, that ends during such Due Period) and (2) the
amount on deposit in the Pre-Funding Account as of the last day of the calendar
month preceding such Funding Period Distribution Date (or, if the Funding Period
ended during such calendar month, as of the last day of the Funding Period).
Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered Holders of CWHEQ, Inc., Home Equity Loan Asset
Backed Certificates, Series 2007-S3". Funds in the Carryover Reserve Fund shall
be held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Certificate: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-3, Exhibit B, Exhibit C and Exhibit D.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and the Certificate Insurer and
designated "Countrywide Home Loans Servicing LP in trust for registered Holders
of CWHEQ, Inc., Home Equity Loan Asset Backed Certificates, Series 2007-S3".
Funds in the Certificate Account shall be held in trust for the
Certificateholders and the Certificate Insurer for the uses and purposes set
forth in this Agreement.
Certificate Insurance Policy: The irrevocable Financial Guaranty
Insurance Policy, No. 493810, including any endorsements thereto, issued by MBIA
with respect to the Class A Certificates.
Certificate Insurance Policy Premium Rate: 0.240% per annum.
Certificate Insurance Premium: For any Distribution Date, an amount
equal to the product of (x) the Certificate Insurance Policy Premium Rate and
(y) the aggregate Certificate Principal Balance of the Class A Certificates
immediately prior to such Distribution Date. The
7
Certificate Insurance Premium shall be computed on the basis of a 360-day year
and the actual number of days elapsed during the related accrual period.
Certificate Insurance Reimbursement Amount: As to any Distribution
Date, (i) all Insured Payments paid by the Certificate Insurer for which the
Certificate Insurer has not been reimbursed prior to such Distribution Date
pursuant to Section 4.04 hereof, plus (ii) interest accrued on such Insured
Payments not previously repaid, calculated at the Late Payment Rate from the
date the Insured Payments were made, plus (iii) any other amounts then due and
owing to the Certificate Insurer pursuant to the Insurance and Indemnity
Agreement plus interest accrued on such amount not previously paid calculated at
the Late Payment Rate, plus (iv) any payment made by the Certificate Insurer in
its sole discretion to cure any payment default under the Swap Contract after
the Swap Contract Administrator has failed to do so, plus interest thereon
calculated at the Late Payment Rate.
Certificate Insurer: MBIA in its capacity as insurer under the
Certificate Insurance Policy, and any permitted successor or assign.
Certificate Insurer Contact Person: The officer designated by the
Master Servicer to provide information to the Certificate Insurer pursuant to
Section 4.06(i).
Certificate Insurer Default: As defined in Section 4.06(l).
Certificate Owner: With respect to a Book-Entry Certificate, the person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than the
Class C and Class E-P Certificates) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate (A) less the sum of (i) all
amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant to
Section 4.04, (ii) with respect to the Class A Certificates only, payments under
the Certificate Insurance Policy relating to principal (except that any payment
under the Certificate Insurance Policy with respect to an Applied Realized Loss
Amount allocated to the Class A Certificates shall not result in a further
reduction of the Certificate Principal Balance of the Class A Certificates) and
(iii) any Applied Realized Loss Amounts allocated to such Certificate on
previous Distribution Dates pursuant to Section 4.04(i), and (B) increased by
any Subsequent Recoveries allocated to such Certificate pursuant to Section
4.04(j) on such Distribution Date subject to the proviso set forth in Section
4.04(j). References herein to the Certificate Principal Balance of a Class of
Certificates shall mean the Certificate Principal Balances of all Certificates
in such Class. The Class C Certificates shall have a Certificate Principal
Balance equal to the Overcollateralized Amount. The Class E-P Certificates do
not have a Certificate Principal Balance. With respect to any Certificate (other
than the Class C and Class E-P Certificates) of a Class and any Distribution
Date, the portion of the Certificate Principal Balance of such Class represented
by such Certificate is equal to the product of the Percentage Interest evidenced
by such Certificate and the Certificate Principal Balance of such Class.
Exclusively for the purpose of determining any subrogation rights of the
Certificate Insurer arising under Section 4.06 hereof, the "Certificate
Principal Balance" of the Class A Certificates shall not be reduced by the
amount of any payments made by the Certificate Insurer in respect of principal
on such
8
Certificates under the Certificate Insurance Policy, except to the extent such
payment shall have been reimbursed to the Certificate Insurer pursuant to the
provisions of this Agreement.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Class of Book-Entry Certificates), except
that solely for the purpose of giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Voting Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests necessary to effect such consent has been
obtained; provided that if any such Person (including the Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates, such Certificates
shall be deemed to be Outstanding for purposes of any provision hereof (other
than the second sentence of Section 10.01 hereof) that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
Certification Party: As defined in Section 11.05.
Certifying Person: As defined in Section 11.05.
Charge-off Date: With respect to a Mortgage Loan, the close of business
on the last day of the calendar month in which such Mortgage Loan became a
Charged-off Mortgage Loan.
Charged-off Loan Proceeds: With respect to a Charged-off Mortgage Loan,
any Insurance Proceeds and all other net proceeds received with respect to such
Charged-off Mortgage Loan after the related Charge-off Date in connection with
the partial or complete liquidation of such Charged-off Mortgage Loan, whether
through trustee's sale, foreclosure sale, auction or otherwise, or in connection
with any condemnation or partial release of the related Mortgaged Property,
together with the net proceeds received after the related Charge-off Date with
respect to any Mortgaged Property acquired by the Master Servicer by foreclosure
or deed in lieu of foreclosure in connection with such Charged-off Mortgage
Loan, less the sum of related unreimbursed Servicing Advances and the related
Charged-off Mortgage Loan Disposition Fee, if any.
Charged-off Mortgage Loan: A Mortgage Loan that is 180 days delinquent;
provided, however, that a Covered Loan shall not be a Charged-off Mortgage Loan
unless (i) the Credit Insurer has rejected the claim under the Credit Insurance
Policy and (ii) no Loss Coverage Payment is payable with respect to such
Mortgage Loan as a result of the Sponsor Loss Coverage Amount being reduced to
zero or otherwise.
Charged-off Mortgage Loan Disposition Fee: The fee payable to the
Master Servicer in connection with any Charged-off Mortgage Loan, which shall be
an amount equal to
9
10% of the gross proceeds from the Charged-off Mortgage Loan, regardless of
whether those proceeds arise as a result of a sale, an auction, foreclosure or
otherwise.
CHL: Countrywide Home Loans, Inc., a New York corporation, and its
successors and assigns.
CHL Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule for which CHL is the applicable Seller.
Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.
Class A Certificates: Collectively, the Class A-1, Class A-2 and Class
A-3 Certificates.
Class A Available Funds: With respect to any Distribution Date, funds
allocated from amounts available pursuant to this Agreement to make
distributions on the Class A Certificates on such Distribution Date, including
without limitation amounts on deposit in the Distribution Account and the
Premium Account.
Class A Insurance Payments Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 4.06(c) in the name of
the Trustee for the benefit of the Class A Certificateholders and designated
"The Bank of New York in trust for registered holders of CWHEQ, Inc., Home
Equity Loan Asset Backed Certificates, Series 2007-S3, Class A Certificates."
Funds in the Class A Insurance Payments Account shall be held in trust for the
Class A Certificateholders for the uses and purposes set forth in this
Agreement.
Class A Principal Distribution Amount: With respect to any Distribution
Date, the excess of (x) the aggregate Certificate Principal Balance of the Class
A Certificates immediately prior to that Distribution Date, over (y) the
aggregate Stated Principal Balance of the Mortgage Loans for that Distribution
Date minus the Overcollateralization Target Amount for such Distribution Date.
Class A-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class A-2 Certificate: Any Certificate designated as a "Class A-2
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class A-3 Certificate: Any Certificate designated as a "Class A-3
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class A-R Certificate: Any Certificate designated as a "Class A-R
Certificate" on the face thereof, in the form of Exhibit D-1 hereto or, in the
case of the Tax Matters Person
10
Certificate, Exhibit E hereto, in either case representing the right to
distributions as set forth herein.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
Class C Distributable Amount: As defined in the Preliminary Statement.
Class E-P Certificate: Any Certificate designated as a "Class E-P
Certificate" on the face thereof, in the form of Exhibit D-2 hereto,
representing the right to distributions as set forth herein.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.
Class P Principal Distribution Date: The first Distribution Date that
occurs after the end of the latest Prepayment Charge Period for all Mortgage
Loans that have a Prepayment Charge Period.
Closing Date: March 30, 2007.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collateral Schedule: Schedule II hereto.
Combined Loan-to-Value Ratio: The fraction, expressed as a percentage,
the numerator of which is the sum of (x) original principal balance of the
related Mortgage Loan and (y) the outstanding principal balance of any senior
mortgage loans at the date of origination of the related Mortgage Loan and the
denominator of which is the Appraised Value of the related Mortgaged Property.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: With respect to the Mortgage Loans and any
Distribution Date, an amount equal to the lesser of (x) one-half of the
Servicing Fee for the related Due Period and (y) the aggregate Prepayment
Interest Shortfall for such Distribution Date.
Confirmation: The confirmation, reference number XXXXX0000, with a
trade date of March 27, 2007 evidencing a transaction between the Corridor
Contract Counterparty and CHL relating to the Corridor Contract.
Corporate Trust Office: The designated office of the Trustee in the
State of New York where at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at
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000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 00000 (Attention: Corporate Trust MBS
Administration), telephone: (000) 000-0000, facsimile: (000) 000-0000.
Corridor Contract: With respect to the Class A-1 Certificates, the
transaction evidenced by the Confirmation (as assigned to the Corridor Contract
Administrator pursuant to the Corridor Contract Assignment Agreement).
Corridor Contract Administration Agreement: The corridor contract
administration agreement dated as of the Closing Date among CHL, the Trustee and
the Corridor Contract Administrator.
Corridor Contract Administrator: The Bank of New York, in its capacity
as corridor contract administrator under the Corridor Contract Administration
Agreement.
Corridor Contract Assignment Agreement: The Assignment Agreement dated
as of the Closing Date among CHL, the Corridor Contract Administrator and the
Corridor Contract Counterparty.
Corridor Contract Counterparty: Bear Xxxxxxx Financial Products Inc.
Corridor Contract Termination Date: The Distribution Date in March
2009.
Covered Certificates: The Class A-1 Certificates.
Covered Loan: A Mortgage Loan covered by the Credit Insurance Policy as
of the Cut-off Date.
Credit Bureau Risk Score: A statistical credit score obtained by CHL in
connection with the origination of a Mortgage Loan.
Credit Insurance Policy: The Credit Insurance Policy issued by the
Credit Insurer with respect to certain Mortgage Loans identified in the Mortgage
Loan Schedule.
Credit Insurance Premium: For any Distribution Date, the aggregate fee
payable to the Credit Insurer equal to the product of (x) the Credit Insurance
Premium Rate and (y) the unpaid principal balance of each Covered Loan as of the
first day of the related calendar month, computed on the basis of a 360-day year
consisting of twelve 30-day months.
Credit Insurance Premium Rate: The rate at which the Credit Insurance
Premium accrues on each Mortgage Loan, as set forth on the Mortgage Loan
Schedule.
Credit Insurer: Old Republic Insurance Company, or any replacement
Credit Insurer, as applicable.
Cumulative Loss Trigger Event: With respect to any Distribution Date on
or after the Stepdown Date, (x) the aggregate amount of Realized Losses
(calculated without taking into account payments made under the Credit Insurance
Policy or any Loss Coverage Payments) on the Mortgage Loans from the Cut-off
Date for each such Mortgage Loan to (and including) the
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last day of the related Due Period (reduced by the aggregate amount of any
Subsequent Recoveries and Charged-off Loan Proceeds received through the last
day of that Due Period) exceeds (y) the applicable percentage, for such
Distribution Date, of the sum of the Initial Cut-off Date Pool Principal Balance
and the Pre-Funded Amount, as set forth below:
Distribution Date Percentage
----------------- ----------
October 2009 --March 2010.......................... 2.025% with respect to October 2009, plus
an additional 1/6th of 0.675% for each
month thereafter through March 2010
April 2010 -- March 2011........................... 2.700% with respect to April 2010, plus an
additional 1/12th of 1.100% for each month
thereafter through March 2011
April 2011 -- March 2012........................... 3.800% with respect to April 2011, plus an
additional 1/12th of 1.100% for each month
thereafter through March 2012
April 2012 -- March 2013........................... 4.900% with respect to April 2012, plus an
additional 1/12th of 0.500% for each month
thereafter until March 2013
April 2013 and thereafter......................... 5.400%
Current Interest: With respect to each Class of Interest-Bearing
Certificates and each Distribution Date, interest accrued at the applicable
Pass-Through Rate for the applicable Accrual Period on the Certificate Principal
Balance of such Class immediately prior to such Distribution Date.
Cut-off Date: With respect to any Mortgage Loan, the Initial Cut-off
Date or the related Subsequent Cut-off Date, as the case may be.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all payments of principal due on or prior to the Cut-off Date,
whether or not received, and all Principal Prepayments received on or prior to
the Cut-off Date, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
13
Deficiency Amount: As defined in the Certificate Insurance Policy.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans
identified on the schedule of Mortgage Loans hereto set forth on Exhibit F-2
hereof for which all or a portion of a related Mortgage File is not delivered to
the Trustee on or prior to the Closing Date, and (ii) the Subsequent Mortgage
Loans identified on the schedule of Subsequent Mortgage Loans set forth in Annex
I to each related Subsequent Transfer Agreement for which all or a portion of
the related Mortgage File is not delivered to the Trustee on or prior to the
related Subsequent Transfer Date. The Depositor shall deliver (or cause delivery
of) the Mortgage Files to the Trustee: (A) with respect to at least 50% of the
Initial Mortgage Loans, not later than the Closing Date and with respect to at
least 10% of the Subsequent Mortgage Loans conveyed on a Subsequent Transfer
Date, not later than such Subsequent Transfer Date, (B) with respect to at least
an additional 40% of the Initial Mortgage Loans, not later than 20 days after
the Closing Date, and not later than 20 days after the relevant Subsequent
Transfer Date with respect to the remaining Subsequent Mortgage Loans conveyed
on such Subsequent Transfer Date, and (C) with respect to the remaining Initial
Mortgage Loans, not later than thirty days after the Closing Date. To the extent
that Countrywide Home Loans, Inc. shall be in possession of any Mortgage Files
with respect to any Delay Delivery Mortgage Loan, until delivery of such
Mortgage File to the Trustee as provided in Section 2.01, Countrywide Home
Loans, Inc. shall hold such files as agent and in trust for the Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to any Distribution Date on or
after the Stepdown Date, the Rolling Sixty-Day Delinquency Rate for that
Distribution Date for the outstanding Mortgage Loans exceeds 4.50%.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or, if
not the foregoing, the Percentage Interest appearing on the face thereof, as
applicable.
Depositor: CWHEQ, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
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times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Book-Entry Certificates, the
agreement among the Depositor and the initial Depository, dated as of the
Closing Date, substantially in the form of Exhibit O.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 22nd day
of the month of such Distribution Date or, if such 22nd day is not a Business
Day, the immediately preceding Business Day; provided that the Determination
Date in each month will be at least two Business Days before the Distribution
Date.
Directing Certificateholder: As defined in Section 9.04(a).
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(c) in the name of the Trustee
for the benefit of the Certificateholders and the Certificate Insurer and
designated "The Bank of New York, in trust for registered Holders of CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2007-S3". Funds in the
Distribution Account shall be held in trust for the Certificateholders and the
Certificate Insurer for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 1:00
p.m. Pacific time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The 25th day of each month, or if such day is not a
Business Day, on the first Business Day thereafter, commencing in April 2007.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for Scheduled Payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
XXXXX: The Commission's Electronic Data Gathering, Analysis, and
Retrieval system.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if Xxxxx'x is not a Rating Agency) are rated by each Rating
Agency in one of its two highest long-term and its highest short-term rating
categories respectively, at the time any
15
amounts are held on deposit therein, or (ii) an account or accounts in a
depository institution or trust company in which such accounts are insured by
the FDIC (to the limits established by the FDIC) and the uninsured deposits in
which accounts are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to the Trustee, the Certificate Insurer and to each Rating
Agency, the Certificateholders have a claim with respect to the funds in such
account or a perfected first priority security interest against any collateral
(which shall be limited to Permitted Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution or trust company in which such account is maintained, or (iii) a
trust account or accounts maintained with the corporate trust department of a
federal or state chartered depository institution or trust company having
capital and surplus of not less than $50,000,000, acting in its fiduciary
capacity or (iv) any other account acceptable to the Rating Agencies without
reduction or withdrawal of their then-current ratings of the Certificates
(without regard to the Certificate Insurance Policy, in the case of the Class A
Certificates) as evidenced by a letter from each Rating Agency to the Trustee
and the Certificate Insurer. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(d) hereof.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the applicable requirements of the
Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, Class P
Certificates, Class E-P Certificates, Class C Certificates and Certificates of
any Class that does not have or no longer has a rating of at least AA- or its
equivalent from at least one Rating Agency.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum of (i)
the amount remaining after the distribution of interest to Certificateholders
and payments to the Certificate Insurer for such Distribution Date, pursuant to
Section 4.04(a)(vi), (ii) the amount remaining after the distribution of
principal to Certificateholders and payments to the Certificate Insurer for such
Distribution Date, pursuant to Section 4.04(b)(iv) and (iii) the
Overcollateralization Reduction Amount for such Distribution Date.
Excess Overcollateralization Amount: With respect to any Distribution
Date, the excess, if any, of the Overcollateralized Amount for such Distribution
Date over the Overcollateralization Target Amount for such Distribution Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, other
than a Charged-off Mortgage Loan, the amount, if any, by which the sum of any
Liquidation Proceeds and Subsequent Recoveries are in excess of the sum of (i)
the unpaid principal balance of such Liquidated Mortgage Loan as of the date of
liquidation of such Liquidated Mortgage Loan plus
16
(ii) interest at the Mortgage Rate from the Due Date as to which interest was
last paid or advanced to Certificateholders (and not reimbursed to the Master
Servicer) up to the Due Date in the month in which Liquidation Proceeds are
required to be distributed on the Stated Principal Balance of such Liquidated
Mortgage Loan outstanding during each Due Period as to which such interest was
not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form 10-K
required to be filed by the Depositor with respect to the Trust Fund under the
Exchange Act.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of (i) the
Servicing Fee Rate, (ii) the Trustee Fee Rate and (iii) with respect to any
Covered Loan, the Credit Insurance Premium Rate.
Extra Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (1) the Overcollateralization Deficiency Amount for such
Distribution Date and (2) the Excess Cashflow available for payment thereof for
such Distribution Date.
Xxxxxx Xxx: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Scheduled Distribution Date: With respect to the Class A
Certificates and the Certificate Insurance Policy, the Distribution Date
occurring in the month following the month of the scheduled maturity date of the
Mortgage Loan having the latest scheduled maturity date including any Subsequent
Mortgage Loan, if any.
Form 10-D Disclosure Item: With respect to any Person, any material
litigation or governmental proceedings pending against such Person, or against
any of the Trust Fund, the Depositor, the Trustee, any co-trustee, the Master
Servicer or any Subservicer, if such Person has actual knowledge thereof.
Form 10-K Disclosure Item: With respect to any Person, (a) Form 10-D
Disclosure Item, and (b) any affiliations or relationships between such Person
and any Item 1119 Party.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Funding Period: The period from the Closing Date to and including the
earlier to occur of (x) the date the amount in the Pre-Funding Account is less
than $40,000 and (y) May 24, 2007.
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Funding Period Distribution Date: Each Distribution Date on or prior to
the Distribution Date occurring in the calendar month following the month in
which the Funding Period ends.
Initial Certificate Account Deposit: An amount equal to the aggregate
of all amounts in respect of (i) principal of the Initial Mortgage Loans due
after the Initial Cut-off Date and received by the Master Servicer before the
Closing Date and not applied in computing the Cut-off Date Principal Balance
thereof and (ii) interest on the Initial Mortgage Loans due after the Initial
Cut-off Date and received by the Master Servicer before the Closing Date.
Initial Certificate Principal Balance: With respect to any Certificate
(other than the Class C and Class E-P Certificates) the Certificate Principal
Balance of such Certificate or any predecessor Certificate on the Closing Date.
Initial Cut-off Date: In the case of any Initial Mortgage Loan, the
later of (x) March 1, 2007 and (y) the date of origination of such Mortgage
Loan.
Initial Cut-off Date Pool Principal Balance: The aggregate Cut-off Date
Principal Balance of the Initial Mortgage Loans.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trustee on the
Closing Date pursuant to this Agreement as identified on the Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
Insolvency Proceeding: As defined in Section 4.06(h).
Insurance and Indemnity Agreement: The Insurance Agreement, dated as of
the Closing Date, by and among the Certificate Insurer, as insurer, the
Depositor, as depositor, CHL, as sponsor and a seller, the Master Servicer, as
master servicer, and the Trustee, as trustee.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including the Credit Insurance Policy but
excluding the Certificate Insurance Policy, including all riders and
endorsements thereto in effect with respect to such Mortgage Loan, including any
replacement policy or policies for any Insurance Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
(other than by the Certificate Insurer under the Certificate Insurance Policy)
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed of trust and are
not applied to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account, in each case other
than any amount included in such Insurance Proceeds in respect of Insured
Expenses and received either prior to or in connection with such Mortgage Loan
becoming a Liquidated Mortgage Loan.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
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Insured Payments: As defined in the Certificate Insurance Policy.
Interest-Bearing Certificates: The Class A Certificates.
Interest Carry Forward Amount: With respect to each Class of
Interest-Bearing Certificates and each Distribution Date, the excess of (i) the
Current Interest for such Class with respect to prior Distribution Dates over
(ii) the amount actually distributed to such Class with respect to interest on
such prior Distribution Dates.
Interest Determination Date: With respect to the Adjustable Rate
Certificates, the second LIBOR Business Day preceding the commencement of each
Accrual Period.
Interest Funds: With respect to any Distribution Date, (x) an amount
equal to the sum of (i) the Interest Remittance Amount for such Distribution
Date, (ii) the Capitalized Interest Requirement, if any, for such Distribution
Date, (iii) solely for the purpose of calculating the Deficiency Amount, the
amount on deposit in the Premium Account after taking into account any deposits
to the Premium Account on such Distribution Date, plus (iv) the Adjusted
Replacement Upfront Amount, if any, less (y) the sum of (i) the Trustee Fee for
such Distribution Date and (ii) the Credit Insurance Premium for such
Distribution Date.
Interest Remittance Amount: With respect to any Distribution Date, (x)
the sum, without duplication, of (i) all scheduled interest collected during the
related Due Period with respect to the Mortgage Loans less the Servicing Fee,
(ii) all interest on Principal Prepayments received during the related
Prepayment Period with respect to the Mortgage Loans, other than Prepayment
Interest Excess, (iii) all Advances relating to interest with respect to the
Mortgage Loans, (iv) all Compensating Interest with respect to the Mortgage
Loans, (v) Liquidation Proceeds with respect to the Mortgage Loans collected
during the related Due Period (to the extent such Liquidation Proceeds relate to
interest), (vi) any payments received under the Credit Insurance Policy
attributable to interest for the related Due Period, (vii) any Loss Coverage
Payment attributable to interest for the related Due Period and (viii) the
Seller Interest Shortfall Payment, if any, less (y) all reimbursements to the
Master Servicer during the related Due Period for Advances of interest
previously made.
Investment Letter: As defined in Section 5.02(b).
Item 1119 Party: The Depositor, any Seller, the Master Servicer, the
Trustee, any Subservicer, any originator identified in the Prospectus
Supplement, the Certificate Insurer, the Credit Insurer, the Corridor Contract
Counterparty, the Swap Counterparty and any other material transaction party, as
identified in Exhibit Z hereto, as updated pursuant to Section 11.04.
Late Payment Rate: With respect to any Distribution Date, the lesser of
(i) the greater of (a) the rate of interest, as it is publicly announced by
Citibank, N.A. at its principal office in New York, New York as its prime rate
(any change in the prime rate of interest to be effective on the date the change
is announced by Citibank, N.A.) plus 2% and (b) the then applicable highest rate
of interest on any of the Class A Certificates and (ii) the maximum rate
permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of the actual number of days
elapsed over a year of 360 days.
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Latest Possible Maturity Date: The Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Limited Exchange Act Reporting Obligations: The obligations of the
Master Servicer under Section 3.17(b), Section 6.02 and Section 6.04 with
respect to notice and information to be provided to the Depositor and Article XI
(except Section 11.07(a)(1) and (2)).
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified in
the related Prepayment Period that it has received all amounts it expects to
receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property
received in connection with or prior to such Mortgage Loan becoming a Liquidated
Mortgage Loan (other than the amount of such net proceeds representing any
profit realized by the Master Servicer in connection with the disposition of any
such properties and other than amounts paid under the Certificate Insurance
Policy), less the sum of related unreimbursed Advances, Servicing Fees and
Servicing Advances. For the avoidance of doubt, Liquidation Proceeds shall not
include Charged-off Loan Proceeds.
Loan Number and Borrower Identification Mortgage Loan Schedule: With
respect to any Subsequent Transfer Date, the Loan Number and Borrower
Identification Mortgage Loan Schedule delivered in connection with such
Subsequent Transfer Date pursuant to Section 2.01(f). Each Loan Number and
Borrower Identification Mortgage Loan Schedule shall contain the information
specified in the definition of "Mortgage Loan Schedule" with respect to the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, and each
Loan Number and Borrower Identification Mortgage Loan Schedule shall be deemed
to be included in the Mortgage Loan Schedule.
Loss Coverage Payment: With respect to any Distribution Date on or
prior to the Distribution Date on which the Sponsor Loss Coverage Amount is
reduced to zero, the amount of Realized Losses on the Covered Loans with respect
to which a claim for payment was denied by the Credit Insurer due to an
exclusion in the Credit Insurance Policy but for which there are no breaches of
the representations and warranties set forth in Section 2.03 with respect to
such Covered Loans. Notwithstanding the preceding sentence, with respect to the
Distribution Date on which the amount described in the preceding sentence
exceeds the Sponsor Loss Coverage
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Amount, the Loss Coverage Payment for such Distribution Date shall be the
Sponsor Loss Coverage Amount.
Majority Holder: The Holders of Certificates evidencing at least 51% of
the Voting Rights allocated to such Class of Certificates.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as master servicer
hereunder.
Master Servicer Advance Date: As to any Distribution Date, the Business
Day immediately preceding such Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived other
than in accordance with the standard set forth in the first sentence of Section
3.20(a), or (ii) collected from the Master Servicer in respect of a remedy for
the breach of the representation made by CHL set forth in Section 3.20(c).
MBIA: MBIA Insurance Corporation, organized and created under the laws
of the State of New York, or any successor thereto.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Auction Amount: With respect to any auction of the Mortgage
Loans and any REO Properties pursuant to Section 9.04, the sum of (i) the
Termination Price that would be payable by the NIM Insurer if the Optional
Termination were exercised in the following calendar month pursuant to Section
9.01 and (ii) all reasonable fees and expenses incurred by the Trustee in
connection with any auction conducted pursuant to Section 9.04. For the
avoidance of doubt, the Minimum Auction Amount shall result in a final
distribution on the Class A Certificates and to the Certificate Insurer that is
sufficient (x) to pay such Class A Certificates in full (without the need of any
payment by the Certificate Insurer of any Insured Payment) and (y) to pay any
amounts due and payable to the Certificate Insurer pursuant to the terms hereof
and pursuant to the Insurance and Indemnity Agreement.
Modified Mortgage Loan: As defined in Section 3.12(a).
MOM Loan: Any Mortgage Loan, as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
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Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. and its successors.
Mortgage: The mortgage, deed of trust or other instrument creating a
second lien on or second priority ownership interest in an estate in fee simple
in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the deletion of Liquidated
Mortgage Loans and Deleted Mortgage Loans and the addition of (x) Replacement
Mortgage Loans pursuant to the provisions of this Agreement and (y) Subsequent
Mortgage Loans pursuant to the provisions of this Agreement and any Subsequent
Transfer Agreement) transferred to the Trustee as part of the Trust Fund and
from time to time subject to this Agreement, attached hereto as Exhibit F-1,
setting forth in the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) [Reserved];
(iii) the Appraised Value;
(iv) the Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Combined Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(xii) a code indicating whether the residential dwelling is
either (a) a detached single-family dwelling, (b) a two-family
residential property, (c) a three-family residential property, (d) a
four-family residential property, (e) planned unit development, (f) a
low-rise condominium unit, (g) a high-rise condominium unit or (h)
manufactured housing;
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(xiii) the purpose of the Mortgage Loan;
(xiv) a code indicating if such Mortgage Loan is a Covered
Loan and the related Credit Insurance Premium Rate; and
(xv) a code indicating whether the Mortgage Loan is a CHL
Mortgage Loan, a Park Granada Mortgage Loan, a Park Monaco Mortgage
Loan or a Park Sienna Mortgage Loan.
Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans. The Mortgage Loan Schedule shall be
deemed to include each Loan Number and Borrower Identification Mortgage Loan
Schedule delivered pursuant to Section 2.01(f) and all the related Subsequent
Mortgage Loans and Subsequent Mortgage Loan information included therein.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof and any Subsequent Transfer
Agreement as from time to time are held as part of the Trust Fund (including any
REO Property), the mortgage loans so held being identified in the Mortgage Loan
Schedule, notwithstanding foreclosure or other acquisition of title of the
related Mortgaged Property. Any mortgage loan that was intended by the parties
hereto to be transferred to the Trust Fund as indicated by such Mortgage Loan
Schedule which is in fact not so transferred for any reason, including a breach
of the representation contained in Section 2.02 hereof, shall continue to be a
Mortgage Loan hereunder until the Purchase Price with respect thereto has been
paid to the Trust Fund.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note as
set forth in the Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Net Rate Cap: For each Distribution Date,
(i) with respect to the Class A-1 Certificates, (1) the
weighted average Adjusted Net Mortgage Rate of the Mortgage Loans as of
the first day of the related Due Period (after giving effect to
Principal Prepayments received during the Prepayment Period that ends
during such Due Period), less (2) the Certificate Insurance Policy
Premium Rate, multiplied by a fraction, the numerator of which
23
is (a) the aggregate Certificate Principal Balance of the Class A
Certificates and the denominator of which is (b) the aggregate Stated
Principal Balance of the Mortgage Loans as of the first day of the
related Due Period (after giving effect to Principal Prepayments
received during the Prepayment Period that ends during such Due Period)
plus any amounts on deposit in the Pre-Funding Account as of the first
day of that Due Period. The Net Rate Cap for the Class A-1 Certificates
shall be adjusted to an effective rate reflecting the calculation of
interest on the basis of the actual number of days elapsed during the
related Accrual Period and a 360 day year, and
(ii) with respect to the Class A-2 and Class A-3 Certificates,
the related Net Rate Cap for the Class A-1 Certificates (adjusted to an
effective rate reflecting the calculation of interest on the basis of
the actual number of days elapsed during the related Accrual Period and
a 360-day year), minus a fraction, expressed as a percentage, the
numerator of which is (x) the sum of (1) the Net Swap Payment payable
to the Swap Counterparty with respect to such Distribution Date times a
fraction, the numerator of which is 360 and the denominator of which is
the actual number of days in the related Accrual Period and (2) any
Swap Termination Payment payable to the Swap Counterparty for such
Distribution Date (other than a Swap Termination Payment due to a Swap
Counterparty Trigger Event), and the denominator of which is (y) the
aggregate Certificate Principal Balance of the Class A-2 and Class A-3
Certificates immediately prior to such Distribution Date.
Net Rate Carryover: With respect to any Class of Class A Certificates
and any Distribution Date, the sum of (A) the excess of (i) the amount of
interest that such Class would otherwise have accrued for such Distribution Date
had the Pass-Through Rate for such Class and the related Accrual Period not been
determined based on the related Net Rate Cap, over (ii) the amount of interest
accrued on such Class at the applicable Net Rate Cap for such Distribution Date
and (B) the Net Rate Carryover for such Class for all previous Distribution
Dates not previously paid pursuant to Section 4.04, together with interest
thereon at the then-applicable Pass-Through Rate for such Class, without giving
effect to the applicable Net Rate Cap.
Net Swap Payment: With respect to any Distribution Date and payment by
the Swap Contract Administrator to the Swap Counterparty, the excess, if any, of
the "Fixed Amount" (as defined in the Swap Contract) with respect to such
Distribution Date over the "Floating Amount" (as defined in the Swap Contract)
with respect to such Distribution Date. With respect to any Distribution Date
and payment by the Swap Counterparty to the Swap Contract Administrator, the
excess, if any, of the "Floating Amount" (as defined in the Swap Contract) with
respect to such Distribution Date over the "Fixed Amount" (as defined in the
Swap Contract) with respect to such Distribution Date.
NIM Insurer: Any insurer guarantying at the request of CHL certain
payments under notes backed or secured by the Class C and/or Class P
Certificates.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master
24
Servicer, will not or, in the case of a current delinquency, would not, be
ultimately recoverable by the Master Servicer from the related Mortgagor,
related Liquidation Proceeds or otherwise. Any unreimbursed Advances made prior
to the related Charge-off Date in connection with a Charged-off Mortgage Loan
shall be considered Nonrecoverable Advances as of the related Charge-off Date.
Non-United States Person: A Person that is not a citizen or resident of
the United States, a corporation, partnership, or other entity (treated as a
corporation or a partnership for federal income tax purposes) created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia, an estate whose income from sources without the United
States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trustor.
OC Floor: An amount equal to 0.50% of the sum of the Initial Cut-off
Date Pool Principal Balance and the Pre-Funded Amount.
Officer's Certificate: A certificate (i) in the case of the Depositor,
signed by the Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant
Treasurers or Assistant Secretaries of the Depositor, (ii) in the case of the
Master Servicer, signed by the President, an Executive Vice President, a Vice
President, an Assistant Vice President, the Treasurer, or one of the Assistant
Treasurers or Assistant Secretaries of Countrywide GP, Inc., its general
partner, (iii) if provided for in this Agreement, signed by a Servicing Officer,
as the case may be, and delivered to the Depositor and the Trustee, as the case
may be, as required by this Agreement, or (iv) in the case of any other Person,
signed by an authorized officer of such Person.
One-Month LIBOR: With respect to any Accrual Period for the Adjustable
Rate Certificates, the rate determined by the Trustee on the related Interest
Determination Date on the basis of the rate for U.S. dollar deposits for one
month as quoted on the Bloomberg Terminal on such Interest Determination Date.
If such rate is not quoted on the Bloomberg Terminal (or if such service is no
longer offered, such other service for displaying One-Month LIBOR or comparable
rates as may be reasonably selected by the Trustee), One-Month LIBOR for the
applicable Accrual Period for the Adjustable Rate Certificates will be the
Reference Bank Rate. If no such quotations can be obtained by the Trustee and no
Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period for the Adjustable Rate Certificates.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either and (iii) not be connected with the Depositor or the
Master Servicer as an
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officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of the Trust Fund provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to clause (a)
of the first sentence of Section 9.01 hereof.
Optional Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the sum of the Initial Cut-off Date Pool Principal Balance and the
Pre-Funded Amount.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the Master Servicer or the sales price of
such property or, in the case of a refinancing, on an appraisal satisfactory to
the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
To effectuate the Certificate Insurer's rights of subrogation
under Section 4.06 hereof, all Class A Certificates that have been paid
with funds provided under the Certificate Insurance Policy shall be
Outstanding until the Certificate Insurer has been paid all amounts due
to it pursuant to this Agreement and the Insurance and Indemnity
Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Mortgage
Loan, prior to the end of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to the distribution of the Principal Distribution Amount (other
than the portion thereof consisting of the Extra Principal Distribution Amount)
on such Distribution Date).
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (i) the Excess
Overcollateralization Amount for such Distribution Date and (ii) the Principal
Remittance Amount for such Distribution Date.
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Overcollateralization Target Amount: With respect to any Distribution
Date: (1) through the Distribution Date in June 2007, $0, and (2) beginning with
the Distribution Date in July 2007 and (a) prior to the Stepdown Date, an amount
equal to 2.10% of the sum of the Initial Cut-off Date Pool Principal Balance and
the Pre-Funded Amount and (b) on or after the Stepdown Date, the greater of (i)
an amount equal to 4.20% of the aggregate Stated Principal Balance of the
Mortgage Loans for that Distribution Date and (ii) the OC Floor; provided,
however, that if a Trigger Event is in effect on any Distribution Date, the
Overcollateralization Target Amount will be the Overcollateralization Target
Amount as in effect for the prior Distribution Date.
Overcollateralized Amount: With respect to any Distribution Date, the
amount, if any, by which (x) the sum of the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date and any amount on deposit in
the Pre-Funding Account exceeds (y) the aggregate Certificate Principal Balance
of the Class A Certificates as of such Distribution Date (after giving effect to
the distribution of the Principal Remittance Amount on such Distribution Date
and, in the case of the Distribution Date immediately following the end of the
Funding Period, any amounts to be released from the Pre-Funding Account).
Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Park Granada: Park Granada LLC, a Delaware limited liability company,
and its successors and assigns.
Park Granada Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Granada is the applicable Seller.
Park Monaco: Park Monaco Inc., a Delaware corporation, and its
successors and assigns.
Park Monaco Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Monaco is the applicable Seller.
Park Sienna: Park Sienna LLC, a Delaware limited liability company, and
its successors and assigns.
Park Sienna Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Sienna is the applicable Seller.
Pass-Through Margin: With respect to any Distribution Date and (1) the
Class A-1 Certificates, 0.140% per annum, (2) the Class A-2 Certificates, 0.250%
per annum and (3) the Class A-3 Certificates, 0.380% per annum.
Pass-Through Rate: With respect to any Accrual Period and each Class of
Interest-Bearing Certificates, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
27
Percentage Interest: With respect to any Interest-Bearing Certificate,
a fraction, expressed as a percentage, the numerator of which is the Certificate
Principal Balance represented by such Certificate and the denominator of which
is the aggregate Certificate Principal Balance of the related Class. With
respect to the Class C, Class E-P, Class P and Class A-R Certificates, the
portion of the Class evidenced thereby, expressed as a percentage, as stated on
the face of such Certificate or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the same Class.
Performance Certification: As defined in Section 11.05.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as each Rating Agency has confirmed in writing is sufficient for
the ratings originally assigned to the Certificates by such Rating
Agency (without regard to the Certificate Insurance Policy, in the case
of the Class A Certificates);
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as each Rating Agency has
confirmed in writing is sufficient for the ratings originally assigned
to the Certificates by such Rating Agency (without regard to the
Certificate Insurance Policy, in the case of the Class A Certificates);
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding company,
but only if Xxxxx'x is not a Rating Agency) are then rated one of the
two highest long-term and the highest short-term ratings of each such
Rating Agency for such securities, or such lower ratings as each Rating
Agency has confirmed in writing is sufficient for the ratings
originally assigned to the Certificates by such Rating Agency (without
regard to the Certificate Insurance Policy, in the case of the Class A
Certificates);
(v) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
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(vi) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest long term ratings of each Rating Agency (except (x) if the
Rating Agency is Moody's, such rating shall be the highest commercial
paper rating of S&P for any such securities) and (y), or such lower
rating as each Rating Agency has confirmed in writing is sufficient for
the ratings originally assigned to the Certificates by such Rating
Agency (without regard to the Certificate Insurance Policy, in the case
of the Class A Certificates);
(vii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable long term
rating by each Rating Agency or such lower rating as each Rating Agency
has confirmed in writing is sufficient for the ratings originally
assigned to the Certificates by such Rating Agency (without regard to
the Certificate Insurance Policy, in the case of the Class A
Certificates);
(viii) short term investment funds sponsored by any trust
company or national banking association incorporated under the laws of
the United States or any state thereof which on the date of acquisition
has been rated by each Rating Agency in their respective highest
applicable rating category or such lower rating as each Rating Agency
has confirmed in writing is sufficient for the ratings originally
assigned to the Certificates by such Rating Agency (without regard to
the Certificate Insurance Policy, in the case of the Class A
Certificates); and
(ix) such other relatively risk free investments having a
specified stated maturity and bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any
Rating Agency (without regard to the Certificate Insurance Policy, in
the case of the Class A Certificates), as evidenced by a signed writing
delivered by each Rating Agency, and reasonably acceptable to the NIM
Insurer and the Certificate Insurer, as evidenced by a signed writing
delivered by the NIM Insurer and the Certificate Insurer;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes,
29
unless the Master Servicer shall receive an Opinion of Counsel, at the expense
of Master Servicer, to the effect that such investment will not adversely affect
the status of any such REMIC as a REMIC under the Code or result in imposition
of a tax on any such REMIC. Permitted Investments that are subject to prepayment
or call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States Persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC formed hereunder to fail to
qualify as a REMIC at any time that any Certificates are Outstanding. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.
Plan: An "employee benefit plan" as defined in section 3(3) of ERISA
that is subject to Title I of ERISA, a "plan" as defined in section 4975 of the
Code that is subject to section 4975 of the Code, or any Person investing on
behalf of or with plan assets (as defined in 29 CFR ss.2510.3-101 or otherwise
under ERISA) of such an employee benefit plan or plan.
Pool Stated Principal Balance: The aggregate of the Stated Principal
Balances of the Mortgage Loans which were Outstanding Mortgage Loans.
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Pre-Funded Amount: The amount deposited in the Pre-Funding Account on
the Closing Date, which shall equal $103,872,796.73.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and the Certificate Insurer and
designated "The Bank of New York, in trust for registered holders of CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2007-S3." Funds in the
Pre-Funding Account shall be held in trust for the Certificateholders and the
Certificate Insurer for the uses and purposes set forth in this Agreement and
shall not be a part of any REMIC created hereunder, provided, however that any
investment income earned from Permitted Investments made with funds in the
Pre-Funding Account will be for the account of CHL.
Preference Amount: As defined in the Certificate Insurance Policy.
Preference Claim: As defined in Section 4.06(h).
Premium Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.05 in the name of the Trustee for the
benefit of the Certificateholders and the Certificate Insurer and designated
"The Bank of New York, in trust for registered holders of CWHEQ, Inc., Home
Equity Loan Asset Backed Certificates, Series 2007-S3." Funds in the Premium
Account shall be held in trust for the Certificateholders and the Certificate
Insurer for the uses and purposes set forth in this Agreement.
