EXHIBIT 99.4
Exhibit 99.4
EXECUTION COPY
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CWHEQ, INC.
Depositor
WILMINGTON TRUST COMPANY
Owner Trustee
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TRUST AGREEMENT
Dated as of January 30, 2007
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CWHEQ REVOLVING HOME EQUITY LOAN TRUST,
SERIES 2007-A
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Table of Contents
Page
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ARTICLE 1 DEFINITIONS AND CONSTRUCTION 4
Section 1.01 Definitions................................................................4
Section 1.02 Rules of Construction......................................................4
ARTICLE 2 ORGANIZATION 6
Section 2.01 Name.......................................................................6
Section 2.02 Office.....................................................................6
Section 2.03 Purposes and Powers........................................................6
Section 2.04 Appointment of Owner Trustee...............................................7
Section 2.05 Initial Capital Contribution of Assets.....................................7
Section 2.06 Declaration of Trust.......................................................7
Section 2.07 Liability of a Certificateholder...........................................7
Section 2.08 Title to Trust Property....................................................8
Section 2.09 Location of Trust..........................................................8
Section 2.10 Representations and Warranties of Depositor................................8
ARTICLE 3 THE CERTIFICATES 9
Section 3.01 Initial Beneficiary of Trust...............................................9
Section 3.02 Issuance of the Certificates...............................................9
Section 3.03 Authentication of Certificates............................................10
Section 3.04 Registration of and Transfer and Exchange of Certificates.................10
Section 3.05 Mutilated, Destroyed, Lost, or Stolen Certificate.........................11
Section 3.06 Maintenance of Office or Agency...........................................11
Section 3.07 Persons Considered Certificateholders.....................................12
Section 3.08 Access to List of Certificateholders' Names and Addresses.................12
Section 3.09 Appointment of Certificate Paying Agent...................................12
Section 3.10 Restrictions on Transfer; Legends.........................................13
Section 3.11 REMIC Provisions..........................................................17
Section 3.12 Tax Matters...............................................................20
ARTICLE 4 ACTIONS BY OWNER TRUSTEE 23
Section 4.01 Prior Notice to Certificateholders Regarding Certain Matters..............23
Section 4.02 Action by Certificateholders Regarding Certain Matters....................24
Section 4.03 Action by Certificateholders Regarding Bankruptcy.........................24
Section 4.04 Restrictions on Certificateholder's Power.................................24
Section 4.05 Majority Interest.........................................................24
ARTICLE 5 APPLICATION OF TRUST FUNDS; CERTAIN DUTIES 25
Section 5.01 Application of Trust Funds................................................25
Section 5.02 Method of Payment.........................................................26
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ARTICLE 6 AUTHORITY AND DUTIES OF OWNER TRUSTEE 26
Section 6.01 General Authority.........................................................26
Section 6.02 General Duties............................................................26
Section 6.03 Action on Instruction.....................................................27
Section 6.04 No Duties Except as Specified in the Agreement or in Instructions.........28
Section 6.05 No Action Except Under Specified Documents or Instructions................28
Section 6.06 Restrictions..............................................................28
ARTICLE 7 CONCERNING OWNER TRUSTEE 29
Section 7.01 Acceptance of Trusts and Duties...........................................29
Section 7.02 Furnishing Documents......................................................30
Section 7.03 Representations and Warranties............................................30
Section 7.04 Reliance; Advice of Counsel...............................................30
Section 7.05 Not Acting in Individual Capacity.........................................31
Section 7.06 Owner Trustee Not Liable for Certificates or Payment Obligations..........31
Section 7.07 Owner Trustee May Own Notes...............................................32
ARTICLE 8 COMPENSATION OF OWNER TRUSTEE 32
Section 8.01 Owner Trustee's Fees......................................................32
Section 8.02 Reimbursement and Indemnification.........................................32
Section 8.03 Payments to Owner Trustee.................................................33
ARTICLE 9 TERMINATION OF AGREEMENT 33
Section 9.01 Termination of Agreement..................................................33
ARTICLE 10 SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES 34
Section 10.01 Resignation or Removal of Owner Trustee...................................34
Section 10.02 Successor Owner Trustee...................................................34
Section 10.03 Merger or Consolidation of Owner Trustee..................................35
Section 10.04 Appointment of Co-Trustee or Separate Trustee.............................35
ARTICLE 11 MISCELLANEOUS 36
Section 11.01 Supplements and Amendments................................................36
Section 11.02 Limitations on Rights of Others...........................................37
Section 11.03 Notices...................................................................38
Section 11.04 Severability..............................................................38
Section 11.05 Separate Counterparts.....................................................38
Section 11.06 Successors and Assigns....................................................38
Section 11.07 Nonpetition Covenant......................................................38
Section 11.08 No Recourse...............................................................39
Section 11.09 Headings..................................................................39
Section 11.10 Governing Law.............................................................39
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Section 11.11 Rule 144A Information.....................................................39
Section 11.12 Third-Party Beneficiary...................................................39
EXHIBITS
EXHIBIT A Form of Certificate of Trust of Revolving
Home Equity Loan Trust, Series 2007-A............................................A-1
EXHIBIT B-1 Form of Class C Certificates.....................................................B-1
EXHIBIT B-2 Form of Class E-P Certificates...................................................B-2
EXHIBIT B-3 Form of Residual Certificates....................................................B-3
EXHIBIT C-1 Form of Representation Letter....................................................C-1
EXHIBIT C-2 Form of Transfer Affidavit.......................................................C-2
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This TRUST AGREEMENT (the "Agreement") dated as of January 30, 2007,
between CWHEQ, INC., a Delaware corporation, as Depositor, and WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as Owner Trustee,
WITNESSETH:
WHEREAS, the parties to this Agreement will create the CWHEQ Revolving
Home Equity Loan Trust, Series 2007-A and provide for, among other things, the
issuance of the Class C Certificates, the Class E-P Certificates, the Class R-1
Certificates, and the Class R-2 Certificates;
NOW, THEREFORE, the parties to this Agreement agree as follows.