Prepayment Assumption: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to the Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan within the related Prepayment Charge Period in accordance with the
terms thereof (other than any Master Servicer Prepayment Charge Payment Amount).
Prepayment Charge Period: With respect to any Mortgage Loan, the period
of time during which a Prepayment Charge may be imposed.
Prepayment Charge Schedule: As of the Initial Cut-off Date with respect
to each Initial Mortgage Loan and as of the Subsequent Cut-off Date with respect
to each Subsequent Mortgage Loan, a list attached hereto as Schedule I
(including the Prepayment Charge Summary attached thereto), setting forth the
following information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
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(iv) the date on which the first monthly payment was due on
the related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of
the Cut-off Date.
As of the Closing Date, the Prepayment Charge Schedule shall contain
the necessary information for each Initial Mortgage Loan. The Prepayment Charge
Schedule shall be amended by the Master Servicer upon the sale of any Subsequent
Mortgage Loans to the Trust Fund. In addition, the Prepayment Charge Schedule
shall be amended from time to time by the Master Servicer in accordance with the
provisions of this Agreement and a copy of each related amendment shall be
furnished by the Master Servicer to the Class P and Class C Certificateholders
and the NIM Insurer.
Prepayment Interest Excess: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a Principal Prepayment during the
period from the related Due Date to the end of the related Prepayment Period,
any payment of interest received in connection therewith (net of any applicable
Servicing Fee) representing interest accrued for any portion of such month of
receipt.
Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal Prepayment or
a Principal Prepayment in full during the period from the beginning of the
related Prepayment Period to the Due Date in such Prepayment Period (other than
a Principal Prepayment in full resulting from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof) and for each Mortgage
Loan that became a Liquidated Mortgage Loan during the related Due Period, the
amount, if any, by which (i) one month's interest at the applicable Net Mortgage
Rate on the Stated Principal Balance of such Mortgage Loan immediately prior to
such prepayment (or liquidation) or in the case of a partial Principal
Prepayment on the amount of such prepayment (or Liquidation Proceeds) exceeds
(ii) the amount of interest paid or collected in connection with such Principal
Prepayment or such Liquidation Proceeds.
Prepayment Period: As to any Distribution Date and related Due Date,
the period beginning with the opening of business on the sixteenth day of the
calendar month preceding the month in which such Distribution Date occurs (or,
with respect to the first Distribution Date, the period beginning with the
opening of business on March 2, 2007) and ending on the close of business on the
fifteenth day of the month in which such Distribution Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of New York,
as publicly announced to be in effect from time to time. The Prime Rate shall be
adjusted automatically, without notice, on the effective date of any change in
such prime commercial lending rate. The Prime Rate is not necessarily The Bank
of New York's lowest rate of interest.
Principal Distribution Amount: With respect to each Distribution Date,
the sum of (i) the Principal Remittance Amount for such Distribution Date, less
any portion of such amount used to cover any payment due to the Swap
Counterparty with respect to such
32
Distribution Date, (ii) the Extra Principal Distribution Amount for such
Distribution Date, and (iii) with respect to the Distribution Date immediately
following the end of the Funding Period, the amount, if any, remaining in the
Pre-Funding Account at the end of the Funding Period (net of any investment
income therefrom), minus (iv) the Overcollateralization Reduction Amount for
such Distribution Date.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 2.07, 3.12 and 9.01
hereof) that is received in advance of its scheduled Due Date to the extent it
is not accompanied by an amount as to interest representing scheduled interest
due on any date or dates in any month or months subsequent to the month of
prepayment. Partial Principal Prepayments shall be applied by the Master
Servicer in accordance with the terms of the related Mortgage Note.
Principal Remittance Amount: With respect to any Distribution Date, (a)
the sum, without duplication, of: (i) the scheduled principal collected with
respect to the Mortgage Loans during the related Due Period or advanced with
respect to such Distribution Date, (ii) Principal Prepayments collected in the
related Prepayment Period with respect to the Mortgage Loans, (iii) the Stated
Principal Balance of each Mortgage Loan that was repurchased by a Seller or
purchased by the Master Servicer with respect to such Distribution Date, (iv)
the amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loans delivered by the Sellers in connection with a
substitution of a Mortgage Loan is less than the aggregate unpaid principal
balance of any Deleted Mortgage Loans, (v) any payments received under the
Credit Insurance Policy attributable to principal for the related Due Period,
(vi) any Loss Coverage Payment attributable to principal for the related Due
Period, and (vii) all Liquidation Proceeds (to the extent such Liquidation
Proceeds related to principal) and Subsequent Recoveries collected during the
related Due Period; less (b) all Advances relating to principal and certain
expenses reimbursable pursuant to Section 6.03 and reimbursed during the related
Due Period.
Principal Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered Holders of CWHEQ, Inc., Home Equity Loan Asset
Backed Certificates, Series 2007-S3". Funds in the Principal Reserve Fund shall
be held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Private Certificates: The Class C, Class E-P and Class P Certificates.
Prospectus: The prospectus dated November 15, 2006, relating to asset
backed securities to be sold by the Depositor.
Prospectus Supplement: The prospectus supplement dated March 29, 2007,
relating to the public offering of the certain Classes of Certificates offered
thereby.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
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Purchase Price: With respect to any Mortgage Loan (x) required to be
(1) repurchased by a Seller or purchased by the Master Servicer, as applicable,
pursuant to Section 2.02, 2.03, 2.07 or 3.12 hereof or (2) repurchased by the
Depositor pursuant to Section 2.04 hereof, or (y) that the Master Servicer has a
right to purchase pursuant to Section 3.12 hereof, an amount equal to the sum of
(i) 100% of the unpaid principal balance (or, if such purchase or repurchase, as
the case may be, is effected by the Master Servicer, the Stated Principal
Balance (without giving effect to the second sentence of the definition of
Stated Principal Balance)) of the Mortgage Loan as of the date of such purchase,
(ii) accrued interest thereon at the applicable Mortgage Rate (or, if such
purchase or repurchase, as the case may be, is effected by the Master Servicer,
at the Net Mortgage Rate) from (a) the date through which interest was last paid
by the Mortgagor (or, if such purchase or repurchase, as the case may be, is
effected by the Master Servicer, the date through which interest was last
advanced by and not reimbursed to the Master Servicer) to (b) the Due Date in
the month in which the Purchase Price is to be distributed to Certificateholders
and (iii) any costs, expenses and damages incurred by the Trust Fund resulting
from any violation of any predatory or abusive lending law in connection with
such Mortgage Loan.
Qualified Bidder: With respect to any auction pursuant to Section 9.04,
any institution that is a regular purchaser and/or seller in the secondary
market of residential mortgage loans as determined by the Trustee (or any
advisor on its behalf), in its sole discretion, and any holder of an interest in
the Class C Certificates; provided, however, that neither CHL nor any of its
affiliates shall constitute a Qualified Bidder.
Rating Agency: Each of Xxxxx'x and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person
identified as a "Rating Agency" in the Underwriter's Exemption, designated by
the Depositor with the prior written consent of the Certificate Insurer, notice
of which designation shall be given to the Trustee. References herein to a given
rating category of a Rating Agency shall mean such rating category without
giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of such Liquidated Mortgage Loan as of the date of such liquidation,
minus (ii) the Liquidation Proceeds, if any, received in connection with such
liquidation during the month in which such liquidation occurs, to the extent
applied as recoveries of principal of the Liquidated Mortgage Loan. With respect
to each Mortgage Loan that has become the subject of a Deficient Valuation, (i)
if the value of the related Mortgaged Property was reduced below the principal
balance of the related Mortgage Note, the amount by which the value of the
Mortgaged Property was reduced below the principal balance of the related
Mortgage Note and (ii) if the principal amount due under the related Mortgage
Note has been reduced, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Charged-off Mortgage Loan, the Stated Principal Balance
thereof at the time it became a Charged-off Mortgage Loan.
34
Record Date: With respect to any Distribution Date and the
Adjustable-Rate Certificates, the Business Day immediately preceding such
Distribution Date, or if such Certificates are no longer Book-Entry
Certificates, the last Business Day of the month preceding the month of such
Distribution Date. With respect to the Class A-R, Class C, Class E-P and Class P
Certificates, the last Business Day of the month preceding the month of a
Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the arithmetic
mean (rounded upwards, if necessary, to the nearest whole multiple of 0.03125%)
of the offered rates for United States dollar deposits for one month that are
quoted by the Reference Banks as of 11:00 a.m., New York City time, on the
related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the
outstanding aggregate Certificate Principal Balance of the Adjustable-Rate
Certificates on such Interest Determination Date, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple of 0.03125%) of the rates quoted by one
or more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York City time, on such date for loans in U.S. dollars to leading European
banks for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Adjustable-Rate Certificates on such
Interest Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor,
CHL or the Master Servicer and (iii) which have been designated as such by the
Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than the Class A-R
Certificates.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time and publicly available.
Relief Act: The Servicemembers Civil Relief Act.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits which appear at section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
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Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM Insurer in accordance with Section 4.01.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a Seller for
a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for File Release, (i) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) have the same or higher
credit quality characteristics than that of the Deleted Mortgage Loan; (iii) be
accruing interest at a rate not more than 1% per annum higher or lower than that
of the Deleted Mortgage Loan; (iv) have a Combined Loan-to-Value Ratio no higher
than that of the Deleted Mortgage Loan; (v) have a remaining term to maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (vi) not permit conversion of the Mortgage Rate from a fixed rate
to a variable rate; (vii) provide for a Prepayment Charge on terms substantially
similar to those of the Prepayment Charge, if any, of the Deleted Mortgage Loan;
(viii) have the same occupancy type and lien priority as the Deleted Mortgage
Loan; and (ix) comply with each representation and warranty set forth in Section
2.03 as of the date of substitution; provided, however, that notwithstanding the
foregoing, to the extent that compliance with clause (ix) of this definition
would cause a proposed Replacement Mortgage Loan to fail to comply with one or
more of clauses (i), (iii), (vii) and/or (viii) of this definition, then such
proposed Replacement Mortgage Loan must comply with clause (ix) and need not
comply with one or more of clauses (i), (iii), (vii) and/or (viii), to the
extent, and only to the extent, necessary to assure that the Replacement
Mortgage Loan otherwise complies with clause (ix).
Reportable Event: Any event required to be reported on Form 8-K, and in
any event, the following:
(a) entry into a definitive agreement related to the Trust Fund, the
Certificates or the Mortgage Loans, or an amendment to a Transaction Document,
even if the Depositor is not a party to such agreement (e.g., a servicing
agreement with a servicer contemplated by Item 1108(a)(3) of Regulation AB);
(b) termination of a Transaction Document (other than by expiration of
the agreement on its stated termination date or as a result of all parties
completing their obligations under such agreement), even if the Depositor is not
a party to such agreement (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to the Master Servicer only, if the Master Servicer
becomes aware of any bankruptcy or receivership with respect to CHL, the
Depositor, the Master Servicer, any Subservicer, the Trustee, the Corridor
Contract Counterparty, the Swap Counterparty, any enhancement or support
provider contemplated by Items 1114(b) or 1115 of Regulation AB, or any other
material party contemplated by Item 1101(d)(1) of Regulation AB;
36
(d) with respect to the Trustee, the Master Servicer and the Depositor
only, the occurrence of an early amortization, performance trigger or other
event, including an Event of Default under this Agreement;
(e) any amendment to this Agreement;
(f) the resignation, removal, replacement, substitution of the Master
Servicer, any Subservicer, the Trustee or any co-trustee;
(g) with respect to the Master Servicer only, if the Master Servicer
becomes aware that (i) any material enhancement or support specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB that was
previously applicable regarding one or more classes of the Certificates has
terminated other than by expiration of the contract on its stated termination
date or as a result of all parties completing their obligations under such
agreement; (ii) any material enhancement specified in Item 1114(a)(1) through
(3) of Regulation AB or Item 1115 of Regulation AB has been added with respect
to one or more classes of the Certificates; or (iii) any existing material
enhancement or support specified in Item 1114(a)(1) through (3) of Regulation AB
or Item 1115 of Regulation AB with respect to one or more classes of the
Certificates has been materially amended or modified; and
(h) with respect to the Trustee, the Master Servicer and the Depositor
only, a required distribution to Holders of the Certificates is not made as of
the required Distribution Date under this Agreement.
Reporting Subcontractor: With respect to the Master Servicer or the
Trustee, any Subcontractor determined by such Person pursuant to Section
11.08(b) to be "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB. References to a Reporting Subcontractor shall refer
only to the Subcontractor of such Person and shall not refer to Subcontractors
generally.
Representing Party: As defined in Section 2.03(f).
Request for Document Release: A Request for Document Release submitted
by the Master Servicer to the Trustee, substantially in the form of Exhibit M.
Request for File Release: A Request for File Release submitted by the
Master Servicer to the Trustee, substantially in the form of Exhibit N.
Required Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the excess of (i) $1,000 over (ii) the
amount of funds on deposit in the Carryover Reserve Fund.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement, including with respect to the Covered Loans, the Credit Insurance
Policy.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any
37
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also to whom, with respect
to a particular matter, such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any Distribution
Date on or after the Stepdown Date, the average of the Sixty-Day Delinquency
Rates for that Distribution Date and the two immediately preceding Distribution
Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. and its successors.
Xxxxxxxx-Xxxxx Certification: As defined in Section 11.05.
Scheduled Payment: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and/or interest due on any Due Date on such
Mortgage Loan which is payable by the related Mortgagor from time to time under
the related Mortgage Note, determined: (a) after giving effect to (i) any
Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage
Loan and (ii) any reduction in the amount of interest collectible from the
related Mortgagor pursuant to the Relief Act or any similar state or local law;
(b) without giving effect to any extension granted or agreed to by the Master
Servicer pursuant to Section 3.05(a); and (c) on the assumption that all other
amounts, if any, due under such Mortgage Loan are paid when due.
Securities Act: The Securities Act of 1933, as amended.
Seller Interest Shortfall Payment: With respect to any Initial Mortgage
Loan that does not have a Scheduled Payment of interest due on or before the Due
Date in the month of the first Distribution Date or any Subsequent Mortgage Loan
that does not have a Scheduled Payment of interest due date on or before the Due
Date in the month immediately following the related Subsequent Transfer Date, an
amount equal to one month's interest at the related Net Mortgage Rate on the
Cut-off Date Principal Balance of that Mortgage Loan.
Sellers: CHL, in its capacity as seller of the CHL Mortgage Loans to
the Depositor, Park Granada, in its capacity as seller of the Park Granada
Mortgage Loans to the Depositor, Park Monaco, in its capacity as seller of the
Park Monaco Mortgage Loans to the Depositor and Park Sienna, in its capacity as
seller of the Park Sienna Mortgage Loans to the Depositor.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged Property, (ii)
any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property, (iv) auction costs and
38
expenses in connection with Charged-off Mortgage Loans and (v) compliance with
the obligations under Section 3.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan for the preceding Distribution Date or,
in the event of any payment of interest that accompanies a Principal Prepayment
in full made by the Mortgagor, interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan for the period covered by such payment
of interest. The Servicing Fee will not accrue on any Charged-off Mortgage Loan
after the related Charge-off Date.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date on or
after the Stepdown Date, a fraction, expressed as a percentage, the numerator of
which is the aggregate Stated Principal Balance for such Distribution Date of
all Mortgage Loans 60 or more days delinquent as of the close of business on the
last day of the calendar month preceding such Distribution Date (including
Mortgage Loans in foreclosure, bankruptcy and REO Properties) and the
denominator of which is the aggregate Stated Principal Balance for such
Distribution Date of all Mortgage Loans.
Sponsor Loss Coverage Amount: With respect to any Distribution Date,
the amount by which 1.00% of the sum of the aggregate Cut-off Date Principal
Balance of the Initial Mortgage Loans and the Pre-Funded Amount exceeds the
aggregate amount of Loss Coverage Payments, if any, made prior to such
Distribution Date.
Sponsor Loss Coverage Obligation: The obligation of CHL described in
Section 2.08 with respect to Loss Coverage Payments.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the unpaid principal balance of the
Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due on or prior to such date and
irrespective of any delinquency in payment by the related Mortgagor, and (ii) as
of any other Distribution Date, the Stated Principal Balance of the Mortgage
Loan as of its Cut-off Date, minus the sum of (a) the principal portion of the
Scheduled Payments (x) due with respect to such Mortgage Loan during each Due
Period ending prior to such Distribution Date and (y) that were received by the
Master Servicer as of the close of business on the Determination Date related to
such Distribution Date or with respect to which Advances were made as of the
Master Servicer
39
Advance Date related to such Distribution Date, (b) all Principal Prepayments
with respect to such Mortgage Loan received by the Master Servicer during each
Prepayment Period ending prior to such Distribution Date, (c) all Liquidation
Proceeds collected with respect to such Mortgage Loan during each Due Period
ending prior to such Distribution Date, to the extent applied by the Master
Servicer as recoveries of principal in accordance with Section 3.12 and (d) any
Realized Loss previously incurred in connection with a Deficient Valuation. The
Stated Principal Balance of any Mortgage Loan that becomes a Liquidated Mortgage
Loan will be zero on each date following the Due Period in which such Mortgage
Loan becomes a Liquidated Mortgage Loan, and the Stated Principal Balance of a
Charged-off Mortgage Loan will be zero on the date following the date on which
it became a Charged-off Mortgage Loan. References herein to the Stated Principal
Balance of the Mortgage Loans at any time shall mean the aggregate Stated
Principal Balance of all Mortgage Loans in the Trust Fund as of such time.
Stepdown Date: The later to occur of (i) the Distribution Date in
October 2009 and (ii) the first Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans for that Distribution Date is less than
or equal to 50.00% of the sum of the Initial Cut-off Date Pool Principal Balance
and the Pre-Funded Amount.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to the Mortgage Loans under the direction or authority of the
Master Servicer or a Subservicer or the Trustee, as the case may be.
Subsequent Certificate Account Deposit: With respect to any Subsequent
Transfer Date, an amount equal to the aggregate of all amounts in respect of (i)
principal of the related Subsequent Mortgage Loans due after the related
Subsequent Cut-off Date and received by the Master Servicer on or before such
Subsequent Transfer Date and not applied in computing the Cut-off Date Principal
Balance thereof and (ii) interest on the such Subsequent Mortgage Loans due
after such Subsequent Cut-off Date and received by the Master Servicer on or
before the Subsequent Transfer Date.
Subsequent Cut-off Date: In the case of any Subsequent Mortgage Loan,
the later of (x) the first day of the month of the related Subsequent Transfer
Date and (y) the date of origination of such Subsequent Mortgage Loan.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the Trustee on
a Subsequent Transfer Date, and listed on the related Loan Number and Borrower
Identification Mortgage Loan Schedule delivered pursuant to Section 2.01(f).
When used with respect to a single Subsequent Transfer Date, "Subsequent
Mortgage Loan" shall mean a Subsequent Mortgage Loan conveyed to the Trustee on
such Subsequent Transfer Date.
Subsequent Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar
month, unexpected amounts received by the Master Servicer (net of any related
expenses permitted to be reimbursed pursuant to Section 3.08 and 3.12)
specifically related to such Liquidated Mortgage Loan after the
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classification of such Mortgage Loan as a Liquidated Mortgage Loan. Subsequent
Recoveries shall not include Charged-off Loan Proceeds.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit P hereto, executed and delivered by the
Sellers, the Depositor and the Trustee as provided in Section 2.01(d).
Subsequent Transfer Date: For any Subsequent Transfer Agreement, the
"Subsequent Transfer Date" identified in such Subsequent Transfer Agreement;
provided, however, the Subsequent Transfer Date for any Subsequent Transfer
Agreement must be a Business Day and may not be a date earlier than the date on
which the Subsequent Transfer Agreement is executed and delivered by the parties
thereto pursuant to Section 2.01(d).
Subsequent Transfer Date Purchase Amount: With respect to any
Subsequent Transfer Date, the "Subsequent Transfer Date Purchase Amount"
identified in the related Subsequent Transfer Agreement which shall be an
estimate of the aggregate Stated Principal Balances of the Subsequent Mortgage
Loans identified in such Subsequent Transfer Agreement.
Subsequent Transfer Date Transfer Amount: With respect to any
Subsequent Transfer Date, an amount equal to the lesser of (i) the aggregate
Stated Principal Balances as of the related Subsequent Cut-off Dates of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, as listed
on the related Loan Number and Borrower Identification Mortgage Loan Schedule
delivered pursuant to Section 2.01(f) and (ii) the amount on deposit in the
Pre-Funding Account.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(f).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(f), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
Successful Auction: An auction held pursuant to Section 9.04 at which
at least three Qualified Bidders submitted bids and at least one of those bids
was an Acceptable Bid Amount.
Swap Account: The separate Eligible Account created and initially
maintained by the Swap Trustee pursuant to Section 4.09.
Swap Confirmation: The confirmation, reference number CXCWL07S3, with a
trade date of March 27, 2007 evidencing a transaction between the Swap
Counterparty and CHL relating to the Swap Contract.
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Swap Contract: The transaction evidenced by the Swap Confirmation (as
assigned to the Swap Contract Administrator pursuant to the Swap Contract
Assignment Agreement).
Swap Contract Administration Agreement: The swap contract
administration agreement dated as of the Closing Date among CHL, the Trustee and
the Swap Contract Administrator.
Swap Contract Administrator: The Bank of New York, in its capacity as
swap contract administrator under the Swap Contract Administration Agreement and
its successors and assigns.
Swap Contract Assignment Agreement: The Assignment Agreement dated as
of the Closing Date among CHL, the Swap Contract Administrator and the Swap
Counterparty.
Swap Contract Termination Date: The Distribution Date in March 2014.
Swap Counterparty: Bear Xxxxxxx Capital Markets Inc. and its
successors.
Swap Counterparty Trigger Event: Either (i) an "Event of Default" under
the Swap Contract with respect to which the Swap Counterparty is the sole
"Defaulting Party" (as defined in the Swap Contract) or (ii) a "Termination
Event" (other than an Illegality or a Tax Event (as such terms are defined in
the Swap Contract)) or "Additional Termination Event" under the Swap Contract
with respect to which the Swap Counterparty is the sole "Affected Party" (as
defined in the Swap Contract).
Swap Reserve Fund: The separate Eligible Account created and initially
maintained by the Trustee pursuant to Section 4.09 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New York
in trust for registered Holders of CWHEQ, Inc., Asset-Backed Certificates,
Series 2007-S3". Funds in the Swap Reserve Fund shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Swap Reserve Fund O/C Deficiency Amount: For any Distribution Date, an
amount equal to the Overcollateralization Deficiency Amount for such
Distribution Date after giving effect to the distribution of the Principal
Distribution Amount, Excess Cashflow and the Net Swap Payment, if any, on such
Distribution Date.
Swap Termination Payment: The payment payable to either party under the
Swap Contract due to an early termination of the Swap Contract.
Swap Trust: The trust fund established by Section 4.09.
Swap Trustee: The Bank of New York, a New York banking corporation, not
in its individual capacity, but solely in its capacity as trustee of the Swap
Trust for the benefit of the Holders of the Class A Certificates under this
Agreement, and any successor thereto, and any corporation or national banking
association resulting from or surviving any consolidation or
42
merger to which it or its successors may be a party and any successor trustee as
may from time to time be serving as successor trustee hereunder.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and Treasury
regulation ss. 301.6231(a)(7)-1. Initially, this person shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.05 and in the form of Exhibit E hereto.
Terminator: As defined in Section 9.01.
Termination Price: As defined in Section 9.01.
Transaction Documents: This Agreement, the Corridor Contract, the
Corridor Contract Administration Agreement, the Credit Insurance Policy, the
Swap Contract, the Swap Contract Administration Agreement, the Certificate
Insurance Policy, the Insurance and Indemnity Agreement and any other document
or agreement entered into in connection with the Trust Fund, the Certificates or
the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date on or after the
Stepdown Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger
Event is in effect with respect to that Distribution Date.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(2); (ii) the
Certificate Account, the Distribution Account, the Principal Reserve Fund, the
Carryover Reserve Fund, the Pre-Funding Account, the Capitalized Interest
Account, the Premium Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) the rights to receive certain
proceeds of the Corridor Contract as provided in the Corridor Contract
Administration Agreement; (iv) property that secured a Mortgage Loan and has
been acquired by foreclosure, deed in lieu of foreclosure or otherwise; (v) the
mortgagee's rights under the Insurance Policies with respect to the Mortgage
Loan; (vi) rights under the Credit Insurance Policy; (vii) the rights of the
Trustee for the benefit of the Class A Certificateholders under the Certificate
Insurance Policy; and (viii) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.
Trustee: The Bank of New York, a New York banking corporation, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders
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and the Certificate Insurer under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Trustee Advance Notice: As defined in Section 4.01(d).
Trustee Advance Rate: With respect to any Advance made by the Trustee
pursuant to Section 4.01(d), a per annum rate of interest determined as of the
date of such Advance equal to the Prime Rate in effect on such date plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i) the Pool Stated
Principal Balance and (ii) any amounts remaining in the Pre-Funding Account
(excluding any investment earnings thereon) with respect to such Distribution
Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum
rate agreed upon in writing on or prior to the Closing Date by the Trustee and
the Depositor, which is 0.009% per annum.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
Underwriters: Countrywide Securities Corporation and Greenwich Capital
Markets, Inc.
Unpaid Realized Loss Amount: For any Class of Certificates and any
Distribution Date, (x) the portion of the aggregate Applied Realized Loss Amount
allocated to that Class and remaining unpaid (in the case of any Class of Class
A Certificates, without regard to any payment made by the Certificate Insurer in
respect of that Class under the Certificate Insurance Policy) minus (y) the sum
of (1) the Charged-off Loan Proceeds distributed in respect of such Class of
Certificates on any prior Distribution Date pursuant to Section 4.04(c), (2)
amounts on deposit in the Premium Account distributed in respect of such Class
of Certificates on any prior Distribution Date pursuant to Section 4.04(k)(iv),
(3) Excess Cashflow distributed in respect of such Class of Certificates on any
prior Distribution Date pursuant to Section 4.04(d)(2) and (4) either (a) any
increase in the Certificate Principal Balance of that Class due to the
allocation of Subsequent Recoveries to the Certificate Principal Balance of that
Class pursuant to Section 4.04(j) or (b) in the case of any Class of Class A
Certificates, the amount of any Subsequent Recovery paid to the Certificate
Insurer in respect of that Class.
Voting Rights: The voting rights of all the Certificates that are
allocated to any Certificates for purposes of the voting provisions hereunder.
Voting Rights allocated to each Class of Certificates shall be allocated 96% to
the Certificates other than the Class A-R, Class C, Class E-P and Class P
Certificates (with the allocation among the Certificates to be in proportion to
the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes), and 1% to each of the Class A-R,
Class C, Class E-P and Class P Certificates. Voting Rights will be allocated
among the Certificates of each such Class in
44
accordance with their respective Percentage Interests. Notwithstanding any of
the foregoing, on any date on which any Class A Certificates are outstanding or
any amounts are owed the Certificate Insurer under this Agreement, unless a
Certificate Insurer Default shall have occurred and be continuing, the
Certificate Insurer will be entitled to exercise the Voting Rights of the Class
A Certificateholders, without the consent of the Class A Certificateholders, and
the Class A Certificateholders may exercise such rights only with the prior
written consent of the Certificate Insurer.
Winning Bidder: With respect to a Successful Auction, the Qualified
Bidder that bids the highest price.
Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined meanings
when used in any certificate, agreement or other document delivered pursuant
hereto unless otherwise defined therein. For purposes of this Agreement and all
such certificates and other documents, unless the context otherwise requires:
(a) accounting terms not otherwise defined in this Agreement, and accounting
terms partly defined in this Agreement to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles; (b) the words "hereof," "herein" and "hereunder" and words of
similar import refer to this Agreement (or the certificate, agreement or other
document in which they are used) as a whole and not to any particular provision
of this Agreement (or such certificate, agreement or document); (c) references
to any Section, Schedule or Exhibit are references to Sections, Schedules and
Exhibits in or to this Agreement, and references to any paragraph, subsection,
clause or other subdivision within any Section or definition refer to such
paragraph, subsection, clause or other subdivision of such Section or
definition; (d) the term "including" means "including without limitation"; (e)
references to any law or regulation refer to that law or regulation as amended
from time to time and include any successor law or regulation; (f) references to
any agreement refer to that agreement as amended from time to time; (g)
references to any Person include that Person's permitted successors and assigns;
and (h) a Mortgage Loan is "30 days delinquent" if a Scheduled Payment has not
been received by the close of business on the Due Date on which the next
Scheduled Payment is due. Similarly for "60 days delinquent," "90 days
delinquent" and so on.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of such Seller in and to the applicable Initial Mortgage Loans,
including all interest and principal received and receivable by such Seller on
or with respect to applicable Initial Mortgage Loans after the Initial Cut-off
Date (to the extent not applied in computing the Cut-off Date Principal Balance
thereof) or
45
deposited into the Certificate Account by the Master Servicer on behalf of such
Seller as part of the Initial Certificate Account Deposit as provided in this
Agreement, other than principal due on the applicable Initial Mortgage Loans on
or prior to the Initial Cut-off Date and interest accruing prior to the Initial
Cut-off Date. The Master Servicer confirms that, on behalf of the Sellers,
concurrently with the transfer and assignment, it has deposited into the
Certificate Account the Initial Certificate Account Deposit.
Immediately upon the conveyance of the Initial Mortgage Loans referred
to in the preceding paragraph, the Depositor (i) sells, transfers, assigns, sets
over and otherwise conveys to the Trustee for benefit of the Certificateholders
and the Certificate Insurer, without recourse, all right title and interest in
the Initial Mortgage Loans, (ii) causes the Certificate Insurer to deliver the
Certificate Insurance Policy to the Trustee and (iii) causes the Credit Insurer
to deliver the Credit Insurance Policy to the Trustee.
CHL further agrees (x) to cause The Bank of New York to enter into the
Corridor Contract Administration Agreement as Corridor Contract Administrator
and (y) to assign all of its right, title and interest in and to the interest
rate corridor transaction evidenced by each Confirmation, and to cause all of
its obligations in respect of such transaction to be assumed by, the Corridor
Contract Administrator, on the terms and conditions set forth in the Corridor
Contract Assignment Agreement.
In addition, CHL further agrees (x) to cause The Bank of New York to
enter into the Swap Contract Administration Agreement as Swap Contract
Administrator and (y) to assign all of its right, title and interest in and to
the interest rate swap transaction evidenced by the Swap Confirmation, and to
cause all of its obligations in respect of such transaction to be assumed by,
the Swap Contract Administrator, on the terms and conditions set forth in the
Swap Contract Assignment Agreement.
(b) Subject to the execution and delivery of the related Subsequent
Transfer Agreement as provided by Section 2.01(d) and the terms and conditions
of this Agreement, each Seller sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, on each Subsequent
Transfer Date, all the right, title and interest of such Seller in and to the
related Subsequent Mortgage Loans, including all interest and principal received
and receivable by such Seller on or with respect to such Subsequent Mortgage
Loans after the related Subsequent Cut-off Date (to the extent not applied in
computing the Cut-off Date Principal Balance thereof) or deposited into the
Certificate Account by the Master Servicer on behalf of such Seller as part of
any related Subsequent Certificate Account Deposit as provided in this
Agreement, other than principal due on such Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date and interest accruing prior to the
related Subsequent Cut-off Date.
Immediately upon the conveyance of the Subsequent Mortgage Loans
referred to in the preceding paragraph, the Depositor sells, transfers, assigns,
sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders and the Certificate Insurer, without recourse, all right
title and interest in the Subsequent Mortgage Loans.
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(c) Each Seller has entered into this Agreement in consideration for
the purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders and the
Certificate Insurer, without recourse, all right title and interest in the
portion of the Trust Fund not otherwise conveyed to the Trustee pursuant to
Section 2.01(a) or (b).
(d) On any Business Day during the Funding Period designated by CHL to
the Trustee, the Sellers, the Depositor and the Trustee shall complete, execute
and deliver a Subsequent Transfer Agreement. After the execution and delivery of
such Subsequent Transfer Agreement, on the Subsequent Transfer Date, the Trustee
shall set aside in the Pre-Funding Account an amount equal to the related
Subsequent Transfer Date Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the satisfaction of each of the following
conditions:
(1) the Trustee, the Underwriters and the Certificate Insurer
will be provided Opinions of Counsel addressed to the Rating Agencies
and the Certificate Insurer as with respect to the sale of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date
(such opinions being substantially similar to the opinions delivered on
the Closing Date to the Rating Agencies and the Certificate Insurer
with respect to the sale of the Initial Mortgage Loans on the Closing
Date), to be delivered as provided in Section 2.01(f);
(2) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans does
not result in a reduction or withdrawal of any ratings assigned to the
Certificates by the Rating Agencies (without regard to the Certificate
Insurance Policy, in the case of the Class A Certificates);
(3) the Depositor shall deliver to the Trustee an Officer's
Certificate confirming the satisfaction of each of the conditions set
forth in this Section 2.01(e) required to be satisfied by such
Subsequent Transfer Date;
(4) each Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date satisfies the representations and warranties applicable
to it under this Agreement, provided, however, that with respect to a
breach of a representation and warranty with respect to a Subsequent
Mortgage Loan set forth in this clause (4), the obligation under
Section 2.03(f) of this Agreement of the applicable Seller, to cure,
repurchase or replace such Subsequent Mortgage Loan shall constitute
the sole remedy against such Seller respecting such breach available to
Certificateholders, the Depositor, the Certificate Insurer or the
Trustee;
(5) the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date were selected in a manner reasonably believed not to be
adverse to the interests of the Certificateholders or the Certificate
Insurer;
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(6) no Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date was 30 or more days delinquent as of the related Cut-off
Date;
(7) following the conveyance of the Subsequent Mortgage Loans
on such Subsequent Transfer Date, the characteristics of the Mortgage
Loans will not vary by more than the amount specified below from the
characteristics listed below; provided that for the purpose of making
such calculations, the characteristics for any Initial Mortgage Loan
made will be taken as of the Initial Cut-off Date and the
characteristics for any Subsequent Mortgage Loans will be taken as of
the Subsequent Cut-off Date;
Permitted
Variance
Characteristic Value or Range
-------------- ----- --------
Average Stated Principal Balance................................ $46,179 +/- 5.00%
Weighted Average Mortgage Rate.................................. 8.670% +/- 0.10%
Weighted Average Original Combined Loan-to-Value Ratio.......... 90.72% +/- 3.00%
Weighted Average Remaining Term to Maturity..................... 228 months +/-3 months
Weighted Average FICO Score..................................... 721 points +/-5 points
(8) none of the Sellers or the Depositor is insolvent and
neither of the Sellers nor the Depositor will be rendered insolvent by
the conveyance of Subsequent Mortgage Loans on such Subsequent Transfer
Date; and
(9) the Trustee, the Underwriters and the Certificate Insurer
will be provided with an Opinion of Counsel, which Opinion of Counsel
shall not be at the expense of either the Trustee or the Trust Fund,
addressed to the Trustee and the Certificate Insurer, to the effect
that such purchase of Subsequent Mortgage Loans will not (i) result in
the imposition of the tax on "prohibited transactions" on the Trust
Fund or contributions after the Startup Date, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any
REMIC formed hereunder to fail to qualify as a REMIC, such opinion to
be delivered as provided in Section 2.01(f).
The Trustee shall not be required to investigate or otherwise verify
compliance with these conditions, except for its own receipt of documents
specified above, and shall be entitled to rely on the required Officer's
Certificate.
(f) Within six Business Days after each Subsequent Transfer Date, upon
(1) delivery to the Trustee and the Certificate Insurer by the Depositor of the
Opinions of Counsel referred to in Section 2.01(e)(1) and (e)(9), (2) delivery
to the Trustee by CHL (on behalf of each Seller) of a Loan Number and Borrower
Identification Mortgage Loan Schedule reflecting the Subsequent Mortgage Loans
conveyed on such Subsequent Transfer Date, (3) deposit in the Certificate
Account by the Master Servicer on behalf of the Sellers of the applicable
Subsequent Certificate Account Deposit, and (4) delivery to the Trustee by the
Depositor of an Officer's Certificate confirming the satisfaction of each of the
conditions precedent set forth in this Section 2.01(f), the Trustee shall pay
the applicable Seller the Subsequent Transfer Date Transfer Amount from such
funds that were set aside in the Pre-Funding Account pursuant to Section
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2.01(d). The positive difference, if any, between the Subsequent Transfer Date
Transfer Amount and the Subsequent Transfer Date Purchase Amount shall be
re-invested by the Trustee in the Pre-Funding Account.
The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except for
its own receipt of documents specified above, and shall be entitled to rely on
the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the Depositor
shall deliver to the Trustee and the Certificate Insurer a letter of a
nationally recognized firm of independent public accountants stating whether or
not the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date
conform to the characteristics described in Section 2.01(e)(6) and (7). Promptly
after the end of the Funding Period, the Master Servicer shall deliver to the
Certificate Insurer a final data tape which includes all Mortgage Loans as of
the end of the Funding Period. Such data tape shall be in a format and contain
the information provided to the Certificate Insurer with respect to the Initial
Mortgage Loans.
(g) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered to, and deposited with, the Trustee (or, in
the case of the Delay Delivery Mortgage Loans, will deliver to, and deposit
with, the Trustee within the time periods specified in the definition of Delay
Delivery Mortgage Loans) (except as provided in clause (vi) below) for the
benefit of the Certificateholders and the Certificate Insurer, the following
documents or instruments with respect to each such Mortgage Loan so assigned
(with respect to each Mortgage Loan, clause (i) through (vi) below, together,
the "Mortgage File" for each such Mortgage Loan):
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the order
of ________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and interest
of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating
that the original Mortgage Note was lost or destroyed, together with a
copy of the related Mortgage Note and all such intervening
endorsements;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage, with recording information, and in the case of each MERS
Mortgage Loan, the original Mortgage or a copy of such Mortgage, with
recording information, noting the presence of the MIN of the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM Loan if
the Mortgage Loan is a MOM Loan, with evidence of recording indicated
thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;
49
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to "Home
Equity Loan Asset Backed Certificates, Series 2007-S3, CWHEQ, Inc., by
The Bank of New York, a New York banking corporation, as trustee under
the Pooling and Servicing Agreement dated as of March 1, 2007, without
recourse" or a copy of such assignment, with recording information,
(each such assignment, when duly and validly completed, to be in
recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which such assignment
relates);
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or a
copy of such assignments, with recording information (in each case
noting the presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the electronic
equivalent and all riders thereto or, in the event such original title
policy has not been received from the insurer, such original or
duplicate original lender's title policy and all riders thereto shall
be delivered within one year of the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, each Seller agrees that it will cause, at such Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have been assigned by such Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders and the
Certificate Insurer by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Sellers further agree that they will not, and will not
permit the Master Servicer to, and the Master Servicer agrees that it will not,
alter the codes referenced in this paragraph with respect to any Mortgage Loan
during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan a Seller cannot deliver the original recorded Mortgage or all
interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv) concurrently with the execution and delivery hereof,
such Seller shall deliver or cause to be delivered to the Trustee a true copy of
such Mortgage and of each such undelivered interim assignment of the Mortgage
each certified by such Seller, the applicable title company, escrow agent or
attorney, or the originator of such Mortgage, as the case may be, to be a true
and complete copy of the
50
original Mortgage or assignment of Mortgage submitted for recording. For any
such Mortgage Loan that is not a MERS Mortgage Loan each Seller shall promptly
deliver or cause to be delivered to the Trustee such original Mortgage and such
assignment or assignments with evidence of recording indicated thereon upon
receipt thereof from the public recording official, or a copy thereof,
certified, if appropriate, by the relevant recording office, but in no event
shall any such delivery be made later than 270 days following the Closing Date;
provided that in the event that by such date such Seller is unable to deliver or
cause to be delivered each such Mortgage and each interim assignment by reason
of the fact that any such documents have not been returned by the appropriate
recording office, or, in the case of each interim assignment, because the
related Mortgage has not been returned by the appropriate recording office, such
Seller shall deliver or cause to be delivered such documents to the Trustee as
promptly as possible upon receipt thereof. If the public recording office in
which a Mortgage or interim assignment thereof is recorded retains the original
of such Mortgage or assignment, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and complete
by such recording office, shall satisfy a Seller's obligations in Section 2.01.
If any document submitted for recording pursuant to this Agreement is (x) lost
prior to recording or rejected by the applicable recording office, the
applicable Seller shall immediately prepare or cause to be prepared a substitute
and submit it for recording, and shall deliver copies and originals thereof in
accordance with the foregoing or (y) lost after recording, the applicable Seller
shall deliver to the Trustee a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original recorded
document. Each Seller shall promptly forward or cause to be forwarded to the
Trustee (x) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (y) any other documents
required to be delivered by the Depositor or the Master Servicer to the Trustee
within the time periods specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan as
to which the related Mortgaged Property and Mortgage File are located in any
jurisdiction under the laws of which the recordation of the assignment specified
in clause (iii) above is not necessary to protect the Trustee's, the Certificate
Insurer's and the Certificateholders' interest in the related Mortgage Loan, as
evidenced by an Opinion of Counsel delivered by CHL to the Trustee and the
Certificate Insurer within 90 days of the Closing Date (which opinion may be in
the form of a "survey" opinion and is not required to be delivered by counsel
admitted to practice law in the jurisdiction as to which such opinion applies),
in lieu of recording the assignment specified in clause (iii) above, the
applicable Seller may deliver an unrecorded assignment in blank, in form
otherwise suitable for recording to the Trustee; provided that if the related
Mortgage has not been returned from the applicable public recording office, such
assignment, or any copy thereof, of the Mortgage may exclude the information to
be provided by the recording office. As to any Mortgage Loan other than a MERS
Mortgage Loan, the procedures of the preceding sentence shall be applicable only
so long as the related Mortgage File is maintained in the possession of the
Trustee in the State or jurisdiction described in such sentence. In the event
that with respect to Mortgage Loans other than MERS Mortgage Loans (I) any
Seller, the Depositor, the Master Servicer, the Certificate Insurer or the NIM
Insurer gives written notice to the Trustee that recording is required to
protect the right, title and interest of the Trustee on behalf of the
Certificateholders in and to any Mortgage Loan, (II) a court recharacterizes any
sale of the Mortgage Loans as a financing, or (III) as a result of any change in
or amendment to the laws of the State or jurisdiction described in the first
sentence of this paragraph or any applicable
51
political subdivision thereof, or any change in official position regarding
application or interpretation of such laws, including a holding by a court of
competent jurisdiction, such recording is so required, the Trustee shall
complete the assignment in the manner specified in clause (iii) above and CHL
shall submit or cause to be submitted for recording as specified above or,
should CHL fail to perform such obligations, the Trustee shall cause the Master
Servicer, at the Master Servicer's expense, to cause each such previously
unrecorded assignment to be submitted for recording as specified above. In the
event a Mortgage File is released to the Master Servicer as a result of the
Master Servicer's having completed a Request for Document Release, the Trustee
shall complete the assignment of the related Mortgage in the manner specified in
clause (iii) above.
The Trustee or its agent shall maintain possession of the Mortgage
Files in the State of California and shall not remove the Mortgage Files from
the State of California. In the event that a Seller fails to record an
assignment of a Mortgage Loan as herein provided within 90 days of notice of an
event set forth in clause (I), (II) or (III) of the preceding paragraph, the
Master Servicer shall prepare and, if required hereunder, file such assignments
for recordation in the appropriate real property or other records office. Each
Seller hereby appoints the Master Servicer (and any successor servicer
hereunder) as its attorney-in-fact with full power and authority acting in its
stead for the purpose of such preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date (in the case of Initial Mortgage Loans) or
related Subsequent Transfer Date (in the case of Subsequent Mortgage Loans) and
the Cut-off Date, CHL shall deposit or cause to be deposited in the Certificate
Account the amount required to be deposited therein with respect to such payment
pursuant to Section 3.05 hereof.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date (in the case of Initial Mortgage Loans) or
within twenty days after the related Subsequent Transfer Date (in the case of
Subsequent Mortgage Loans), CHL (on behalf of each Seller) shall either (i)
deliver to the Trustee the Mortgage File as required pursuant to this Section
2.01 for each Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay
Delivery Mortgage Loan or (B) substitute the Delay Delivery Mortgage Loan for a
Replacement Mortgage Loan, which repurchase or substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, provided that if CHL fails to deliver a Mortgage File for any Delay
Delivery Mortgage Loan within the period provided in the prior sentence, the
cure period provided for in Section 2.02 or in Section 2.03 shall not apply to
the initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan,
but rather CHL shall have five (5) Business Days to cure such failure to
deliver. CHL shall promptly provide each Rating Agency and the Certificate
Insurer with written notice of any cure, repurchase or substitution made
pursuant to the proviso of the preceding sentence. On or before the thirtieth
(30th) day (or if such thirtieth day is not a Business Day, the succeeding
Business Day) after the Closing Date (in the case of Initial Mortgage Loans) or
within twenty days after the related Subsequent Transfer Date (in the case of
Subsequent Mortgage Loans), the Trustee shall, in accordance with the provisions
of Section 2.02, send a Delay Delivery Certification substantially in the form
annexed hereto as Exhibit G-3 (with any applicable exceptions noted thereon) for
all Delay Delivery Mortgage Loans delivered within thirty (30) days after such
date. The Trustee will promptly send a copy of such Delay Delivery Certification
to each Rating Agency and the Certificate Insurer.
52
Each Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans sold by such Seller to the Depositor and has
agreed to take the actions specified herein. The Depositor, concurrently with
the execution and delivery of this Agreement, hereby sells, transfers, assigns
and otherwise conveys to the Trustee for the use and benefit of the
Certificateholders and the Certificate Insurer, without recourse, all right
title and interest in the portion of the Trust Fund not otherwise conveyed to
the Trust Fund pursuant to Sections 2.01(a) or (b).
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt, subject to the limitations
contained in and any exceptions noted in the Initial Certification in the form
annexed hereto as Exhibit G-1 and in the list of exceptions attached thereto, of
the documents referred to in clauses (i) and (iii) of Section 2.01(g) above with
respect to the Initial Mortgage Loans and all other assets included in the Trust
Fund and declares that it holds and will hold such documents and the other
documents delivered to it constituting the Mortgage Files, and that it holds or
will hold such other assets included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future Certificateholders and the
Certificate Insurer.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer, CHL (on behalf of each Seller) and the
Certificate Insurer, an Initial Certification substantially in the form annexed
hereto as Exhibit G-1 to the effect that, as to each Initial Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Initial Mortgage Loan paid
in full or any Initial Mortgage Loan specifically identified in such
certification as not covered by such certification), the documents described in
Section 2.01(g)(i) and, in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, the documents described in Section 2.01(g)(iii) with respect
to such Initial Mortgage Loans as are in the Trustee's possession and based on
its review and examination and only as to the foregoing documents, such
documents appear regular on their face and relate to such Initial Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after the Closing Date
to the Depositor, the Master Servicer, CHL (on behalf of each Seller) and the
Certificate Insurer, an Interim Certification substantially in the form annexed
hereto as Exhibit G-2 to the effect that, as to each Initial Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Initial Mortgage Loan paid
in full or any Initial Mortgage Loan specifically identified in such
certification as not covered by such certification) all documents required to be
delivered to the Trustee pursuant to the Agreement with respect to such Initial
Mortgage Loans are in its possession (except those documents described in
Section 2.01(g)(vi)) and based on its review and examination and only as to the
foregoing documents, (i) such documents appear regular on their face and relate
to such Initial Mortgage Loan, and (ii) the information set forth in items (i),
(iv), (v), (vi), (viii) and (ix) of the definition of the "Mortgage Loan
Schedule" accurately reflects information set forth in the Mortgage File. On or
before the thirtieth (30th) day after the Closing Date (or if such thirtieth day
is not a Business Day, the succeeding Business Day), the Trustee shall deliver
to the Depositor, the Master Servicer, CHL (on behalf of each Seller) and the
Certificate Insurer a Delay Delivery Certification with respect to the Initial
Mortgage Loans substantially in the form annexed hereto as Exhibit G-3, with any
applicable exceptions noted thereon. The Trustee shall be under no duty or
obligation to inspect, review or examine such documents, instruments,
certificates or other papers to determine that the same are genuine, enforceable
or appropriate for
53
the represented purpose or that they have actually been recorded in the real
estate records or that they are other than what they purport to be on their
face.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer, CHL (on behalf of each Seller),
the Certificate Insurer and any Certificateholder that so requests, a Final
Certification with respect to the Initial Mortgage Loans substantially in the
form annexed hereto as Exhibit H, with any applicable exceptions noted thereon.
In connection with the Trustee's completion and delivery of such Final
Certification, the Trustee shall review each Mortgage File with respect to the
Initial Mortgage Loans to determine that such Mortgage File contains the
following documents:
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the order
of ________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and interest
of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating
that the original Mortgage Note was lost or destroyed, together with a
copy of the related Mortgage Note and all such intervening
endorsements;
(ii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage, with recording information, and in the case of each Initial
Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage or a
copy of such Mortgage, with recording information, noting the presence
of the MIN of the Initial Mortgage Loan and language indicating that
the Mortgage Loan is a MOM Loan if the Initial Mortgage Loan is a MOM
Loan, with evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which Mortgage has
been recorded;
(iii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, a duly executed assignment of the Mortgage or a
copy thereof with recording information, in either case in the form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or a
copy of such assignments, with recording information (in each case
noting the presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
54
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the electronic
equivalent and all riders thereto.
If, in the course of such review, the Trustee finds any document or
documents constituting a part of such Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi) above, the Trustee shall include such
exceptions in such Final Certification (and the Trustee shall state in such
Final Certification whether any Mortgage File does not then include the original
or duplicate original lender's title policy or a printout of the electronic
equivalent and all riders thereto). If the public recording office in which a
Mortgage or assignment thereof is recorded retains the original of such Mortgage
or assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall be deemed to satisfy the requirements of clause (ii),
(iii) or (iv) above, as applicable. CHL shall promptly correct or cure such
defect referred to above within 90 days from the date it was so notified of such
defect and, if CHL does not correct or cure such defect within such period, CHL
shall either (A) if the time to cure such defect expires prior to the end of the
second anniversary of the Closing Date, substitute for the related Initial
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (B) purchase such Initial Mortgage Loan from the Trust Fund within 90
days from the date CHL was notified of such defect in writing at the Purchase
Price of such Initial Mortgage Loan; provided that any such substitution
pursuant to (A) above or repurchase pursuant to (B) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05 hereof and any substitution pursuant to (A) above shall not be
effected prior to the additional delivery to the Trustee of a Request for File
Release. No substitution will be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Initial
Mortgage Loan shall be deposited by CHL in the Certificate Account and, upon
receipt of such deposit and Request for File Release with respect thereto, the
Trustee shall release the related Mortgage File to CHL and shall execute and
deliver at CHL's request such instruments of transfer or assignment as CHL has
prepared, in each case without recourse, as shall be necessary to vest in CHL,
or a designee, the Trustee's interest in any Initial Mortgage Loan released
pursuant hereto. If pursuant to the foregoing provisions CHL repurchases an
Initial Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer shall
cause MERS to execute and deliver an assignment of the Mortgage in recordable
form to transfer the Mortgage from MERS to CHL and shall cause such Mortgage to
be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations.
The Trustee shall retain possession and custody of each Mortgage File
in accordance with and subject to the terms and conditions set forth herein.
Each Seller shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File that come into the possession of such Seller from time to time.
It is understood and agreed that the obligation of CHL to substitute
for or to purchase any Mortgage Loan that does not meet the requirements of
Section 2.02(a) above shall constitute the sole remedy respecting such defect
available to the Trustee, the Depositor and any Certificateholder against any
Seller.
55
It is understood and agreed that the obligation of CHL to substitute
for or to purchase, pursuant to Section 2.02(a), any Initial Mortgage Loan whose
Mortgage File contains any document or documents that does not meet the
requirements of clauses (i)-(iv) and (vi) above and which defect is not
corrected or cured by CHL within 90 days from the date it was notified of such
defect, shall constitute the sole remedy respecting such defect available to the
Trustee, the Depositor and any Certificateholder against any Seller.
(b) The Trustee agrees to execute and deliver on the Subsequent
Transfer Date to the Depositor, the Master Servicer, CHL (on behalf of each
Seller) and the Certificate Insurer an Initial Certification substantially in
the form annexed hereto as Exhibit G-4 to the effect that, as to each Subsequent
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Subsequent
Mortgage Loan paid in full or any Subsequent Mortgage Loan specifically
identified in such certification as not covered by such certification), the
documents described in Section 2.01(g)(i) and, in the case of each Subsequent
Mortgage Loan that is not a MERS Mortgage Loan, the documents described in
Section 2.01(g)(iii), with respect to such Subsequent Mortgage Loan are in its
possession, and based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and relate to such
Subsequent Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after the
Subsequent Transfer Date to the Depositor, the Master Servicer, CHL (on behalf
of each Seller) and the Certificate Insurer an Interim Certification
substantially in the form annexed hereto as Exhibit G-2 to the effect that, as
to each Subsequent Mortgage Loan listed in the Mortgage Loan Schedule (other
than any Subsequent Mortgage Loan paid in full or any Subsequent Mortgage Loan
specifically identified in such certification as not covered by such
certification), all documents required to be delivered to it pursuant to this
Agreement with respect to such Subsequent Mortgage Loan are in its possession
(except those described in Section 2.01(g)(vi)) and based on its review and
examination and only as to the foregoing documents, (i) such documents appear
regular on their face and relate to such Subsequent Mortgage Loan, and (ii) the
information set forth in items (i), (iv), (v), (vi), (viii) and (ix) of the
definition of the "Mortgage Loan Schedule" accurately reflects information set
forth in the Mortgage File. On or before the thirtieth (30th) day after the
Subsequent Transfer Date (or if such thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer, CHL (on behalf of each Seller) and the Certificate Insurer a Delay
Delivery Certification with respect to the Subsequent Mortgage Loans
substantially in the form annexed hereto as Exhibit G-3, with any applicable
exceptions noted thereon, together with a Subsequent Certification substantially
in the form annexed hereto as Exhibit G-4. The Trustee shall be under no duty or
obligation to inspect, review or examine such documents, instruments,
certificates or other papers to determine that the same are genuine, enforceable
or appropriate for the represented purpose or that they have actually been
recorded in the real estate records or that they are other than what they
purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date, the Trustee
shall deliver to the Depositor, the Master Servicer, CHL (on behalf of each
Seller), the Certificate Insurer and to any Certificateholder that so requests a
Final Certification with respect to the Subsequent Mortgage Loans substantially
in the form annexed hereto as Exhibit H, with any applicable exceptions noted
thereon.
56
In connection with the Trustee's completion and delivery of such Final
Certification, the Trustee shall review each Mortgage File with respect to the
Subsequent Mortgage Loans to determine that such Mortgage File contains the
following documents:
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the order
of ________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and interest
of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating
that the original Mortgage Note was lost or destroyed, together with a
copy of the related Mortgage Note and all such intervening
endorsements;
(ii) in the case of each Subsequent Mortgage Loan that is not
a MERS Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage, with recording information, and in the case of each
Subsequent Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage or a copy of such Mortgage, with recording information, noting
the presence of the MIN of the Subsequent Mortgage Loan and language
indicating that the Subsequent Mortgage Loan is a MOM Loan if the
Subsequent Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public
recording office in which Mortgage has been recorded;
(iii) in the case of each Subsequent Mortgage Loan that is not
a MERS Mortgage Loan, a duly executed assignment of the Mortgage or a
copy thereof with recording information, in either case in the form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or a
copy of such assignments, with recording information (in each case
noting the presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the electronic
equivalent and all riders thereto.
If, in the course of such review, the Trustee finds any document or
documents constituting a part of such Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi) above, the Trustee shall include such
exceptions in such Final Certification (and the Trustee shall state in such
Final Certification whether any Mortgage File does not then include the original
or duplicate original lender's title policy or a printout of the electronic
equivalent and all riders thereto). If the public recording office in which a
Mortgage or assignment thereof is recorded retains the original of such Mortgage
or assignment, a copy of the original Mortgage or
57
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv) above, as applicable. CHL shall
promptly correct or cure such defect referred to above within 90 days from the
date it was so notified of such defect and, if CHL does not correct or cure such
defect within such period, CHL shall either (A) if the time to cure such defect
expires prior to the end of the second anniversary of the Closing Date,
substitute for the related Subsequent Mortgage Loan a Replacement Mortgage Loan,
which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.03, or (B) purchase such Subsequent Mortgage
Loan from the Trust Fund within 90 days from the date CHL was notified of such
defect in writing at the Purchase Price of such Subsequent Mortgage Loan;
provided that any such substitution pursuant to (A) above or repurchase pursuant
to (B) above shall not be effected prior to the delivery to the Trustee of the
Opinion of Counsel required by Section 2.05 hereof and any substitution pursuant
to (A) above shall not be effected prior to the additional delivery to the
Trustee of a Request for File Release. No substitution will be made in any
calendar month after the Determination Date for such month. The Purchase Price
for any such Subsequent Mortgage Loan shall be deposited by CHL in the
Certificate Account and, upon receipt of such deposit and Request for File
Release with respect thereto, the Trustee shall release the related Mortgage
File to CHL and shall execute and deliver at CHL's request such instruments of
transfer or assignment as CHL has prepared, in each case without recourse, as
shall be necessary to vest in CHL, or a designee, the Trustee's interest in any
Subsequent Mortgage Loan released pursuant hereto. If pursuant to the foregoing
provisions CHL repurchases a Subsequent Mortgage Loan that is a MERS Mortgage
Loan, the Master Servicer shall cause MERS to execute and deliver an assignment
of the Mortgage in recordable form to transfer the Mortgage from MERS to CHL and
shall cause such Mortgage to be removed from registration on the MERS(R) System
in accordance with MERS' rules and regulations.
The Trustee shall retain possession and custody of each Mortgage File
in accordance with and subject to the terms and conditions set forth herein.
Each Seller shall promptly deliver to the Trustee, upon the execution or receipt
thereof, the originals of such other documents or instruments constituting the
Mortgage File that come into the possession of such Seller from time to time.
It is understood and agreed that the obligation of the Sellers to
substitute for or to purchase, pursuant to Section 2.02(b), any Subsequent
Mortgage Loan whose Mortgage File contains any document or documents that does
not meet the requirements of clauses (i)-(iv) and (vi) above and which defect is
not corrected or cured by such Seller within 90 days from the date it was
notified of such defect, shall constitute the sole remedy respecting such defect
available to the Trustee, the Depositor and any Certificateholder against the
Sellers.
58
Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Sellers.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Certificate Insurer and the Trustee as follows, as of the date
hereof with respect to the Initial Mortgage Loans, and the related Subsequent
Transfer Date with respect to the Subsequent Mortgage Loans:
(1) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under the laws
of the State of Texas and is duly authorized and qualified to transact
any and all business contemplated by this Agreement to be conducted by
the Master Servicer in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(2) The Master Servicer has the full partnership power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
partnership action on the part of the Master Servicer the execution,
delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes a legal, valid and binding obligation
of the Master Servicer, enforceable against the Master Servicer in
accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer
under this Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Master Servicer and will not (A) result in a material breach of any
term or provision of the certificate of limited partnership,
partnership agreement or other organizational document of the Master
Servicer or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under,
the terms of any other material agreement or instrument to which the
Master Servicer is a party or by which it may be bound, or (C)
constitute a material violation of any statute, order or
59
regulation applicable to the Master Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over the Master Servicer; and the Master Servicer is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over it which breach or violation may materially
impair the Master Servicer's ability to perform or meet any of its
obligations under this Agreement.
(4) The Master Servicer is an approved servicer of
conventional mortgage loans for Xxxxxx Xxx and Xxxxxxx Mac and is a
mortgagee approved by the Secretary of Housing and Urban Development
pursuant to sections 203 and 211 of the National Housing Act.
(5) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer
to service the Mortgage Loans or to perform any of its other
obligations under this Agreement or any Subsequent Transfer Agreement
in accordance with the terms hereof or thereof.
(6) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Master Servicer has obtained the same.
(7) The Master Servicer is a member of MERS in good standing,
and will comply in all material respects with the rules and procedures
of MERS in connection with the servicing of the Mortgage Loans for as
long as such Mortgage Loans are registered with MERS.
(b) CHL hereby represents and warrants to the Depositor, the
Certificate Insurer and the Trustee as follows, as of the Initial Cut-off Date
in the case of the Initial Mortgage Loans and as of the related Subsequent
Cut-off Date in the case of the Subsequent Mortgage Loans (unless otherwise
indicated or the context otherwise requires, percentages with respect to the
Initial Mortgage Loans in the Trust Fund are measured by the Cut-off Date
Principal Balance of the Initial Mortgage Loans in the Trust Fund):
(1) CHL is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the State of
New York and is duly authorized and qualified to transact any and all
business contemplated by this Agreement and each Subsequent Transfer
Agreement to be conducted by CHL in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with
the doing business laws of any such state, to the extent necessary to
ensure its ability to enforce each Mortgage Loan, to sell the CHL
Mortgage Loans in accordance with the terms of this Agreement and each
Subsequent Transfer Agreement and to perform any of its other
obligations under this Agreement and each Subsequent Transfer Agreement
in accordance with the terms hereof and thereof.
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(2) CHL has the full corporate power and authority to sell
each CHL Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement and has duly
authorized by all necessary corporate action on the part of CHL the
execution, delivery and performance of this Agreement and each
Subsequent Transfer Agreement; and this Agreement and each Subsequent
Transfer Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid
and binding obligation of CHL, enforceable against CHL in accordance
with its terms, except that (a) the enforceability hereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (b) the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by CHL, the sale of the CHL Mortgage
Loans by CHL under this Agreement and each Subsequent Transfer
Agreement, the consummation of any other of the transactions
contemplated by this Agreement and each Subsequent Transfer Agreement,
and the fulfillment of or compliance with the terms hereof and thereof
are in the ordinary course of business of CHL and will not (A) result
in a material breach of any term or provision of the charter or by-laws
of CHL or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under,
the terms of any other material agreement or instrument to which CHL is
a party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to CHL of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over CHL; and CHL is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair CHL's ability
to perform or meet any of its obligations under this Agreement and each
Subsequent Transfer Agreement.
(4) CHL is an approved seller of conventional mortgage loans
for Xxxxxx Mae and Xxxxxxx Mac and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(5) No litigation is pending or, to the best of CHL's
knowledge, threatened, against CHL that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or
any Subsequent Transfer Agreement or the ability of CHL to sell the CHL
Mortgage Loans or to perform any of its other obligations under this
Agreement or any Subsequent Transfer Agreement in accordance with the
terms hereof or thereof.
(6) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by CHL of, or compliance by CHL with, this Agreement or
any Subsequent Transfer
61
Agreement or the consummation of the transactions contemplated hereby,
or if any such consent, approval, authorization or order is required,
CHL has obtained the same.
(7) The information set forth on the Mortgage Loan Schedule
with respect to each Initial Mortgage Loan is true and correct in all
material respects as of the Closing Date and is true and correct in all
material respects as of the Subsequent Transfer Date with respect to
the related Subsequent Mortgage Loans.
(8) CHL will treat the transfer of the CHL Mortgage Loans to
the Depositor as a sale of the CHL Mortgage Loans for all tax,
accounting and regulatory purposes.
(9) None of the Mortgage Loans is 30 days or more delinquent.
(10) No Mortgage Loan had a Combined Loan-to-Value Ratio at
origination in excess of 100.00%.
(11) Each Mortgage Loan is secured by a valid and enforceable
second lien on the related Mortgaged Property subject only to (1) the
lien of non-delinquent current real property taxes and assessments, (2)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal made in connection with the origination of the related
Mortgage Loan, (3) other matters to which like properties are commonly
subject that do not materially interfere with the benefits of the
security intended to be provided by such Mortgage (4) any senior
mortgage loan secured by such Mortgaged Property and identified in the
Mortgage File related to such Mortgage Loan.
(12) Immediately prior to the assignment of each CHL Mortgage
Loan to the Depositor, CHL had good title to, and was the sole owner
of, such CHL Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(14) There is no valid offset, claim, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
(15) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property that are or may be a lien
prior to, or equal with, the lien of such Mortgage, except those that
are insured against by the title insurance policy referred to in item
(18) below.
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(16) As of the Closing Date in the case of the Initial
Mortgage Loans and as of the related Subsequent Transfer Date in the
case of the Subsequent Mortgage Loans, to the best of CHL's knowledge,
each Mortgaged Property is free of material damage and is in good
repair.
(17) As of the Closing Date in the case of the Initial
Mortgage Loans and as of the related Subsequent Transfer Date in the
case of the Subsequent Mortgage Loans, neither CHL nor any prior holder
of any Mortgage has modified the Mortgage in any material respect
(except that a Mortgage Loan may have been modified by a written
instrument that has been recorded or submitted for recordation, if
necessary, to protect the interests of the Certificateholders and the
Certificate Insurer and the original or a copy of which has been
delivered to the Trustee); satisfied, cancelled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property
in whole or in part from the lien of such Mortgage; or executed any
instrument of release, cancellation, modification (except as expressly
permitted above) or satisfaction with respect thereto.
(18) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Mortgage Loan or a commitment (binder) to issue
the same was effective on the date of the origination of each Mortgage
Loan, each such policy is valid and remains in full force and effect,
and each such policy was issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located
and acceptable to Xxxxxx Mae and Xxxxxxx Mac and is in a form
acceptable to Xxxxxx Mae and Xxxxxxx Mac, which policy insures the
Sellers and successor owners of indebtedness secured by the insured
Mortgage, as to the second priority lien, of the Mortgage subject to
the exceptions set forth in paragraph (11) above; to the best of CHL's
knowledge, no claims have been made under such mortgage title insurance
policy and no prior holder of the related Mortgage, including any
Seller, has done, by act or omission, anything that would impair the
coverage of such mortgage title insurance policy.
(19) No Initial Mortgage Loan was the subject of a Principal
Prepayment in full between the Initial Cut-off Date and the Closing
Date. No Subsequent Mortgage Loan was the subject of a Principal
Prepayment in full between the Subsequent Cut-off Date and the
Subsequent Transfer Date.
(20) To the best of CHL's knowledge, all of the improvements
that were included for the purpose of determining the Appraised Value
of the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.
(21) To the best of CHL's knowledge, no improvement located on
or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of CHL's knowledge,
all inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property
and, with respect to the use and occupancy of the same, including but
not limited to certificates of occupancy and fire underwriting
certificates, have been made or
63
obtained from the appropriate authorities, unless the lack thereof
would not have a material adverse effect on the value of such Mortgaged
Property, and the Mortgaged Property is lawfully occupied under
applicable law.
(22) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms and under applicable
law, except that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. To the best of CHL's
knowledge, all parties to the Mortgage Note and the Mortgage had legal
capacity to execute the Mortgage Note and the Mortgage and each
Mortgage Note and Mortgage have been duly and properly executed by such
parties.
(23) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making, or
closing or recording the Mortgage Loan were paid.
(24) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(25) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable by
the Certificateholders or the Trust Fund to the trustee under the deed
of trust, except in connection with a trustee's sale after default by
the Mortgagor.
(26) [Reserved].
(27) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Sellers have
been capitalized under the Mortgage or the related Mortgage Note.
(28) The origination, underwriting, servicing and collection
practices with respect to each Mortgage Loan have been in all respects
legal, proper, prudent and customary in the mortgage lending and
servicing business, as conducted by prudent lending institutions which
service mortgage loans of the same type in the jurisdiction in which
the Mortgaged Property is located.
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(29) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(31) Each Mortgage Loan contains a customary "due on sale"
clause.
(32) No less than approximately the percentage specified in
the Collateral Schedule of the Initial Mortgage Loans are secured by
single family detached dwellings. No more than approximately the
percentage specified in the Collateral Schedule of the Initial Mortgage
Loans are secured by two- to four-family dwellings. No more than
approximately the percentage specified in the Collateral Schedule of
the Initial Mortgage Loans are secured by low-rise condominium units.
No more than approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans are secured by high-rise
condominium units. No more than approximately the percentage specified
in the Collateral Schedule of the Initial Mortgage Loans are secured by
manufactured housing. No more than approximately the percentage
specified in the Collateral Schedule of the Initial Mortgage Loans are
secured by PUDs.
(33) Each Initial Mortgage Loan was originated on or after the
date specified in the Collateral Schedule.
(34) [Reserved];
(35) Approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans provide for a Prepayment Charge.
(36) On the basis of representations made by the Mortgagors in
their loan applications, no more than approximately the percentage
specified in the Collateral Schedule of the Initial Mortgage Loans,
respectively, are secured by investor properties, and no less than
approximately the percentage specified in the Collateral Schedule of
the Initial Mortgage Loans respectively, are secured by owner-occupied
Mortgaged Properties that are primary residences.
(37) At the Cut-off Date, the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where the Mortgaged Property is located in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent
the Mortgagor and/or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium unit. All
such individual insurance policies and all flood policies referred to
in item (38) below contain a standard mortgagee clause naming the
applicable Seller or the original mortgagee, and its successors in
interest, as mortgagee, and the applicable Seller has received no
notice that
65
any premiums due and payable thereon have not been paid; the Mortgage
obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and
upon the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at the Mortgagor's cost
and expense and to seek reimbursement therefor from the Mortgagor.
(38) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property
with a generally acceptable carrier in an amount representing coverage
not less than the least of (A) the original outstanding principal
balance of the Mortgage Loan, (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis, or (C) the
maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973, as amended.
(39) To the best of CHL's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of the Mortgaged Property.
(40) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of CHL's
knowledge, there is no material event that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and no Seller has waived any
default, breach, violation or event of acceleration or received notice
of default of any senior mortgage loan related to a Mortgaged Property
that has not been cured by a party other than the Sellers or the Master
Servicer.
(41) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of CHL's knowledge, no improvement
to a Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
Mortgage Loan Schedule. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan. The Mortgage
Note does not permit or obligate the Master Servicer to make future
advances to the Mortgagor at the option of the Mortgagor.
(44) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
that previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every
such item that remains unpaid and that has been assessed, but
66
is not yet due and payable. Except for (A) payments in the nature of
escrow payments, and (B) interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage proceeds,
whichever is later, to the day that precedes by one month the Due Date
of the first installment of principal and interest, including without
limitation, taxes and insurance payments, the Master Servicer has not
advanced funds, or induced, solicited or knowingly received any advance
of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required by the Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten in
all material respects in accordance with CHL's underwriting guidelines
for closed-end second lien mortgage loans or, with respect to Mortgage
Loans purchased by CHL were underwritten in all material respects in
accordance with customary and prudent underwriting guidelines generally
used by originators of closed-end second lien mortgage loans.
(46) Prior to the approval of the Mortgage Loan application,
an appraisal of the related Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan; such appraisal is in
a form acceptable to Xxxxxx Xxx and Xxxxxxx Mac.
(47) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and no Mortgage Loan
is subject to a buydown or similar arrangement.
(48) The Mortgage Rates borne by the Initial Mortgage Loans as
of the Cut-off Date ranged between the approximate per annum
percentages specified on the Collateral Schedule and the weighted
average Mortgage Rate of the Initial Mortgage Loans as of the Cut-off
Date was approximately the per annum rate specified on the Collateral
Schedule.
(49) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the applicable
Seller's portfolio at the Closing Date as to which the representations
and warranties made as to the Mortgage Loans set forth in this Section
2.03(b) and Sections 2.03(c), 2.03(d) and 2.03(e) can be made. No
selection was made in a manner that would adversely affect the
interests of Certificateholders or the Certificate Insurer.
(50) [Reserved].
(51) Each of the Initial Mortgage Loans in the Mortgage Pool
has a Due Date on or before the date specified in the Collateral
Schedule.
(52) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
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(53) There is no obligation on the part of any Seller under
the terms of the Mortgage or related Mortgage Note to make payments in
addition to those made by the Mortgagor.
(54) Any leasehold estate securing a Mortgage Loan has a term
of not less than five years in excess of the term of the related
Mortgage Loan.
(55) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without regard
to the rule in Treasury Regulation ss. 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially
similar successor provision) and applicable Treasury regulations
promulgated thereunder.
(56) No Mortgage Loan was either a "consumer credit contract"
or a "purchase money loan" as such terms are defined in 16 C.F.R. ss.
433 nor is any Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss.
1602(aa).
(57) Each Mortgage Loan, at the time it was originated and as
of the Closing Date or the related Subsequent Transfer Date, as
applicable, complied in all material respects with applicable local,
state and federal laws, including, but not limited to, all predatory
and abusive lending laws.
(58) None of the Mortgage Loans is a "high cost" mortgage loan
as defined by applicable federal, state and local predatory and abusive
lending laws.
(59) Each Prepayment Charge is enforceable and was originated
in compliance with all applicable federal, state and local laws.
(60) None of the Mortgage Loans that are secured by property
located in the State of Illinois are in violation of the provisions of
the Illinois Interest Act; 815 Ill. Comp. Stat. 205/0.01 (2004).
(61) There is no Mortgage Loan in the Trust Fund that was
originated on or after March 7, 2003, which is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
(62) No Mortgage Loan in the Trust Fund is a High Cost Loan or
Covered Loan, as applicable (as such terms are defined in the
then-current Standard & Poor's LEVELS(R) Glossary which is now Version
5.7, Appendix E) and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act.
(63) Each Mortgage Loan is secured by a "single family
residence" within the meaning of Section 25(e)(10) of the Internal
Revenue Code of 1986 (as amended) (the "Code"). The fair market value
of the manufactured home securing each Mortgage Loan was at least equal
to 80% of the adjusted issue price of the contract at either (i) the
time the contract was originated (determined pursuant to the REMIC
68
Provisions) or (ii) the time the contract is transferred to the
purchaser. Each Mortgage Loan is a "qualified mortgage" under Section
860G(a)(3) of the Code.
(64) No Mortgage Loan in the Trust Fund is a "high cost home,"
"covered" (excluding home loans defined as "covered home loans" in the
New Jersey Home Ownership Security Act of 2002 that were originated
between November 26, 2003 and July 7, 2004), "high risk home" or
"predatory" loan under any applicable state, federal or local law (or a
similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability
for residential mortgage loans having high interest rates, points
and/or fees).
(65) There is no Mortgage Loan in the Trust Fund that was
originated on or after October 1, 2002 and before March 7, 2003, which
is secured by property located in the State of Georgia.
(66) The representations in Section 2.03(c)(1)-(6),
2.03(d)(1)-(6) and 2.03(e)(1)-(6) are true and correct.
(c) Park Granada hereby represents and warrants to the Depositor, the
Certificate Insurer and the Trustee as follows, as of the Cut-off Date:
(1) Park Granada is duly organized as a Delaware corporation
and is validly existing and in good standing under the laws of the
State of Delaware and is duly authorized and qualified to transact any
and all business contemplated by this Agreement and each Subsequent
Transfer Agreement to be conducted by Park Granada in any state in
which a Mortgaged Property securing a Park Granada Mortgage Loan is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Park Granada Mortgage Loan, to sell the Park
Granada Mortgage Loans in accordance with the terms of this Agreement
and each Subsequent Transfer Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(2) Park Granada has the full company power and authority to
sell each Park Granada Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by this Agreement and each Subsequent Transfer Agreement and has duly
authorized by all necessary corporate action on the part of Park
Granada the execution, delivery and performance of this Agreement and
each Subsequent Transfer Agreement; and this Agreement and each
Subsequent Transfer Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
a legal, valid and binding obligation of Park Granada, enforceable
against Park Granada in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
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(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Granada, the sale of the Park
Granada Mortgage Loans by Park Granada under this Agreement and each
Subsequent Transfer Agreement, the consummation of any other of the
transactions contemplated by this Agreement and each Subsequent
Transfer Agreement, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of Park Granada and will
not (A) result in a material breach of any term or provision of the
certificate of incorporation or by-laws of Park Granada or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Park Granada is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to Park
Granada of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Park Granada; and Park
Granada is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair Park Granada's ability to perform or
meet any of its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park Granada's
knowledge, threatened, against Park Granada that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of Park
Granada to sell the Park Granada Mortgage Loans or to perform any of
its other obligations under this Agreement or any Subsequent Transfer
Agreement in accordance with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Park Granada of, or compliance by Park Granada with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Granada has obtained
the same.
(6) Park Granada will treat the transfer of the Park Granada
Mortgage Loans to the Depositor as a sale of the Park Granada Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Granada
Mortgage Loan to the Depositor, Park Granada had good title to, and was
the sole owner of, such Park Granada Mortgage Loan free and clear of
any pledge, lien, encumbrance or security interest and had full right
and authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to this
Agreement.
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(d) Park Monaco hereby represents and warrants to the Depositor, the
Certificate Insurer and the Trustee as follows, as of the Cut-off Date:
(1) Park Monaco is duly organized as a Delaware corporation
and is validly existing and in good standing under the laws of the
State of Delaware and is duly authorized and qualified to transact any
and all business contemplated by this Agreement and each Subsequent
Transfer Agreement to be conducted by Park Monaco in any state in which
a Mortgaged Property securing a Park Monaco Mortgage Loan is located or
is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Park Monaco Mortgage Loan, to sell the Park
Monaco Mortgage Loans in accordance with the terms of this Agreement
and each Subsequent Transfer Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(2) Park Monaco has the full company power and authority to
sell each Park Monaco Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by this Agreement and each Subsequent Transfer Agreement and has duly
authorized by all necessary corporate action on the part of Park Monaco
the execution, delivery and performance of this Agreement and each
Subsequent Transfer Agreement; and this Agreement and each Subsequent
Transfer Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid
and binding obligation of Park Monaco, enforceable against Park Monaco
in accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Monaco, the sale of the Park
Monaco Mortgage Loans by Park Monaco under this Agreement and each
Subsequent Transfer Agreement, the consummation of any other of the
transactions contemplated by this Agreement and each Subsequent
Transfer Agreement, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of Park Monaco and will
not (A) result in a material breach of any term or provision of the
certificate of incorporation or by-laws of Park Monaco or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which Park Monaco is a
party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to Park Monaco
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over Park Monaco; and Park Monaco is not in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially
71
impair Park Monaco's ability to perform or meet any of its obligations
under this Agreement.
(4) No litigation is pending or, to the best of Park Monaco's
knowledge, threatened, against Park Monaco that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of Park
Monaco to sell the Park Monaco Mortgage Loans or to perform any of its
other obligations under this Agreement or any Subsequent Transfer
Agreement in accordance with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Park Monaco of, or compliance by Park Monaco with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Monaco has obtained
the same.
(6) Park Monaco will treat the transfer of the Park Monaco
Mortgage Loans to the Depositor as a sale of the Park Monaco Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Monaco
Mortgage Loan to the Depositor, Park Monaco had good title to, and was
the sole owner of, such Park Monaco Mortgage Loan free and clear of any
pledge, lien, encumbrance or security interest and had full right and
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to this
Agreement.
(e) Park Sienna hereby represents and warrants to the Depositor, the
Certificate Insurer and the Trustee as follows, as of the Cut-off Date:
(1) Park Sienna is duly organized as a Delaware limited
liability company and is validly existing and in good standing under
the laws of the State of Delaware and is duly authorized and qualified
to transact any and all business contemplated by this Agreement and
each Subsequent Transfer Agreement to be conducted by Park Sienna in
any state in which a Mortgaged Property securing a Park Sienna Mortgage
Loan is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the
doing business laws of any such state, to the extent necessary to
ensure its ability to enforce each Park Sienna Mortgage Loan, to sell
the Park Sienna Mortgage Loans in accordance with the terms of this
Agreement and each Subsequent Transfer Agreement and to perform any of
its other obligations under this Agreement in accordance with the terms
hereof.
(2) Park Sienna has the full company power and authority to
sell each Park Sienna Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by this Agreement and each Subsequent Transfer Agreement and has duly
authorized by all necessary company action on the part of Park Sienna
the execution, delivery and performance of this Agreement and each
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Subsequent Transfer Agreement; and this Agreement and each Subsequent
Transfer Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid
and binding obligation of Park Sienna, enforceable against Park Sienna
in accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Sienna, the sale of the Park
Sienna Mortgage Loans by Park Sienna under this Agreement and each
Subsequent Transfer Agreement, the consummation of any other of the
transactions contemplated by this Agreement and each Subsequent
Transfer Agreement and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of Park Sienna and will
not (A) result in a material breach of any term or provision of the
certificate of formation or limited liability company agreement of Park
Sienna or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under,
the terms of any other material agreement or instrument to which Park
Sienna is a party or by which it may be bound, or (C) constitute a
material violation of any statute, order or regulation applicable to
Park Sienna of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Park Sienna; and Park Sienna
is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order
or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair Park Sienna's ability to perform or meet any of
its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park Sienna's
knowledge, threatened, against Park Sienna that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of Park
Sienna to sell the Park Sienna Mortgage Loans or to perform any of its
other obligations under this Agreement or any Subsequent Transfer
Agreement in accordance with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Park Sienna of, or compliance by Park Sienna with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Sienna has obtained
the same.
(6) Park Sienna will treat the transfer of the Park Sienna
Mortgage Loans to the Depositor as a sale of the Park Sienna Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Sienna
Mortgage Loan to the Depositor, Park Sienna had good title to, and was
the sole owner of, such the
73
Park Sienna Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement.
(f) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) through (e) that
materially and adversely affects the interests of the Certificateholders or the
Certificate Insurer in any Mortgage Loan, the party discovering such breach
shall give prompt notice thereof to the other parties, the NIM Insurer and the
Certificate Insurer. Each of the Master Servicer and the Sellers (each, a
"Representing Party") hereby covenants with respect to the representations and
warranties set forth in Sections 2.03(a) through (e) that within 90 days of the
earlier of the discovery by such Representing Party or receipt of written notice
by such Representing Party from any party of a breach of any representation or
warranty set forth herein made that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan or the Certificate
Insurer, it shall cure such breach in all material respects and, if such breach
is not so cured, shall, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage
Loan") from the Trust Fund and substitute in its place a Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at
the Purchase Price in the manner set forth below; provided that (a) any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof, (b) any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for File Release and (c) any such substitution pursuant to (i) above
shall include a payment by the applicable Representing Party of any amount as
calculated under item (iii) of the definition of "Purchase Price". Any
Representing Party liable for a breach under this Section 2.03 shall promptly
reimburse the Master Servicer or the Trustee for any expenses reasonably
incurred by the Master Servicer or the Trustee in respect of enforcing the
remedies for such breach. To enable the Master Servicer to amend the Mortgage
Loan Schedule, any Representing Party liable for a breach under this Section
2.03 shall, unless it cures such breach in a timely fashion pursuant to this
Section 2.03, promptly notify the Master Servicer whether such Representing
Party intends either to repurchase, or to substitute for, the Mortgage Loan
affected by such breach. With respect to the representations and warranties
described in this Section that are made to the best of the Representing Party's
knowledge, if it is discovered by any of the Depositor, the Master Servicer, the
Sellers, the Certificate Insurer or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, notwithstanding the
Representing Party's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the applicable
Seller delivering such Replacement Mortgage Loan shall deliver to the Trustee
for the benefit of the Certificateholders and the Certificate Insurer the
related Mortgage Note, Mortgage and assignment of the Mortgage, and such other
documents and agreements as are required by Section 2.01, with the Mortgage Note
endorsed and the Mortgage assigned as required by Section 2.01. No substitution
will be made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the
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Due Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
applicable Seller delivering such Replacement Mortgage Loan on such Distribution
Date. For the month of substitution, distributions to Certificateholders will
include the Scheduled Payment due on any Deleted Mortgage Loan for the related
Due Period and thereafter the applicable Seller shall be entitled to retain all
amounts received in respect of such Deleted Mortgage Loan. The Master Servicer
shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the removal of such Deleted Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans and the Master Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Replacement Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the applicable Seller delivering such Replacement
Mortgage Loan shall be deemed to have made with respect to such Replacement
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties set forth in Section 2.03(b), (c), (d) or (e) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
to the Representing Party the Mortgage File relating to such Deleted Mortgage
Loan and held for the benefit of the Certificateholders and shall execute and
deliver at the Master Servicer's direction such instruments of transfer or
assignment as have been prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the applicable Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which any Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of all such Deleted Mortgage
Loans. An amount equal to the aggregate of the deficiencies described in the
preceding sentence (such amount, the "Substitution Adjustment Amount") shall be
forwarded by the applicable Seller to the Master Servicer and deposited by the
Master Servicer into the Certificate Account not later than the Determination
Date for the Distribution Date relating to the Prepayment Period during which
the related Mortgage Loan became required to be purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.05 on the Determination Date for the Distribution Date in the month
following the month during which such Seller became obligated to repurchase or
replace such Mortgage Loan and upon such deposit of the Purchase Price, the
delivery of the Opinion of Counsel required by Section 2.05, if any, and the
receipt of a Request for File Release, the Trustee shall release the related
Mortgage File held for the benefit of the Certificateholders to such Seller, and
the Trustee shall execute and deliver at such Person's direction the related
instruments of transfer or assignment prepared by such Seller, in each case
without recourse, as shall be necessary to transfer title from the Trustee for
the benefit of the Certificateholders and transfer the Trustee's interest to
such Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Sellers to
cure, repurchase or replace any Mortgage Loan
75
as to which a breach has occurred and is continuing shall constitute the sole
remedy against the Sellers respecting such breach available to
Certificateholders, the Depositor or the Trustee.