ARTICLE 1
DEFINITIONS AND CONSTRUCTION
Section 1.01 Definitions.
Unless the context requires a different meaning, capitalized terms are
used in this Agreement have the meanings given to them in the Master Glossary of
Defined Terms attached hereto as Annex 1.
Section 1.02 Rules of Construction.
Except as otherwise expressly provided in this Agreement or unless the
context clearly requires otherwise:
(a) Defined terms include, as appropriate, all genders and the plural
as well as the singular.
(b) References to designated articles, sections, subsections,
exhibits, and other subdivisions of this Agreement, such as "Section 6.12
(a)," refer to the designated article, section, subsection, exhibit, or other
subdivision of this Agreement as a whole and to all subdivisions of the
designated article, section, subsection, exhibit, or other subdivision. The
exhibits and other attachments to this Agreement are a part of this Agreement.
The words "herein," "hereof," "hereto," "hereunder," and other words of
similar import refer to this Agreement as a whole and not to any particular
article, section, exhibit, or other subdivision of this Agreement.
(c) The recitals located before Article I are not a part of the
agreement of the parties. Whether or not they are correct, the recitals shall
not affect the agreement of the parties or the interpretation of this
Agreement, and they shall not be interpreted as representations, warranties,
covenants, or any other matter of substance. The headings of the various
Articles
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and Sections in this Agreement are for convenience of reference only and shall
not define or limit any of the provisions of this Agreement.
(d) Any term that relates to a document or a statute, rule, or
regulation includes any amendments, modifications, supplements, or any other
changes that may have occurred since the document, statute, rule, or
regulation came into being, including changes that occur after the date of
this Agreement. References to law are not limited to statutes. References to
statutes include any rules or regulations promulgated under them by a
governmental authority charged with the administration of the statute. Any
reference to any person includes references to its successors and assigns.
(e) Any party may execute any of the requirements under this Agreement
either directly or through others, and the right to cause something to be done
rather than doing it directly shall be implicit in every requirement under this
Agreement. Unless a provision is restricted as to time or limited as to
frequency, all provisions under this Agreement are implicitly available from
time to time.
(f) The term "including" and all its variations mean "including but not
limited to." Except when used in conjunction with the word "either," the word
"or" is always used inclusively (for example, the phrase "A or B" means "A or B
or both," not "either A or B but not both").
(g) A reference to "a [thing]" or "any [of a thing]" does not imply the
existence or occurrence of the thing referred to even though not followed by "if
any," and "any [of a thing]" is any and all of it. A reference to the plural of
anything as to which there could be either one or more than one does not imply
the existence of more than one (for instance, the phrase "the obligors on a
note" means "the obligor or obligors on a note"). "Until [something occurs]"
does not imply that it must occur, and will not be modified by the word
"unless." The word "due" and the word "payable" are each used in the sense that
the stated time for payment has passed. The word "accrued" is used in its
accounting sense, i.e., an amount paid is no longer accrued. In the calculation
of amounts of things, differences and sums may generally result in negative
numbers, but when the calculation of the excess of one thing over another
results in zero or a negative number, the calculation is disregarded and an
"excess" does not exist. Portions of things may be expressed as fractions or
percentages interchangeably. The word "shall" is used in its imperative sense,
as for instance meaning a party agrees to something or something must occur or
exist.
(h) All accounting terms used in an accounting context and not
otherwise defined, and accounting terms partly defined in this Agreement, to the
extent not completely defined, shall be construed in accordance with generally
accepted accounting principles in the United States. To the extent that the
definitions of accounting terms in this Agreement are inconsistent with their
meanings under generally accepted accounting principles, the definitions in this
Agreement shall control. Capitalized terms used in this Agreement without
definition that are
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defined in the Uniform Commercial Code of the relevant jurisdiction are used in
this Agreement as defined in that Uniform Commercial Code.
(i) In the computation of a period of time from a specified date to a
later specified date or an open-ended period, the words "from" and "beginning"
mean "from and including," the word "after" means "from but excluding," the
words "to" and "until" mean "to but excluding," and the word "through" means "to
and including." Likewise, in setting deadlines or other periods, "by" means "on
or before." The words "preceding," "following," and words of similar import,
mean immediately preceding or following. References to a month or a year refer
to calendar months and calendar years.
(j) Any reference to the enforceability of any agreement against a
party means that it is enforceable against the party in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, and other
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(k) Generally only the registered holder of a Security is recognized,
such as in Section 3.07. Persons Considered Owner and payment provisions.
However, for the purposes of the transfer restrictions and related provisions,
such as agreements, representations, and warranties by holders of Securities,
references to Securityholders, holders, and the like refer equally to beneficial
owners who have an interest in a Security but are not reflected in the
applicable register as the owner and references to transfers of Securities
include transfers of interests in a Security.