(g) The representations and warranties set forth in this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders and the Certificate Insurer with respect to
each Mortgage Loan.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer,
the Certificate Insurer and the Trustee as follows, as of the date hereof and as
of each Subsequent Transfer Date:
(1) The Depositor is duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware
and has full power and authority (corporate and other) necessary to own
or hold its properties and to conduct its business as now conducted by
it and to enter into and perform its obligations under this Agreement
and each Subsequent Transfer Agreement.
(2) The Depositor has the full corporate power and authority
to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and each Subsequent
Transfer Agreement and has duly authorized, by all necessary corporate
action on its part, the execution, delivery and performance of this
Agreement and each Subsequent Transfer Agreement; and this Agreement
and each Subsequent Transfer Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
a legal, valid and binding obligation of the Depositor, enforceable
against the Depositor in accordance with its terms, subject, as to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and (ii) general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by the Depositor, the consummation of the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of the Depositor and will not (A) result in a material breach of any
term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which the Depositor is a
party or by which it may be bound or (C) constitute a material
violation of any statute, order or regulation applicable to the
Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or
meet any of its obligations under this Agreement.
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(4) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or any Subsequent Transfer Agreement
or the ability of the Depositor to perform its obligations under this
Agreement or any Subsequent Transfer Agreement in accordance with the
terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor
with, this Agreement or any Subsequent Transfer Agreement or the
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Depositor
has obtained the same.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan, as of the Closing Date or the related Subsequent
Transfer Date, as applicable, following the transfer of such Mortgage Loan to it
by the Sellers, the Depositor had good title to the Initial Mortgage Loans or
related Subsequent Mortgage Loans, as applicable, and the related Mortgage Notes
were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties set
forth in the two immediately preceding paragraphs shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor, the Certificate
Insurer or the Trustee, of a breach of any of the foregoing representations and
warranties set forth in the immediately preceding paragraph or any
representations in Section 10.04(b) hereof (referred to herein as a "breach"),
which breach materially and adversely affects the interest of the
Certificateholders or the Certificate Insurer, the party discovering such breach
shall give prompt written notice to the others and to each Rating Agency and the
NIM Insurer. The Depositor hereby covenants with respect to the representations
and warranties made by it in this Section 2.04 or any representations in Section
10.04(b) hereof that within 90 days of the earlier of the discovery by it or
receipt of written notice by it from any party of a breach of any representation
or warranty set forth herein made that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan or the Certificate
Insurer, it shall cure such breach in all material respects and, if such breach
is not so cured, shall repurchase or replace the affected Mortgage Loan or Loans
in accordance with the procedure set forth in Section 2.03(f).
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee and the Certificate Insurer an Opinion of
Counsel (which such Representing Party shall use reasonable efforts to obtain),
addressed to the Trustee to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of the Trust Fund or contributions after the Closing Date, as defined in
sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause the any
REMIC formed hereunder to fail to qualify as a REMIC at any time that any
77
Certificates are outstanding. Any Mortgage Loan as to which repurchase or
substitution was delayed pursuant to this paragraph shall be repurchased or the
substitution therefor shall occur (subject to compliance with Sections 2.02,
2.03 or 2.04) upon the earlier of (a) the occurrence of a default or imminent
default with respect to such loan and (b) receipt by the Trustee and the
Certificate Insurer of an Opinion of Counsel to the effect that such repurchase
or substitution, as applicable, will not result in the events described in
clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, any Seller, the Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of section 860G(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within five Business Days of discovery)
give written notice thereof to the other parties and the NIM Insurer and the
Certificate Insurer. In connection therewith, the Trustee shall require CHL, at
CHL's option, to either (i) substitute, if the conditions in Section 2.03(f)
with respect to substitutions are satisfied, a Replacement Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90
days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Section 2.03. The Trustee
shall reconvey to CHL the Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Section
2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and the Certificate Insurer and to perform the duties set forth in
this Agreement.
Section 2.07 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor, the Certificate
Insurer and the Trustee as follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy;
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any affiliate
of the Depositor, the Certificate Insurer or the Trustee and prepared by the
Master Servicer pursuant to this Agreement will contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
information, certificate, statement or report not misleading; and
(c) the Master Servicer shall ensure that the Covered Loans are
serviced in accordance with the requirements of the Credit Insurance Policy so
as not to cause any of the Covered Loans to be excluded from coverage or have
the related coverage reduced under the
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Credit Insurance Policy, otherwise the Master Servicer shall be required to
repurchase the Mortgage Loan at the related Purchase Price, which shall be the
sole remedy in respect of such breach.
Section 2.08 Sponsor Loss Coverage Obligation.
CHL hereby agrees that, for the benefit of the Certificateholders and
the Certificate Insurer, on the Business Day immediately preceding each
Distribution Date it will remit to the Trustee for deposit into the Distribution
Account the amount of any Loss Coverage Payment due for such Distribution Date
as specified in the remittance report delivered by the Master Servicer. The
obligation of CHL to remit Loss Coverage Payments will terminate when the
Sponsor Loss Coverage Amount has been reduced to zero.
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with customary and usual
standards of practice of prudent mortgage loan lenders in the respective states
in which the Mortgaged Properties are located, including taking all required and
appropriate actions under each Required Insurance Policy and taking all required
and appropriate actions under the Credit Insurance Policy on behalf of the
Trustee, other than the payment of the Credit Insurance Premium. In connection
with such servicing and administration, the Master Servicer shall have full
power and authority, acting alone and/or through subservicers as provided in
Section 3.02 hereof, subject to the terms hereof (i) to execute and deliver, on
behalf of the Certificateholders and the Trustee, customary consents or waivers
and other instruments and documents, (ii) to consent to transfers of any
Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages
(but only in the manner provided in this Agreement), (iii) to collect any
Insurance Proceeds, other Liquidation Proceeds and Subsequent Recoveries, and
(iv) subject to Section 3.12(b), to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan; provided
that the Master Servicer shall take no action that is inconsistent with or
prejudices the interests of the Trustee, the Certificate Insurer or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Certificate Insurer and the Trustee under this Agreement. The
Master Servicer shall represent and protect the interest of the Trustee in the
same manner as it currently protects its own interest in mortgage loans in its
own portfolio in any claim, proceeding or litigation regarding a Mortgage Loan
and shall not make or permit any modification, waiver or amendment of any term
of any Mortgage Loan which would (i) cause any REMIC formed hereunder to fail to
qualify as a REMIC, (ii) result in the imposition of any tax under section
860(a) or 860(d) of the Code or (iii) cause any Covered Loan to not be covered
by the Credit Insurance Policy, but in any case the Master Servicer shall not
act in any manner that is a lesser standard than that provided in the first
sentence of this Section 3.01. Without limiting the generality of the foregoing,
the Master Servicer, in its own name or in the name of the Depositor and the
Trustee, is hereby authorized and empowered by the Depositor
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and the Trustee, when the Master Servicer believes it appropriate in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Master Servicer
to service and administer the Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer. The Master Servicer further is authorized and empowered
by the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS, solely as nominee
for the Trustee and its successors and assigns.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers to the
Trustee by the Closing Date.
In addition, the Master Servicer shall administer the Credit Insurance
Policy on behalf of itself, the Sellers, the Depositor, and the Trustee for the
benefit of the Certificateholders and the Certificate Insurer, when it is
necessary to make claims and receive payments under the Credit Insurance Policy.
In connection with its activities as Master Servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and the
Certificateholders, claims to the insurer under any primary insurance policies
and, in this regard, to take any reasonable action necessary to permit recovery
under any primary insurance policies respecting defaulted Mortgage Loans. Any
amounts collected by the Master Servicer under any primary insurance policies
shall be deposited in the Certificate Account.
The Master Servicer shall take whatever action is appropriate to
maximize the amounts payable under the Credit Insurance Policy and to service
the Covered Loans in the manner required by the Credit Insurance Policy. The
Master Servicer shall prepare and submit all claims eligible for submission
under the Credit Insurance Policy and shall, except as otherwise specified in
this Agreement, perform all of the obligations of the insured under the Credit
Insurance Policy.
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In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Scheduled Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor master servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement. Notwithstanding
the foregoing, this Section 3.01 shall not limit the ability of the Master
Servicer to seek recovery of any such amounts from the related Mortgagor under
the terms of the related Mortgage Note, as permitted by law and shall not be an
expense of the Trust.
Section 3.02 Subservicing; Enforcement of the Obligations of Master
Servicer.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that (i)
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder, (ii) that
such subservicing agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the ratings on any Class of Certificates (without regard
to the Certificate Insurance Policy in the case of the Class A Certificates), as
evidenced by a letter to that effect delivered by each Rating Agency to the
Depositor, the Certificate Insurer and the NIM Insurer and (iii) the NIM Insurer
shall have consented to such subservicing agreements (which consent shall not be
unreasonably withheld) with Subservicers, for the servicing and administration
of the Mortgage Loans. The Master Servicer shall deliver to the Trustee copies
of all Sub-Servicing Agreements, and any amendments or modifications thereof,
promptly upon the Master Servicer's execution and delivery of such instruments.
The Master Servicer, with the written consent of the NIM Insurer (which consent
shall not be unreasonably withheld), shall be entitled to terminate any
Subservicing Agreement and the rights and obligations of any Subservicer
pursuant to any Subservicing Agreement in accordance with the terms and
conditions of such Subservicing Agreement. Notwithstanding the provisions of any
subservicing agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer or a subservicer or
reference to actions taken through a subservicer or otherwise, the Master
Servicer shall remain obligated and liable to the Depositor, the Trustee, the
Certificate Insurer and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
subservicer and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
Every subservicing agreement entered into by the Master Servicer shall contain a
provision giving the successor Master Servicer the option to terminate such
agreement without cost in the event a successor Master Servicer is appointed.
All actions of each subservicer performed pursuant to the related subservicing
agreement shall be performed as an agent of the Master Servicer with the same
force and effect as if performed directly by the Master Servicer.
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(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.
Section 3.03 Rights of the Depositor, the Sellers, the
Certificateholders, the NIM Insurer, the Certificate
Insurer and the Trustee in Respect of the Master Servicer.
None of the Trustee, the Sellers, the Certificateholders, the NIM
Insurer, the Certificate Insurer or the Depositor shall have any responsibility
or liability for any action or failure to act by the Master Servicer, and none
of them is obligated to supervise the performance of the Master Servicer
hereunder or otherwise. The Master Servicer shall afford (and any Subservicing
Agreement shall provide that each Subservicer shall afford) the Depositor, the
NIM Insurer, the Certificate Insurer and the Trustee, upon reasonable notice,
during normal business hours, access to all records maintained by the Master
Servicer (and any such Subservicer) in respect of the Master Servicer's rights
and obligations hereunder and access to officers of the Master Servicer (and
those of any such Subservicer) responsible for such obligations. Upon request,
the Master Servicer shall furnish to the Depositor, the NIM Insurer, the
Certificate Insurer and the Trustee its (and any such Subservicer's) most recent
financial statements and such other information relating to the Master
Servicer's capacity to perform its obligations under this Agreement that it
possesses. To the extent such information is not otherwise available to the
public, the Depositor, the NIM Insurer, the Certificate Insurer and the Trustee
shall not disseminate any information obtained pursuant to the preceding two
sentences without the Masters Servicer's (or any such Subservicer's) written
consent, except as required pursuant to this Agreement or to the extent that it
is necessary to do so (i) in working with legal counsel, auditors, taxing
authorities or other governmental agencies, rating agencies or reinsurers or
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having jurisdiction over the
Depositor, the Trustee, the NIM Insurer, the Certificate Insurer or the Trust
Fund, and in either case, the Depositor, the NIM Insurer, the Certificate
Insurer or the Trustee, as the case may be, shall use its reasonable best
efforts to assure the confidentiality of any such disseminated non-public
information. The Depositor may, but is not obligated to, enforce the obligations
of the Master Servicer under this Agreement and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer under this Agreement or exercise the rights of the Master Servicer
under this Agreement; provided by virtue of such performance by the Depositor of
its designee. The Depositor shall not have any responsibility or liability for
any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default or
termination by the Depositor), the Trustee or its designee shall thereupon
assume all of the rights and obligations of the Master Servicer hereunder
arising thereafter (except that the Trustee shall not be (i) liable for losses
of the Master Servicer pursuant to Section 3.10 hereof or any acts or omissions
of the predecessor
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Master Servicer hereunder, (ii) obligated to make Advances if it is prohibited
from doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02 or
2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant to
Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of Section
6.02 hereof). If the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of any Event of Default or termination by
the Depositor), the Trustee (or any other successor servicer) may, at its
option, succeed to any rights and obligations of the Master Servicer under any
subservicing agreement in accordance with the terms thereof; provided that the
Trustee (or any other successor servicer) shall not incur any liability or have
any obligations in its capacity as servicer under a subservicing agreement
arising prior to the date of such succession unless it expressly elects to
succeed to the rights and obligations of the Master Servicer thereunder; and the
Master Servicer shall not thereby be relieved of any liability or obligations
under the subservicing agreement arising prior to the date of such succession.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; Pre-Funding Account; Capitalized
Interest Account; Premium Account.
(a) The Master Servicer shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties are located to collect
all payments called for under the terms and provisions of the Mortgage Loans to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late payment
charge or, subject to Section 3.20, any Prepayment Charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due dates
for payments due on a Mortgage Note for a period not greater than 270 days;
provided that the Master Servicer will not extend the due date of any such
Mortgage Loan past the maturity date for the latest maturing Mortgage Loan as of
the Cut-off Date. In the event of any such arrangement, the Master Servicer
shall make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. In addition, the NIM
Insurer's prior written consent shall be required for any waiver of Prepayment
Charges or for the extension of the due dates for the payments due on a Mortgage
Note, if the aggregate number of Mortgage Loans that have been granted such
waivers or extensions exceeds 5% of the aggregate number of the Mortgage Loans.
The Master Servicer shall not be required to institute or join in litigation
with respect to collection of any payment (whether under a Mortgage, Mortgage
Note or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that enforcing the
provision of the Mortgage or other instrument pursuant to which such payment is
required is prohibited by applicable law.
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(b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited on
a daily basis within two Business Days of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted by
Subservicers or received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans on or before the Cut-off Date) and the following amounts required
to be deposited hereunder:
(1) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(2) all payments on account of interest on the Mortgage Loans
(net of the related Servicing Fee and Prepayment Interest Excess
permitted under Section 3.15 hereof to the extent not previously paid
to or withheld by the Master Servicer);
(3) all Insurance Proceeds (including proceeds from the Credit
Insurance Policy) and Charged-off Loan Proceeds;
(4) all Liquidation Proceeds and Subsequent Recoveries, other
than proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures;
(5) all Compensating Interest;
(6) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
(7) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.10 hereof;
(8) the Purchase Price and any Substitution Adjustment Amount;
(9) all Advances made by the Master Servicer or the Trustee
pursuant to Section 4.01 hereof;
(10) all Prepayment Charges and Master Servicer Prepayment
Charge Payment Amounts; and
(11) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer into
the Certificate Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be remitted by the
Master Servicer. In the event that the Master Servicer shall remit any amount
not required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw or direct the institution
maintaining the Certificate Account, to withdraw such amount from the
Certificate Account, any provision herein to the contrary notwithstanding. Such
withdrawal or direction may be accomplished by
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delivering written notice thereof to the institution maintaining the Certificate
Account, that describes the amounts deposited in error in the Certificate
Account. The Master Servicer shall maintain adequate records with respect to all
withdrawals made pursuant to this Section. All funds deposited in the
Certificate Account shall be held in trust for the Certificateholders and the
Certificate Insurer until withdrawn in accordance with Section 3.08.
No later than 1:00 p.m. Pacific time on the Business Day prior to the
Master Servicer Advance Date, CHL shall remit to the Master Servicer, and the
Master Servicer shall deposit in the Certificate Account, the Seller Interest
Shortfall Payments (if any) for such Master Servicer Advance Date.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders and the Certificate Insurer, the Distribution Account. The
Trustee shall, promptly upon receipt, deposit in the Distribution Account and
retain therein the following:
(1) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a);
(2) any Loss Coverage Payment made by CHL pursuant to Section
2.08;
(3) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments; and
(4) any amount to be deposited by the Trustee in the
Distribution Account pursuant to Section 3.05(d) and 3.05(e).
The foregoing requirements for remittance by the Master Servicer and
deposit by the Trustee into the Distribution Account shall be exclusive. In the
event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering a written notice to the Trustee that
describes the amounts deposited in error in the Distribution Account. All funds
deposited in the Distribution Account shall be held by the Trustee in trust for
the Certificateholders and the Certificate Insurer until disbursed in accordance
with this Agreement or withdrawn in accordance with Section 3.08. In no event
shall the Trustee incur liability for withdrawals from the Distribution Account
at the direction of the Master Servicer.
(d) If the Pre-Funded Amount is greater than zero, the Trustee shall
establish and maintain, on behalf of the Certificateholders and the Certificate
Insurer, the Pre-Funding Account, and on the Closing Date, CHL shall remit the
Pre-Funded Amount to the Trustee for deposit in the Pre-Funding Account.
On the Business Day before the Distribution Date following the end of
the Funding Period, the Trustee shall (i) withdraw the amount on deposit in the
Pre-Funding Account (net of investment income), (ii) promptly deposit such
amount in the Distribution
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Account, and (iii) distribute each amount to the Certificates on the
Distribution Date pursuant to Section 4.04.
(e) If the Capitalized Interest Deposit is greater than zero, the
Trustee shall establish and maintain, on behalf of the Certificateholders and
the Certificate Insurer, the Capitalized Interest Account. On the Closing Date,
CHL shall remit the Capitalized Interest Deposit to the Trustee for deposit in
the Capitalized Interest Account. On each Distribution Account Deposit Date
related to a Funding Period Distribution Date, the Trustee shall transfer from
the Capitalized Interest Account to the Distribution Account an amount equal to
the Capitalized Interest Requirement (which, to the extent required, may include
investment earnings on amounts on deposit therein) for the related Distribution
Date.
If any funds remain in the Capitalized Interest Account at the end of
the Distribution Account Deposit Date for the last Funding Period Distribution
Date, the Trustee shall distribute any such remaining funds to the order of CHL
on the last Funding Period Distribution Date.
(f) Each institution that maintains the Certificate Account, the
Distribution Account, the Premium Account, the Pre-Funding Account or the
Capitalized Interest Account shall invest the funds in each such account, as
directed by the Master Servicer, in Permitted Investments, which shall mature
not later than (x) in the case of the Certificate Account, the second Business
Day next preceding the related Distribution Account Deposit Date (except that if
such Permitted Investment is an obligation of the institution that maintains
such Certificate Account, then such Permitted Investment shall mature not later
than the Business Day next preceding such Distribution Account Deposit Date) and
(y) in the case of the Distribution Account, the Premium Account, the
Pre-Funding Account and the Capitalized Interest Account, the Business Day
immediately preceding the first Distribution Date that follows the date of such
investment (except that if such Permitted Investment is an obligation of the
institution that maintains such Distribution Account, the Premium Account or
Pre-Funding Account, then such Permitted Investment shall mature not later than
such Distribution Date), in each case, shall not be sold or disposed of prior to
its maturity. All such Permitted Investments shall be made in the name of the
Trustee, for the benefit of the Certificateholders and the Certificate Insurer.
In the case of (i) the Certificate Account and the Distribution Account, all
income and gain net of any losses realized from any such investment shall be for
the benefit of the Master Servicer as servicing compensation and shall be
remitted to it monthly as provided herein, (ii) the Pre-Funding Account, all
income and gain net of any losses realized from any such investment shall be for
the benefit of the Depositor and shall be remitted to the Depositor as provided
herein, (iii) the Capitalized Interest Account, all income and gain net of any
losses realized from any such investment on deposit therein shall be credited
thereto and (iv) the Premium Account, all income and gain net of any losses
realized from any such investment shall be for the benefit of the
Certificateholders and the Certificate Insurer and shall be remitted to the
Premium Account. The amount of any losses incurred in the Certificate Account or
the Distribution Account in respect of any such investments shall be deposited
by the Master Servicer in the Certificate Account or paid to the Trustee for
deposit into the Distribution Account out of the Master Servicer's own funds
immediately as realized. The amount of any losses incurred in the Pre-Funding
Account or the Capitalized Interest Account in respect of any such investments
shall be paid by the Master Servicer to the Trustee for deposit into the
Pre-Funding Account or the Capitalized Interest
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Account, as applicable, out of the Master Servicer's own funds immediately as
realized. The Trustee shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Certificate
Account, the Distribution Account, the Premium Account, the Pre-Funding Account
or the Capitalized Interest Account and made in accordance with this Section
3.05 (other than as obligor on any such investment). The Master Servicer shall
not be liable for the amount of any loss incurred in respect of any investment
or lack of investment of funds held in the Premium Account and made in
accordance with this Section 3.05.
(g) The Master Servicer shall give at least 30 days advance notice to
the Trustee, each Seller, the Certificate Insurer, each Rating Agency and the
Depositor of any proposed change of location of the Certificate Account prior to
any change thereof. The Trustee shall give at least 30 days advance notice to
the Master Servicer, each Seller, the Certificate Insurer, each Rating Agency
and the Depositor of any proposed change of the location of the Distribution
Account, the Pre-Funding Account, the Premium Account, the Carryover Reserve
Fund or the Capitalized Interest Account prior to any change thereof.
(h) Except as otherwise expressly provided in this Agreement, if any
default occurs under any Permitted Investment, the Trustee may and, subject to
Sections 8.01 and 8.02(a)(4), at the request of the Holders of Certificates
representing more than 50% of the Voting Rights), or the NIM Insurer, shall take
any action appropriate to enforce payment or performance, including the
institution and prosecution of appropriate proceedings.
(i) Upon its initial receipt of written instructions from the Master
Servicer pursuant to Section 3.08(b)(vi) directing the Trustee to deposit an
amount in the Premium Account, the Trustee shall establish and maintain, on
behalf of the Certificateholders and the Certificate Insurer, the Premium
Account.
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the Master
Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors (or
advances by the Master Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Master Servicer to compel a Mortgagor to
establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination
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of this Agreement in accordance with Section 9.01 hereof. The Escrow Accounts
shall not be a part of the Trust Fund.
Section 3.07 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Master Servicer shall afford the Depositor, the NIM Insurer, the
Trustee and the Certificate Insurer reasonable access to all records and
documentation regarding the Mortgage Loans and all accounts, insurance policies
and other matters relating to this Agreement, such access being afforded without
charge, but only upon reasonable request and during normal business hours at the
offices of the Master Servicer designated by it. Upon request, the Master
Servicer shall furnish to the Trustee and the NIM Insurer its most recent
publicly available financial statements and any other information relating to
its capacity to perform its obligations under this Agreement reasonably
requested by the NIM Insurer.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to each Certificateholder or
Certificate Owner that is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder or
Certificate Owner to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to be reimbursed by each such
Certificateholder or Certificate Owner for actual expenses incurred by the
Master Servicer in providing such reports and access.
Section 3.08 Permitted Withdrawals from the Certificate Account,
Distribution Account, Carryover Reserve Fund and the
Principal Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not
previously paid to or withheld by the Master Servicer), as servicing
compensation in accordance with Section 3.15, that portion of any
payment of interest that equals the Servicing Fee for the period with
respect to which such interest payment was made, and, as additional
servicing compensation to the Master Servicer, those other amounts set
forth in Section 3.15;
(ii) to reimburse each of the Master Servicer and the Trustee
for Advances made by it with respect to the Mortgage Loans, such right
of reimbursement pursuant to this subclause (ii) being limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, Liquidation Proceeds, Insurance Proceeds and Subsequent
Recoveries (other than proceeds of the Credit Insurance Policy) but not
Charged-off Loan Proceeds) that represent late recoveries of payments
of principal and/or interest on such particular Mortgage Loan(s) in
respect of which any such Advance was made;
(iii) [Reserved];
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(iv) to reimburse each of the Master Servicer and the Trustee
for any Nonrecoverable Advance previously made;
(v) to reimburse the Master Servicer from Insurance Proceeds
(other than proceeds of the Credit Insurance Policy) for Insured
Expenses covered by the related Insurance Policy;
(vi) to pay the Master Servicer any unpaid Servicing Fees and
to reimburse it for any unreimbursed Servicing Advances, the Master
Servicer's right to reimbursement of Servicing Advances pursuant to
this subclause (vi) with respect to any Mortgage Loan being limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, Liquidation Proceeds, Insurance Proceeds and Subsequent
Recoveries, Charged-off Loan Proceeds and purchase and repurchase
proceeds) that represent late recoveries of the payments for which such
advances were made pursuant to Section 3.01 or Section 3.06;
(vii) to pay to the applicable Seller, the Depositor or the
Master Servicer, as applicable, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant
to Section 2.02, 2.03, 2.04 or 3.12, all amounts received thereon and
not taken into account in determining the related Purchase Price of
such repurchased Mortgage Loan;
(viii) to reimburse the applicable Seller, the Master
Servicer, the NIM Insurer or the Depositor for expenses incurred by any
of them in connection with the Mortgage Loans or Certificates and
reimbursable pursuant to Section 6.03 hereof; provided that such amount
shall only be withdrawn following the withdrawal from the Certificate
Account for deposit into the Distribution Account pursuant to the
following paragraph;
(ix) to pay any lender-paid primary mortgage insurance
premiums (other than the Credit Insurance Premium);
(x) to withdraw any amount deposited in the Certificate
Account and not required to be deposited therein; and
(xi) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 1:00 p.m. Pacific time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Certificate
Account and remit to the Trustee the Interest Remittance Amount, the Principal
Remittance Amount, Prepayment Charges collected and the Master Servicer
Prepayment Charge Payment Amount, and the Trustee shall deposit such amount in
the Distribution Account.
The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On the
Closing Date, CHL shall deposit into the Principal Reserve Fund $200.00. Funds
on deposit in the Principal Reserve Fund shall not be invested. The Principal
Reserve Fund shall be treated as an "outside reserve fund" under
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applicable Treasury regulations and shall not be part of any REMIC created under
this Agreement.
On the Business Day before the first Distribution Date, the Trustee
shall transfer $100.00 from the Principal Reserve Fund to the Distribution
Account, and on the first Distribution Date, the Trustee shall withdraw $100 and
distribute such amount to the Class A-R Certificates in reduction of the
Certificate Principal Balance thereof.
On the Business Day before the Class P Principal Distribution Date, the
Trustee shall transfer from the Principal Reserve Fund to the Distribution
Account $100.00 and shall distribute such amount to the Class P Certificates on
the Class P Principal Distribution Date. Following the distribution to be made
in accordance with the preceding sentence, the Trustee shall then terminate the
Principal Reserve Fund.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii), (iv),
(v), (vi), (vii), (viii), (ix) and (x) above. Prior to making any withdrawal
from the Certificate Account pursuant to subclause (iv), the Master Servicer
shall deliver to the Trustee and the Certificate Insurer an Officer's
Certificate of a Servicing Officer indicating the amount of any previous Advance
determined by the Master Servicer to be a Nonrecoverable Advance and identifying
the related Mortgage Loan(s), and their respective portions of such
Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distribution to the Certificateholders, the Certificate Insurer and the Swap
Account in the manner specified in this Agreement (and to withhold from the
amounts so withdrawn, the amount of any taxes that it is authorized to retain
pursuant to the third paragraph of Section 8.11). On each Distribution Date, the
Trustee shall pay (or cause to be paid) the applicable Credit Insurance Premium
to the Credit Insurer from funds on deposit in the Distribution Account. To the
extent the Trustee receives any payments under the Credit Insurance Policy, it
shall notify the Master Servicer and promptly deposit such amounts into the
Certificate Account. Payments to the Credit Insurer shall be made by the Trustee
by wire transfer of immediately available funds to the following account, unless
the Credit Insurer notifies the Trustee in writing: ABA#000000000,
DDA#198002383687, Bank Name: US Bank, Re: Policy No. V29, [include reporting
month here]. In addition, the Trustee may from time to time make withdrawals
from the Distribution Account for the following purposes:
(i) to pay the Trustee the Trustee Fee on each Distribution
Date;
(ii) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in
or credited to the Distribution Account;
(iii) to withdraw pursuant to Section 3.05 any amount
deposited in the Distribution Account and not required to be deposited
therein;
(iv) to reimburse the Trustee for any unreimbursed Advances
made by it pursuant to Section 4.01(d) hereof, such right of
reimbursement pursuant to this
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subclause (iv) being limited to (x) amounts received on the related
Mortgage Loan(s) in respect of which any such Advance was made and (y)
amounts not otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(ii) hereof;
(v) to reimburse the Trustee (other than from amounts
representing Charged-off Loan Proceeds) for any Nonrecoverable Advance
previously made by the Trustee pursuant to Section 4.01(d) hereof, such
right of reimbursement pursuant to this subclause (v) being limited to
amounts not otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(iv) hereof;
(vi) upon receipt with written instructions by the Master
Servicer, deposit all or a portion of the Credit Insurance Premium into
the Premium Account; and
(vii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
(c) The Trustee shall withdraw funds from the Carryover Reserve Fund
for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the third paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Carryover Reserve Fund for the following purposes:
(1) to withdraw any amount deposited in the Carryover Reserve
Fund and not required to be deposited therein; and
(2) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09 [Reserved].
Section 3.10 Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures) shall be deposited in the Certificate Account. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their
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benefit, be added to the principal balance of the Mortgage Loan, notwithstanding
that the terms of the Mortgage Loan so permit. Such costs shall be recoverable
by the Master Servicer out of late payments by the related Mortgagor or out of
Liquidation Proceeds or Subsequent Recoveries to the extent permitted by Section
3.08 hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with respect to
such Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the original principal balance of the related Mortgage Loan, (ii)
the replacement value of the improvements that are part of such Mortgaged
Property, or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended. If the hazard policy contains a deductible clause, the Master Servicer
will be required to deposit from its own funds into the Certificate Account the
amounts that would have been deposited therein but for the deductible clause.
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
The Master Servicer shall notify the Trustee that any such substitution,
modification or assumption agreement has been completed by forwarding to the
Trustee the executed original of such substitution or assumption agreement,
which document shall be added
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to the related Mortgage File and shall, for all purposes, be considered a part
of such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Trustee for signature
and shall direct, in writing, the Trustee to execute the assumption agreement
with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. The Master Servicer shall notify
the Trustee that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original of such substitution or
assumption agreement, which in the case of the original shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Master Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds and Realized Losses; Repurchase of
Certain Mortgage Loans; Auction of Charged-off Mortgage
Loans.
(a) Notwithstanding the first sentence of Section 3.01, the Master
Servicer may agree to any modification of any Mortgage Loan (the "Modified
Mortgage Loan") if (i) CHL purchases the Modified Mortgage Loan from the Trust
Fund immediately following the modification as described below and (ii) the
Stated Principal Balance of such Mortgage Loan, when taken together with the
aggregate of the Stated Principal Balances of all other Mortgage Loans that have
been so modified since the Closing Date at the time of those modifications, does
not exceed an amount equal to 5% of the aggregate Certificate Principal Balance
of the related Certificates. Effective immediately after the modification, and,
in any event, on the same Business Day on which the modification occurs, all
interest of the Trustee in the Modified Mortgage Loan shall automatically be
deemed transferred and assigned to CHL and all benefits and burdens of ownership
thereof, including the right to accrued interest thereon from the date of
modification and the risk of default thereon, shall pass to CHL. The Master
Servicer shall promptly deliver to the Trustee a certification of a Servicing
Officer to the effect that all requirements of this paragraph have been
satisfied with respect to the Modified Mortgage Loan. For federal income tax
purposes, the Trustee shall account for such purchase as a prepayment in
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full of the Modified Mortgage Loan. CHL shall remit the Purchase Price to the
Master Servicer for deposit into the Certificate Account pursuant to Section
3.05 within one Business Day after the purchase of the Modified Mortgage Loan.
Upon receipt by the Trustee of written notification of any such deposit signed
by a Servicing Officer, the Trustee shall release to CHL or its designee the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as shall be necessary to vest in
CHL any Modified Mortgage Loan previously transferred and assigned pursuant
hereto. CHL covenants and agrees to indemnify the Trust Fund against any
liability for any "prohibited transaction" taxes and any related interest,
additions, and penalties imposed on the Trust Fund established hereunder as a
result of any modification of a Mortgage Loan effected pursuant to this
subsection (a), any holding of a Modified Mortgage Loan by the Trust Fund or any
purchase of a Modified Mortgage Loan by CHL (but such obligation shall not
prevent CHL or any other appropriate Person from in good faith contesting any
such tax in appropriate proceedings and shall not prevent CHL from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). CHL shall have no right of reimbursement for any amount paid
pursuant to the foregoing indemnification, except to the extent that the amount
of any tax, interest, and penalties, together with interest thereon, is refunded
to the Trust Fund or CHL. If the Master Servicer agrees to a modification of any
Mortgage Loan pursuant to this Section 3.12(a), and if such Mortgage Loan
carries a Prepayment Charge provision, CHL shall deliver to the Trustee the
amount of the Prepayment Charge, if any, that would have been due had such
Mortgage Loan been prepaid at the time of such modification, for deposit into
the Certificate Account (not later than 1:00 p.m. Pacific time on the Master
Servicer Advance Date immediately succeeding the date of such modification) for
distribution in accordance with the terms of this Agreement.
(b) The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Certificate Account pursuant to Section 3.08
hereof). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property and any related Subsequent Recoveries, as
contemplated in Section 3.08 hereof. If the Master Servicer has knowledge that a
Mortgaged Property that the Master Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
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With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Master Servicer shall ensure
that the title to such REO Property references this Agreement and the Trustee's
capacity thereunder. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall either itself or through an agent selected by the Master
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master Servicer
deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds, but in
no event later than three years after its acquisition by the Trust Fund or, at
the expense of the Trust Fund, the Master Servicer shall request, more than 60
days prior to the day on which such three-year period would otherwise expire, an
extension of the three-year grace period. In the event the Trustee shall have
been supplied with an Opinion of Counsel (such opinion not to be an expense of
the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of the Trust Fund as defined in section
860F of the Code or cause any REMIC formed hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, and the Trust Fund may
continue to hold such Mortgaged Property (subject to any conditions contained in
such Opinion of Counsel) after the expiration of such three-year period.
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust Fund
in such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition
of any federal, state or local income taxes on the income earned from such
Mortgaged Property under section 860G(c) of the Code or otherwise, unless the
Master Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure
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would exceed the costs and expenses of bringing such a proceeding. The income
earned from the management of any Mortgaged Properties acquired through
foreclosure or other judicial proceeding, net of reimbursement to the Master
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Certificate Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan and
any Subsequent Recoveries, net of any payment to the Master Servicer as provided
above, shall be deposited in the Certificate Account as provided in Section 3.05
for distribution on the related Distribution Date, except that any Excess
Proceeds shall be retained by the Master Servicer as additional servicing
compensation.
The proceeds of any Liquidated Mortgage Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12;
second, to reimburse the Master Servicer for any unreimbursed Advances, pursuant
to Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid
interest (to the extent no Advance has been made for such amount) on the
Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due Date
occurring in the month in which such amounts are required to be distributed; and
fourth, as a recovery of principal of the Mortgage Loan.
(c) [Reserved].
(d) The Master Servicer, in its sole discretion, shall have the right
to elect (by written notice sent to the Trustee) to purchase for its own account
from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a
price equal to the Purchase Price; provided, however, that the Master Servicer
may only exercise this right on or before the last day of the calendar month in
which such Mortgage Loan became 150 days delinquent (such month, the "Eligible
Repurchase Month"); provided further, that any such Mortgage Loan which becomes
current but thereafter becomes delinquent may be purchased by the Master
Servicer pursuant to this Section in any ensuing Eligible Repurchase Month. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the Certificate Account. Any purchase of a Mortgage Loan pursuant to this
Section 3.12(d) shall be accomplished by remittance to the Master Servicer for
deposit in the Certificate Account of the Purchase Price. The Trustee, upon
receipt of certification from the Master Servicer of such deposit and a Request
for File Release from the Master Servicer, shall release or cause to be released
to the purchaser of such Mortgage Loan the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment prepared by the
purchaser of such Mortgage Loan, in each case without
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recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan
any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage
Loan shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The purchaser of such
Mortgage Loan shall thereupon own such Mortgage Loan, and all security and
documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
(e) The Master Servicer shall use reasonable efforts to solicit bids on
a quarterly basis from at least two unaffiliated third parties for the purchase
of a Charged-off Mortgage Loan during the related Auction Period. If more than
one Charged-off Mortgage Loan exists, the Master Servicer may solicit bids for a
single Charged-off Mortgage Loan, a portion of the outstanding Charged-off
Mortgage Loans or all of the outstanding Charged-off Mortgage Loans. If fewer
than two bids with respect to a Charged-off Mortgage Loan are received during
the related Auction Period, the Master Servicer shall, in accordance with
Section 3.12(b), use reasonable efforts to foreclose the Mortgaged Property
securing the related Charged-off Mortgage Loan to the extent that the Master
Servicer determines that the proceeds of such foreclosure would exceed the costs
and expenses of bringing such a proceeding. If two or more bids with respect to
a Charged-off Mortgage Loan are received during the related Auction Period, the
Master Servicer shall arrange for the sale of the Charged-off Mortgage Loan to
the highest bidder. The Master Servicer shall prepare any necessary
documentation required to transfer title to the Charged-off Mortgage Loans to
the related purchaser. The Master Servicer shall deduct from the proceeds of the
sale or foreclosure of such Charged-off Mortgage Loan the related Charged-off
Mortgage Loan Disposition Fee and any unreimbursed Servicing Advances with
respect to such Charged-off Mortgage Loan in accordance with Section 3.08. The
Master Servicer and its affiliates shall not purchase Charged-off Mortgage Loans
in any auction described in this subsection.
Section 3.13 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will promptly notify the
Trustee by delivering a Request for File Release. Upon receipt of such request,
the Trustee shall promptly release the related Mortgage File to the Master
Servicer, and the Trustee shall at the Master Servicer's direction execute and
deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage in each case provided by the Master Servicer, together
with the Mortgage Note with written evidence of cancellation thereon. The Master
Servicer is authorized to cause the removal from the registration on the MERS(R)
System of such Mortgage and to execute and deliver, on behalf of the Trust Fund
and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Certificate Account, the Distribution Account, the
Carryover Reserve Fund or the related subservicing account. From time to time
and as shall be appropriate for the servicing or foreclosure of any Mortgage
Loan, including for such purpose, collection under any policy of flood insurance
any fidelity bond or errors or omissions policy, or for the purposes of
effecting a partial release of any Mortgaged
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Property from the lien of the Mortgage or the making of any corrections to the
Mortgage Note or the Mortgage or any of the other documents included in the
Mortgage File, the Trustee shall, upon delivery to the Trustee of a Request for
Document Release or a Request for File Release, as applicable, release the
documents specified in such request or the Mortgage File, as the case may be, to
the Master Servicer. Subject to the further limitations set forth below, the
Master Servicer shall cause the Mortgage File or documents so released to be
returned to the Trustee when the need therefor by the Master Servicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds thereof are
deposited in the Certificate Account, in which case the Master Servicer shall
deliver to the Trustee a Request for File Release for any remaining documents in
the Mortgage File not in the possession of the Master Servicer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity. Notwithstanding the foregoing, the Master Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Trustee to be returned to the Trustee within 21 calendar days
after possession thereof shall have been released by the Trustee unless (i) the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Certificate Account, and the Master
Servicer shall have delivered to the Trustee a Request for File Release or (ii)
the Mortgage File or document shall have been delivered to an attorney or to a
public trustee or other public official as required by law for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property and the Master Servicer shall have delivered to the
Trustee an Officer's Certificate of a Servicing Officer certifying as to the
name and address of the Person to which the Mortgage File or the documents
therein were delivered and the purpose or purposes of such delivery.
Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds, Insurance Proceeds or
Subsequent Recoveries in respect of any Mortgage Loan. All Mortgage Files and
funds collected or held by, or under the control of, the Master Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds or Subsequent Recoveries
including but not limited to, any funds on deposit in the Certificate Account,
shall be held by the Master Servicer for and on behalf of the Trust Fund and
shall be and remain the sole and exclusive property of the Trust Fund, subject
to the applicable provisions of this Agreement. The Master Servicer also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Certificate Account, the
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Distribution Account, the Pre-Funding Account, the Premium Account, the
Carryover Reserve Fund or in any Escrow Account (as defined in Section 3.06), or
any funds that otherwise are or may become due or payable to the Trustee for the
benefit of the Certificateholders and the Certificate Insurer, to any claim,
lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of set
off against any Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan, except, however, that the Master Servicer shall be entitled to
set off against and deduct from any such funds any amounts that are properly due
and payable to the Master Servicer under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Certificate Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of any Excess Proceeds,
assumption fees, late payment charges, Prepayment Interest Excess, and all
income and gain net of any losses realized from Permitted Investments shall be
retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(b) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.
Section 3.16 Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and
Certificate Owners and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the Master Servicer
designated by it. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
Section 3.17 Annual Statement as to Compliance.
(a) The Master Servicer shall deliver to the Depositor, the Certificate
Insurer and the Trustee on or before March 15 of each year, commencing with its
2008 fiscal year, an Officer's Certificate stating, as to the signer thereof,
that (i) a review of the activities of the Master Servicer during the preceding
calendar year (or applicable portion thereof) and of the
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performance of the Master Servicer under this Agreement, has been made under
such officer's supervision and (ii) to the best of such officer's knowledge,
based on such review, the Master Servicer has fulfilled all its obligations
under this Agreement, in all material respects throughout such year (or
applicable portion thereof), or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status thereof and (iii) to the best of such
officer's knowledge, each Subservicer has fulfilled all its obligations under
its Subservicing Agreement in all material respects throughout such year, or, if
there has been a failure to fulfill any such obligation in any material respect
specifying each such failure known to such officer and the nature and status
thereof.
(b) The Master Servicer shall cause each Subservicer to deliver to the
Depositor, the Certificate Insurer and the Trustee on or before March 15 of each
year, commencing with its 2008 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of such Subservicer
during the preceding calendar year (or applicable portion thereof) and of the
performance of the Subservicer under the applicable Subservicing Agreement or
primary servicing agreement, has been made under such officer's supervision and
(ii) to the best of such officer's knowledge, based on such review, such
Subservicer has fulfilled all its obligations under the applicable Subservicing
Agreement or primary servicing agreement, in all material respects throughout
such year (or applicable portion thereof), or, if there has been a failure to
fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof.
(c) The Trustee shall forward a copy of each such statement to each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder or Certificate Owner upon request at the Master Servicer's
expense, provided such statement is delivered by the Master Servicer to the
Trustee.
Section 3.18 The Corridor Contract.
CHL shall cause The Bank of New York to enter into the Corridor
Contract Administration Agreement and shall assign all of its right, title and
interest in and to the interest rate corridor transaction evidenced by the
Corridor Contract to, and shall cause all of its obligations in respect of such
transaction to be assumed by, the Corridor Contract Administrator, on the terms
and conditions set forth in the Corridor Contract Assignment Agreement. The
Trustee's rights to receive certain proceeds of the Corridor Contract as
provided in the Corridor Contract Administration Agreement will be an asset of
the Trust Fund but will not be an asset of any REMIC. The Trustee shall deposit
any amounts received from time to time with respect to the Corridor Contract
into the Carryover Reserve Fund. The Master Servicer shall deposit any amounts
received on behalf of the Trustee from time to time with respect to the Corridor
Contract into the Carryover Reserve Fund.
No later than two Business Days following each Distribution Date, the
Trustee shall provide the Corridor Contract Administrator with information
regarding the Certificate Principal Balance of the Class A-1 Certificates after
all distributions on such Distribution Date.
The Trustee shall direct the Corridor Contract Administrator to
terminate the Corridor Contract upon the occurrence of certain events of default
or termination events to the
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extent specified thereunder. Upon any such termination, the Corridor Contract
Counterparty will be obligated to pay the Corridor Contract Administrator an
amount in respect of such termination, and the portion of such amount that is
distributable to the Trust Fund pursuant to the Corridor Contract Administration
Agreement and received by the Trustee or the Master Servicer for the benefit of
the Trust Fund, as the case may be, in respect of such termination shall be
deposited and held in the Carryover Reserve Fund to pay Net Rate Carryover for
the Class A-1 Certificates as provided in Section 4.04(f) on the Distribution
Dates following such termination to and including the Corridor Contract
Termination Date, and shall not be available for distribution to the Class C
Certificates pursuant to Section 4.08(c) until such Corridor Contract
Termination Date. On the Corridor Contract Termination Date, after all other
distributions on such date, if any such amount in respect of early termination
of the Corridor Contract remains in the Carryover Reserve Fund, such amounts
shall be distributed by the Trustee to the Class C Certificates.
Section 3.19 [Reserved].
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Master Servicer may not waive any Prepayment Charge or portion thereof required
by the terms of the related Mortgage Note unless (i) such Mortgage Loan is in
default or the Master Servicer believes that such a default is imminent, and the
Master Servicer determines that such waiver would maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the value of
such Prepayment Charge, or (ii) (A) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law relating
to creditors' rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment, or (B) the enforceability is otherwise
limited or prohibited by applicable law. In the event of a Principal Prepayment
in full or in part with respect to any Mortgage Loan, the Master Servicer shall
deliver to the Trustee an Officer's Certificate substantially in the form of
Exhibit T no later than the third Business Day following the immediately
succeeding Determination Date with a copy to the Class P Certificateholders. If
the Master Servicer has waived or does not collect all or a portion of a
Prepayment Charge relating to a Principal Prepayment in full or in part due to
any action or omission of the Master Servicer, other than as provided above, the
Master Servicer shall deliver to the Trustee, together with the Principal
Prepayment in full or in part, the amount of such Prepayment Charge (or such
portion thereof as had been waived) for deposit into the Certificate Account
(not later than 1:00 p.m. Pacific time on the immediately succeeding Master
Servicer Advance Date, in the case of such Prepayment Charge) for distribution
in accordance with the terms of this Agreement.
(b) Upon discovery by the Master Servicer or a Responsible Officer of
the Trustee of a breach of the foregoing subsection (a), the party discovering
the breach shall give prompt written notice to the other parties.
(c) CHL represents and warrants to the Depositor and the Trustee, as of
the Closing Date and each Subsequent Transfer Date, that the information in the
Prepayment Charge Schedule (including the attached prepayment charge summary) is
complete and accurate in all
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material respects at the dates as of which the information is furnished and each
Prepayment Charge is permissible and enforceable in accordance with its terms
under applicable state law, except as the enforceability thereof is limited due
to acceleration in connection with a foreclosure or other involuntary payment.
(d) Upon discovery by the Master Servicer or a Responsible Officer of
the Trustee of a breach of the foregoing clause (c) that materially and
adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties hereto. Within 60 days of the earlier of discovery
by the Master Servicer or receipt of notice by the Master Servicer of breach,
the Master Servicer shall cure the breach in all material respects or shall pay
into the Certificate Account the amount of the Prepayment Charge that would
otherwise be due from the Mortgagor, less any amount representing such
Prepayment Charge previously collected and paid by the Master Servicer into the
Certificate Account.
Section 3.21 Swap Contract.
The Trustee's rights to receive certain proceeds of the Swap Contract
as provided in the Swap Contract Administration Agreement shall be rights of the
Trustee as Swap Trustee hereunder, shall be an asset of the Swap Trust and shall
not be an asset of the Trust Fund or of any REMIC. The Swap Trustee shall
deposit any amounts received from time to time from the Swap Contract
Administrator with respect to the Swap Contract into the Swap Account. The
Master Servicer shall deposit any amounts received on behalf of the Swap Trustee
from time to time with respect to the Swap Contract into the Swap Account.
On the Business Day preceding each Distribution Date, the Swap Trustee
shall notify the Swap Contract Administrator of any amounts distributable to the
Class A Certificates pursuant to Section 4.04(e)(3) through (7) that will remain
unpaid following all distributions to be made on such Distribution Date pursuant
to Section 4.04(a) through (d).
No later than two Business Days following each Distribution Date, the
Trustee shall provide the Swap Contract Administrator with information regarding
the aggregate Certificate Principal Balance of the Class A-2 and Class A-3
Certificates after all distributions on such Distribution Date.
Upon the Swap Contract Administrator obtaining actual knowledge of a
Xxxxx'x First Level Downgrade or a S&P First Level Downgrade with respect to the
Swap Counterparty (each as defined in the Swap Contract) or upon the Swap
Contract Administrator obtaining actual knowledge of a Xxxxx'x Second Level
Downgrade or a S&P Second Level Downgrade with respect to the Swap Counterparty
(each as defined in the Swap Contract), the Swap Trustee shall promptly provide
written notice thereof to the Certificate Insurer and direct the Swap Contract
Administrator to (i) demand payment of the Delivery Amount (as defined in the
Swap Contract) from the Swap Counterparty on each Valuation Date (as defined in
the Swap Contract) and to perform its other obligations in accordance with the
Swap Contract and (ii) take such other action required under the Swap Contract.
If a Delivery Amount is demanded, the Swap Contract Administrator, in accordance
with the Swap Contract Administration Agreement, shall establish an account to
hold cash and other eligible investments pledged under the Swap Contract. Any
cash or other Eligible Collateral (as defined in the Swap Contract) pledged
under the Swap Contract shall not be part of the Distribution Account or the
Swap Account unless remitted to
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such accounts by the Swap Contract Administrator in accordance with the Swap
Contract Administration Agreement. If Eligible Collateral with a value equal to
the Delivery Amount is not delivered to the Swap Contract Administrator by the
Swap Counterparty, the Swap Trustee shall promptly provide written notice
thereof to the Certificate Insurer and direct the Swap Contract Administrator to
notify the Swap Counterparty of such failure.
Upon the Swap Trustee obtaining actual knowledge of an Event of Default
(as defined in the Swap Contract) or Termination Event (as defined in the Swap
Contract) for which the Swap Contract Administrator has the right to designate
an Early Termination Date (as defined in the Swap Contract), the Swap Trustee
shall act at the written direction of the Depositor as to whether to direct the
Swap Contract Administrator to designate an Early Termination Date; provided,
however, that the Swap Trustee shall provide written notice to each Rating
Agency and the Certificate Insurer following the Event of Default or Termination
Event. Upon the termination of the Swap Contract under the circumstances
contemplated by this Section 3.21, the Swap Trustee shall use its reasonable
best efforts to enforce the rights of the Swap Contract Administrator as may be
permitted by the terms of the Swap Contract and consistent with the terms hereof
and CHL shall assist the Swap Contract Administrator in procuring a replacement
swap contract with terms approximating those of the original Swap Contract in
form and substance acceptable to the Certificate Insurer and with a replacement
Swap Counterparty acceptable to the Certificate Insurer.
Any Swap Termination Payment received from the Swap Counterparty shall
be used to pay any upfront amount required under any replacement swap contract
and any excess shall be distributed to CHL and will not be available to make
distributions in respect of any Class of Certificates. In the event that a
replacement swap contract cannot be procured, any Swap Termination Payment
received from the Swap Counterparty in respect of the termination of the
original Swap Contract shall, in accordance with the Swap Contract
Administration Agreement, be retained by the Swap Contract Administrator and
remitted to the Swap Trustee on subsequent Distribution Dates up to and
including the Swap Contract Termination Date to pay any amounts distributable to
the Class A Certificates pursuant to Section 4.04(e)(3) through (7) that will
remain unpaid following all distributions to be made on such Distribution Date
pursuant to Section 4.04(a) through (d). Any portion of such upfront amount
remaining after the Swap Contract Termination Date shall be distributed to CHL
and will not be available to make distributions in respect of any Class of
Certificates.
In the event that the swap counterparty in respect of a replacement
swap contract pays any upfront amount to the Swap Contract Administrator in
connection with entering into the replacement swap contract and such upfront
amount is received by the Swap Contract Administrator prior to the Distribution
Date on which any Swap Termination Payment will be payable to the Swap
Counterparty in respect of the original Swap Contract, a portion of that upfront
amount equal to the lesser of (x) that upfront amount and (y) the amount of the
Swap Termination Payment due to the Swap Counterparty in respect of
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the original Swap Contract (the "Adjusted Replacement Upfront Amount") shall be
included in Interest Funds for that Distribution Date and any upfront amount in
excess of the Adjusted Replacement Upfront Amount shall be distributed to CHL
and will not be available to make distributions in respect of any Class of
Certificates. Any upfront amount paid to the Swap Contract Administrator by the
Swap Counterparty in respect of a replacement swap contract after the
Distribution Date on which any Swap Termination Payment will be payable to the
Swap Counterparty in respect of the original Swap Contract, such upfront amount
shall, in accordance with the Swap Contract Administration Agreement, be
retained by the Swap Contract Administrator and remitted to the Swap Trustee on
subsequent Distribution Dates up to and including the Swap Contract Termination
Date to pay any amounts distributable to the Class A Certificates pursuant to
Section 4.04(e)(3) through (7) that will remain unpaid following all
distributions to be made on such Distribution Date pursuant to Section 4.04(a)
through (d).
The Swap Counterparty shall be an express third party beneficiary of
this Agreement for the purpose of enforcing the provisions hereof to the extent
of the Swap Counterparty's rights explicitly specified herein as if a party
hereto.
The Swap Contract Administrator and the Swap Trustee (i) shall not
consent to any amendments or modifications of the Swap Contract without the
prior written consent of the Certificate Insurer, (ii) shall promptly forward to
the Certificate Insurer all notices and other communications received by it or
delivered by it relating to the Swap Contract and (iii) shall obtain the
Certificate Insurer's consent prior to agreeing to any Replacement Transaction
or Permitted Transfer under the Swap Contract as such terms are defined in the
Swap Contract. The Certificate Insurer shall have the right in its sole
discretion to cure any payment default under the Swap Contract if the Swap
Contract Administrator fails to do so, and the Certificate Insurer shall be
entitled to reimbursement for such payment, plus interest thereon calculated at
the Late Payment Rate.
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports.
(a) Within two Business Days after each Determination Date, the Master
Servicer shall deliver to the Trustee by facsimile or electronic mail (or by
such other means as the Master Servicer and the Trustee, as the case may be, may
agree from time to time) a Remittance Report with respect to the related
Distribution Date. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
(b) Subject to the conditions of this Article IV, the Master Servicer,
as required below, shall make an Advance and deposit such Advance in the
Certificate Account. Each such Advance shall be remitted to the Certificate
Account no later than 1:00 p.m. Pacific time on the Master Servicer Advance Date
in immediately available funds. The Trustee will provide notice to the Master
Servicer by facsimile by the close of business on any Master Servicer Advance
Date in the event that the amount remitted by the Master Servicer to the Trustee
on the Distribution Account Deposit Date is less than the Advances required to
be made by the Master Servicer for such Distribution Date. The Master Servicer
shall be obligated to make any such Advance only to the extent that such advance
would not be a Nonrecoverable Advance; provided however, that the Master
Servicer shall not have the obligation (and shall not) make an Advance with
respect to any Charged-off Mortgage Loan after the related Charge-off Date. If
the Master Servicer shall have determined that it has made a Nonrecoverable
Advance or that a proposed Advance or a lesser portion of such Advance would
constitute a
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Nonrecoverable Advance, the Master Servicer shall deliver (i) to the Trustee for
the benefit of the Certificateholders funds constituting the remaining portion
of such Advance, if applicable, and (ii) to the Depositor, each Rating Agency,
the Certificate Insurer and the Trustee an Officer's Certificate setting forth
the basis for such determination.
(c) In lieu of making all or a portion of such Advance from its own
funds, the Master Servicer may (i) cause to be made an appropriate entry in its
records relating to the Certificate Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required to
be distributed pursuant to this Agreement. The Master Servicer shall be entitled
to be reimbursed from the Certificate Account for all Advances of its own funds
made pursuant to this Section as provided in Section 3.08. The obligation to
make Advances with respect to any Mortgage Loan shall continue until such
Mortgage Loan is paid in full or becomes a Liquidated Mortgage Loan or a
Charged-off Mortgage Loan or until the purchase or repurchase thereof (or
substitution therefor) from the Trustee pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section 4.01.
(d) If the Master Servicer determines that it will be unable to comply
with its obligation to make the Advances as and when described in paragraphs (b)
and (c) immediately above, it shall use its best efforts to give written notice
thereof to the Trustee (each such notice a "Trustee Advance Notice"; and such
notice may be given by facsimile), not later than 3:00 p.m., New York time, on
the Business Day immediately preceding the related Master Servicer Advance Date,
specifying the amount that it will be unable to deposit (each such amount an
"Advance Deficiency") and certifying that such Advance Deficiency constitutes an
Advance hereunder and is not a Nonrecoverable Advance. If the Trustee receives a
Trustee Advance Notice on or before 3:30 p.m., (New York time) on a Master
Servicer Advance Date, the Trustee shall, not later than 3:00 p.m., (New York
time), on the related Distribution Date, deposit in the Distribution Account an
amount equal to the Advance Deficiency identified in such Trustee Advance Notice
unless it is prohibited from so doing by applicable law. Notwithstanding the
foregoing, the Trustee shall not be required to make such deposit if the Trustee
shall have received written notification from the Master Servicer that the
Master Servicer has deposited or caused to be deposited in the Certificate
Account an amount equal to such Advance Deficiency. All Advances made by the
Trustee pursuant to this Section 4.01(d) shall accrue interest on behalf of the
Trustee at the Trustee Advance Rate from and including the date such Advances
are made to but excluding the date of repayment, with such interest being an
obligation of the Master Servicer and not the Trust Fund. The Master Servicer
shall reimburse the Trustee for the amount of any Advance made by the Trustee
pursuant to this Section 4.01(d) together with accrued interest, not later than
6:00 p.m. (New York time) on the Business Day following the related Distribution
Date. In the event that the Master Servicer does not reimburse the Trustee in
accordance with the requirements of the preceding sentence, the Trustee shall
immediately (i) terminate all of the rights and obligations of the Master
Servicer under this Agreement in accordance with Section 7.01 and (ii) subject
to the limitations set forth in Section 3.04, assume all of the rights and
obligations of the Master Servicer hereunder.
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(e) The Master Servicer shall, not later than the close of business on
the second Business Day immediately preceding each Distribution Date, deliver to
the Trustee a report (in form and substance reasonably satisfactory to the
Trustee) that indicates (i) the Mortgage Loans with respect to which the Master
Servicer has determined that the related Scheduled Payments should be advanced
and (ii) the amount of the related Scheduled Payments. The Master Servicer shall
deliver to the Trustee and the Certificate Insurer on the related Master
Servicer Advance Date an Officer's Certificate of a Servicing Officer indicating
the amount of any proposed Advance determined by the Master Servicer to be a
Nonrecoverable Advance.
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Master Servicer shall remit any related Compensating
Interest as part of the related Interest Remittance Amount as provided in this
Agreement. The Master Servicer shall not be entitled to any recovery or
reimbursement for Compensating Interest from the Depositor, the Trustee, any
Seller, the Trust Fund, the Certificate Insurer or the Certificateholders.
Section 4.03 [Reserved].
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such Distribution
Date shall be distributed by the Trustee from the Distribution Account in the
following order of priority:
(i) to the Swap Account, the amount of any Net Swap Payment
and any Swap Termination Payment (other than a Swap Termination Payment
due to a Swap Counterparty Trigger Event) payable to the Swap
Counterparty with respect to such Distribution Date,
(ii) to the Certificate Insurer, the Certificate Insurance
Policy Premium for such Distribution Date;
(iii) concurrently to each Class of Class A Certificates, the
Current Interest for each such Class and such Distribution Date, pro
rata, based on their respective entitlements;
(iv) to the Certificate Insurer, the Certificate Insurance
Reimbursement Amount for such Distribution Date;
(v) concurrently to each Class of Class A Certificates, the
Interest Carry Forward Amount for each such Class and such Distribution
Date, pro rata, based on their respective entitlements; and
(vi) any remainder as part of the Excess Cashflow.
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(b) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date shall be distributed by the Trustee from the Distribution
Account in the following order of priority (with the Principal Distribution
Amount exclusive of the portion thereof consisting of the Extra Principal
Distribution Amount being applied first and the Extra Principal Distribution
Amount being applied thereafter):
(i) to the Certificate Insurer, any Certificate Insurance
Policy Premium for such Distribution Date remaining unpaid after
application of Interest Funds on such Distribution Date;
(ii) to the Class A Certificates, in an amount up to the Class
A Principal Distribution Amount, sequentially to the Class A-1, Class
A-2 and Class A-3 Certificates, in that order, until their respective
Certificate Principal Balances are reduced to zero,
(iii) to the Certificate Insurer, any Certificate Insurance
Reimbursement Amount for such Distribution Date remaining unpaid after
application of Interest Funds on such Distribution Date; and
(iv) any remainder as part of the Excess Cashflow.
(c) On each Distribution Date, the Charged-off Loan Proceeds received
during the related Due Period, if any, will be distributed sequentially in the
following order (after application of Excess Cashflow on such Distribution
Date):
(i) to the Certificate Insurer, any Certificate Insurance
Reimbursement Amount for such Distribution Date remaining unpaid after
application of Interest Funds, Excess Cashflow and the Principal
Distribution Amount on such Distribution Date;
(ii) to the Class or Classes of Class A Certificates then
entitled to receive distributions in respect of principal, in an
aggregate amount equal to the Overcollateralization Deficiency Amount
remaining unpaid after taking into account all distributions on that
Distribution Date other than the distribution of Charged-off Loan
Proceeds and the payments under the Certificate Insurance Policy,
payable in the order set forth in Section 4.04(b) above;
(iii) concurrently, to each Class of Class A Certificates, pro
rata based on the Unpaid Realized Loss Amounts for those Classes, in an
amount equal to the Unpaid Realized Loss Amount for each such Class
(after taking into account all distributions on that Distribution Date
other than distribution of Charged-off Loan Proceeds and payments under
the Certificate Insurance Policy), provided, however, that to the
extent an Applied Realized Loss Amount was covered under the
Certificate Insurance Policy and not previously paid as part of the
Certificate Insurance Reimbursement Amount, then any related amounts
otherwise payable to the Class A Certificates pursuant to this clause
(iii) will instead be paid to the Certificate Insurer; and
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(iv) to the Class E-P Certificates, any remaining Charged-off
Loan Proceeds.
(d) With respect to any Distribution Date, any Excess Cashflow shall be
distributed to the Classes of Certificates in the following order of priority:
(1) to the Class or Classes of Class A Certificates then
entitled to receive distributions in respect of principal, in an
aggregate amount equal to the Extra Principal Distribution Amount,
payable as part of the Principal Distribution Amount pursuant to
Section 4.04(b) above;
(2) concurrently, to each Class of Class A Certificates, pro
rata based on the Unpaid Realized Loss Amounts for each such Classes,
in each case in an amount equal to the Unpaid Realized Loss Amount for
such Class; provided, however that to the extent an Applied Realized
Loss Amount was covered under the Certificate Insurance Policy and not
previously paid as part of the Certificate Insurance Reimbursement
Amount, then any related amounts otherwise payable to the Class A
Certificates pursuant to this clause (2) shall instead be paid to the
Certificate Insurer;
(3) to each Class of Class A Certificates (in the case of the
Class A-1 Certificates, after application of amounts received by the
Trust Fund in respect of the Corridor Contract to cover Net Rate
Carryover), pro rata based on the Certificate Principal Balances
thereof, to the extent needed to pay any Net Rate Carryover for each
such Class; provided that any Excess Cashflow remaining after such
allocation to pay Net Rate Carryover based on the Certificate Principal
Balances of those Certificates shall be distributed to each Class of
Class A Certificates with respect to which there remains any unpaid Net
Rate Carryover (after the distribution based on Certificate Principal
Balances), pro rata, based on the amount of such unpaid Net Rate
Carryover;
(4) to the Carryover Reserve Fund, in an amount equal to the
Required Carryover Reserve Fund Deposit (after giving effect to other
deposits and withdrawals therefrom on such Distribution Date without
regard to any amounts allocated to the Trust Fund in respect of the
Corridor Contract not required to cover Net Rate Carryover on the Class
A-1 Certificates on such Distribution Date);
(5) to the Swap Account, in an amount equal to any Swap
Termination Payment due to the Swap Counterparty as a result of a Swap
Counterparty Trigger Event;
(6) to the Class C Certificateholders, the Class C
Distributable Amount for such Distribution Date; and
(7) to the Class A-R Certificates, any remaining amount.
(e) On each Distribution Date on or prior to the Swap Contract
Termination Date, following the deposits to the Swap Account pursuant to Section
4.04(a)(i) and Section 4.09, the Swap Trustee shall distribute amounts on
deposit in the Swap Account and the Swap Reserve Fund in the following amounts
and order of priority:
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(1) to the Swap Contract Administrator for payment to the Swap
Counterparty, any Net Swap Payment payable to the Swap Counterparty
with respect to such Distribution Date;
(2) to the Swap Contract Administrator for payment to the Swap
Counterparty, any Swap Termination Payment (other than a Swap
Termination Payment due to a Swap Counterparty Trigger Event) payable
to the Swap Counterparty with respect to such Distribution Date;
(3) concurrently, to the Class A-2 and Class A-3 Certificates,
any remaining Current Interest and Interest Carry Forward Amount, pro
rata based on their respective entitlements;
(4) concurrently, to the Class A-2 and Class A-3 Certificates,
to the extent needed to pay any remaining Net Rate Carryover for each
such Class, pro rata, based on the amount of such remaining Net Rate
Carryover;
(5) to the Class or Classes of Class A Certificates then
entitled to receive distributions in respect of principal, in an
aggregate amount up to the Overcollateralization Deficiency Amount
remaining unpaid following the distribution of Excess Cashflow pursuant
to Section 4.04(d) above, but not exceeding the aggregate amount of
Realized Losses on the Mortgage Loans from the Cut-off Date for each
Mortgage Loan to (and including) the last day of the related Due Period
(reduced by the aggregate amount of any Subsequent Recoveries and
Charged-off Loan Proceeds received through the last day of that Due
Period) payable in the order of priority set forth in Section
4.04(b)(ii) above;
(6) concurrently, to the Class A-2 and Class A-3 Certificates,
pro rata based on the remaining Unpaid Realized Loss Amounts for those
Classes, in an amount equal to the remaining Unpaid Realized Loss
Amount for each such Class;
(7) to the Swap Reserve Fund, the Swap Reserve Fund O/C
Deficiency Amount; and
(8) to the Swap Contract Administrator for payment to the Swap
Counterparty, only to the extent necessary to cover any Swap
Termination Payment due to a Swap Counterparty Trigger Event payable to
the Swap Counterparty with respect to such Distribution Date;
provided that, with respect to each of the foregoing clauses of this
Section 4.04(e), amounts otherwise distributable to the Class A-2 and
Class A-3 Certificates that were covered by the Certificate Insurance
Policy and were not repaid as Certificate Insurance Reimbursement
Amounts shall instead be payable to the Certificate Insurer.
(f) On each Distribution Date on or prior to the Corridor Contract
Termination Date and prior to the distribution of Excess Cashflow on such
Distribution Date, amounts received by the Trustee in respect of the Corridor
Contract for such Distribution Date shall be withdrawn from the Carryover
Reserve Fund and distributed to the Class A-1
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Certificates to the extent needed to pay any Net Rate Carryover with respect to
such Class. Any amounts remaining in the Carryover Reserve Fund in respect of
the Corridor Contract shall be distributed to the Holders of the Class C
Certificates as provided in Section 4.08(c).
(g) To the extent that a Class of Interest-Bearing Certificates
receives interest in excess of the applicable Net Rate Cap, if such interest is
paid pursuant to Section 4.04(d), then it shall be deemed to have been paid to
the Carryover Reserve Fund and then paid by the Carryover Reserve Fund to those
Certificateholders, and if such interest is paid pursuant to Section 4.04(e),
then such interest shall be deemed to have been paid to the Swap Account and
then paid by the Swap Account to those Certificateholders. For purposes of the
Code, amounts deemed deposited in the Carryover Reserve Fund shall be deemed to
have first been distributed, in the case of any such amounts relating to the
Corridor Contract, to the Class C Certificates.
(h) On each Distribution Date, all Prepayment Charges (including
amounts deposited in connection with the full or partial waiver of such
Prepayment Charges pursuant to Section 3.20) shall be allocated to the Class P
Certificates.
(i) On each Distribution Date, the Trustee shall allocate any Applied
Realized Loss Amount to reduce the Certificate Principal Balances of the Class A
Certificates, pro rata, based on their respective Certificate Principal
Balances, until the Certificate Principal Balances of such Classes have been
reduced to zero. On each Distribution Date, the Certificate Insurer is obligated
to pay to the Class A Certificates an amount equal to the Applied Realized Loss
Amount allocated to the Class A Certificates on such Distribution Date;
provided, however, if the Premium Account is funded pursuant to Section
3.08(b)(vi), the Certificate Insurer shall only be obligated to pay any Applied
Realized Loss Amount to the extent that funds on deposit in the Premium Account
(after giving effect to all deposits to be made to the Premium Account on such
Distribution Date) are insufficient to cover the Applied Realized Loss Amount
for such Distribution Date.
(j) On each Distribution Date, the Trustee shall allocate the amount of
the Subsequent Recoveries with respect to the Mortgage Loans, if any, to
increase the Certificate Principal Balances of the Class A Certificates to which
Applied Realized Loss Amounts have been previously allocated, on a pro rata
basis according to their respective Certificate Principal Balances and in each
case by not more than the amount of the Unpaid Realized Loss Amount of such
Class; provided, however, that to the extent an Applied Realized Loss Amount was
covered under the Certificate Insurance Policy and not subsequently reimbursed,
then any related Subsequent Recovery otherwise payable to the Class A
Certificateholders will instead be paid to the Certificate Insurer and will not
increase the Certificate Principal Balances of any Class A Certificates by the
amount of any such Subsequent Recoveries.
Holders of Certificates to which any Subsequent Recoveries have been
allocated shall not be entitled to any payment in respect of Current Interest on
the amount of such increases for any Accrual Period preceding the Distribution
Date on which such increase occurs.
(k) On any Distribution Date on which there are any amounts on deposit
in the Premium Account (after taking into account any deposit to the Premium
Account on such Distribution Date pursuant to Section 3.08(b)(vi)) and (i) any
amounts payable to the Class A
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Certificates pursuant to Sections 4.04(a)(iii) or 4.04(a)(v) remain unpaid, (ii)
Applied Realized Loss Amounts are allocable to the Class A Certificates on such
Distribution Date, (iii) Unpaid Realized Loss Amounts are outstanding and/or
(iv) on the Final Scheduled Distribution Date, the aggregate Certificate
Principal Balance of the Class A Certificates has not been reduced to zero after
making all distributions on such Distribution Date but prior to any draw on the
Certificate Insurance Policy, the Trustee shall apply the amounts on deposit in
the Premium Account in the following amounts and order of priority:
(i) first, concurrently to each Class of Class A Certificates,
the unpaid Current Interest for each such Class and such Distribution
Date, pro rata, based on their respective entitlements;
(ii) second, concurrently to each Class of Class A
Certificates, the unpaid Interest Carry Forward Amount for each such
Class and such Distribution Date, pro rata, based on their respective
entitlements;
(iii) third, concurrently, to each Class of Class A
Certificates, in an amount up to the Applied Realized Loss Amount
allocable to such Class pursuant to Section 4.04(i) on such
Distribution Date, pro rata, based on the amount of Applied Realized
Loss Amounts allocable to each such Class on such Distribution Date;
(iv) fourth, concurrently, to each Class of Class A
Certificates, pro rata based on the Unpaid Realized Loss Amounts for
such Classes, in each case in an amount up to the Unpaid Realized Loss
Amount for such Class; provided, however that to the extent an Applied
Realized Loss Amount was covered under the Certificate Insurance Policy
and not previously paid as part of the Certificate Insurance
Reimbursement Amount, then any related amounts otherwise payable to the
Class A Certificates pursuant to this paragraph shall instead be paid
to the Certificate Insurer;
(v) fifth, on the Final Scheduled Distribution Date, to each
Class of Class A Certificates with an outstanding Certificate Principal
Balance, pro rata, until the Certificate Principal Balances thereof are
reduced to zero; and
(vi) sixth, to the Certificate Insurer, the amount of any
Certificate Insurance Reimbursement Amount remaining unpaid.
(l) Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such Holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date and (ii) such Holder shall hold Regular Certificates with an aggregate
initial Certificate Principal Balance of not less than $1,000,000 or evidencing
a Percentage Interest aggregating 10% or more with respect to such Class or, if
not, by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register. Notwithstanding
the foregoing,
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but subject to Section 9.02 hereof respecting the final distribution,
distributions with respect to Certificates registered in the name of a
Depository shall be made to such Depository in immediately available funds.
Payments to the Certificate Insurer shall be made by wire transfer of
immediately available funds to the following account, unless the Certificate
Insurer notifies the Trustee in writing: Account Name: MBIA Insurance
Corporation, Account Number 000-0-000000, Bank - JPMorgan Chase Bank, ABA Number
000-000-000, Re: CWHEQ 2007-S3, Policy No. 493810 Class A Certificates.
On or before 5:00 p.m. Pacific time on the fifth Business Day following
each Determination Date (but in no event later than 5:00 p.m. Pacific time on
the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee (in the form of a computer
readable magnetic tape or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to by the Master Servicer and the Trustee such as to permit the Trustee
to prepare the Monthly Statement and make the required distributions for the
related Distribution Date (the "Remittance Report"). The Trustee shall not be
responsible to recompute, recalculate or verify information provided to it by
the Master Servicer and shall be permitted to conclusively rely on any
information provided to it by the Master Servicer.
Section 4.05 Monthly Statements to Certificateholders. (a) Concurrently
with each distribution on a Distribution Date, the Trustee will forward by mail
to each Rating Agency, the Certificate Insurer and the NIM Insurer and make
available to Certificateholders and the Certificate Insurer on the Trustee's
website (xxxx://xxx.xxxxxxxxxxxxxxxxxxxx.xxx) a statement generally setting
forth the information contained in Exhibit W.
(b) The Trustee's responsibility for disbursing the above information
to the Certificateholders is limited to the availability, timeliness and
accuracy of the information derived from the Master Servicer.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information regarding (i) the amount of distributions to that Certificateholder
allocable to principal, separately identifying (A) the aggregate amount of any
Principal Prepayments included therein and (B) the aggregate of all scheduled
payments of principal included therein, (ii) the amount of distributions to that
Certificateholder allocable to interest and (iii) the related amount of the
Servicing Fees paid to or retained by the Master Servicer, in each case
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class A-R Certificates the Form 1066 and each Form
1066Q and shall respond
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promptly to written requests made not more frequently than quarterly by any
Holder of Class A-R Certificates with respect to the following matters:
(1) The original projected principal and interest cash flows
on the Closing Date on each related Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(2) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each related
Class of regular and residual interests created hereunder and the
Mortgage Loans, based on the Prepayment Assumption;
(3) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest
cash flows described above;
(4) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each related
Class of regular or residual interests created hereunder and to the
Mortgage Loans, together with each constant yield to maturity used in
computing the same;
(5) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of the
related REMIC with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(6) The amount and timing of any non-interest expenses of the
related REMIC; and
(7) Any taxes (including penalties and interest) imposed on
the related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (1), (2), (3) and (4) above shall
be provided by the Depositor pursuant to Section 8.11.
Section 4.06 Certificate Insurance Policy; Rights of the Certificate
Insurer.
(a) If, on the third Business Day before any Distribution Date, the
Trustee determines that a there will be a Deficiency Amount for such
Distribution Date, the Trustee shall determine the amount of any such deficiency
and shall give notice to the Certificate Insurer by telephone or telecopy of the
amount of such deficiency, confirmed in writing by notice substantially in the
form of Exhibit A to the Certificate Insurance Policy, by 12:00 p.m., New York
time on such third Business Day. The Trustee's responsibility for delivering the
notice to the Certificate Insurer as provided in the preceding sentence is
limited to the availability, timeliness and accuracy of the information provided
by the Master Servicer.
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(b) In the event the Trustee receives a certified copy of an order of
the appropriate court that any scheduled payment of principal or interest on a
Class A Certificate has been voided in whole or in part as a preference payment
under applicable bankruptcy law, the Trustee shall (i) promptly notify the
Certificate Insurer and (ii) comply with the provisions of the Certificate
Insurance Policy, to obtain payment by the Certificate Insurer of such voided
scheduled payment. In addition, the Trustee shall mail notice to all Holders of
the Class A Certificates so affected that, in the event that any such Holder's
scheduled payment is so recovered, such Holder will be entitled to payment
pursuant to the terms of the Certificate Insurance Policy, a copy of which shall
be made available to such Holders by the Trustee. The Trustee shall furnish to
the Certificate Insurer its records listing the payments on the affected Class A
Certificates, if any, that have been made by the Trustee and subsequently
recovered from the affected Holders, and the dates on which such payments were
made by the Trustee.
(c) At the time of the execution hereof, and for the purposes hereof,
the Trustee shall establish a special purpose trust account in the name of the
Trustee for the benefit of Holders of the Class A Certificates (the "Class A
Insurance Payments Account") over which the Trustee shall have exclusive control
and sole right of withdrawal. The Class A Insurance Payments Account shall be an
Eligible Account. The Trustee shall deposit any amount paid under the
Certificate Insurance Policy into the Class A Insurance Payments Account and
distribute such amount only for the purposes of making the payments to Holders
of the Class A Certificates, in respect of the related Deficiency Amount for
which the related claim was made under the Certificate Insurance Policy. Such
amounts shall be allocated by the Trustee to Holders of Class A Certificates
affected by such shortfalls in the same manner as principal and interest
payments are to be allocated with respect to such Certificates pursuant to
Section 4.04. It shall not be necessary for such payments to be made by checks
or wire transfers separated from the checks or wire transfers used to make
regular payments hereunder with funds withdrawn from the Distribution Account.
However, any payments made on the Class A Certificates from funds in the Class A
Insurance Payments Account shall be noted as provided in subsection (e) below.
Funds held in the Class A Insurance Payments Account shall not be invested by
the Trustee.
(d) Any funds received from the Certificate Insurer for deposit into
the Class A Insurance Payments Account pursuant to the Certificate Insurance
Policy in respect of a Distribution Date or otherwise as a result of any claim
under the Certificate Insurance Policy shall be applied by the Trustee directly
to the payment in full (i) of the related Deficiency Amount on such Distribution
Date or (ii) of other amounts payable under the Certificate Insurance Policy.
Funds received by the Trustee as a result of any claim under the Certificate
Insurance Policy shall be used solely for payment to the Holders of the Class A
Certificates and may not be applied for any other purpose, including, without
limitation, satisfaction of any costs, expenses or liabilities of the Trustee,
the Master Servicer, the Depositor, the NIM Insurer or the Trust Fund. Any funds
remaining in the Class A Insurance Payments Account on the first Business Day
after each Distribution Date shall be remitted promptly to the Certificate
Insurer in accordance with the instructions set forth in Section 4.04(l).
(e) The Trustee shall keep complete and accurate records in respect of
(i) all funds remitted to it by the Certificate Insurer and deposited into the
Class A Insurance Payments Account and (ii) the allocation of such funds to (A)
payments of interest on and principal in
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respect of any Class A Certificates and (B) the amount of funds available to
make distributions on the Class A Certificates pursuant to Sections 4.04(a),
(b), (c), (d), (e), (h), (i), (j) and (k). The Certificate Insurer shall have
the right to inspect such records at reasonable times during normal business
hours upon three Business Days' prior notice to the Trustee.
(f) The Trustee acknowledges, and each Holder of a Class A Certificate
by its acceptance of the Class A Certificate agrees, that, without the need for
any further action on the part of the Certificate Insurer or the Trustee, to the
extent the Certificate Insurer makes payments, directly or indirectly, on
account of principal of or interest on any Class A Certificates, the Certificate
Insurer will be fully subrogated to the rights of the Holders of such Class A
Certificates to receive such principal and interest from the Trust Fund. The
Holders of the Class A Certificates, by acceptance of the Class A Certificates,
assign their rights as Holders of the Class A Certificates to the extent of the
Certificate Insurer's interest with respect to amounts paid under the
Certificate Insurance Policy. Anything herein to the contrary notwithstanding,
solely for purposes of determining the Certificate Insurer's rights, as
applicable, as subrogee for payments distributable pursuant to Section 4.04, any
payment with respect to distributions to the Class A Certificates which is made
with funds received pursuant to the terms of the Certificate Insurance Policy
shall not be considered payment of the Class A Certificates from the Trust Fund
and shall not result in the distribution or the provision for the distribution
in reduction of the Certificate Principal Balance of the Class A Certificates
within the meaning of Article IV.
(g) Upon its becoming aware of the occurrence of an Event of Default,
the Trustee shall promptly notify the Certificate Insurer of such Event of
Default.
(h) The Trustee shall promptly notify the Certificate Insurer of either
of the following as to which it has actual knowledge: (A) the commencement of
any proceeding by or against the Depositor commenced under the United States
bankruptcy code or any other applicable bankruptcy, insolvency, receivership,
rehabilitation or similar law (an "Insolvency Proceeding") and (B) the making of
any claim in connection with any Insolvency Proceeding seeking the avoidance as
a preferential transfer (a "Preference Claim") of any distribution made with
respect to the Class A Certificates as to which it has actual knowledge. Each
Holder of a Class A Certificate, by its purchase of Class A Certificates, and
the Trustee hereby agrees that the Certificate Insurer (so long as no
Certificate Insurer Default exists) may at any time during the continuation of
any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedes or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Certificate Insurer shall be subrogated
to the rights of the Trustee and each Holder of a Class A Certificate in the
conduct of any Preference Claim, including, without limitation, all rights of
any party to an adversary proceeding action with respect to any court order
issued in connection with any such Preference Claim.
(i) The Master Servicer shall designate a Certificate Insurer Contact
Person who shall be available to the Certificate Insurer to provide reasonable
access to information regarding the Mortgage Loans. The initial Certificate
Insurer Contact Person is to the attention of Secondary Marketing.
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(j) The Trustee shall surrender the Certificate Insurance Policy to the
Certificate Insurer for cancellation upon the reduction of the Certificate
Principal Balance of the Class A Certificates to zero.
(k) The Trustee shall send to the Certificate Insurer the reports
prepared pursuant to Section 3.17 and the statements prepared pursuant to
Section 4.05, as well as any other statements or communications sent to Holders
of the Class A Certificates, in each case at the same time such reports,
statements and communications are otherwise sent.
(l) For so long as there is no continuing default by the Certificate
Insurer under its obligations under the Certificate Insurance Policy (a
"Certificate Insurer Default"), each Holder of a Class A Certificate agrees that
the Certificate Insurer shall be treated by the Depositor, the Master Servicer
and the Trustee as if the Certificate Insurer were the Holder of all of the
Class A Certificates, for the purpose (and solely for the purpose) of the giving
of any consent, the making of any direction or the exercise of any voting or
other control rights otherwise given to the Holders of the Class A Certificates
hereunder.