ARTICLE 2
ORGANIZATION
Section 2.01 Name.
This Trust shall be known as "CWHEQ Revolving Home Equity Loan Trust,
Series 2007-A," in which name the Owner Trustee may issue Notes and otherwise
conduct the business of the Trust.
Section 2.02 Office.
The office of the Trust shall be in care of the Owner Trustee at
"Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, Attention:
Corporate Trust Administration" or at any other address in the State of Delaware
that the Owner Trustee may designate by notice to the Depositor.
Section 2.03 Purposes and Powers.
(a) The Trust is authorized to engage in the following activities:
(1) to issue the Notes pursuant to the Indenture;
(2) to issue the Certificates pursuant to this Agreement;
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(3) to Grant the Assets to the Indenture Trustee pursuant to
the Indenture;
(4) to distribute to the Holders of the Certificates pursuant
to this Agreement and the Transaction Documents distributions to the
Issuer under the Indenture and any portion of the Assets released from
the Lien of the Indenture and any other amounts provided for in the
Sale and Servicing Agreement;
(5) to enter into and perform its obligations under the
Transaction Documents to which it becomes a party;
(6) to engage in those activities, including entering into
agreements, that are appropriate to accomplish any of the foregoing or
are incidental to them; and
(7) subject to compliance with the Transaction Documents, to
engage in any other activities appropriate to conserve the Assets and
make distributions to any Certificateholder and the holders of Notes.
The Trust shall not engage in any activity other than in connection
with the foregoing activities or other than as required or authorized by this
Agreement or the other Transaction Documents.
Section 2.04 Appointment of Owner Trustee.
The Depositor appoints the Owner Trustee as trustee of the Trust
effective as of the date of this Agreement to have all the rights and
obligations in this Agreement.
Section 2.05 Initial Capital Contribution of Assets.
The Depositor hereby remits to the Owner Trustee the sum of $1. The
Owner Trustee hereby acknowledges receipt in trust from the Depositor of the
foregoing contribution. The Depositor shall pay organizational expenses of the
Trust as they may arise or shall promptly reimburse the Owner Trustee on request
for any such expenses paid by the Owner Trustee.
Section 2.06 Declaration of Trust.
The Owner Trustee hereby declares that it will hold the Assets on the
terms of this Agreement, for the benefit of the Certificateholders, subject to
the obligations of the Trust under the Transaction Documents. The Trust is a
statutory trust under the Statutory Trust Statute and this Agreement is the
governing instrument of the statutory trust. The Owner Trustee shall have all
rights and obligations in this Agreement and in the Statutory Trust Statute for
accomplishing the purposes of the Trust. The Owner Trustee shall file with the
Secretary of State of the State of Delaware a Certificate of Trust of the Trust.
Section 2.07 Liability of a Certificateholder.
Except to the extent otherwise provided in this Agreement or in the
other Transaction Documents, the Certificateholders shall be entitled to the
same limitation of personal liability extended to stockholders of private
corporations for profit organized under the general corporation law of the State
of Delaware.
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Section 2.08 Title to Trust Property.
Legal title to all the Assets shall be vested in the Trust as a
separate legal entity except where applicable law in any jurisdiction requires
title to any part of the Assets to be vested in a trustee, in which case title
shall be vested in the Owner Trustee or any co-trustee or separate trustee, as
the case may be.
Section 2.09 Location of Trust.
The Trust will be located in Delaware and administered in Delaware. Any
bank accounts maintained by the Owner Trustee on behalf of the Trust shall be
located in Delaware or Illinois. The Trust shall not have any employees in any
State other than Delaware. Nothing in this Agreement shall restrict the Owner
Trustee from having employees within or without Delaware. Payments will be
received by the Trust only in Delaware, Illinois, or California, and payments
will be made by the Trust only from Delaware or Illinois.
Section 2.10 Representations and Warranties of Depositor.
The Depositor represents and warrants to the Owner Trustee as of the
date of this Agreement, and as to any Transaction Document, as of its date that:
(a) Organization and Good Standing. The Depositor is a corporation duly
organized and validly existing under the laws of Delaware, with full power and
authority to own its properties and to conduct its business as presently owned
or conducted and to execute, deliver, and perform this Agreement and any other
document related to this Agreement to which it is a party and to perform its
obligations as contemplated by them.
(b) Due Qualification. The Depositor is duly qualified to do business
as a Delaware corporation in good standing and has obtained all necessary
licenses and approvals in each jurisdiction in which failure to so qualify or to
obtain required licenses or approvals would have a material adverse effect on
its ability to perform its obligations under this Agreement and the Transaction
Documents to which the Depositor is a party.
(c) Due Authorization; Enforceability. The Depositor has full power and
authority to execute, deliver, and perform this Agreement and the Transaction
Documents to which it is a party and to carry out their respective terms. The
Depositor has full power and authority to sell and assign the Assets. The
execution, delivery, and performance by the Depositor of this Agreement and the
Transaction Documents to which the Depositor is a party have been duly
authorized by the Depositor by all necessary action. This Agreement and the
Transaction Documents executed by the Depositor have been duly executed and
delivered and constitute the valid and legally binding obligations of the
Depositor enforceable against the Depositor in accordance with their terms.