(m) With respect to this Section 4.06, the terms "Receipt" and
"Received" shall mean actual delivery to the Certificate Insurer, if any, prior
to 12:00 p.m., New York time, on a Business Day; delivery either on a day that
is not a Business Day or after 12:00 p.m., New York time, shall be deemed to be
Receipt on the next succeeding Business Day. If any notice or certificate given
under the Certificate Insurance Policy by the Trustee is not in proper form or
is not properly completed, executed or delivered, it shall be deemed not to have
been Received. The Certificate Insurer shall promptly so advise the Trustee and
the Trustee may submit an amended notice.
(n) All notices, statements, reports, certificates or opinions required
by this Agreement to be sent to the Rating Agencies or the Class A
Certificateholders shall also be sent at such time to the Certificate Insurer at
the notice address set forth in Section 10.05.
(o) The Certificate Insurer shall be an express third party beneficiary
of this Agreement for the purpose of enforcing the provisions hereof to the
extent of the Certificate Insurer's rights explicitly specified herein as if a
party hereto.
(p) All references herein to the ratings assigned to the Certificates
and to the interests of any Certificateholders shall be without regard to the
Certificate Insurance Policy, in the case of the Class A Certificates.
Section 4.07 Termination of the Credit Insurance Policy.
If the Credit Insurance Policy is terminated for any reason other than
the exhaustion of its coverage, or if the claims-paying ability rating of Credit
Insurer is reduced to "A+" or below by S&P or "A1" or below by Xxxxx'x or if the
Credit Insurer fails to make any payment due under the Credit Insurance Policy,
the Master Servicer shall use its best efforts to obtain a comparable policy in
form and substance acceptable to the Certificate Insurer from an insurer that is
acceptable to the Rating Agencies and to the Certificate Insurer. The
replacement policy shall provide coverage equal to the then remaining coverage
of the Credit Insurance Policy if available. However, if the premium cost of a
replacement policy exceeds the premium
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cost of the Credit Insurance Policy, the Master Servicer, at the written
direction of the Certificate Insurer, will either (i) obtain a replacement
credit insurance policy with reduced coverage so that its premium cost will not
exceed the premium cost of the Credit Insurance Policy or (ii) from interest
collections on the Mortgage Loans for each Due Period, deposit into the Premium
Account the amounts that would have been paid as premium on the Credit Insurance
Policy had it not been terminated, which amounts will be available to make
payments as provided in Section 4.04(k) prior to making any draws on the
Certificate Insurance Policy. The amount remaining in the Premium Account after
the payment in full of the Class A Certificates and amounts owing to the
Certificate Insurer will be paid to the Class C Certificates.
In addition, if during the period which the Depositor is required to
file Exchange Act Reports with respect to the Trust Fund, the Credit Insurer
shall fail to provide to the Depositor with any information required to comply
with the Depositor's reporting obligations under the related Exchange Act
Reports, within 5 days of the Depositor's request therefor, then the Trustee
shall act at the written direction of the Depositor as to whether to terminate
the Credit Insurance Policy (either by not paying the renewal premium or by
terminating the Credit Insurance Policy in accordance with its terms); provided,
however, that the Depositor shall not direct the Trustee to terminate the Credit
Insurance Policy until it has procured one or more replacement credit insurance
policies in form and substance acceptable to the Certificate Insurer covering
the then-outstanding Covered Loans from an insurer under a policy or policies
acceptable to the Certificate Insurer and the Rating Agencies and such credit
insurance policy must cover the Covered Loans outstanding as of such date, if
available. The Credit Insurance Policy will not be amended in any manner that
materially and adversely affects the coverage provided thereby without the prior
written consent of the Certificate Insurer.
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund and shall deposit $1,000 therein. The Carryover Reserve
Fund shall be an Eligible Account, and funds on deposit therein shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including without limitation, other moneys held by the Trustee pursuant to this
Agreement.
(b) On each Distribution Date, the Trustee shall deposit all amounts
received in respect of the Corridor Contract in the Carryover Reserve Fund. The
Trustee shall make withdrawals from the Carryover Reserve Fund to make
distributions in respect of Net Rate Carryover as to the extent required by
Section 4.04.
(c) Any amounts received in respect of the Corridor Contract with
respect to a Distribution Date and remaining after the distributions required
pursuant to Section 4.04(f) shall be distributed to the Class C Certificates;
provided, however, that if the Corridor Contract is subject to early
termination, early termination payments received in respect of the Corridor
Contract shall be deposited by the Trustee in the Carryover Reserve Fund and
withdrawn from the Carryover Reserve Fund to pay any Net Rate Carryover for the
applicable Classes of Certificates as provided in Section 4.04(f) on the
Distribution Dates following such termination to and including the Corridor
Contract Termination Date, but such early termination payments
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shall not be available for distribution to the Class C Certificates on future
Distribution Dates until the Corridor Contract Termination Date.
(d) (1) Funds in the Carryover Reserve Fund in respect of amounts
received under the Corridor Contract may be invested in Permitted Investments at
the written direction of the Majority Holder of the Class C Certificates, which
Permitted Investments shall mature not later than the Business Day immediately
preceding the first Distribution Date that follows the date of such investment
(except that if such Permitted Investment is an obligation of the institution
that maintains the Carryover Reserve Fund, then such Permitted Investment shall
mature not later than such Distribution Date) and shall not be sold or disposed
of prior to maturity. All such Permitted Investments shall be made in the name
of the Trustee, for the benefit of the Certificateholders. In the absence of
such written direction, all funds in the Carryover Reserve Fund in respect of
amounts received under the Corridor Contract shall be invested by the Trustee in
The Bank of New York cash reserves. Any net investment earnings on such amounts
shall be payable pro rata to the Holders of the Class C Certificates in
accordance with their Percentage Interests. Any losses incurred in the Carryover
Reserve Fund in respect of any such investments shall be charged against amounts
on deposit in the Carryover Reserve Fund (or such investments) immediately as
realized.
(2) The Trustee shall not be liable for the amount of any loss
incurred in respect of any investment or lack of investment of funds held in the
Carryover Reserve Fund and made in accordance with this Section 4.08. The
Carryover Reserve Fund shall not constitute an asset of any REMIC created
hereunder. The Class C Certificates shall evidence ownership of the Carryover
Reserve Fund for federal tax purposes.
Section 4.09 Swap Trust and Swap Account.
On the Closing Date, there is hereby established a separate trust (the
"Swap Trust"), the assets of which shall consist of the Trustee's rights and
obligations under the Swap Contract Administration Agreement, the Swap Account
and the Swap Reserve Fund. The Swap Trust shall be maintained by the Swap
Trustee, who initially, shall be the Trustee. The Swap Trustee shall hold the
assets of the Swap Trust in trust for the benefit of the Holders of the
Interest-Bearing Certificates and the Swap Counterparty. No later than the
Closing Date, the Swap Trustee shall establish and maintain a separate,
segregated trust account to be held in the Swap Trust, titled, "Swap Account,
The Bank of New York, as Swap Trustee, in trust for the Swap Counterparty and
the registered holders of CWHEQ, Inc., Asset-Backed Certificates, Series
2007-S3." Such account shall be an Eligible Account and funds on deposit therein
shall be held separate and apart from, and shall not be commingled with, any
other moneys, including, without limitation, other moneys of the Trustee held
pursuant to this Agreement. Amounts therein shall be held uninvested. Funds on
deposit in the Swap Account shall be distributed in the amounts and in the order
of priority described under Section 4.04(e). For federal income tax purposes,
the Swap Trust, including the Swap Account and Swap Reserve Fund, shall be owned
by the Class C Certificates.
On each Distribution Date, the Trustee shall make a deposit to the Swap
Account pursuant to Section 4.04(a)(i), and to the extent that the amount of
such deposit is insufficient to pay any Net Swap Payment and/or Swap Termination
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Payment (other than a Swap Termination Payment due to a Swap Counterparty
Trigger Event) due to the Swap Counterparty with respect to such Distribution
Date, the Trustee shall withdraw, out of amounts on deposit in the Distribution
Account in respect of the Principal Remittance Amount, such additional amount as
is necessary to cover the remaining portion of any such Net Swap Payment and/or
Swap Termination Payment (other than a Swap Termination Payment due to a Swap
Counterparty Trigger Event) due to the Swap Counterparty with respect to such
Distribution Date.
Section 4.10 Swap Reserve Fund.
On the Closing Date, the Swap Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Class A Certificates
and the Certificate Insurer, the Swap Reserve Fund and shall deposit $1,000
therein upon receipt from or on behalf of the Depositor of such amount. The Swap
Reserve Fund shall be an Eligible Account, and funds on deposit therein shall be
held separate and apart from, and shall not be commingled with, any other
moneys, including without limitation, other moneys held by the Trustee pursuant
to this Agreement. Amounts therein shall be held uninvested. Funds on deposit in
the Swap Account shall be distributed in the amounts and in the order of
priority described under Section 4.04(e). The Swap Reserve Fund shall not
constitute an asset of the Trust Fund or any REMIC created hereunder.
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ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through X-0, Xxxxxxx X, Xxxxxxx X, Xxxxxxx X-0, Exhibit D-2 and
Exhibit E. The Certificates shall be issuable in registered form, in the minimum
dollar denominations, integral dollar multiples in excess thereof and aggregate
dollar denominations as set forth in the following table:
Original Certificate
Integral Multiples in Principal Balance/
Class Minimum Denomination Excess of Minimum Original Notional Amount
------------------------------- ---------------------------- ---------------------------- ----------------------------
A-1 $25,000 $1 $298,454,000
A-2 $25,000 $1 $242,359,000
A-3 $25,000 $1 $159,187,000
E-P (2) (2) N/A
A-R $99.95(1) N/A $100
C N/A N/A N/A
P (2) (2) $100
(1) The Tax Matters Person Certificate may be issued in a denomination of
$0.05.
(2) The minimum denomination for the Class P Certificates is a 20%
Percentage Interest. Any Percentage Interest in excess of 20% is an
authorized denomination.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable
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regulations as it may prescribe, the Trustee shall provide for the registration
of Certificates and of Transfers and exchanges of Certificates as herein
provided. Upon surrender for registration of Transfer of any Certificate, the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall (except in connection with any transfer of a
Private Certificate to an affiliate of the Depositor (either directly or through
a nominee) in connection with the initial issuance of the Certificates) each
certify to the Trustee in writing the facts surrounding the Transfer in
substantially the forms set forth in Exhibit J-2 and, in the case of a Class A-R
Certificate, Exhibit J-1 (the "Transferor Certificate") and (i) deliver a letter
in substantially the form of either Exhibit K (in the case of the Class P, Class
E-P and Class C Certificates only) (the "Investment Letter") or Exhibit L (in
the case of any Private Certificate) (the "Rule 144A Letter") or (ii) there
shall be delivered to the Trustee at the expense of the Certificateholder
desiring to effect such transfer an Opinion of Counsel that such Transfer may be
made pursuant to an exemption from the Securities Act; provided, however, that
in the case of the delivery of an Investment Letter in connection with the
transfer of any Class C, Class E-P or Class P Certificate to a transferee that
is formed with the purpose of issuing notes backed by such Class C, Class E-P or
Class P Certificate, as the case may be, clause (b) and (c) of the form of
Investment Letter shall not be applicable and shall be deleted by such
transferee. The Depositor shall provide to any Holder of a Private Certificate
and any prospective transferee designated by any such Holder, information
regarding the related Certificates and the Mortgage Loans and such other
information as shall be necessary to satisfy the condition to eligibility set
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forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee and the Master Servicer shall
cooperate with the Depositor in providing the Rule 144A information referenced
in the preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such Transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Trust Fund, each Seller, the Master Servicer, the Certificate
Insurer and the NIM Insurer against any liability that may result if the
Transfer is not so exempt or is not made in accordance with such federal and
state laws.
No Transfer of an ERISA-Restricted Certificate (other than a transfer
of an ERISA-Restricted Certificate to an affiliate of the Depositor (either
directly or through a nominee) in connection with the initial issuance of the
Certificates) shall be made unless the Trustee shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee (in the event such Certificate is a
Private Certificate, such requirement is satisfied only by the Trustee's receipt
of a representation letter from the transferee substantially in the form of
Exhibit K or Exhibit L, or in the event such Certificate is a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that (x) such transferee is not a Plan, or (y) in the case of
an ERISA-Restricted Certificate that has been the subject of an ERISA-Qualifying
Underwriting, a representation that the transferee is an insurance company which
is purchasing such Certificate with funds contained in an "insurance company
general account" (as such term is defined in section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificate satisfy the requirements for exemptive relief under
Sections I and III of PTCE 95-60 or (ii) in the case of any ERISA-Restricted
Certificate presented for registration in the name of an employee benefit plan
or arrangement subject to ERISA, or a plan or arrangement subject to Section
4975 of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or arrangement or any other person acting on behalf of
any such plan or arrangement, an Opinion of Counsel satisfactory to the Trustee,
addressed to the Trustee and the Master Servicer, to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not result in a
non-exempt prohibited transaction under ERISA or the Code and will not subject
the Trustee or the Master Servicer to any obligation in addition to those
expressly undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Certificate Insurer, the Master Servicer, or the
Trust Fund. For purposes of the preceding sentence, one of such representations,
as appropriate, shall be deemed to have been made to the Trustee by the
transferee's acceptance of an ERISA-Restricted Certificate (or the acceptance by
a Certificate Owner of the beneficial interest in any such Class of
ERISA-Restricted Certificates) unless the Trustee shall have received from the
transferee an Opinion of Counsel as described in clause (ii) or a representation
letter acceptable in form and substance to the Trustee. Notwithstanding anything
else to the contrary herein, any purported transfer of an ERISA-Restricted
Certificate to or on behalf of an employee benefit plan subject to Section 406
of ERISA or a plan subject to Section 4975 of the Code without the delivery to
the Trustee of an Opinion of Counsel satisfactory to the Trustee meeting the
requirements of clause (i) of the first sentence of this paragraph as described
above shall be void and of no effect. The Trustee shall be under no liability to
any Person for any registration of transfer of any ERISA-Restricted
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Certificate that is in fact not permitted by this Section 5.02(b) or for making
any payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the Trustee, with respect to the transfer of such Classes of
Certificates, required delivery of such certificates and other documentation or
evidence as are expressly required by the terms of this Agreement and examined
such certificates and other documentation or evidence to determine compliance as
to form with the express requirements hereof. The Trustee shall be entitled, but
not obligated, to recover from any Holder of any ERISA-Restricted Certificate
that was in fact an employee benefit plan or arrangement subject to Section 406
of ERISA or a plan or arrangement subject to Section 4975 of the Code or a
Person acting on behalf of any such plan or arrangement at the time it became a
Holder or, at such subsequent time as it became such a plan or arrangement or
Person acting on behalf of such a plan or arrangement, all payments made on such
ERISA-Restricted Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to the last
preceding Holder of such Certificate that is not such a plan or arrangement or
Person acting on behalf of a plan or arrangement.
Until the Swap Trust terminates, no transfer of an Interest-Bearing
Certificate (other than a transfer of an Interest-Bearing Certificate to an
affiliate of the Depositor (either directly or through a nominee) in connection
with the initial issuance of the Certificates) shall be made unless the Trustee
shall have received either (i) a written representation from the transferee of
such Interest-Bearing Certificate acceptable to and in form and substance
satisfactory to the Trustee to the effect that such transferee is not a Plan, or
(ii) a written representation that the purchase and holding of the
Interest-Bearing Certificate satisfy the requirements for exemptive relief under
XXXX 00-00, XXXX 00-0, XXXX 00-00, XXXX 00-00, XXXX 96-23, the service provider
exemption provided under Section 408 (b)(17) of ERISA and Section 4975 (d)(20)
of the Code or a similar exemption. In the event that such representation is not
delivered, one of the foregoing representations, as appropriate, shall be deemed
to have been made by the transferee's (including an initial acquiror's)
acceptance of the Interest-Bearing Certificate. In the event that such
representation is violated, such transfer or acquisition shall be void and of no
effect.
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(1) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(2) Except in connection with (i) the registration of the Tax
Matters Person Certificate in the name of the Trustee or (ii) any
registration in the name of, or transfer of a Class A-R Certificate to,
an affiliate of the Depositor (either directly or through a nominee) in
connection with the initial issuance of the Certificates, no Ownership
Interest in a Class A-R Certificate may be registered or transferred,
and the Trustee shall not register the Transfer of any Class A-R
Certificate, unless the Trustee
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shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached
hereto as Exhibit I.
(3) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class A-R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class A-R
Certificate and (C) not to Transfer its Ownership Interest in a Class
A-R Certificate, or to cause the Transfer of an Ownership Interest in a
Class A-R Certificate to any other Person, if it has actual knowledge
that such Person is not a Permitted Transferee or that such Transfer
Affidavit is false.
(4) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit and Transferor Certificate. The Trustee
shall be entitled but not obligated to recover from any Holder of a
Class A-R Certificate that was in fact not a Permitted Transferee at
the time it became a Holder or, at such subsequent time as it became
other than a Permitted Transferee, all payments made on such Class A-R
Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, any Seller or the Master
Servicer, to the effect that the elimination of such restrictions will not cause
any REMIC formed hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the Trust
Fund, a Certificateholder or another Person. Each Person holding or acquiring
any Ownership Interest in a Class A-R Certificate, by acceptance of its
Ownership Interest, shall be deemed to consent to any amendment of this
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Agreement that, based on an Opinion of Counsel furnished to the Trustee, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class A-R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Class A-R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all affidavits, certifications and
opinions referred to above in this Section 5.02 shall not be an expense of the
Trust Fund, the Trustee, the Depositor, any Seller or the Master Servicer.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Master Servicer and the Trustee (and with respect to the Class A
Certificates, the Certificate Insurer) such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee, the NIM Insurer, the Certificate
Insurer and any agent of the Master Servicer, the Trustee, the NIM Insurer or
the Certificate Insurer may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and none of the Master Servicer, the Trustee, the NIM Insurer, the
Certificate Insurer or any agent of the Master Servicer, the Trustee, the NIM
Insurer or the Certificate Insurer shall be affected by any notice to the
contrary.
Section 5.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders or Certificate Owners (a) request
such information in writing from the Trustee, (b) state that such
Certificateholders or Certificate Owners desire to communicate with other
Certificateholders or Certificate Owners with respect to their rights under this
Agreement or under the Certificates and (c) provide a copy of the communication
that such Certificateholders or Certificate Owners propose to transmit or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the
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Trustee shall, within ten Business Days after the receipt of such request,
provide the Depositor, the Master Servicer or such Certificateholders or
Certificate Owners at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder or Certificate Owner, by receiving and holding a
Certificate, agree that the Trustee shall not be held accountable by reason of
the disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06 Book-Entry Certificates.
The Book-Entry Certificates, upon original issuance, shall be issued in
the form of one typewritten Certificate (or more than one, if required by the
Depository) for each Class of such Certificates, to be delivered to the
Depository by or on behalf of the Depositor. Such Certificates shall initially
be registered on the Certificate Register in the name of the Depository or its
nominee, and no Certificate Owner of such Certificates will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of such Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Sellers, the Master Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of
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the aggregate unpaid principal amount of any Class of Certificates, such
direction or consent may be given by Certificate Owners (acting through the
Depository and the Depository Participants) owning Book-Entry Certificates
evidencing the requisite percentage of principal amount of such Class of
Certificates.
Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of the Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
Section 5.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor advises the Trustee that the Depository is no
longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor or (b) after the occurrence
and continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Certificates, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners of such Class requesting the same. The Depositor shall provide the
Trustee with an adequate inventory of Certificates to facilitate the issuance
and transfer of Definitive Certificates. Upon surrender to the Trustee of any
such Certificates by the Depository, accompanied by registration instructions
from the Depository for registration, the Trustee shall authenticate and deliver
such Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates its offices at 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, as offices for such purposes. The
Trustee will give prompt written notice to the Certificateholders and the
Certificate Insurer of any change in such location of any such office or agency.
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Sellers.
The Depositor, the Master Servicer and each Seller shall each be liable
in accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Sellers.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of the
United States or under the laws of one of the states thereof and will obtain and
preserve its qualification or registration to do business as a foreign
partnership in each jurisdiction in which such qualification or registration is
or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any Person into which the Depositor, the Master Servicer or any Seller
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Master Servicer or any Seller shall be
a party, or any person succeeding to the business of the Depositor, the Master
Servicer or any Seller, shall be the successor of the Depositor, the Master
Servicer or such Seller, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided that the successor or
surviving Person to the Master Servicer shall be qualified to service mortgage
loans on behalf of Xxxxxx Mae and Xxxxxxx Mac.
As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Master Servicer, the Master Servicer shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
a replacement Master Servicer.
Section 6.03 Limitation on Liability of the Depositor, the Sellers, the
Master Servicer, the NIM Insurer and Others.
None of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer or any of the directors, officers, employees or agents of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer shall be under
any liability to the Trustee (except as provided in Section
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8.05), the Trust Fund or the Certificateholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided that this provision shall not
protect the Depositor, the Sellers, the Master Servicer or any such Person
against any breach of representations or warranties made by it herein or protect
the Depositor, the Sellers, the Master Servicer or any such Person from any
liability that would otherwise be imposed by reasons of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Sellers, the
NIM Insurer, the Master Servicer and any director, officer, employee or agent of
the Depositor, the Sellers, the NIM Insurer or the Master Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Sellers, the NIM Insurer, the Master Servicer and any director, officer,
employee or agent of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and that
in its opinion may involve it in any expense or liability; provided that any of
the Depositor, the Sellers, the NIM Insurer or the Master Servicer may, in its
discretion undertake any such action that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be, expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Sellers, the NIM Insurer and the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account as provided by
Section 3.08 hereof.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that its duties hereunder are
no longer permissible under applicable law or (ii) upon appointment of a
successor servicer that is reasonably acceptable to the Trustee, the Certificate
Insurer and the NIM Insurer and the written confirmation from each Rating Agency
(which confirmation shall be furnished to the Depositor, the Trustee, the
Certificate Insurer and the NIM Insurer) that such resignation will not cause
such Rating Agency to reduce the then-current rating of the Certificates (such
determination to be made without regard to the Certificate Insurance Policy).
Any such determination pursuant to clause (i) of the preceding sentence
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee and the Certificate
Insurer. No resignation of the Master Servicer shall become effective until the
Trustee shall have assumed the Master Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement and the Depositor shall
have received the information described in the following sentence. As a
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condition to the effectiveness of any such resignation, at least 15 calendar
days prior to the effective date of such resignation, the Master Servicer shall
provide (x) written notice to the Depositor of any successor pursuant to this
Section and (y) in writing and in form and substance reasonably satisfactory to
the Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
the resignation of the Master Servicer.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Xxxxxx Xxx and Xxxxxxx Mac for
persons performing servicing for mortgage loans purchased by Xxxxxx Mae and
Xxxxxxx Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.
The Master Servicer shall provide the Trustee, the Certificate Insurer
and the NIM Insurer (upon such party's reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer.
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(1) any failure by the Master Servicer to deposit in the
Certificate Account or the Distribution Account or remit to the Trustee
any payment (excluding a payment required to be made under Section 4.01
hereof) required to be made under the terms of this Agreement, which
failure shall continue unremedied for the earlier of the related
Distribution Date or five calendar days and, with respect to a payment
required to be made under Section 4.01(b) or (c) hereof, for one
Business Day, in each case, after the date on which written notice of
such failure shall have been given to the Master Servicer by the
Trustee, the NIM Insurer, the Certificate Insurer or the Depositor, or
to the Trustee, the NIM Insurer, the Certificate Insurer and the Master
Servicer by the Holders of Certificates evidencing not less than 25% of
the Voting Rights; or
(2) any failure by the Master Servicer to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in this Agreement (except with
respect to a failure related to a Limited Exchange Act Reporting
Obligation) or any representation or warranty shall prove to be
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untrue, which failure or breach shall continue unremedied for a period
of 60 days after the date on which written notice of such failure shall
have been given to the Master Servicer by the Trustee, the NIM Insurer,
the Certificate Insurer or the Depositor, or to the Trustee by the
Holders of Certificates evidencing not less than 25% of the Voting
Rights; provided, that the sixty-day cure period shall not apply to the
initial delivery of the Mortgage File for Delay Delivery Mortgage Loans
or the failure to repurchase or substitute in lieu thereof; or
(3) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(4) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(5) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(6) the Master Servicer shall fail to reimburse in full the
Trustee not later than 6:00 p.m. (New York time) on the Business Day
following the related Distribution Date for any Advance made by the
Trustee pursuant to Section 4.01(d) together with accrued and unpaid
interest.
If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
shall, but only at the direction of either the NIM Insurer, or the Holders of
Certificates evidencing not less than 25% of the Voting Rights (subject to the
consent of the Certificate Insurer, which consent shall not be unreasonably
withheld) or at the direction of the Certificate Insurer (so long as no
Certificate Insurer Default is continuing), by notice in writing to the Master
Servicer (with a copy to each Rating Agency and the Depositor), terminate all of
the rights and obligations of the Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. In addition, if during the period that the
Depositor is required to file Exchange Act Reports with respect to the Trust
Fund, the Master Servicer shall fail to observe or perform any of the
obligations that constitute a Limited Exchange Act Reporting Obligation or the
obligations set forth in Section 3.17(a) or Section 11.07(a)(1) and (2), and
such failure continues for the lesser of 10 calendar days or such period in
which the applicable Exchange Act Report can be filed timely (without taking
into account any extensions), so long as such failure shall not have been
remedied, the Trustee shall, but only at the direction of the Depositor,
terminate all of the rights and obligations of the Master Servicer
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under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. The Depositor shall not
be entitled to terminate the rights and obligations of the Master Servicer if a
failure of the Master Servicer to identify a Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with respect
to mortgage loans other than the Mortgage Loans.
On or after the receipt by the Master Servicer of such written notice,
all authority and power of the Master Servicer hereunder, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee.
The Trustee shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article VIII.
The Master Servicer agrees to cooperate with the Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee of all cash amounts
which shall at the time be credited to the Certificate Account, or thereafter be
received with respect to the Mortgage Loans. The Trustee shall promptly notify
the Rating Agencies, the Certificate Insurer and the Depositor of the occurrence
of an Event of Default.
Notwithstanding any termination of the activities of a Master Servicer
hereunder, such Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.08(a)(i)
through (viii), and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
If the Master Servicer is terminated, the Trustee shall provide the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
a successor master servicer in the event the Trustee should succeed to the
duties of the Master Servicer as set forth herein.
Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all fees, costs and expenses relating to the
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Mortgage Loans that the Master Servicer would have been entitled to if the
Master Servicer had continued to act hereunder. Notwithstanding the foregoing,
if the Trustee has become the successor to the Master Servicer in accordance
with Section 7.01 hereof, the Trustee may, if it shall be unwilling to so act,
or shall, if it is prohibited by applicable law from making Advances pursuant to
Section 4.01 hereof or if it is otherwise unable to so act, (i) appoint any
established mortgage loan servicing institution acceptable to the NIM Insurer
and the Certificate Insurer (as evidenced by the prior written consent of the
NIM Insurer and the Certificate Insurer (which consent shall not be unreasonably
withheld by the Certificate Insurer)), or (ii) if it is unable for 60 days to
appoint a successor servicer acceptable to the NIM Insurer, petition a court of
competent jurisdiction to appoint any established mortgage loan servicing
institution, the appointment of which does not adversely affect the then-current
rating of the Certificates (without regard to the Certificate Insurance Policy,
in the case of the Class A Certificates) and the NIM Insurer guaranteed notes
(without giving any effect to any policy or guaranty provided by the NIM
Insurer) by each Rating Agency as the successor to the Master Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Master Servicer hereunder. Any successor Master Servicer
shall be an institution that is a Xxxxxx Mae and Xxxxxxx Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000
and that is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than liabilities and indemnities of the Master Servicer under Section
6.03 hereof incurred prior to termination of the Master Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement; and
provided further that each Rating Agency acknowledges in writing delivered to
the Trustee and the Certificate Insurer that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be qualified
or reduced as a result of such assignment and delegation (without regard to the
Certificate Insurance Policy, in the case of the Class A Certificates). No
appointment of a successor to the Master Servicer hereunder shall be effective
until (i) the Trustee and the Certificate Insurer shall have consented thereto
(which consent shall not be unreasonably withheld by the Certificate Insurer),
(ii) written notice of such proposed appointment shall have been provided by the
Trustee to each Certificateholder and the Certificate Insurer and (iii) at least
15 calendar days prior to the effective date of such appointment, (x) the
Trustee shall provide written notice to the Depositor of such successor pursuant
to this Section 7.02 and (y) such successor Master Servicer shall provide to the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
a replacement master servicer. The Trustee shall not resign as servicer until a
successor servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as herein above provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided that no such compensation shall be in excess of
that permitted the Master Servicer hereunder. The Trustee and such successor
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Trustee nor any other successor
servicer shall be deemed to be in default hereunder by reason
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of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Master Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give notice to
the NIM Insurer and the Mortgagors of such change of servicer and shall, during
the term of its service as servicer maintain in force the policy or policies
that the Master Servicer is required to maintain pursuant to Section 6.05.
In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Trustee promptly
upon receipt of the original with evidence of recording thereon or a copy
certified by the public recording office in which such assignment was recorded.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, to the Certificate Insurer and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
ARTICLE VIII.
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
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The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability that would be imposed by
reason of its willful misfeasance or bad faith; provided that:
(1) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable,
individually or as Trustee, except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably
believed in good faith to be genuine and to have been duly executed by
the proper authorities respecting any matters arising hereunder;
(2) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee was
negligent or acted in bad faith or with willful misfeasance;
(3) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
Holders of each Class of Certificates evidencing not less than 25% of
the Voting Rights of such Class relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee under this
Agreement; and
(4) without in any way limiting the provisions of this Section
8.01 or Section 8.02 hereof, the Trustee shall be entitled to rely
conclusively on the information delivered to it by the Master Servicer
in a Trustee Advance Notice in determining whether or not it is
required to make an Advance under Section 4.01(d), shall have no
responsibility to ascertain or confirm any information contained in any
Trustee Advance Notice, and shall have no obligation to make any
Advance under Section 4.01(d) in the absence of a Trustee Advance
Notice or actual knowledge by a Responsible Officer that (A) a required
Advance was not made and (B) such required Advance was not a
Nonrecoverable Advance.
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The Trustee hereby represents, warrants, covenants and agrees that,
except as permitted by Article IX hereof, it shall not cause the Trust Fund to
consolidate or amalgamate with, or merge with or into, or transfer all or
substantially all of the Trust Fund to, another Person.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(1) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(2) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(3) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(4) prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default that may have occurred,
the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by the NIM Insurer, the Certificate Insurer or the Holders of each
Class of Certificates evidencing not less than 25% of the Voting Rights
of such Class; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee not reasonably assured to the Trustee by the
NIM Insurer or such Certificateholders, the Trustee may require
reasonable indemnity against such expense, or liability from the NIM
Insurer or such Certificateholders as a condition to taking any such
action;
(5) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(6) the Trustee shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any of
its duties hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
liability is not assured to it;
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(7) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(8) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(9) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of the NIM Insurer or any of the Certificateholders,
pursuant to the provisions of this Agreement, unless the NIM Insurer or
such Certificateholders, as applicable, shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
The Depositor hereby directs the Trustee to execute, deliver and
perform its obligations under the Swap Contract Administration Agreement (in its
capacity as Swap Trustee). The Sellers, the Depositor, the Master Servicer and
the Holders of the Interest-Bearing Certificates by their acceptance of such
Certificates acknowledge and agree that the Trustee shall execute, deliver and
perform its obligations under the Swap Contract Administration Agreement and
shall do so solely in its capacity as Swap Trustee and not in its individual
capacity. Every provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Trustee shall apply to the
Trustee's execution of the Swap Contract Administration Agreement in its
capacity as Swap Trustee, and the performance of its duties and satisfaction of
its obligations thereunder.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of any Mortgage Loan or related
document or of MERS or the MERS(R) System other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any funds paid to the Depositor or the Master Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Certificate Account by
the Depositor or the Master Servicer.
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Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in their
capacities as trustees hereunder and (B) to the extent that the Trustee must
engage persons not regularly in its employ to perform acts or services on behalf
of the Trust Fund, which acts or services are not in the ordinary course of the
duties of a trustee, paying agent or certificate registrar, in the absence of a
breach or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(i) incurred in connection with any legal action relating to this Agreement or
the Certificates, or in connection with the performance of any of the Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or by reason of reckless disregard of the Trustee's
obligations and duties hereunder or (ii) resulting from any error in any tax or
information return prepared by the Master Servicer. Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the Trustee
hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates (without regard to the
Certificate Insurance Policy, in the case of the Class A Certificates) below the
ratings issued on the Closing Date (or having provided such security from time
to time as is sufficient to avoid such reduction). If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Sellers and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
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affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the Master Servicer and by mailing notice of resignation by first class mail,
postage prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register, the Certificate Insurer and each Rating Agency, not less
than 60 days before the date specified in such notice when, subject to Section
8.08, such resignation is to take effect, and (2) acceptance of appointment by a
successor trustee in accordance with Section 8.08 and meeting the qualifications
set forth in Section 8.06. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
As a condition to the effectiveness of any such resignation, at least
15 calendar days prior to the effective date of such resignation, the Trustee
shall provide (x) written notice to the Depositor of any successor pursuant to
this Section and (y) in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to the resignation of the Trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the NIM Insurer, the Certificate Insurer or the
Depositor, (ii) the Trustee shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, (iii)(A) a tax is imposed with respect to the Trust
Fund by any state in which the Trustee or the Trust Fund is located, (B) the
imposition of such tax would be avoided by the appointment of a different
trustee and (C) the Trustee fails to indemnify the Trust Fund against such tax,
or (iv) during the period which the Depositor is required to file Exchange Act
Reports with respect to the Trust Fund, the Trustee fails to comply with its
obligations under the last sentence of Section 7.01, the preceding paragraph,
Section 8.09 or Article XI and such failure is not remedied within the lesser of
10 calendar days or such period in which the applicable Exchange Act Report can
be filed timely (without taking into account any extensions), then, in the case
of clauses (i) through (iii), the Depositor, the NIM Insurer or the Master
Servicer, or in the case of clause (iv), the Depositor, may remove the Trustee
and appoint a successor trustee, reasonably acceptable to the Certificate
Insurer, the Certificate Insurer and the NIM Insurer, by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Master Servicer and one copy of which
shall be delivered to the successor trustee.
The Certificate Insurer (so long as no Certificate Insurer Default is
continuing) or Holders evidencing at least 51% of the Voting Rights of each
Class of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of
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`which instruments shall be delivered by the successor Trustee to the Master
Servicer one complete set to the Trustee so removed, one complete set to the
successor so appointed and one complete set to the Depositor, together with a
written description of the basis for such removal. Notice of any removal of the
Trustee shall be given to each Rating Agency and the Certificate Insurer by the
successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof which successor trustee shall be reasonably
acceptable to the Certificate Insurer.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, its predecessor trustee
and the Master Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. In addition, if the Corridor Contract is still
outstanding, the Person appointed as successor trustee shall execute,
acknowledge and deliver to the predecessor trustee, CHL and the Master Servicer
an instrument accepting the appointment as successor Corridor Contract
Administrator under the Corridor Contract Administration Agreement. Similarly,
if the Swap Contract is still outstanding, the Person appointed as successor
trustee shall execute, acknowledge and deliver to the predecessor trustee, CHL
and the Master Servicer an instrument accepting the appointment as successor
Swap Trustee and as Swap Contract Administrator under the Swap Contract
Administration Agreement.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof, is reasonably
acceptable to the Certificate Insurer and the NIM Insurer, its appointment shall
not adversely affect the then-current ratings of the Certificates (without
regard to the Certificate Insurance Policy, in the case of the Class A
Certificates) and has provided to the Depositor in writing and in form and
substance reasonably satisfactory to the Depositor, all information reasonably
requested by the Depositor in order to comply with its reporting obligation
under Item 6.02 of Form 8-K with respect to a replacement Trustee.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to the Certificate Insurer, the NIM Insurer and all Holders of
Certificates. If the Depositor fails to mail such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or
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consolidation to which the Trustee shall be a party, or any corporation
succeeding to substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided that such corporation
shall be eligible under the provisions of Section 8.06 hereof without the
execution or filing of any paper or further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Trustee, the Trustee shall provide (x) written notice to
the Depositor of any successor pursuant to this Section and (y) in writing and
in form and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a replacement Trustee.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and reasonably acceptable to the NIM Insurer and
the Certificate Insurer to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the Certificate Insurer, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.10, such powers, duties, obligations, rights
and trusts as the Master Servicer and the Trustee may consider necessary or
desirable. If the Master Servicer shall not have joined in such appointment, or
the NIM Insurer shall not have approved such appointment, within 15 days after
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(1) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master Servicer,
shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any
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portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(2) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(3) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC created pursuant
to the Preliminary Statement qualifies as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Trustee covenants and agrees that it shall
act as agent (and the Trustee is hereby appointed to act as agent) on behalf of
the Trust Fund and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Returns (Form 1066 or any successor form adopted
by the Internal Revenue Service) and prepare and file or cause to be prepared
and filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each REMIC created hereunder containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the Holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times
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in the manner required by the Code for the Trust Fund; (c) make or cause to be
made elections, on behalf of each REMIC created hereunder to be treated as a
REMIC on the federal tax return of each such REMIC for its first taxable year
(and, if necessary, under applicable state law); (d) prepare and forward, or
cause to be prepared and forwarded, to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Class A-R Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non-Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control conduct the affairs of the Trust Fund at
all times that any Certificates are outstanding so as to maintain the status of
each REMIC created hereunder as a REMIC under the REMIC Provisions; (g) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any REMIC created hereunder; (h)
pay, from the sources specified in the third paragraph of this Section 8.11, the
amount of any federal, state and local taxes, including prohibited transaction
taxes as described below, imposed on any REMIC created hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) sign or cause to be signed federal, state
or local income tax or information returns; (j) maintain records relating to
each REMIC created hereunder, including but not limited to the income, expenses,
assets and liabilities of each such REMIC, and the fair market value and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC created hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of the
Trust Fund, and otherwise act on behalf of any REMIC created hereunder in
relation to any tax matter involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans (and, to the extent not part of the
aforementioned, the information referred to in paragraphs (1), (2), (3) and (4)
of Section 4.05(d)). Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or data
that the Trustee may, from time to time, request in order to enable the Trustee
to perform its duties as set forth herein. The Depositor hereby indemnifies the
Trustee for any losses, liabilities, damages, claims or expenses of the Trustee
arising from any errors or miscalculations
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of the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
Trust Fund pursuant to sections 23153 and 24872 of the California Revenue and
Taxation Code if not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee, if any such other tax arises out of or results from a
breach by the Trustee of any of its obligations under this Agreement, (ii) (x)
the Master Servicer, in the case of any such minimum tax, and (y) any party
hereto (other than the Trustee) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or (iii) in all other cases, or in the event that any liable
party here fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be paid first with amounts otherwise to be distributed
to the Class A-R Certificateholders, and second with amounts otherwise to be
distributed to all other Certificateholders in the same manner as if such tax
were a Realized Loss. Notwithstanding anything to the contrary contained herein,
to the extent that such tax is payable by the Class A-R Certificates, the
Trustee is hereby authorized to retain on any Distribution Date, from the
Holders of the Class A-R Certificates (and, if necessary, second, from the
Holders of the other Certificates in the priority specified in the preceding
sentence), funds otherwise distributable to such Holders in an amount sufficient
to pay such tax. The Trustee agrees to promptly notify in writing the party
liable for any such tax of the amount thereof and the due date for the payment
thereof.
The Trustee shall treat the Carryover Reserve Fund and the Swap Trust,
including the Swap Account and the Swap Reserve Fund, as outside reserve funds
within the meaning of Treasury Regulation 1.860G-2(h), neither of which is an
asset of any REMIC created hereunder. The Carryover Reserve Fund shall be
treated as owned by the Class C Certificateholders and the Swap Trust, including
the Swap Account and Swap Reserve Fund, shall be treated as owned by the Class C
Certificateholders. The rights of the Holders of each Class of Certificates
(other than the Class P and Class A-R Certificates) to receive payments from,
and the deemed obligations of such Holders to make payments to, the Carryover
Reserve Fund shall be treated as rights and obligations with respect to notional
principal contracts written by (i) the Corridor Contract Counterparty in respect
of any Net Rate Carryover funded by the Corridor Contract and in respect of any
residual payments from such Corridor Contract received by the Class C
Certificates, (ii) the Swap Counterparty in respect of any Net Rate Carryover
funded by the Swap Contract and in respect of any residual payments from such
Swap Contract received by the Class C Certficiates and (iii) the Holders of the
Class C Certificates in respect of any Net Rate Carryover distributed pursuant
to Sections 4.04(d)(4). Thus, the Certificates (other than the Class P and Class
A-R Certificates), shall be treated as representing ownership of Master REMIC
regular interests coupled with contractual rights and obligations within the
meaning of Treasury Regulation 1.860G-2(i). For purposes of determining the
issue price of the various Master REMIC regular interests, the Trustee shall
assume that the Corridor Contract has a value of $8,000.
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Section 8.12 Access to Records of the Trustee.
The Trustee shall afford the Sellers, the Depositor, the Master
Servicer, the NIM Insurer, the Certificate Insurer and each Certificate Owner
upon reasonable notice during normal business hours access to all records
maintained by the Trustee in respect of its duties under this Agreement and
access to officers of such entity responsible for performing its duties. Upon
request, the Trustee shall furnish the Depositor, the Master Servicer, the NIM
Insurer, the Certificate Insurer and any requesting Certificate Owner with its
most recent financial statements. The Trustee shall cooperate fully with the
Sellers, the Master Servicer, the Depositor, the NIM Insurer, the Certificate
Insurer and the Certificate Owner for review and copying any books, documents,
or records requested with respect to the Trustee's duties under this Agreement.
The Sellers, the Depositor, the Master Servicer, the Certificate Insurer and the
Certificate Owner shall not have any responsibility or liability for any action
for failure to act by the Trustee and are not obligated to supervise the
performance of the Trustee under this Agreement or otherwise.
Section 8.13 Suits for Enforcement.
If an Event of Default or other material default by the Master Servicer
or the Depositor under this Agreement occurs and is continuing, at the direction
of the Certificateholders holding not less than 51% of the Voting Rights, the
Certificate Insurer (so long as no Certificate Insurer Default is continuing) or
the NIM Insurer, the Trustee shall proceed to protect and enforce its rights and
the rights of the Certificateholders, the Certificate Insurer or the NIM Insurer
under this Agreement by a suit, action, or proceeding in equity or at law or
otherwise, whether for the specific performance of any covenant or agreement
contained in this Agreement or in aid of the execution of any power granted in
this Agreement or for the enforcement of any other legal, equitable, or other
remedy, as the Trustee, being advised by counsel, and subject to the foregoing,
shall deem most effectual to protect and enforce any of the rights of the
Trustee, the NIM Insurer, the Certificate Insurer and the Certificateholders.
Section 8.14 Monitoring of Significance Percentage.
With respect to each Distribution Date, the Trustee shall calculate the
"significance percentage" (as defined in Item 1115 of Regulation AB) of each
derivative instrument, if any, based on the aggregate Class Principal Balance of
the related Class(es) of Covered Certificates for such derivative instrument and
Distribution Date (after all distributions to be made thereon on such
Distribution Date) and based on the methodology provided in writing by or on
behalf of CHL no later than the fifth Business Day preceding such Distribution
Date. On each Distribution Date, the Trustee shall provide to CHL a written
report (which written report may include similar information with respect to
other derivative instruments relating to securitization transactions sponsored
by CHL) specifying the "significance percentage" of each derivative instrument,
if any, for that Distribution Date. If the "significance percentage" of any
derivative instrument exceeds 7.0% with respect to any Distribution Date, the
Trustee shall make a separate notation thereof in the written report described
in the preceding sentence. Such written report may contain such assumptions and
disclaimers as are deemed necessary and appropriate by the Trustee.
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ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
Subject to Section 9.03 and Section 9.04, the Trust Fund shall
terminate and the obligations and responsibilities of the Depositor, the Master
Servicer, the Sellers and the Trustee created hereby shall terminate upon the
earlier of (a) the purchase by the Master Servicer or the NIM Insurer (the party
exercising such purchase option, the "Terminator") of all of the Mortgage Loans
(and REO Properties) remaining in the Trust Fund at the price (the "Termination
Price") equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan in the Trust Fund (other than in respect of an REO Property), (ii)
accrued interest thereon at the applicable Mortgage Rate (or, if such repurchase
is effected by the Master Servicer, at the applicable Net Mortgage Rate), (iii)
the appraised value of any REO Property in the Trust Fund (up to the Stated
Principal Balance of the related Mortgage Loan), such appraisal to be conducted
by an appraiser mutually agreed upon by the Terminator and the Trustee, (iv) any
remaining unpaid costs and damages incurred by the Trust Fund that arises out of
an actual violation of any predatory or abusive lending law or regulation and
(v) if the Terminator is the NIM Insurer, any unreimbursed Servicing Advances,
and the principal portion of any unreimbursed Advances, made on the Mortgage
Loans prior to the exercise of such repurchase, (b) the purchase by the Winning
Bidder of all of the Mortgage Loans (and REO Properties) remaining in the Trust
Fund after a Successful Action is conducted pursuant to Section 9.04 and the
related auction proceeds are distributed pursuant to Section 9.02(c) and (c) the
later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to related
Certificateholders of all amounts required to be distributed to them pursuant to
this Agreement, as applicable. In no event shall the trusts created hereby
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador
of the United States to the Court of St. James's, living on the date hereof and
(ii) the Latest Possible Maturity Date. If any such termination will result in a
Deficiency Amount on the Certificate Insurance Policy, the consent of the
Certificate Insurer will also be required prior to exercising the option
specified in clause (a) of this paragraph.
The right to purchase all Mortgage Loans and REO Properties by the
Terminator pursuant to clause (a) of the immediately preceding paragraph shall
be conditioned upon (1) the Stated Principal Balance of the Mortgage Loans, at
the time of any such repurchase, aggregating ten percent (10%) or less of the
sum of the aggregate Cut-off Date Principal Balance of the Initial Mortgage
Loans and the Pre-Funded Amount and (2) unless the NIM Insurer otherwise
consents, the purchase price for such Mortgage Loans and REO Properties shall
result in a final distribution on any NIM Insurer guaranteed notes that is
sufficient (x) to pay such notes in full and (y) to pay any amounts due and
payable to the NIM Insurer pursuant to the indenture related to such notes and
(3) unless the Certificate Insurer otherwise consents, the purchase price for
such Mortgage Loans and REO Properties shall result in a final distribution on
the Class A Certificates and the Certificate Insurer that is sufficient (x) to
pay such Class A Certificates in full (without the need of any Insured Payment)
and (y) to pay any amounts due and payable to
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the Certificate Insurer pursuant to the terms hereof and pursuant to the
Insurance and Indemnity Agreement.
The NIM Insurer's right to purchase all Mortgage Loans and REO
Properties shall be further conditioned upon the written consent of the Master
Servicer.
The Swap Trust shall terminate on the earliest of (i) the Swap Contract
Termination Date, (ii) the reduction of the aggregate Certificate Principal
Balance of the Class A-2 and Class A-3 Certificates to zero and (iii) the
termination of this Agreement.
Section 9.02 Final Distribution on the Certificates.
(a) Timing of Notice of Final Distribution, Auction or Optional
Termination
(i) If on any Determination Date, (1) the Master Servicer determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, then the Master
Servicer shall direct the Trustee to send a final distribution notice promptly
to each Certificateholder and the Certificate Insurer in accordance with Section
9.02(b) or (2) the Trustee determines that a Class of Certificates shall be
retired after a final distribution on such Class, the Trustee shall notify the
related Certificateholders and the Certificate Insurer within five (5) Business
Days after such Determination Date that the final distribution in retirement of
such Class of Certificates is scheduled to be made on the immediately following
Distribution Date. Any final distribution made pursuant to the immediately
preceding sentence will be made only upon presentation and surrender of the
related Certificates at the Corporate Trust Office of the Trustee. In the event
such notice is given pursuant to clause (1), the Master Servicer shall cause all
funds in the Certificate Account to be remitted to the Trustee for deposit in
the Distribution Account on or before the Business Day prior to the applicable
Distribution Date , net of any amounts permitted to be withdrawn pursuant to
Section 3.08(a). Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee shall
promptly release to the Master Servicer the Mortgage Files for the Mortgage
Loans.
(ii) If the Directing Certificateholder chooses to exercise its right
to cause an auction pursuant to Section 9.04, then the Directing
Certificateholder shall provide written notice to the Master Servicer no later
than the 1st day of the calendar month in which such auction is to be conducted.
If a Successful Auction is held pursuant to the requirements of Section 9.04,
then the Trustee shall distribute the proceeds of the Successful Auction that
have been remitted to the Distribution Account to the Certificateholders
pursuant to Sections 4.04 and 9.04 hereof on the Distribution Date in the
calendar month immediately following the calendar month in which the Successful
Auction occurs.
(iii) If the Directing Certificateholder does not exercise its right to
cause an auction pursuant to Section 9.04 and the Terminator (after prior
written notice to the Master Servicer if the Terminator is the NIM Insurer)
elects to terminate the Trust Fund pursuant to Section 9.01, then at least 20
days prior to the date notice is to be mailed to Certificateholders in
accordance with Section 9.02(b), the Terminator shall notify in writing the
Depositor, the Certificate Insurer and the Trustee of (a) its election to
terminate the Trust Fund, (b) the
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Distribution Date on which it intends to terminate the Trust Fund pursuant to
Section 9.01 and (c) the applicable purchase price of the Mortgage Loans and REO
Properties. In the event such notice is given, the Terminator shall remit to the
Master Servicer, on or before the Business Day prior to the final Distribution
Date, for deposit into the Certificate Account, the Termination Price. The
Master Servicer shall cause all funds in the Certificate Account, including the
Termination Price, net of any amounts permitted to be withdrawn pursuant to
Section 3.08(a), to be remitted to the Trustee for deposit in the Distribution
Account on or before the Business Day prior to the applicable Distribution Date.
Upon such final deposit with respect to the Trust Fund and the receipt by the
Trustee of a Request for Release therefor, the Trustee shall promptly release to
the Master Servicer the Mortgage Files for the Mortgage Loans.
(b) Timing of Notice to Certificateholders of Termination. Notice of
any termination of the Trust Fund (whether because of a Successful Auction,
Optional Termination or otherwise), specifying the Distribution Date on which
related Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to related Certificateholders mailed not earlier than the 10th day and no
later than the 15th day of the month immediately preceding the month of such
final distribution. Any such notice shall specify (i) the Distribution Date upon
which final distribution on related Certificates will be made upon presentation
and surrender of such Certificates at the office therein designated, (ii) the
amount of such final distribution, (iii) the location of the office or agency at
which such presentation and surrender must be made, and (iv) that the Record
Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of such
Certificates at the office therein specified. The Master Servicer will give such
notice to each Rating Agency and the Swap Counterparty at the time such notice
is given to the Certificateholders.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each affected Class and
the Certificate Insurer the amounts allocable to such Certificates and the
Certificate Insurer held in the Distribution Account (and, if applicable, the
Carryover Reserve Fund) in the order and priority set forth in Section 4.04
hereof (and with respect to the Class C Certificates after a Successful Auction
as set forth in Section 9.04(g) and (k)) on the final Distribution Date and in
proportion to their respective Percentage Interests. Notwithstanding the
reduction of the Certificate Principal Balance of any Class of Certificates to
zero, such Class will be outstanding hereunder (solely for the purpose of
receiving distributions (if any) to which it may be entitled pursuant to the
terms of this Agreement and not for any other purpose) until the termination of
the respective obligations and responsibilities of the Depositor, each Seller,
the Master Servicer and the Trustee hereunder in accordance with Article IX.
(d) In the event that any affected Certificateholders shall not
surrender their respective Certificates for cancellation within six months after
the date specified in the above mentioned written notice, the Trustee shall give
a second written notice to the remaining Certificateholders to surrender their
related Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid
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out of the funds and other assets that remain a part of the Trust Fund. If
within one year after the second notice all related Certificates shall not have
been surrendered for cancellation, the Certificate Insurer, with respect to any
unpaid Certificate Insurance Reimbursement Amounts, and then the Class A-R
Certificates shall be entitled to all unclaimed funds and other assets that
remain subject hereto.
Section 9.03 Additional Termination Requirements.
(a) In the event the Terminator exercises its purchase option, as
provided in Section 9.01 or if there is a Successful Auction pursuant to Section
9.04, the Trust Fund shall be terminated in accordance with the following
additional requirements, unless the Trustee has been supplied with an Opinion of
Counsel, at the expense of the Terminator (or the Directing Certificateholder,
in the case of a Successful Auction), to the effect that the failure of the
Trust Fund to comply with the requirements of this Section 9.03 will not (i)
result in the imposition of taxes on "prohibited transactions" of a REMIC, or
(ii) cause any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day liquidation
period and notify the Trustee thereof, which shall in turn specify the first day
of such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer shall
prepare a plan of complete liquidation and shall otherwise satisfy all the
requirements of a qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel delivered to the
Trustee and the Depositor obtained at the expense of the Terminator (or the
Directing Certificateholder, in the case of a Successful Auction);
(2) During such 90-day liquidation period, and at prior to the
time of making the final payment on the Certificates, the Master Servicer as
agent of the Trustee shall sell all of the assets of the Trust Fund to the
Terminator (or the Winning Bidder in the case of a Successful Auction) for cash
in accordance with Section 9.01 and, if applicable, Section 9.04; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited, to the Class A-R Certificateholders all cash on hand (other than
cash retained to meet claims) related to such Class of Certificates, and the
Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Master Servicer to specify the 90-day liquidation period for the
Trust Fund, which authorization shall be binding upon all successor
Certificateholders. The Trustee shall attach a statement to the final federal
income tax return for each of any REMIC created hereunder stating that pursuant
to Treasury Regulation Section 1.860F-1, the first day of the 90-day liquidation
period for each the REMIC was the date on which the Trustee sold the assets of
the Trust Fund to the Terminator or the Winning Bidder, as applicable.
(c) The Trustee as agent for each REMIC created hereunder hereby agrees
to adopt and sign such a plan of complete liquidation upon the written request
of the Master
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Servicer, and the receipt of the Opinion of Counsel referred to in Section
9.03(a)(1), and together with the Holders of the Class A-R Certificates agree to
take such other action in connection therewith as may be reasonably requested by
the Terminator or the Directing Certificateholder, as applicable.
Section 9.04 Auction of the Mortgage Loans and REO Properties.
(a) On or after the Optional Termination Date, the Holder of the
largest Percentage Interest of Class C Certificates (the "Directing
Certificateholder"), at its option, may by written instruction direct the
Trustee to solicit bids in a commercially reasonable manner from Qualified
Bidders for the purchase of the Mortgage Loans and any REO Properties owned by
the Trust Fund. The Directing Certificateholder shall provide written notice to
the Master Servicer, as provided in Section 9.02(a)(ii), of any such direction
to the Trustee. Any such direction by the Directing Certificateholder shall (i)
be made in writing and (ii) include contact information for the Directing
Certificateholder. Upon receipt of any direction from the Directing
Certificateholder meeting the requirements of the immediately preceding
sentence, the Trustee shall commence the auction process described in this
Section 9.04. The Trustee may engage a financial advisor, which financial
advisor may be CHL or one of its affiliates, in order to perform any of the
duties of the Trustee specified in Section 9.04. To effectuate such sale, the
Trustee (or such financial advisor) shall follow the procedures specified in
Section 9.04(b) below. The Trustee shall facilitate the sale of the assets in
the Trust Fund to the Winning Bidder so long as the Trustee (or any financial
advisor on its behalf) has received at least three bids from Qualified Bidders
and at least one such bid is at least equal to the Acceptable Bid Amount. In the
event the auction is not a Successful Auction, the Trustee shall repeat this
process at such frequency as directed by the Directing Certificateholder until a
Successful Auction is conducted or the Terminator purchases all of the Mortgage
Loans and REO Properties pursuant to Section 9.01. The Trustee shall be
reimbursed for its reasonable costs, including expenses associated with engaging
any financial advisor, from the Directing Certificateholder if the auction is
not a Successful Auction, and, if the auction is a Successful Auction, from the
proceeds of the auction before the proceeds are distributed to
Certificateholders.
The Trustee, upon inquiry from the Master Servicer, agrees to provide the
Master Servicer with the Percentage Interest of Class C Certificates held by
the Directing Certificateholder.
If CHL or any of its affiliates is the Directing Certificateholder, such
Directing Certificateholder shall not have the right to direct the Trustee to
solicit bids for the purchase of the Mortgage Loans and any REO Properties
owned by the Trust Fund.
(b) The Trustee (or any financial advisor on its behalf) shall solicit
bids for the purchase of assets owned by the Trust Fund as provided in Section
9.04(a) not later than two Business Days following receipt of the Directing
Certificateholder's written instruction by contacting by telephone or in writing
at least three Qualified Bidders and requesting that each Qualified Bidder bid
on the Mortgage Loans and REO Properties owned by the Trust Fund (on a
non-recourse basis with no representations or warranties of any nature
whatsoever made by the Trustee (or such financial advisor)) and providing to the
Qualified Bidder any information relating to the Mortgage Loans and REO
Properties owned by the Trust Fund reasonably requested by such Qualified
Bidder, subject to the Qualified Bidder's written agreement not to
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use such information in the purchase or sale of Certificates (it being
understood no Qualified Bidder shall be obligated to submit a bid or take any
other action in connection with any auction). The Master Servicer shall
cooperate with the Trustee (and any financial advisor on its behalf) during the
auction process. At 1:00 p.m. New York time on the second Business Day after the
date on which bids are last solicited (such second day, the "Bid Determination
Date"), the Trustee (or any financial advisor on its behalf) shall determine the
highest bid based on the bids received by the Trustee (or any financial advisor
on its behalf) on or before such time.
(c) If the highest of the bids that are submitted by Qualified Bidders
is less than the Minimum Auction Amount, then the Trustee shall promptly inform
the Directing Certificateholder of the amount of the shortfall and indicate that
the Directing Certificateholder must notify the Trustee within 24 hours whether
it will contribute the amount of such difference (such difference being the
"Auction Supplement Amount") so that the auction will be a Successful Auction.
If the highest of the bids that are submitted by Qualified Bidders is equal to
or greater than the Minimum Auction Amount, or if the Directing
Certificateholder notifies the Trustee within 24 hours of its receipt of notice
as described in the previous sentence that it will contribute the Auction
Supplement Amount, then the Trustee (or any financial advisor on its behalf)
shall notify promptly (but in any event no later than 3:00 p.m. New York time on
the Business Day following the Bid Determination Date) the Winning Bidder that
its bid was the highest bid and shall provide wiring instructions for payment of
the bid amount into the Certificate Account by 12:00 p.m. New York time on the
second Business Day following the Bid Determination Date and, if applicable,
provide the Directing Certificateholder with wiring instructions for payment of
the Auction Supplement Amount into the Certificate Account by such time.
(d) If such Winning Bidder does not wire the bid amount so that it is
received in the Certificate Account in immediately available funds by 12:00 p.m.
New York time on the second Business Day following the Bid Determination Date,
the Trustee shall repeat the process specified in the preceding paragraph with
respect to the second highest bid, but only if such bid is at least the Minimum
Auction Amount or the Directing Certificateholder agrees to pay the new Auction
Supplement Amount. If no other bids are available to be accepted pursuant to the
preceding sentence, or if the amount remitted by the Winning Bidder plus any
Auction Supplement Amount remitted by the Directing Certificateholder is less
than the Minimum Auction Amount, then the auction shall be considered to have
failed for all purposes.
(e) The Trustee shall not be liable with regard to the selection or
engagement of, or for any act or omission of, a financial advisor pursuant to
this Section 9.04 if the Trustee engages CHL to be such financial advisor.
(f) In the event of a Successful Auction and so long as the Winning
Bidder has wired its bid amount (and the Directing Certificateholder has wired
any Auction Supplement Amount, if applicable) to the Certificate Account as
provided above, then the Trustee shall promptly convey to the Winning Bidder the
Mortgage Loans and REO Properties owned by the Trust Fund. The Master Servicer
shall take all reasonable actions requested by the Trustee to effect such
conveyance, including remitting to the Distribution Account from the Certificate
Account, on the Business Day prior to the Distribution Date on which final
distribution on the Certificates is required to be paid under this Agreement,
all amounts on deposit in the Certificate
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Account, net of any amounts permitted to be withdrawn pursuant to Section
3.08(a) and amounts owing to the Trustee in reimbursement of its reasonable
costs, including expenses associated with engaging any financial advisor,
incurred in connection with the auction process. Such amounts owed to the
Trustee shall be withdrawn from the Certificate Account by the Master Servicer
and paid to the Trustee.
(g) Any amount paid by the Winning Bidder in excess of the Minimum
Auction Amount shall be distributed by the Trustee pro rata to the Class C
Certificates on the Distribution Date on which the final distribution on the
Certificates is made.
(h) In the event of a Successful Auction and to the extent the Swap
Contract is still outstanding, the Directing Certificateholder shall either:
(1) if any Swap Termination Payment would be payable by the
Swap Contract Administrator to the Swap Counterparty were the Swap
Contract to be terminated following final distribution on the
Certificates, either:
(A) pay to the Swap Contract Administrator any such
Swap Termination Payment; or
(B) accept assignment of the Swap Contract to the
extent that the Directing Certificateholder is an acceptable
counterparty for the Swap Counterparty;
(2) if any Swap Termination Payment would be payable by the
Swap Counterparty to the Swap Contract Administrator were the Swap
Contract to be terminated following final distribution on the
Certificates, either
(A) (i) if the Directing Certificateholder does not
own 100% of the Class C Certificates, accept assignment of the
Swap Contract to the extent that the Directing
Certificateholder is an acceptable counterparty for the Swap
Counterparty and pay to the Swap Contract Administrator the
Swap Termination Payment that would be owed to the Swap
Contact Administrator by the Swap Counterparty if the Swap
Contract were terminated by the Swap Contract Administrator
following distribution on the Certificates or (ii) if the
Directing Certificateholder owns 100% of the Class C
Certificates, accept assignment of the Swap Contract to the
extent that the Directing Certificateholder is an acceptable
counterparty for the Swap Counterparty; or
(B) instruct the Swap Contract Administrator to
accept from the Swap Counterparty any Swap Termination Payment
that would be owed to the Swap Contract Administrator.
(i) Any amounts paid to the Swap Contract Administrator pursuant to
subsection (h)(2) above shall be distributed to the Class C Certificates, pro
rata, based on entitlement (determined by reference to Section 9.04(k)), by the
Swap Contract Administrator.
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(j) The Master Servicer may purchase the Mortgage Loans and REO
Properties owned by the Trust Fund for its own account pursuant to Section 9.01
or consent to the NIM Insurer's purchase of the Mortgage Loans and REO
Properties owned by the Trust Fund pursuant to Section 9.01 only if (1) the
Directing Certificateholder chooses not to request an auction as described above
or if the immediately preceding auction is unsuccessful or (2) the Master
Servicer notifies the Directing Certificateholder no later than 30 days prior to
the date on which the Master Servicer or the NIM Insurer, as applicable, intends
to effect the purchase of the Mortgage Loans and REO Properties owned by the
Trust Fund and the Directing Certificateholder does not direct the Trustee to
conduct an auction prior to the end of that 30-day period.
(k) If the Directing Certificateholder pays any Auction Supplement
Amount pursuant to Section 9.04(c) or any Swap Termination Payment pursuant to
Section 9.04(h)(1)(A) on the final Distribution Date any amounts to be
distributed to the Class C Certificates pursuant to Section 4.01 will be
distributed as follows, first to the Directing Certificateholder, in an amount
up to the sum of such Auction Supplement Amount and such Swap Termination
Payment and second to the Class C Certificates, pro rata. For federal income tax
purposes, such Auction Supplement Amount and such Swap Termination Payment so
distributed shall be deemed paid pro rata to the Class C Certificates, and the
portion of such amounts deemed distributed to holders of the Class C
Certificates other than the Directing Certificateholder shall be deemed paid
from such other holders to the Directing Certificateholder.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Sellers and the Trustee with the consent of the Certificate
Insurer (such consent not to be unreasonably withheld) and the NIM Insurer,
without the consent of any of the Certificateholders (i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein, (iii) to conform this
Agreement to the Prospectus Supplement or the Prospectus, (iv) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement to comply with any rules or regulations promulgated by the Securities
and Exchange Commission from time to time, or (v) to make such other provisions
with respect to matters or questions arising under this Agreement, as shall not
be inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel delivered and addressed to the Trustee,
adversely affect in any material respect the interests of any Certificateholder;
provided that any such amendment shall be deemed not to adversely affect in any
material respect the interests of the Certificateholders and no such Opinion of
Counsel shall be required if the Person requesting such amendment obtains a
letter from each Rating Agency stating that such amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates (without regard to the Certificate Insurance Policy, in the case of
the Class A Certificates), it being understood and agreed that any such letter
in and of itself will not represent a determination as to the materiality of any
such amendment and will represent a determination only as to the credit issues
affecting any such rating. Any amendment described above made
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solely to conform this Agreement to the Prospectus or the Prospectus Supplement
shall be deemed not to adversely affect in any material respect the interests of
the Certificateholders. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the trust created by this
Agreement may be made without the consent of Certificateholders representing not
less than 51% of the Voting Rights of each Class of Certificates affected by
such amendment. Each party to this Agreement hereby agrees that it will
cooperate with each other party in amending this Agreement pursuant to clause
(iv) above.
The Trustee, the Depositor, the Master Servicer and the Sellers with
the consent of the NIM Insurer and the Certificate Insurer may also at any time
and from time to time amend this Agreement, without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or appropriate to maintain the qualification of the
Trust Fund as a REMIC under the Code or to avoid or minimize the risk of the
imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee, to the effect that such action
is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Sellers and the Trustee with the consent of the NIM
Insurer and the Holders of each Class of Certificates affected thereby
evidencing not less than 51% of the Voting Rights of such Class, with the
consent of the Certificate Insurer (such consent not to be unreasonably
withheld), for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments required to be distributed on any Certificate without the consent of
the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in (i), without the consent of the Holders of Certificates of such
Class evidencing 66% or more of the Voting Rights of such Class, or (iii) reduce
the aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, no amendment
shall adversely affect in any material respect the Swap Counterparty without at
least ten Business Days' prior notice to the Swap Counterparty and without the
prior written consent of the Swap Counterparty, which consent shall not be
unreasonably withheld. CHL shall provide the Swap Counterparty with prior
written notice of any proposed material amendment of this Agreement.
Notwithstanding any contrary provisions of this Agreement,
the Trustee and the NIM Insurer shall not consent to any amendment to this
Agreement unless each shall have first received an Opinion of Counsel
satisfactory to the Trustee and the NIM Insurer, which opinion shall be an
expense of the party requesting such amendment but in any case shall not be an
expense of the Trustee or the NIM Insurer, to the effect that such amendment
will not cause the
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imposition of any tax on the Trust Fund or the Certificateholders or cause any
REMIC formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement, the
Trustee shall furnish written notification of the substance of such amendment to
the Certificate Insurer, the Swap Counterparty and, if the amendment required
the consent of Certificateholders, to each Certificateholder and each Rating
Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, reasonably satisfactory to
the Trustee and the NIM Insurer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01. The Trustee and the
Master Servicer shall not amend the Credit Insurance Policy in any manner that
materially and adversely affects the coverage provided thereby without the prior
written consent of the Certificate Insurer and prior written notice to S&P.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
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Section 10.04 Intention of Parties.
(a) It is the express intent of the parties hereto that the conveyance
of the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement or any Subsequent Transfer Agreement is held or deemed to create a
security interest in such assets, then (i) this Agreement shall be deemed to be
a security agreement (within the meaning of the Uniform Commercial Code of the
State of New York) with respect to all such assets and security interests and
(ii) the conveyance provided for in this Agreement and any Subsequent Transfer
Agreement shall be deemed to be an assignment and a grant pursuant to the terms
of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, the Certificate Insurer and the Swap Counterparty, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders, the
Certificate Insurer, the NIM Insurer and the Swap Counterparty shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders and the Swap Counterparty.
(b) The Depositor hereby represents that:
(i) This Agreement creates a valid and continuing security
interest (as defined in the Uniform Commercial Code as enacted in the
State of New York (the "NY UCC")) in the Mortgage Notes in favor of the
Trustee, which security interest is prior to all other liens, and is
enforceable as such as against creditors of and purchasers from the
Depositor.
(ii) The Mortgage Notes constitute "instruments" within the
meaning of the NY UCC.
(iii) Immediately prior to the assignment of each Mortgage
Loan to the Trustee, the Depositor owns and has good and marketable
title to such Mortgage Loan free and clear of any lien, claim or
encumbrance of any Person.
(iv) The Depositor has received all consents and approvals
required by the terms of the Mortgage Loans to the sale of the Mortgage
Loans hereunder to the Trustee.
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(v) All original executed copies of each Mortgage Note that
are required to be delivered to the Trustee pursuant to Section 2.01
have been delivered to the Trustee.
(vi) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Mortgage Loans. The Depositor has not authorized the filing of and is
not aware of any financing statements against the Depositor that
include a description of collateral covering the Mortgage Loans other
than any financing statement relating to the security interest granted
to the Trustee hereunder or that has been terminated. The Depositor is
not aware of any judgment or tax lien filings against the Depositor.
The parties to this Agreement shall not waive any of the
representations set forth in this Section 10.04(b) without obtaining a
confirmation of the then-current ratings of the Certificates (determined without
regard to the Certificate Insurance Policy).
(c) The Master Servicer shall take such action as is reasonably
necessary to maintain the perfection and priority of the security interest of
the Trustee in the Mortgage Loans; provided, however, that the obligation to
deliver the Mortgage File to the Trustee pursuant to Section 2.01 shall be
solely the Depositor's obligation and the Master Servicer shall not be
responsible for the safekeeping of the Mortgage Files by the Trustee.
(d) It is understood and agreed that the representations and warranties
set forth in subsection (b) above shall survive delivery of the Mortgage Files
to the Trustee. Upon discovery by the Depositor or the Trustee of a breach of
any of the foregoing representations and warranties set forth in subsection (b)
above, which breach materially and adversely affects the interest of the
Certificateholders or the Certificate Insurer, the party discovering such breach
shall give prompt written notice to the others, to the Certificate Insurer and
to each Rating Agency.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency and the Certificate Insurer and the Swap Counterparty with
respect to each of the following of which it has actual knowledge:
(1) Any material change or amendment to this Agreement;
(2) The occurrence of any Event of Default that has not been
cured;
(3) The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
(4) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 2.04, 2.07 and 3.12; and
(5) The final payment to Certificateholders.
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(b) In addition, the Trustee shall promptly furnish to each Rating
Agency and the Certificate Insurer copies of the following:
(1) Each report to Certificateholders described in Section
4.05;
(2) Each annual statement as to compliance described in
Section 3.17; and
(3) Each annual independent public accountants' servicing
report described in Section 11.07.
(c) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when sent by facsimile transmission,
first class mail or delivered to (i) in the case of the Depositor, CWHEQ, Inc.,
0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number: (818)
225-4016, Attention: Xxxx Xxxxx, or such other address as may be hereafter
furnished to the Sellers, the Master Servicer, the Certificate Insurer and the
Trustee by the Depositor in writing; (ii) in the case of CHL, Countrywide Home
Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number
(000) 000-0000, Attention: Xxxx Xxxxx, or such other address as may be hereafter
furnished to the Depositor, the Master Servicer, the Certificate Insurer and the
Trustee by the Sellers in writing; (iii) in the case of Park Monaco, Park Monaco
Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number (818)
225-4024, Attention: Xxxx Xxx, or such other address as may be hereafter
furnished to the Depositor, the Master Servicer, the Certificate Insurer and the
Trustee by the Sellers in writing; (iv) in the case of Park Granada, Park
Granada LLC., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number
(000) 000-0000, Attention: Xxxx Xxx, or such other address as may be hereafter
furnished to the Depositor, the Master Servicer, the Certificate Insurer and the
Trustee by the Sellers in writing; (v) in the case of Park Sienna, Park Sienna
LLC, 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number (818)
225-4024, Attention: Xxxx Xxx, or such other address as may be hereafter
furnished to the Depositor, the Master Servicer, the Certificate Insurer and the
Trustee by the Sellers in writing; (vi) in the case of the Master Servicer,
Countrywide Home Loans Servicing LP, 0000 Xxxxxxxxx Xxxxx, Xxxxx, Xxxxx 00000,
facsimile number (000) 000-0000, Attention: Xxxx Xxxx or such other address as
may be hereafter furnished to the Depositor, the Sellers, the Certificate
Insurer and the Trustee by the Master Servicer in writing; (vii) in the case of
the Trustee, The Bank of New York, 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust MBS Administration, CWHEQ, Series 2007-S3, or
such other address as the Trustee may hereafter furnish to the parties hereto
and the Certificate Insurer; (viii) in the case of the Rating Agencies, (1)
Xxxxx'x Investors Service, Inc., Attention: ABS Monitoring Department, 00 Xxxxxx
Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (2) Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Attention: Mortgage
Surveillance Group, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (ix)
in the case of the Corridor Contract Counterparty, Bear Xxxxxxx Financial
Products Inc., Attention: DPC Manager, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Facsimile: (000) 000-0000, with a
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copy to Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention:
Derivative Operations--7th Floor, Facsimile (000) 000-0000, or such other
address as may be hereafter furnished by the Corridor Contract Counterparty; (x)
in the case of the Swap Counterparty, Bear Xxxxxxx Capital Markets Inc.,
Attention: DPC Manager, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile:
(000) 000-0000, with a copy to Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx
00000, Attention: Derivative Operations--7th Floor, Facsimile (000) 000-0000, or
such other address as may be hereafter furnished by the Swap Counterparty; and
(xi) in the case of the Certificate Insurer, MBIA Insurance Corporation, 000
Xxxx Xxxxxx, Xxxxxx, XX 00000, facsimile number (000) 000-0000 , Attention:
Insured Portfolio Management - Structured Finance (CWHEQ 2007-S3) or such other
address as may be hereafter furnished by the Certificate Insurer. Notices to
Certificateholders shall be deemed given when mailed, first postage prepaid, to
their respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
the Holders of Certificates evidencing not less than 25% of the Voting Rights
shall also have made written request to the Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have
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neglected or refused to institute any such action, suit or proceeding and the
Certificate Insurer has given its prior written consent; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the Certificates,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Agreement, except in the manner herein
provided and for the common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 10.08, each and
every Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, any Seller, the NIM Insurer or the
Trustee during the Master Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Master Servicer
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants selected by
the Depositor, a Seller, the NIM Insurer or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes such accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor, any Seller, the NIM Insurer or the Trustee of any
right under this Section 10.09 shall be borne by the party requesting such
inspection; all other such expenses shall be borne by the Master Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Rights of NIM Insurer.
(a) The rights of the NIM Insurer under this Agreement shall exist only
so long as either:
(1) the notes certain payments on which are guaranteed by the
NIM Insurer remain outstanding or
(2) the NIM Insurer is owed amounts paid by it with respect to
that guaranty.
160
(b) The rights of the NIM Insurer under this Agreement are exercisable
by the NIM Insurer only so long as no default by the NIM Insurer under its
guaranty of certain payments under notes backed or secured by the Class C, Class
E-P or Class P Certificates has occurred and is continuing. If the NIM Insurer
is the subject of any insolvency proceeding, the rights of the NIM Insurer under
this Agreement will be exercisable by the NIM Insurer only so long as:
(1) the obligations of the NIM Insurer under its guaranty of
notes backed or secured by the Class C, Class E-P or Class P
Certificates have not been disavowed and
(2) CHL and the Trustee have received reasonable assurances
that the NIM Insurer will be able to satisfy its obligations under its
guaranty of notes backed or secured by the Class C, Class E-P or Class
P Certificates.
(c) The NIM Insurer is a third party beneficiary of this Agreement to
the same extent as if it were a party to this Agreement and may enforce any of
those rights under this Agreement.
(d) A copy of any documents of any nature required by this Agreement to
be delivered by the Trustee, or to the Trustee or the Rating Agencies, shall in
each case at the same time also be delivered to the NIM Insurer. Any notices
required to be given by the Trustee, or to the Trustee or the Rating Agencies,
shall in each case at the same time also be given to the NIM Insurer. If the
Trustee receives a notice or document that is required hereunder to be delivered
to the NIM Insurer, and if such notice or document does not indicate that a copy
thereof has been previously sent to the NIM Insurer, the Trustee shall send the
NIM Insurer a copy of such notice or document. If such document is an Opinion of
Counsel, the NIM Insurer shall be an addressee thereof or such Opinion of
Counsel shall contain language permitting the NIM Insurer to rely thereon as if
the NIM Insurer were an addressee thereof.
(e) Anything in this Agreement that is conditioned on not resulting in
the downgrading or withdrawal of the ratings then assigned to the Certificates
by the Rating Agencies shall also be conditioned on not resulting in the
downgrading or withdrawal of the ratings then assigned by the Rating Agencies to
the notes backed or secured by the Class C, Class E-P or Class P Certificates
(without giving effect to any policy or guaranty provided by the NIM Insurer).
SECTION 10.12. Protection of Assets.
(a) Except for transactions and activities entered into in connection
with the securitization that is the subject of this Agreement, the Trust Fund
created by this Agreement is not authorized and has no power to:
(1) borrow money or issue debt;
(2) merge with another entity, reorganize, liquidate or sell
assets; or
(3) engage in any business activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until the date that is one year
after the Certificates have been paid.
161
ARTICLE XI.
EXCHANGE ACT REPORTING
Section 11.01 Filing Obligations.
The Master Servicer, the Trustee and each Seller shall reasonably
cooperate with the Depositor in connection with the satisfaction of the
Depositor's reporting requirements under the Exchange Act with respect to the
Trust Fund. In addition to the information specified below, if so requested by
the Depositor for the purpose of satisfying its reporting obligation under the
Exchange Act, the Master Servicer, the Trustee and each Seller shall (and the
Master Servicer shall cause each Subservicer to) provide the Depositor with (a)
such information which is available to such Person without unreasonable effort
or expense and within such timeframe as may be reasonably requested by the
Depositor to comply with the Depositor's reporting obligations under the
Exchange Act and (b) to the extent such Person is a party (and the Depositor is
not a party) to any agreement or amendment required to be filed, copies of such
agreement or amendment in XXXXX-compatible form.
Section 11.02 Form 10-D Filings.
(a) In accordance with the Exchange Act, the Trustee shall prepare for
filing and file within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act) with the Commission with respect to
the Trust Fund, a Form 10-D with copies of the Monthly Statement and, to the
extent delivered to the Trustee, no later than 10 days following the
Distribution Date, such other information identified by the Depositor or the
Master Servicer, in writing, to be filed with the Commission (such other
information, the "Additional Designated Information"). If the Depositor or
Master Servicer directs that any Additional Designated Information is to be
filed with any Form 10-D, the Depositor or Master Servicer, as the case may be,
shall specify the Item on Form 10-D to which such information is responsive and,
with respect to any Exhibit to be filed on Form 10-D, the Exhibit number. Any
information to be filed on Form 10-D shall be delivered to the Trustee in
XXXXX-compatible form or as otherwise agreed upon by the Trustee and the
Depositor or the Master Servicer, as the case may be, at the Depositor's
expense, and any necessary conversion to XXXXX-compatible format will be at the
Depositor's expense. At the reasonable request of, and in accordance with the
reasonable directions of, the Depositor or the Master Servicer, subject to the
two preceding sentences, the Trustee shall prepare for filing and file an
amendment to any Form 10-D previously filed with the Commission with respect to
the Trust Fund. The Master Servicer shall sign the Form 10-D filed on behalf of
the Trust Fund.
(b) No later than each Distribution Date, each of the Master Servicer
and the Trustee shall notify (and the Master Servicer shall cause any
Subservicer to notify) the Depositor and the Master Servicer of any Form 10-D
Disclosure Item, together with a description of any such Form 10-D Disclosure
Item in form and substance reasonably acceptable to the Depositor. In addition
to such information as the Master Servicer and the Trustee are obligated to
provide pursuant to other provisions of this Agreement, if so requested by the
Depositor, each of the Master Servicer and the Trustee shall provide such
information which is available to the Master Servicer and the Trustee, as
applicable, without unreasonable effort or expense regarding the performance or
servicing of the Mortgage Loans (in the case of the Trustee, based on the
162
information provided by the Master Servicer) as is reasonably required to
facilitate preparation of distribution reports in accordance with Item 1121 of
Regulation AB. Such information shall be provided concurrently with the
Remittance Reports in the case of the Master Servicer and the Monthly Statement
in the case of the Trustee, commencing with the first such report due not less
than five Business Days following such request.
(c) The Trustee shall not have any responsibility to file any items
(other than those generated by it) that have not been received in a format
suitable (or readily convertible into a format suitable) for electronic filing
via the XXXXX system and shall not have any responsibility to convert any such
items to such format (other than those items generated by it or that are readily
convertible to such format). The Trustee shall have no liability to the
Certificateholders, the Trust Fund, the Master Servicer, the Depositor or the
NIM Insurer with respect to any failure to properly prepare or file any of Form
10-D to the extent that such failure is not the result of any negligence, bad
faith or willful misconduct on its part.
Section 11.03 Form 8-K Filings.
The Master Servicer shall prepare and file on behalf of the Trust Fund
any Form 8-K required by the Exchange Act. Each Form 8-K must be signed by the
Master Servicer. Each of the Master Servicer (and the Master Servicer shall
cause any Subservicer to promptly notify) and the Trustee shall promptly notify
the Depositor and the Master Servicer (if the notifying party is not the Master
Servicer), but in no event later than one (1) Business Day after its occurrence,
of any Reportable Event of which it has actual knowledge. Each Person shall be
deemed to have actual knowledge of any such event to the extent that it relates
to such Person or any action or failure to act by such Person. Concurrently with
any Subsequent Transfer, CHL shall notify the Depositor and the Master Servicer,
if any material pool characteristic of the actual asset pool at the time of
issuance of the Certificates differs by 5% or more (other than as a result of
the pool assets converting into cash in accordance with their terms) from the
description of the asset pool in the Prospectus Supplement.
Section 11.04 Form 10-K Filings.
Prior to March 30th of each year, commencing in 2008 (or such earlier
date as may be required by the Exchange Act), the Depositor shall prepare and
file on behalf of the Trust Fund a Form 10-K, in form and substance as required
by the Exchange Act. A senior officer in charge of the servicing function of the
Master Servicer shall sign each Form 10-K filed on behalf of the Trust Fund.
Such Form 10-K shall include as exhibits each (i) annual compliance statement
described under Section 3.17, (ii) annual report on assessments of compliance
with servicing criteria described under Section 11.07 and (iii) accountant's
report described under Section 11.07. Each Form 10-K shall also include any
Xxxxxxxx-Xxxxx Certification required to be included therewith, as described in
Section 11.05.
If the Item 1119 Parties listed on Exhibit Z have changed since the
Closing Date, no later than March 1 of each year, the Master Servicer shall
provide each of the Master Servicer (and the Master Servicer shall provide any
Subservicer) and the Trustee with an updated Exhibit Z setting forth the Item
1119 Parties. No later than March 15 of each year, commencing in 2008, the
Master Servicer and the Trustee shall notify (and the Master Servicer shall
cause any
163
Subservicer to notify) the Depositor and the Master Servicer of any Form 10-K
Disclosure Item, together with a description of any such Form 10-K Disclosure
Item in form and substance reasonably acceptable to the Depositor. Additionally,
each of the Master Servicer and the Trustee shall provide, and shall cause each
Reporting Subcontractor retained by the Master Servicer or the Trustee, as
applicable, and in the case of the Master Servicer shall cause each Subservicer,
to provide, the following information no later than March 15 of each year in
which a Form 10-K is required to be filed on behalf of the Trust Fund: (i) if
such Person's report on assessment of compliance with servicing criteria
described under Section 11.07 or related registered public accounting firm
attestation report described under Section 11.07 identifies any material
instance of noncompliance, notification of such instance of noncompliance and
(ii) if any such Person's report on assessment of compliance with servicing
criteria or related registered public accounting firm attestation report is not
provided to be filed as an exhibit to such Form 10-K, information detailing the
explanation why such report is not included.