(d) No Conflict. The Depositor's execution and delivery of this
Agreement and the Transaction Documents to which the Depositor is a party,
performance of the transactions contemplated by them, and fulfillment of their
terms applicable to the Depositor do not conflict with any requirements of law
applicable to the Depositor or conflict with, result in any breach
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of any of the provisions of, or with or without notice or lapse of time
constitute a default under, any indenture, contract, or other instrument to
which the Depositor is a party or by which it or its properties are bound.
(e) Consents. No authorization, consent, license, order, or approval of
or registration or declaration with, any governmental authority is required to
be obtained, effected, or given by the Depositor in connection with the
execution and delivery of this Agreement or the Transaction Documents by the
Depositor or its performance of its obligations under any of them or the
transactions contemplated by any of them, or the transfer of the Assets to the
Trust.
(f) Litigation. No actions, proceedings, or investigations are pending
or, to the best of the Depositor's knowledge, threatened against the Depositor
before any governmental authority having jurisdiction over the Depositor
(1) asserting the invalidity of this Agreement or any other
Transaction Documents to which the Depositor is a party,
(2) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction
Documents to which the Depositor is a party,
(3) seeking any determination that might materially and
adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement or any
other Transaction Documents to which the Depositor is a party, or
(4) seeking to affect adversely the income tax attributes of
the Trust under the United States federal or New York State or Delaware
income tax law.
ARTICLE 3
THE CERTIFICATES
Section 3.01 Initial Beneficiary of Trust.
Upon the formation of the Trust by the contribution by the Depositor
pursuant to Section 2.05 and until the issuance of the Certificates, the
Depositor shall be the sole beneficiary of the Trust.
Section 3.02 Issuance of the Certificates.
(a) On the Closing Date, the Trust will issue four classes of
Certificates designated as the "Revolving Home Equity Loan Asset Backed
Certificates, Series 2007-A, Class R-1," "Revolving Home Equity Loan Asset
Backed Certificates, Series 2007-A, Class R-2," "Revolving Home Equity Loan
Asset Backed Certificates, Series 2007-A, Class E-P," and "Revolving Home Equity
Loan Asset Backed Certificates, Series 2007-A, Class C" pursuant to this
Agreement and deliver them to the order of the Depositor when authenticated.
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(b) The Certificates will be issued in definitive, fully registered
form and will be substantially in the form of Exhibit X-0, X-0, and B-3. The
Certificates will, on the Closing Date, be executed, authenticated, and
delivered by the Owner Trustee to the order of the Depositor concurrently with
the transfer of the Mortgage Loans to the Trust.
(c) The Certificates will be executed by manual or facsimile signature
on behalf of the Owner Trustee by an authorized officer. Certificates bearing
the manual or facsimile signatures of individuals who were, at the time their
signatures were affixed, authorized to sign on behalf of the Owner Trustee shall
bind the Trust, notwithstanding that any of them have ceased to be so authorized
before the authentication and delivery of the Certificates or did not hold such
offices at the date of the Certificate. The Certificates will not be book-entry
certificates.
Section 3.03 Authentication of Certificates.
No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless the Certificate is manually authenticated by
the Owner Trustee substantially in the form provided in this Agreement, and the
authentication on any Certificate will be conclusive evidence, and the only
evidence, that the Certificate has been duly authenticated and delivered. All
Certificates shall be dated the date of their authentication.
The Trust initially appoints the Indenture Trustee to act as the
authentication agent of the Owner Trustee. All references to the authentication
of the Certificates shall be considered to include the authentication agent.
Section 3.04 Registration of and Transfer and Exchange of Certificates.
The Trust shall keep a certificate register (the "Certificate
Register") in which, subject to any reasonable regulations it may prescribe, the
Trust shall provide for the registration of the Certificates and, to the extent
permitted by this Agreement, of transfers and exchanges of the Certificates. The
certificate registrar (the "Certificate Registrar") is initially the Indenture
Trustee.
Whenever any Certificate is surrendered for registration of transfer at
the office or agency of the Certificate Registrar maintained for that purpose
and the conditions of this Section have been satisfied, the Owner Trustee, on
behalf of the Trust, shall execute, authenticate, and deliver in the name of the
designated transferees, one or more new Certificates in authorized denominations
of a like aggregate amount dated the date of authentication by the Owner Trustee
or any authenticating agent.
At the option of its Holder, each Certificate may be exchanged for
other Certificates, in authorized denominations of a like aggregate amount, by
surrendering the Certificate to be exchanged at the office or agency of the
Certificate Registrar maintained for that purpose.
Every Class C Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a fully completed representation
letter, substantially in the
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form of Exhibit C-1, and every Residual Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by fully completed
representation letter and transfer affidavit, substantially in the forms of
Exhibit C-1 and Exhibit C-2, respectively, each delivered at the expense of the
Certificateholder, and duly executed by the Certificateholder or an
attorney-in-fact for the Certificateholder duly authorized in writing. Each
Holder of a Certificate must satisfy the transfer restrictions in the
representation letter. Each Certificate surrendered for registration of transfer
or exchange shall be cancelled and subsequently disposed of by the Owner Trustee
in accordance with its customary practice.
No service charge shall be made for the registration of transfer or
exchange of any Certificate, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of the
Certificate.
The preceding provisions of this Section notwithstanding, the Owner
Trustee need not transfer or exchange, and the Certificate Registrar need not
register transfers or exchanges, of Certificates during the fifteen days
preceding the due date for any payment on the Certificates.