Section 11.05 Xxxxxxxx-Xxxxx Certification.
Each Form 10-K shall include a certification (the "Xxxxxxxx-Xxxxx
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act
(pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2008, the Master Servicer and the Trustee shall (unless
such person is the Certifying Person), and the Master Servicer shall cause each
Subservicer and each Reporting Subcontractor and the Trustee shall cause each
Reporting Subcontractor to, provide to the Person who signs the Xxxxxxxx-Xxxxx
Certification (the "Certifying Person") a certification (each, a "Performance
Certification"), in the form attached hereto as Exhibit X-1 (in the case of a
Subservicer or any Reporting Subcontractor of the Master Servicer or a
Subservicer) and Exhibit X-2 (in the case of the Trustee or any Reporting
Subcontractor of the Trustee), on which the Certifying Person, the entity for
which the Certifying Person acts as an officer, and such entity's officers,
directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The senior officer in charge of
the servicing function of the Master Servicer shall serve as the Certifying
Person on behalf of the Trust Fund. Neither the Master Servicer nor the
Depositor will request delivery of a certification under this clause unless the
Depositor is required under the Exchange Act to file an annual report on Form
10-K with respect to the Trust Fund. In the event that prior to the filing date
of the Form 10-K in March of each year, the Trustee or the Depositor has actual
knowledge of information material to the Xxxxxxxx-Xxxxx Certification, the
Trustee or the Depositor, as the case may be, shall promptly notify the Master
Servicer and the Depositor. The respective parties hereto agree to cooperate
with all reasonable requests made by any Certifying Person or Certification
Party in connection with such Person's attempt to conduct any due diligence that
such Person reasonably believes to be appropriate in order to allow it to
deliver any Xxxxxxxx-Xxxxx Certification or portion thereof with respect to the
Trust Fund.
164
Section 11.06 Form 15 Filing.
Prior to January 30 of the first year in which the Depositor is able to
do so under applicable law, the Depositor shall file a Form 15 relating to the
automatic suspension of reporting in respect of the Trust Fund under the
Exchange Act.
Section 11.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15 of each calendar year, commencing in 2008:
(1) Each of the Master Servicer and the Trustee shall deliver
to the Depositor and the Master Servicer a report (in form and
substance reasonably satisfactory to the Depositor) regarding the
Master Servicer's or the Trustee's, as applicable, assessment of
compliance with the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be
signed by an authorized officer of such Person and shall address each
of the Servicing Criteria specified on a certification substantially in
the form of Exhibit Y hereto delivered to the Depositor concurrently
with the execution of this Agreement. To the extent any of the
Servicing Criteria are not applicable to such Person, with respect to
Asset Backed securities transactions taken as a whole involving such
Person and that are backed by the same asset type backing the
Certificates, such report shall include such a statement to that
effect. The Depositor and the Master Servicer, and each of their
respective officers and directors shall be entitled to rely on upon
each such servicing criteria assessment.
(2) Each of the Master Servicer and the Trustee shall deliver
to the Depositor and the Master Servicer a report of a registered
public accounting firm reasonably acceptable to the Depositor that
attests to, and reports on, the assessment of compliance made by Master
Servicer or the Trustee, as applicable, and delivered pursuant to the
preceding paragraphs. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act
and the Exchange Act, including, without limitation that in the event
that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express
such an opinion. Such report must be available for general use and not
contain restricted use language. To the extent any of the Servicing
Criteria are not applicable to such Person, with respect to Asset
Backed securities transactions taken as a whole involving such Person
and that are backed by the same asset type backing the Certificates,
such report shall include such a statement that that effect.
(3) The Master Servicer shall cause each Subservicer and each
Reporting Subcontractor to deliver to the Depositor an assessment of
compliance and accountant's attestation as and when provided in
paragraphs (a) and (b) of this Section 11.07.
(4) The Trustee shall cause each Reporting Subcontractor to
deliver to the Depositor and the Master Servicer an assessment of
compliance and accountant's attestation as and when provided in
paragraphs (a) and (b) of this Section.
165
(5) The Master Servicer and the Trustee shall execute (and the
Master Servicer shall cause each Subservicer to execute, and the Master
Servicer and the Trustee shall cause each Reporting Subcontractor to
execute) a reliance certificate to enable the Certification Parties to
rely upon each (i) annual compliance statement provided pursuant to
Section 3.17, (ii) annual report on assessments of compliance with
servicing criteria provided pursuant to this Section 11.07 and (iii)
accountant's report provided pursuant to this Section 11.07 and shall
include a certification that each such annual compliance statement or
report discloses any deficiencies or defaults described to the
registered public accountants of such Person to enable such accountants
to render the certificates provided for in this Section 11.07.
(b) In the event the Master Servicer, any Subservicer, the Trustee or
Reporting Subcontractor is terminated or resigns during the term of this
Agreement, such Person shall provide documents and information required by this
Section 11.07 with respect to the period of time it was subject to this
Agreement or provided services with respect to the Trust Fund, the Certificates
or the Mortgage Loans.
(c) Each assessment of compliance provided by a Subservicer pursuant to
Section 11.07(a)(3) shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit Y hereto delivered to the
Depositor concurrently with the execution of this Agreement or, in the case of a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant to
Section 11.07(a)(3) or (4) need not address any elements of the Servicing
Criteria other than those specified by the Master Servicer or the Trustee, as
applicable, pursuant to Section 11.07(a)(1).
Section 11.08 Use of Subservicers and Subcontractors.
(a) The Master Servicer shall cause any Subservicer used by the Master
Servicer (or by any Subservicer) for the benefit of the Depositor to comply with
the provisions of Section 3.17 and this Article XI to the same extent as if such
Subservicer were the Master Servicer (except with respect to the Master
Servicer's duties with respect to preparing and filing any Exchange Act Reports
or as the Certifying Person). The Master Servicer shall be responsible for
obtaining from each Subservicer and delivering to the Depositor any servicer
compliance statement required to be delivered by such Subservicer under Section
3.17, any assessment of compliance and attestation required to be delivered by
such Subservicer under Section 11.07 and any certification required to be
delivered to the Certifying Person under Section 11.05 as and when required to
be delivered. As a condition to the succession to any Subservicer as subservicer
under this Agreement by any Person (i) into which such Subservicer may be merged
or consolidated, or (ii) which may be appointed as a successor to any
Subservicer, the Master Servicer shall provide to the Depositor, at least 15
calendar days prior to the effective date of such succession or appointment, (x)
written notice to the Depositor of such succession or appointment and (y) in
writing and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K.
166
(b) It shall not be necessary for the Master Servicer, any Subservicer
or the Trustee to seek the consent of the Depositor or any other party hereto to
the utilization of any Subcontractor. The Master Servicer or the Trustee, as
applicable, shall promptly upon request provide to the Depositor (or any
designee of the Depositor, such as the Master Servicer or administrator) a
written description (in form and substance satisfactory to the Depositor) of the
role and function of each Subcontractor utilized by such Person (or in the case
of the Master Servicer, any Subservicer), specifying (i) the identity of each
such Subcontractor, (ii) which (if any) of such Subcontractors are
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
a Reporting Subcontractor, the Master Servicer or the Trustee, as applicable,
shall cause any such Subcontractor used by such Person (or in the case of the
Master Servicer, any Subservicer) for the benefit of the Depositor to comply
with the provisions of Sections 11.07 and 11.09 of this Agreement to the same
extent as if such Subcontractor were the Master Servicer (except with respect to
the Master Servicer's duties with respect to preparing and filing any Exchange
Act Reports or as the Certifying Person) or the Trustee, as applicable. The
Master Servicer or the Trustee, as applicable, shall be responsible for
obtaining from each Subcontractor and delivering to the Depositor and the Master
Servicer, any assessment of compliance and attestation required to be delivered
by such Subcontractor under Section 11.05 and Section 11.07, in each case as and
when required to be delivered.
Section 11.09 Amendments.
In the event the parties to this Agreement desire to further clarify or
amend any provision of this Article XI, this Agreement shall be amended to
reflect the new agreement between the parties covering matters in this Article
XI pursuant to Section 10.01, which amendment shall not require any Opinion of
Counsel or Rating Agency confirmations or the consent of any Certificateholder,
the Certificate Insurer or the NIM Insurer provided that written notice of such
amendment shall promptly be delivered by the Master Servicer to the Certificate
Insurer.
If, during the period that the Depositor is required to file Exchange
Act Reports with respect to the Trust Fund, the Master Servicer is no longer an
Affiliate of the Depositor, the Depositor shall assume the obligations and
responsibilities of the Master Servicer in this Article XI with respect to the
preparation and filing of the Exchange Act Reports and/or acting as the
Certifying Person, if the Depositor has received indemnity from such successor
Master Servicer satisfactory to the Depositor, and such Master Servicer has
agreed to provide a Xxxxxxxx-Xxxxx Certification to the Depositor substantially
in the form of Exhibit AA and the certifications referred to in Section 11.07.
167
Section 11.10 Reconciliation of Accounts.
Any reconciliation of Account performed by any party hereto, or any
Subservicer or Subcontractor, shall be prepared no later than 45 calendar days
after the bank statement cutoff date.
168
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
CWHEQ, INC.,
as Depositor
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
PARK GRANADA LLC,
as a Seller
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
PARK MONACO INC.,
as a Seller
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
PARK SIENNA LLC,
as a Seller
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK
(solely with respect to its obligations
under Section 4.01(d))
By: /s/ Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
Exhibits A-1
through A-3
[Exhibits A-1 through A-3 are
photocopies of such Certificates as delivered.]
[See appropriate documents delivered at closing.]
Exhibit B
Exhibit B is a photocopy
of the Class P Certificates
as delivered.
[See appropriate document delivered at closing.]
Exhibit C
Exhibit C is a photocopy
of the Class C Certificates
as delivered.
[See appropriate document delivered at closing.]
Exhibit D-1
Exhibit D-1 is a photocopy
of the Class A-R Certificate
as delivered.
[See appropriate documents delivered at closing.]
Exhibit D-2
Exhibit D-2 is a photocopy
of the Class E-P Certificate
as delivered.
[See appropriate documents delivered at closing.]
Exhibit E
Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.
[See appropriate documents delivered at closing.]
Exhibit F-1 and F-2
[Exhibits F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee.]
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3
--------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of March 1, 2007 (the "Pooling and Servicing Agreement") among CWHEQ,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC,
as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and the undersigned, as
Trustee, hereby certifies that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed in the
attached list of exceptions) the Trustee has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of ______________,
without recourse", or, if the original Mortgage Note has been lost or destroyed
and not replaced, an original lost note affidavit, stating that the original
Mortgage Note was lost or destroyed, together with a copy of the related
Mortgage Note; and
(ii) a duly executed assignment of the Mortgage or a copy of such
assignment, in either case in the form permitted by Section 2.01 of the Pooling
and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of
G-1-1
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.
G-1-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:____________________________________
Name:
Title:
G-1-3
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3
--------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of March 1, 2007 (the "Pooling and Servicing Agreement") among CWHEQ,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC,
as a Seller , Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and the undersigned, as
Trustee, hereby certifies that [, with respect to the Subsequent Mortgage Loans
delivered in connection with the Subsequent Transfer Agreement, dated as of
__________ (the "Subsequent Transfer Agreement") among CWHEQ, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller and The Bank
of New York, as Trustee], except as listed in the following paragraph, as to
each [Initial Mortgage Loan][Subsequent Mortgage Loan] listed in the [Mortgage
Loan Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule]
(other than any [Mortgage Loan][Loan Number and Borrower Identification Mortgage
Loan Schedule] paid in full or listed on the attached list of exceptions) the
Trustee has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete chain
of endorsement from the originator to the Person endorsing the Mortgage Note
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements;
(ii) the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan]
that is not a MERS Mortgage Loan, the original recorded Mortgage or a copy of
such Mortgage, with recording information, and in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] that is a MERS Mortgage Loan, the
original Mortgage or a copy of such Mortgage, with
G-2-1
recording information, noting thereon the presence of the MIN of the [Initial
Mortgage Loan][Subsequent Mortgage Loan] and language indicating that the
[Initial Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan if the [Initial
Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded;
(iii) the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Home Equity Loan Asset Backed Certificates, Series 2007-S3, CWHEQ,
Inc., by The Bank of New York, a New York banking corporation, as trustee under
the Pooling and Servicing Agreement dated as of March 1, 2007, without recourse"
or a copy of such assignment, with recording information, or, in the case of
each [Initial Mortgage Loan][Subsequent Mortgage Loan] with respect to property
located in the State of California that is not a MERS Mortgage Loan, a duly
executed assignment of the Mortgage in blank (each such assignment, when duly
and validly completed, to be in recordable form and sufficient to effect the
assignment of and transfer to the assignee thereof, under the Mortgage to which
such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage or
a copy of such assignments, with recording information, together with all
interim recorded assignments of such Mortgage or a copy of such assignments,
with recording information (in each case noting the presence of a MIN in the
case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or a copy
of lender's title policy or a printout of the electronic equivalent and all
riders thereto or, in the event such original title policy has not been received
from the insurer, any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company, with the original policy of title insurance to be delivered
within one year of the Closing Date.
In the event that in connection with any [Initial Mortgage
Loan][Subsequent Mortgage Loan] that is not a MERS Mortgage Loan the applicable
Seller cannot deliver the original recorded Mortgage or all interim recorded
assignments of the Mortgage satisfying the requirements of clause (ii), (iii) or
(iv), as applicable, the Trustee has received, in lieu thereof, a true and
complete copy of such Mortgage and/or such assignment or assignments of the
Mortgage, as applicable, each certified by the applicable Seller, the applicable
title company, escrow agent or attorney, or the originator of such [Initial
Mortgage Loan][Subsequent Mortgage Loan], as the case may be, to be a true and
complete copy of the original Mortgage or assignment of Mortgage submitted for
recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
[Initial Mortgage Loan][Subsequent Mortgage Loan], and (ii) the information set
forth in items (i), (iv), (v), (vi), (viii) and (ix) of the definition of the
"Mortgage Loan Schedule" in Section 1.01 of the Pooling and Servicing Agreement
accurately reflects information set forth in the Mortgage File.
G-2-2
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
G-2-3
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:____________________________________
Name:
Title:
G-2-4
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3
--------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the Pooling and Servicing Agreement dated as of March 1, 2007
(the "Pooling and Servicing Agreement") among CWHEQ, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, and the undersigned, as Trustee. The
undersigned hereby certifies that [, with respect to the Subsequent Mortgage
Loans delivered in connection with the Subsequent Transfer Agreement, dated as
of __________ (the "Subsequent Transfer Agreement") among CWHEQ, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller and The Bank
of New York, as Trustee,] as to each Delay Delivery Mortgage Loan listed on the
Schedule A attached hereto (other than any [Initial Mortgage Loan][Subsequent
Mortgage Loan] paid in full or listed on Schedule B attached hereto) the Trustee
has received:
(1) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete chain
of endorsement from the originator to the Person endorsing the Mortgage Note
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements;
(2) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Home Equity Loan Asset Backed Certificates, Series 2007-S3, CWHEQ,
Inc., by The Bank of New York, a New York banking corporation, as trustee under
the Pooling and Servicing Agreement
G-3-1
dated as of March 1, 2007, without recourse" or a copy of such assignment, with
recording information, or, in the case of each [Initial Mortgage
Loan][Subsequent Mortgage Loan] with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage in blank (each such assignment, when duly and validly completed, to be
in recordable form and sufficient to effect the assignment of and transfer to
the assignee thereof, under the Mortgage to which such assignment relates).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any such
[Initial Mortgage Loan][Subsequent Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:____________________________________
Name:
Title:
G-3-2
EXHIBIT G-4
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(SUBSEQUENT MORTGAGE LOANS)
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3
--------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of March 1, 2007 (the "Pooling and Servicing Agreement") among CWHEQ,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC,
as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and the undersigned, as
Trustee, the undersigned hereby certifies that, as to each Subsequent Mortgage
Loan listed in the Loan Number and Borrower Identification Mortgage Loan
Schedule (other than any Subsequent Mortgage Loan paid in full or listed in the
attached list of exceptions) the Trustee has received:
(1) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete chain
of endorsement from the originator to the Person endorsing the Mortgage Note
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements; and
(2) a duly executed assignment of the Mortgage or a copy of such
assignment with recording information, in either case in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
G-4-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Subsequent Mortgage
Loans identified on the Loan Number and Borrower Identification Mortgage Loan
Schedule or (ii) the collectibility, insurability, effectiveness or suitability
of any such Subsequent Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:____________________________________
Name:
Title:
G-4-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Sellers]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3
--------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of March 1, 2007 (the "Pooling and Servicing Agreement") among CWHEQ,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC,
as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and the undersigned, as
Trustee, the undersigned, as Trustee, hereby certifies that[, with respect to
the Subsequent Mortgage Loans delivered in connection with the Subsequent
Transfer Agreement, dated as of __________ (the "Subsequent Transfer Agreement")
among CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a
Seller and The Bank of New York, as Trustee,] as to each [Initial Mortgage
Loan][Subsequent Mortgage Loan] listed in the [Mortgage Loan Schedule][Loan
Number and Borrower Identification Mortgage Loan Schedule] (other than any
[Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full or listed on the
attached Document Exception Report) the Trustee has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _________________
without recourse", with all intervening endorsements that show a complete chain
of endorsement from the originator to the Person endorsing the Mortgage Note
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements;
(ii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage or a copy
of such Mortgage, with recording information, and in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] that is a MERS Mortgage Loan, the
original Mortgage or a copy of such Mortgage, with recording information, noting
the presence of the MIN of the [Initial Mortgage
H-1
Loan][Subsequent Mortgage Loan] and language indicating that the [Initial
Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan if the [Initial Mortgage
Loan][Subsequent Mortgage Loan] is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded];
(iii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Home Equity Loan Asset Backed Certificates, Series 2007-S3, CWHEQ,
Inc., by The Bank of New York, a New York banking corporation, as trustee under
the Pooling and Servicing Agreement dated as of March 1, 2007, without recourse"
or a copy of such assignment, with recording information, or, in the case of
each [Initial Mortgage Loan][Subsequent Mortgage Loan] with respect to property
located in the State of California that is not a MERS Mortgage Loan, a duly
executed assignment of the Mortgage in blank (each such assignment, when duly
and validly completed, to be in recordable form and sufficient to effect the
assignment of and transfer to the assignee thereof, under the Mortgage to which
such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage or
a copy of such assignments, with recording information, together with all
interim recorded assignments of such Mortgage or a copy of such assignments,
with recording information (in each case noting the presence of a MIN in the
case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or a copy
of lender's title policy or a printout of the electronic equivalent and all
riders thereto or any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii) and (ix) of the definition of the "Mortgage Loan Schedule" in Section
1.01 of the Pooling and Servicing Agreement accurately reflects information set
forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the
H-2
collectibility, insurability, effectiveness or suitability of any such [Initial
Mortgage Loan][Subsequent Mortgage Loan].
H-3
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:____________________________________
Name:
Title:
H-4
EXHIBIT I
TRANSFER AFFIDAVIT FOR THE CLASS A-R CERTIFICATES
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated as
of March 1, 2007 (the "Agreement"), by and among CWHEQ, Inc., as depositor (the
"Depositor"), Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide
Home Loans Servicing LP, as Master Servicer, and The Bank of New York, as
Trustee. Capitalized terms used, but not defined herein or in Exhibit 1 hereto,
shall have the meanings ascribed to such terms in the Agreement. The Transferee
has authorized the undersigned to make this affidavit on behalf of the
Transferee.
2. The Transferee is not an employee benefit plan that is subject to
Title I of ERISA or to section 4975 of the Internal Revenue Code of 1986, nor is
it acting on behalf of or with plan assets of any such plan. The Transferee is,
as of the date hereof, and will be, as of the date of the Transfer, a Permitted
Transferee. The Transferee will endeavor to remain a Permitted Transferee for so
long as it retains its Ownership Interest in the Certificate. The Transferee is
acquiring its Ownership Interest in the Certificate for its own account.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
I-1
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The Transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J-1 to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to which
the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Class
A-R Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code section
7701(a)(30).
10. The Transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the Transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
Transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.
11. The Transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the Transferee to pay such taxes.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of _____________, 20__.
[NAME OF TRANSFEREE]
By:_____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
____________________________
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ____________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
-------------------------------------
NOTARY PUBLIC
My Commission expires the ___ day of
, 20__.
I-3
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC formed hereunder to fail to
qualify as a REMIC at any time that any Certificates are Outstanding. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, bank, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
I-4
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(1) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(2) Except in connection with (i) the registration of the
Tax Matters Person Certificate in the name of the Trustee or (ii) any
registration in the name of, or transfer of a Class A-R Certificate
to, an affiliate of the Depositor (either directly or through a
nominee) in connection with the initial issuance of the Certificates,
no Ownership Interest in a Class A-R Certificate may be registered on
the Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of any Class A-R Certificate, unless the
Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the
form attached hereto as Exhibit I.
(3) Each Person holding or acquiring any Ownership Interest
in a Class A-R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Class A-R Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer
of a Class A-R Certificate and (C) not to Transfer its Ownership
Interest in a Class A-R Certificate, or to cause the Transfer of an
Ownership Interest in a Class A-R Certificate to any other Person, if
it has actual knowledge that such Person is not a Permitted
Transferee.
(4) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person
for any registration of Transfer of a Class A-R Certificate that is
in fact not permitted by Section 5.02(b) and this Section 5.02(c) or
for making any payments due on such Certificate to the Holder thereof
or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to
recover from any Holder of a Class A-R Certificate that was in fact
not a Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class A-R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee
of such Certificate.
I-5
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section
860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Class A-R Certificate to any Holder who is not a
Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, the Sellers or the Master
Servicer to the effect that the elimination of such restrictions will not cause
any constituent REMIC of any REMIC formed hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any ownership Interest in a Class A-R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class A-R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class A-R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
I-6
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR CLASS A-R CERTIFICATES
Date:
CWHEQ, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3
--------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class A-R Certificates, we
certify that we have no knowledge that the Transferee is not a Permitted
Transferee. All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement dated as of
March 1, 2007, among CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee.
Very truly yours,
_______________________________________
Name of Transferor
By:_____________________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWHEQ, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3, Class [ ]
-----------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-captioned Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of March 1,
2007, among CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as a
Seller, Park Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee.
Very truly yours,
_______________________________________
Name of Transferor
By:_____________________________________
Name:
Title:
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
Date:
CWHEQ, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3, Class [ ]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, or using the assets of any such plan or arrangement to
effect such acquisition or (ii) if the Certificates have been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we are
acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if
K-1
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
March 1, 2007, among CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, and The Bank of New York, as Trustee.
Very truly yours,
________________________________________
Name of Transferee
By:_____________________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
Date:
CWHEQ, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWHEQ Home Equity Loan Trust, Series 2007-S3, Class [ ]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, or using the assets of any such plan or arrangement to
effect such acquisition or (ii) if the Certificates have been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we have
not, nor has anyone acting on our behalf offered, transferred, pledged, sold or
otherwise disposed of the Certificates, any interest in the Certificates or any
other similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto,
L-1
nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
All capitalized terms used herein but not defined herein
shall have the meanings assigned to them in the Pooling and Servicing
Agreement dated as of March 1, 2007, among CWHEQ, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, and The Bank of New York, as Trustee.
Very truly yours,
________________________________________
Name of Transferee
By:_____________________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive
officer of the Buyer.
In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933, as amended ("Rule 144A")
because (i) the Buyer owned and/or invested on a discretionary
basis either at least $100,000,000 in securities or, if Buyer is
a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A and (ii) the Buyer satisfies the criteria in the
category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
___ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by the State or territorial banking commission
or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which
is supervised and examined by a State or Federal authority
having supervision over any such institutions or is a
foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing
of insurance or the reinsuring of
L-3
risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a
similar official or agency of a State, territory or the
District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities
that are part of an unsold allotment to or subscription by the
Buyer, if the Buyer is a dealer, (iii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency,
interest rate and commodity swaps.
For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer
used the cost of such securities to the Buyer and did not
include any of the securities referred to in the preceding
paragraph, except (i) where the Buyer reports its securities
holdings in its financial statements on the basis of their
market value, and (ii) no current information with respect to
the cost of those securities has been published. If clause (ii)
in the preceding sentence applies, the securities may be valued
at market. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the
Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to
the Certificates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer
may be in reliance on Rule 144A.
L-4
Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is
made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if
the Buyer is a bank or savings and loan is provided above, the
Buyer agrees that it will furnish to such parties updated annual
financial statements promptly after they become available.
________________________________________
Print Name of Buyer
By:_____________________________________
Name:
Title:
Date:___________________________________
L-5
ANNEX 2 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A
under the Securities Act of 1933, as amended ("Rule 144A") because Buyer is
part of a Family of Investment Companies (as defined below), is such an
officer of the Adviser.
In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment
Company Act of 1940, as amended and (ii) as marked below, the
Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the
amount of securities owned by the Buyer or the Buyer's Family of
Investment Companies, the cost of such securities was used,
except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no
current information with respect to the cost of those securities
has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market.
___ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the
same parent or because one investment adviser is a majority owned
subsidiary of the other).
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
L-6
agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
The Buyer is familiar with Rule 144A and under-stands that the parties
listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be
in reliance on Rule 144A. In addition, the Buyer will only purchase
for the Buyer's own account.
Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information
and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
________________________________________
Print Name of Buyer or Adviser
By:_____________________________________
Name:
Title:
IF AN ADVISER:
________________________________________
Print Name of Buyer
Date:___________________________________
X-0
X-0
XX0 6105753v.6
EXHIBIT M
FORM OF REQUEST FOR DOCUMENT RELEASE
Loan Information
Name of Mortgagor: ________________________________________
Master Servicer
Loan No.: ________________________________________
Trustee
Name: ________________________________________
Address: ________________________________________
________________________________________
Trustee
Mortgage File No.: ________________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Home Equity Loan Asset Backed Certificates, Series 2007-S3, the
documents referred to below (the "Documents"). All capitalized terms not
otherwise defined in this Request for Document Release shall have the meanings
given them in the Pooling and Servicing Agreement dated as of March 1, 2007 (the
"Pooling and Servicing Agreement") among CWHEQ, Inc., as Depositor, Countrywide
Home Loans, Inc., as a Seller, Park Granada LLC, as a Seller, Park Monaco Inc.,
as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, and The Bank of New York, as Trustee.
|_| Mortgage Note dated ___________, ____, in the original principal sum
of $________, made by __________________, payable to, or endorsed to
the order of, the Trustee.
|_| Mortgage recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
|_| Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
|_| Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder's
Office of
M-1
the County of __________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
|_| Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
|_| ----------------------------------------------
|_| ----------------------------------------------
|_| ----------------------------------------------
|_| ----------------------------------------------
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of
the Documents in trust for the benefit of the Trust Fund, solely for
the purposes provided in the Pooling and Servicing Agreement.
(2) The Master Servicer shall not cause or knowingly permit
the Documents to become subject to, or encumbered by, any claim,
liens, security interest, charges, writs of attachment or other
impositions nor shall the Master Servicer assert or seek to assert
any claims or rights of setoff to or against the Documents or any
proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to
the Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided
in the Pooling and Servicing Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of
the Trust Fund, and the Master Servicer shall keep the Documents and
any proceeds separate and distinct from all other property in the
Master Servicer's possession, custody or control.
[Master Servicer]
By______________________________________
Its_____________________________________
Date: _________________, ____
M-2
EXHIBIT N
FORM OF REQUEST FOR FILE RELEASE
OFFICER'S CERTIFICATE AND TRUST RECEIPT
HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
Series 2007-S3
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE PURCHASE PRICE
FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE MORTGAGE LOANS HAVE BEEN
LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS] [LIQUIDATION PROCEEDS] HAVE
BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE POOLING AND SERVICING
AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN DELIVERED TO THE TRUSTEE IN
THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE CONDITIONS SET FORTH IN
SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO
SECTION 3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE
CREDITED.
____________ _____________________
DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
N-1
Exhibit O
Exhibit O is a photocopy
of the Depository Agreement
as delivered.
[See appropriate documents delivered at closing.]
EXHIBIT P
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 200[_] (this
"Subsequent Transfer Agreement"), among CWHEQ, INC., a Delaware corporation, as
depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York
corporation, in its capacity as a seller under the Pooling and Servicing
Agreement referred to below ("CHL"), PARK GRANADA LLC, a Delaware corporation,
in its capacity as a seller under the Pooling and Servicing Agreement ("Park
Granada"), PARK MONACO INC., a Delaware corporation, in its capacity as a seller
under the Pooling and Servicing Agreement ("Park Monaco"), PARK SIENNA LLC, a
Delaware limited liability company, in its capacity as a seller under the
Pooling and Servicing Agreement ("Park Sienna" and, together with CHL, Park
Granada and Park Monaco, the "Sellers") and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, CHL, Park Granada, Park Monaco, Park Sienna,
the Trustee, Countrywide Home Loans Servicing LP, as Master Servicer, and The
Bank of New York, as Trustee, have entered in the Pooling and Servicing
Agreement, dated as of March 1, 2007 (the "Pooling and Servicing Agreement"),
relating to the CWHEQ, Inc. Home Equity Loan Asset Backed Certificates, Series
2007-S3 (capitalized terms not otherwise defined herein are used as defined in
the Pooling and Servicing Agreement);
WHEREAS, Section 2.01(b) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer Agreement
in accordance with the terms and conditions of the Pooling and Servicing
Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and adequacy of which are hereby acknowledged
the parties hereto agree as follows:
(a) The "Subsequent Transfer Date" with respect to this Subsequent
Transfer Agreement shall be ________ __, 200[_].
(b) The "Subsequent Transfer Date Purchase Amount" with respect to this
Subsequent Transfer Agreement shall be $_______________.
(c) The Subsequent Mortgage Loans conveyed on the Subsequent Transfer
Date shall be subject to the terms and conditions of the Pooling and Servicing
Agreement.
(d) Annex I hereto sets forth a list of the Mortgage Loans which are
Delay Delivery Mortgage Loans.
(e) In case any provision of this Subsequent Transfer Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions or obligations shall not in any way be affected or
impaired thereby.
P-1
(f) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.
(g) This Subsequent Transfer Agreement shall be governed by, and shall
be construed and enforced in accordance with the laws of the State of New York.
(h) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
P-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer Agreement
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
P-3
CWHEQ, INC.,
as Depositor
By: __________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: __________________________________
Name:
Title:
PARK GRANADA LLC,
as a Seller
By: __________________________________
Name:
Title:
PARK MONACO INC.,
as a Seller
By: __________________________________
Name:
Title:
PARK SIENNA LLC,
as a Seller
P-4
By: __________________________________
Name:
Title:
X-0
XXX XXXX XX XXX XXXX,
not in its individual capacity,
but solely as Trustee
By:___________________________________
Name:
Title:
p-6
Annex I
Mortgage Loans for which All or a Portion of a Related Mortgage File is
not Delivered to the Trustee on or prior to the Subsequent Transfer Date
P-7
EXHIBIT Q
[Reserved]
EXHIBIT R
[Reserved]
EXHIBIT S-1
[Reserved]
EXHIBIT S-2
[Reserved]
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
Series 2007-S3
[Date]
Via Facsimile
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement, dated as of
March 1, 2007, (the "Pooling and Servicing Agreement") among CWHEQ, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide
Home Loans Servicing LP, as Master Servicer, and The Bank of New York, as
Trustee. Capitalized terms used herein shall have the meanings ascribed to such
terms in the Pooling and Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing Officer,
holding the office set forth beneath his/her name and hereby further certifies
as follows:
With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received during the
related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage Note with
respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and deposited
in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule for
which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
(i) the Master Servicer's determination that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan,
taking into account the value of such Prepayment Charge, or
T-1
(ii)(A) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
and
4. We certify that all amounts due in connection with the waiver of a
Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Master Servicer pursuant to Section 3.20 of the Pooling and
Servicing Agreement, have been or will be so deposited.
COUNTRYWIDE HOME LOANS, INC.,
as Master Servicer
By:___________________________________
Name:
Title:
T-2
SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED DURING
THE RELATED PREPAYMENT PERIOD
---------------------- ------------------------- -------------------------------
Loan Number Clause 2: Yes/No Clause 3: (i) or (ii)
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
---------------------- ------------------------- -------------------------------
T-3
EXHIBIT U
[Reserved]
EXHIBIT V-1
[Reserved]
EXHIBIT V-2
[Reserved]
EXHIBIT V-3
[Reserved]
EXHIBIT W
MONTHLY STATEMENT
[On file with Trustee]
EXHIBIT X-1
FORM OF PERFORMANCE CERTIFICATION
(Subservicer)
Re: The Pooling and Servicing Agreement dated as of March 1, 2007
(the "Pooling and Servicing Agreement") among CWHEQ, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, and the undersigned, as Trustee, and
[Subservicing Agreement] dated as of [ ] (the "Agreement")
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to the Depositor and the Master
Servicer, and their officers, with the knowledge and intent that they will rely
upon this certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans
by the Company during 200[ ] that were delivered by the Company to the
Depositor, the Master Servicer and the Trustee pursuant to the
Agreement (collectively, the "Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information,
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under which such statements
were made, not misleading with respect to the period of time covered by
the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the Agreement
has been provided to the [Depositor] [Master Servicer];
(4) I am responsible for reviewing the activities performed by
the Company as a servicer under the Agreement, and based on my
knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the
Company has fulfilled its obligations under the Agreement; and
X-1-1
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the Master Servicer. Any material instances of
noncompliance described in such reports have been disclosed to the
Master Servicer. Any material instance of noncompliance with the
Servicing Criteria has been disclosed in such reports.
Date:__________________________________
By:_____________________________________
Name:
Title:
X-1-2
EXHIBIT X-2
FORM OF PERFORMANCE CERTIFICATION
(Trustee)
Re: The Pooling and Servicing Agreement dated as of March 1, 2007
(the "Pooling and Servicing Agreement") among CWHEQ, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, and the undersigned, as Trustee.
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to the Depositor and the Master
Servicer, and their officers, with the knowledge and intent that they will rely
upon this certification, that:
(1) I have reviewed the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), [all reports on Form 10-D containing statements
to certificateholders filed in respect of the period included in the
year covered by the annual report of the Trust Fund] (collectively, the
"Distribution Date Statements");
(2) Assuming the accuracy and completeness of the information
delivered to the Company by the Master Servicer as provided in the
Pooling and Servicing Agreement and subject to paragraph (4) below, the
distribution information determined by the Company and set forth in the
Distribution Date Statements contained in all Form 10-D's included in
the year covered by the annual report of such Trust on Form 10-K for
the calendar year 200[ ], is complete and does not contain any material
misstatement of fact as of the last day of the period covered by such
annual report;
(3) Based solely on the information delivered to the Company
by the Master Servicer as provided in the Pooling and Servicing
Agreement, (i) the distribution information required under the Pooling
and Servicing Agreement to be contained in the Trust Fund's
Distribution Date Statements and (ii) the servicing information
required to be provided by the Master Servicer to the trustee for
inclusion in the Trust Fund's Distribution Date Statements, to the
extent received by the Trustee from the Master Servicer in accordance
with the Pooling and Servicing Agreement, is included in such
Distribution Date Statements;
(4) The Company is not certifying as to the accuracy,
completeness or correctness of the information which it received from
the Master Servicer and did not
X-2-1
independently verify or confirm the accuracy, completeness or
correctness of the information provided by the Master Servicer;
(5) I am responsible for reviewing the activities performed by
the Company as a person "performing a servicing function" under the
Pooling and Servicing Agreement, and based on my knowledge and the
compliance review conducted in preparing the Servicing Assessment and
except as disclosed in the Servicing Assessment or the Attestation
Report, the Company has fulfilled its obligations under the Pooling and
Servicing Agreement; and
(6) The Servicing Assessment and Attestation Report required
to be provided by the Company and by Subcontractor pursuant to the
Pooling and Servicing Agreement, have been provided to the Master
Servicer and the Depositor. Any material instances of noncompliance
described in such reports have been disclosed to the Master Servicer
and the Depositor. Any material instance of noncompliance with the
Servicing Criteria has been disclosed in such reports.
Date:__________________________________
By:_____________________________________
Name:
Title:
X-2-2
EXHIBIT Y
FORM OF
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by [the Master
Servicer] [Trustee] [Name of Subservicer] shall address, at a minimum, the
criteria identified as below as "Applicable Servicing Criteria":
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable Servicing
Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
General Servicing Considerations
-------------------- ----------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
-------------------- ----------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance with
such servicing activities.
-------------------- ----------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans are
maintained.
-------------------- ----------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount of
coverage required by and otherwise in accordance with the
terms of the transaction agreements.
-------------------- ----------------------
Cash Collection and Administration
-------------------- ----------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days
following receipt, or such other number of days specified
in the transaction agreements.
-------------------- ----------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
-------------------- ----------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
-------------------- ----------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
transaction
1122(d)(2)(iv) agreements.
-------------------- ----------------------
1122(d)(2)(v) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this criterion,
"federally insured depository institution" with respect
to a foreign financial institution means a foreign
financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
-------------------- ----------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
-------------------- ----------------------
Y-1
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable Servicing
Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
Asset Backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the bank
statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared
the reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
agreements.
-------------------- ----------------------
Investor Remittances and Reporting
-------------------- ----------------------
1122(d)(3)(i) Reports to investors, including those to be filed with
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth
in the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of mortgage loans
serviced by the Servicer.
-------------------- ----------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
-------------------- ----------------------
Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the transaction
1122(d)(3)(iii) agreements.
-------------------- ----------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
-------------------- ----------------------
Pool Asset Administration
-------------------- ----------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related
mortgage loan documents.
-------------------- ----------------------
Mortgage loan and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements
-------------------- ----------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance with
any conditions or requirements in the transaction
agreements.
-------------------- ----------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made
in accordance with the related mortgage loan documents
are posted to the Servicer's obligor records maintained
no more than two business days after receipt, or such
other number of days specified in the transaction
agreements, and allocated to principal, interest or other
items (e.g., escrow) in accordance with the related
mortgage loan documents.
-------------------- ----------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
unpaid principal balance.
-------------------- ----------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements
and related pool asset documents.
-------------------- ----------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
transaction agreements.
-------------------- ----------------------
Y-2
------------------------------------------------------------------------------------------ ----------------------
Servicing Criteria Applicable Servicing
Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such records
are maintained on at least a monthly basis, or such other
period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent
mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
-------------------- ----------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on
the related mortgage loan documents.
-------------------- ----------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents, on
at least an annual basis, or such other period specified
in the transaction agreements; (B) interest on such funds
is paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and
(C) such funds are returned to the obligor within 30
calendar days of full repayment of the related mortgage
loans, or such other number of days specified in the
transaction agreements.
-------------------- ----------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such
other number of days specified in the transaction
agreements.
-------------------- ----------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the
servicer's funds and not charged to the obligor, unless
the late payment was due to the obligor's error or
omission.
-------------------- ----------------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements.
-------------------- ----------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the
transaction agreements.
-------------------- ----------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the transaction
1122(d)(4)(xv) agreements.
-------------------- ----------------------
---------------------------------------------------------------------
-------------------- --------------------------------------------------------------------- ----------------------
[NAME OF MASTER SERVICER] [NAME OF
TRUSTEE] [NAME OF SUBSERVICER]
Date:___________________________________
By:_____________________________________
Name:
Title:
Y-3
EXHIBIT Z
[FORM OF] LIST OF ITEM 1119 PARTIES
ASSET BACKED CERTIFICATES,
Series 200_-__
[Date]
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Party Contact Information
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Z-1
EXHIBIT AA
FORM OF
XXXXXXXX-XXXXX CERTIFICATION
(Replacement Master Servicer)
(On file with Trustee)
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY
[Delivered to Trustee at closing and on file with the Trustee.]
SCHEDULE II
COLLATERAL SCHEDULE
--------------------------------------------- ----------------- ----------------
Characteristic Applicable Mortgage Loans
Section
--------------------------------------------- ----------------- ----------------
Single-Family Detached Dwellings 2.03(b)(32) 66.90%
--------------------------------------------- ----------------- ----------------
Two- to Four-Family Dwellings 2.03(b)(32) 1.86%
--------------------------------------------- ----------------- ----------------
Low-Rise Condominium Units 2.03(b)(32) 7.65%
--------------------------------------------- ----------------- ----------------
High-Rise Condominium Units 2.03(b)(32) 0.68%
--------------------------------------------- ----------------- ----------------
Manufactured Housing 2.03(b)(32) 0.00%
--------------------------------------------- ----------------- ----------------
PUDs 2.03(b)(32) 22.91%
--------------------------------------------- ----------------- ----------------
Earliest Origination Date 2.03(b)(33) 3/24/2005
--------------------------------------------- ----------------- ----------------
Prepayment Penalty 2.03(b)(35) 29.31%
--------------------------------------------- ----------------- ----------------
Investor Properties 2.03(b)(36) 2.87%
--------------------------------------------- ----------------- ----------------
Primary Residences 2.03(b)(36) 94.60%
--------------------------------------------- ----------------- ----------------
Lowest Current Mortgage Rate 2.03(b)(48) 5.990%
--------------------------------------------- ----------------- ----------------
Highest Current Mortgage Rate 2.03(b)(48) 20.125%
--------------------------------------------- ----------------- ----------------
Weighted Average Current Mortgage Rate 2.03(b)(48) 8.670%
--------------------------------------------- ----------------- ----------------
Date on or before which each Initial
Mortgage Loan has a Due Date 2.03(b)(51) 5/1/2007
--------------------------------------------- ----------------- ----------------