The Certificate Registrar shall at all times maintain an office or
agency where Certificates may be surrendered for registration of transfer or
exchange.
Section 3.05 Mutilated, Destroyed, Lost, or Stolen Certificate.
If any mutilated Certificate is surrendered to the Certificate
Registrar, then the Owner Trustee shall execute and the Certificate Registrar
shall authenticate and deliver, in exchange for or in lieu of the mutilated
Certificate, a new Certificate of like tenor and denomination.
If the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss, or theft of a Certificate and the Certificate Registrar
receives the security or indemnity it requires to hold it harmless, then in the
absence of notice to the Issuer, the Certificate Registrar, or the Certificate
Registrar that the Certificate has been acquired by a Protected Purchaser, and
if the requirements of Section 8-406 of the UCC are met and subject to Section
8-405 of the UCC, then the Owner Trustee shall execute and the Certificate
Registrar shall authenticate and deliver, in exchange for or in lieu of the
destroyed, lost, or stolen Certificate, a new Certificate of like tenor and
denomination. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen, or destroyed Certificate is found.
The Certificate Registrar may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed on the
issuance of the new Certificate under this Section.
Section 3.06 Maintenance of Office or Agency.
The Trust shall maintain an office or agency where notices and demands
on the Trust regarding the Certificates and the Transaction Documents may be
served. The Trust initially
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designates Indenture Trustee as its office for those purposes. The Owner Trustee
shall give prompt written notice to the Certificateholders of the location, and
any change in the location, of this office or agency. If the Trust ever fails to
maintain this office or agency, then presentations, surrenders, notices, and
demands may be made or served at the Corporate Trust Office of the Owner
Trustee.
Section 3.07 Persons Considered Certificateholders.
Before due presentation of a Certificate for registration of transfer,
the Owner Trustee, the Certificate Registrar, and any paying agent for the
Certificates shall treat the person in whose name any Certificate is registered
in the Certificate Register as the owner of the Certificate for the purpose of
receiving distributions pursuant to Section 5.02 and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar, and any
paying agent for the Certificates shall be bound by any notice to the contrary.
Section 3.08 Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar shall furnish to the Depositor or the Owner
Trustee a list of the names and addresses of the Certificateholders as of the
most recent Record Date within fifteen days after receipt by the Certificate
Registrar of a written request for it from the Depositor or the Owner Trustee.
Section 3.09 Appointment of Certificate Paying Agent.
The paying agent for the Certificates shall make distributions to the
Holder of each Certificate pursuant to this Agreement and shall report the
amounts of those distributions to the Owner Trustee. The Administrator, on
behalf of the Trust, may remove the Certificate Paying Agent if the
Administrator determines in its sole discretion that the Certificate Paying
Agent has failed to perform its obligations under this Agreement in any material
respect. The Certificate Paying Agent initially shall be the Indenture Trustee.
The Certificate Paying Agent shall be permitted to resign as Certificate Paying
Agent on thirty days' written notice to the Owner Trustee. If the Indenture
Trustee is no longer the Certificate Paying Agent, the Administrator shall
appoint a bank or trust company as successor to act as Certificate Paying Agent.
The Administrator shall cause the successor Certificate Paying Agent or any
additional Certificate Paying Agent appointed by the Administrator to execute
and deliver to the Trust an instrument in which the successor Certificate Paying
Agent or additional Certificate Paying Agent agrees with the Trust that, as
Certificate Paying Agent, the successor Certificate Paying Agent or additional
Certificate Paying Agent will hold any sums held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
to them until those sums are paid to the appropriate Certificateholders. The
Certificate Paying Agent shall return all unclaimed funds to the Trust, and upon
removal of a Certificate Paying Agent, the Certificate Paying Agent shall also
return all funds in its possession to the Trust. Any reference in this Agreement
to the Certificate Paying Agent shall include any co-Certificate Paying Agent
unless the context requires otherwise.
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Section 3.10 Restrictions on Transfer; Legends.
(a) The Certificates shall be assigned, transferred, exchanged,
pledged, financed, hypothecated, or otherwise conveyed (collectively, for
purposes of this Section and any other Section referring to the Certificates,
"transferred" or a "transfer") only in accordance with this Section.
(b) No transfer of a Certificate will be made unless the transfer is
exempt from the registration requirements of the Securities Act of 1933 (the
"Act") and any applicable state securities laws or is made in accordance with
the Act and those laws. Except for the initial issuance of a Certificate to the
Master Servicer or the Depositor (or an affiliate of any of them) (and any
subsequent transfer by any of them to one of its Affiliates), the Owner Trustee
will require either:
(1) the transferee to execute an investment letter acceptable
to and in form and substance satisfactory to the Owner Trustee
certifying to the Owner Trustee the facts surrounding the transfer,
which investment letter shall not be an expense of the Owner Trustee or
(2) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Owner Trustee and the Depositor that the
transfer may be made pursuant to an exemption from the Act, describing
the applicable exemption and its basis, or is being made pursuant to
the Act, which Opinion of Counsel shall not be an expense of the Owner
Trustee or the Depositor.
The Holder of a Certificate desiring to effect a transfer shall
indemnify the Trust against any liability that may result if the transfer is not
so exempt or is not made in accordance with any federal and state laws.
(c) No transfer of an interest in a Certificate will be made unless the
Owner Trustee has received either:
(1) a representation letter from the proposed transferee,
acceptable to and in form and substance satisfactory to the Owner
Trustee, to the effect that the proposed transferee is not an employee
benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, or a person acting on behalf of, or investing
plan assets of, any such plan, which representation letter shall not be
an expense of the Owner Trustee; or
(2) an Opinion of Counsel acceptable to the Owner Trustee to
the effect that the purchase or holding of the Certificate will not
result in a non-exempt prohibited transaction under ERISA or Section
4975 of the Code and will not subject the Owner Trustee to any
obligation in addition to those undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Owner Trustee or the
Depositor;
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except that, in the case of the initial issuance of a Certificate to the Master
Servicer or the Depositor (or an affiliate of any of them) (and any subsequent
transfer by any of them to one of its Affiliates), the representation in clause
(i) shall be deemed to have been made.
(d) No transfer of an interest in a Class R-1 Certificate after its
initial issuance will be made unless:
(1) the proposed Holder expressly assumes the performance of
every obligation of the existing Holder under this Agreement and the
other Transaction Documents pursuant to an agreement acceptable to the
Owner Trustee, including the obligation to advance funds to the Trust
as necessary so that the Trust is able to pay the purchase price for
Additional Home Equity Loans;
(2) the existing Holder delivers to the Owner Trustee an
Officer's Certificate stating that the transfer complies with this
Section 3.10 and that all the conditions in this Section 3.10 have been
complied with, and an Opinion of Counsel stating that all the
conditions in this Section 3.10 have been complied with; and
(3) the Rating Agency Condition is satisfied with respect to
the transfer.
(e) Each person who has or who acquires any ownership interest in a
Residual Certificate by accepting its ownership interest agrees to the following
provisions, and the rights of each person acquiring any ownership interest in a
Residual Certificate are subject to the following provisions:
(1) Only Permitted Transferee may hold an ownership interest
in a Residual Certificate and each person holding or acquiring any
ownership interest in a Residual Certificate shall promptly notify the
Indenture Trustee of any change or impending change in its status as a
Permitted Transferee.
(2) No ownership interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Indenture Trustee shall not register the transfer of any Residual
Certificate unless the Indenture Trustee has received a Transfer
Affidavit from the initial owner or the proposed transferee, except in
connection with the registration of the Tax Matters Person Certificate
in the name of the Indenture Trustee or any registration in the name
of, or transfer of a Residual Certificate to, an Affiliate of the
Depositor (either directly or through a nominee).
(3) Each person holding or acquiring any ownership interest in
a Residual Certificate shall
(A) obtain a Transfer Affidavit from any other person
it attempts to transfer its ownership interest in a Residual
Certificate to,
(B) obtain a Transfer Affidavit from any person for
whom it is acting as nominee, trustee, or agent in connection
with any transfer of any ownership interest in a Residual
Certificate, and
14
(C) not transfer its ownership interest in a Residual
Certificate to any other person if it has actual knowledge
that such person is not a Permitted Transferee.
(4) Any attempted transfer of any ownership interest in a
Residual Certificate in violation of this Section 3.10(e) shall be void
ab initio and shall vest no rights in the purported transferee. If any
purported transferee becomes a Holder of a Residual Certificate in
violation of this Section 3.10(e), then the last preceding Permitted
Transferee shall be restored to all rights as Holder of the Residual
Certificate retroactive to the date of registration of transfer of the
Residual Certificate. The Indenture Trustee shall be under no liability
to any person for any registration of transfer of a Residual
Certificate that is in fact not permitted by this Section 3.10(e) or
for making any payments due on the Residual Certificate to its Holder
or taking any other action with respect to the Holder under this
Agreement so long as the transfer was registered after receipt of the
related Transfer Affidavit and any other required documents. The
Indenture Trustee shall be entitled but not obligated to recover from
any Holder of a Residual 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
the Residual Certificate at and after either such time. Any such
payments so recovered by the Indenture Trustee shall be paid and
delivered by the Indenture Trustee to the last preceding Permitted
Transferee of the Residual Certificate.
(5) The Depositor shall use its best efforts to make
available, upon receipt of written request from the Indenture 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 Residual Certificate to any Holder who is not a Permitted
Transferee.
(f) Each Certificate shall bear a legend substantially in the following
form:
This certificate has not been and will not be registered under the Securities
Act of 1933, as amended, or the securities laws of any state and may not be
resold or transferred unless it is registered pursuant to the Securities Act of
1933 and the securities laws of any state or is sold or transferred in
transactions that are exempt from registration under the Securities Act of 1933
and under applicable state law and is transferred in accordance with Section
3.10 of the Trust Agreement related to CWHEQ Revolving Home Equity Loan Trust,
Series 2007-A. Neither this certificate nor any interest in it may be
transferred unless the transferee delivers to the trustee either a
representation letter to the effect that the transferee is not an employee
benefit plan subject to the Employee Retirement Income Security Act of 1974, as
amended, a plan subject to Section 4975 of the Code, as amended, or a person
acting on behalf of or using the assets of any such plan; or an opinion of
counsel in accordance with Section 3.10(c) of the Trust Agreement related to
CWHEQ Revolving Home Equity Loan Trust, Series 2007-A. Notwithstanding anything
else to the contrary herein, any purported transfer of this certificate to or on
behalf of an employee
15
benefit plan subject to ERISA or to Section 4975 of the Code without the opinion
of counsel satisfactory to the trustee as described above shall be void.
(g) No Certificate shall be transferred except to (i) the Master
Servicer, the Depositor, or the Trust (or an affiliate of any of them) or (ii) a
qualified institutional buyer (as defined in Rule 144A under the Securities
Act). Each person (other than the Master Servicer, or the Trust (or an affiliate
of them)) to whom a Certificate is proposed to be transferred will be required
to certify to the holder of the R-1 Certificates, the Trust, and the Certificate
Registrar that it is a qualified institutional buyer.
The Class R-1 Certificates may not be transferred except to the Master
Servicer, the Depositor, or the Trust (or an affiliate of any of them).
(h) Notwithstanding anything in this Agreement to the contrary, the
Depositor, without the consent of any Noteholder or Certificateholder, may amend
this Section 3.10 with the consent of the Credit Enhancer if it receives an
Opinion of Counsel to the effect that the amendment will not cause the
imposition of any tax on any REMIC or the Certificateholders or Noteholders, or
cause any REMIC to fail to qualify as a REMIC at any time that any Certificates
or Notes are outstanding.
(i) The restrictions on transfers of a Residual Certificate in this
Section 3.10 shall cease to apply (and the applicable portions of the legend on
a Residual Certificate may be deleted) with respect to transfers occurring after
delivery to the Owner Trustee of an Opinion of Counsel to the effect that the
elimination of the restrictions will not cause any REMIC 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, a Certificateholder, Noteholder, or another
person. Each person holding or acquiring any ownership interest in a Residual
Certificate consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Owner Trustee, is reasonably necessary
(1) to ensure that the record ownership of, or any beneficial
interest in, a Residual Certificate is not transferred, directly or
indirectly, to a person that is not a Permitted Transferee or
(2) to provide for a means to compel the transfer of a
Residual Certificate that is held by a person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(j) Pursuant to the Sale and Servicing Agreement, Principal Collections
may be applied to purchase Additional Balances for the Trust during a Collection
Period. If on any Collection Period Principal Collections are insufficient to
purchase all Additional Balances, the Holder of the Class R-1 Certificates will
advance funds to the Trust to purchase the Additional Balances that were not
funded by Principal Collections. The Class R-1 Balance will be repaid to the
Class R-1 Certificates from Principal Collections on the Mortgage Loans
allocated to the
16
Certificates on future Payment Dates and will be entitled to allocation of
Interest Collections on the Mortgage Loans.
If the Holder of the Class R-1 Certificates fails to advance to the
Trust amounts specified in the previous paragraph, the Sponsor will be required
to purchase, and the Holder of the Class R-1 Certificates will be required to
sell, the Class R-1 Certificates and the Sponsor will assume all of the
obligations of the Holder of the R-1 Certificates, including the obligation to
make advances as provided in the preceding paragraph.
Section 3.11 REMIC Provisions.
The Owner Trustee will elect as provided in this Section that the
Trust, other than the Basis Risk Carryforward Reserve Fund, the Cap Contract
Account, and the Additional Loan Account, be treated for federal income tax
purposes as comprising three real estate mortgage investment conduits (each a
"REMIC" or, in the alternative, the "Lower Tier REMIC," the "Middle Tier REMIC"
and the "Master REMIC"). The Lower Tier REMIC will hold as assets all property
of the Trust, other than the Basis Risk Carryforward Reserve Fund, the Cap
Contract Account, and the Additional Loan Account, and will be evidenced by (i)
the Lower Tier REMIC Regular Interests, which will be uncertificated and will
represent the "REMIC regular interests" in the Lower Tier REMIC, and (ii) the
Class LT-R Interest, which will represent the "REMIC residual interest" in the
Lower Tier REMIC. The Middle Tier REMIC will hold as assets the Lower Tier REMIC
Regular Interests and will be evidenced by Middle Tier REMIC Regular Interests,
which will be uncertificated and will represent the REMIC regular interests in
the Middle Tier REMIC, and the Class MT-R Interest, which will represent the
REMIC residual interest in the Middle Tier REMIC. The Master REMIC will hold as
assets the Middle Tier REMIC Regular Interests and will be evidenced by the
Notes and the Certificates, each of which (other than the Class R-2
Certificates) will represent ownership of one or more REMIC regular interests in
the Master REMIC. The Class R-1 Certificates will represent ownership of the
sole Class of the REMIC residual interest in the Lower Tier REMIC. The Class R-2
Certificates will represent ownership of the sole Class of the REMIC residual
interest in each of the Middle Tier REMIC and the Master REMIC. 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 Lower Tier REMIC
The Lower Tier REMIC Regular Interests will have the principal balances
and pass-through rates as set forth in the following table:
----------------------------------------- ---------------------------------------- -----------------------------------
Lower Tier REMIC Interests Initial Principal Balance Pass-Through Rate
----------------------------------------- ---------------------------------------- -----------------------------------
LT-1................................. (1) (2)
----------------------------------------- ---------------------------------------- -----------------------------------
LT-2................................. (3) (4)
----------------------------------------- ---------------------------------------- -----------------------------------
R-1.................................. (5) (5)
----------------------------------------- ---------------------------------------- -----------------------------------
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(1) The LT-1 Interest shall have a principal balance equal to the initial
Loan Pool Balance as of the Cut-off Date.
(2) Interest shall accrue on the LT-1 Interest at a per annum rate equal to
the weighted average of the Loan Rates of the Mortgage Loans (weighted
on the basis of the daily average Asset Balance of each Mortgage Loan
during the related billing cycle before the Collection Period relating
to the Payment Date) net of (i) the Servicing Fee Rate and (ii) the
rate at which the premium payable to the Note Insurer is calculated
(adjusted to reflect the difference between the Loan Pool Balance as of
the beginning of the Collection Period and the Note Principal Balance
of the Class A Notes).
(3) The LT-2 Interest shall have a principal balance equal to the amount
deposited in the Trust Fund on the Closing Date to purchase Additional
Home Equity Loans.
(4) During the first Collection Period, the LT-2 Interest shall not accrue
any interest. Thereafter, interest shall accrue on the LT-2 Interest at
a per annum rate equal to the weighted average of the Loan Rates of the
Mortgage Loans (weighted on the basis of the daily average Asset
Balance of each Mortgage Loan during the related billing cycle before
the Collection Period relating to the Payment Date) net of (i) the
Servicing Fee Rate and (ii) the rate at which the premium payable to
the Note Insurer is calculated (adjusted to reflect the difference
between the Loan Pool Balance as of the beginning of the Collection
Period and the Note Principal Balance of the Class A Notes).
(5) The Class R-1 Certificates shall not have any initial principal
balance. If there are any Net Draws, the Class R-1 Certificates shall
contribute an amount equal to such Net Draws to a reserve fund in the
Lower Tier REMIC established to acquire such Net Draws. After the first
Collection Period the Class R-1 Certificates shall be entitled to its
proportionate amount of interest accruing based on the outstanding Net
Draws. For the first Collection Period, if there are any Net Draws, the
Class R-1 Certificates shall be entitled to the excess of the interest
accruing on the Mortgage Loans over the interest that accrues on the
Lower Tier REMIC regular interests.
The Middle Tier REMIC
The Middle Tier REMIC Regular Interests will have the principal balances,
pass-through rates and Corresponding Classes of Certificates as set forth in the
following table:
---------------------------------------------------------------------------------------------------------------------
Middle Tier REMIC Initial Principal Pass-Through Corresponding
Regular Interests Balance Rate Class of Notes
---------------------------------------------------------------------------------------------------------------------
MT-A............................ (1) (2) A
---------------------------------------------------------------------------------------------------------------------
MT-Accrual...................... (3) (2) N/A
---------------------------------------------------------------------------------------------------------------------
MT-R............................ (4) (4) N/A
---------------------------------------------------------------------------------------------------------------------
(1) The MT-A Interests (the "Accretion Directed Class") shall have an
initial balance equal to 50% of its Corresponding Class of Notes and on
each Payment Date, interest,
18
principal payments and Realized Losses shall be allocated so as to
cause the MT-A Interests to continue to equal 50% of the Corresponding
Class of Notes.
(2) Each MT-A Interest shall have an interest rate equal to the weighted
average of the LT-1 Interest and LT-2 Interest for such Payment Date
(the "LT REMIC WAC").
(3) The MT-Accrual Interest (the "Accrual Class") shall have a principal
balance equal to the sum of (a) 50% of the Loan Pool Balance as of the
Cut-off Date (b) 50% of the amount contributed to the Trust on the
Closing Date to acquire Additional Home Equity Loans, and (c) 50% of
initial overcollateralization. The initial overcollateralization is the
excess of the sum of the Loan Pool Balance plus the amount contributed
to the Trust to acquire Additional Home Equity Loans over the Note
Principal Balance of the Class A Notes. On each Payment Date, interest,
principal and Realized Losses shall be allocated so as to cause the
MT-Accrual Interest to equal the excess of the Loan Pool Balance (less
Net Draws) as of the end of the Collection Period over the principal
balance of the Accretion Directed Class (after taking into account
distributions for such Payment Date).
(4) The MT-R Interest shall not have any initial principal balance and
shall not have a pass-through rate.
The Master REMIC
The following table specifies the class designation, pass through rate,
and principal amount for each class of Master REMIC Interest:
Master REMIC Regular Interests Initial Principal Balance Pass Through-Through Rate
Class A Notes........................ $ 1,200,000,000 (1)
Class R-2 Certificates.............. (2) (2)
Class C Certificates................. (3) (4)
(1) The pass-through rate on the Class A Notes is equal to the least of (i)
its LIBOR rate plus its margin and (ii) a rate equal to the weighted
average interest rate of the Accretion Directed and Accrual Classes
(the "MT Interests").
(2) The R-2 Certificates shall not have any initial principal balance and
shall not have a pass-through rate.
(3) The Class C Interest shall have a principal balance equal to the sum of
the initial overcollateralization. It shall not be entitled to receive
interest on its principal balance. The Class C Interest shall have a
notional balance equal to the Loan Pool Balance as of the beginning of
a Collection Period less Net Draws.
(4) 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
specified portion of the interest on the MT-A Interest equal to the
excess of the LT REMIC WAC over the product of two and the weighted
average of the rate on the Accretion Directed Class (capped at the
19
rate on its Corresponding Class of Notes) and MT-Accrual Interest
(subject to a cap of 0.00%). The Pass-Through Rate of the Class C
Certificates shall be a rate sufficient to entitle it to all interest
accrued on home equity loans less the interest accrued on the other
interests issued by the Master REMIC. The Class C Distributable Amount
for any Payment Date is payable from current interest on the Mortgage
Loans to the extent not used to increase overcollateralization and any
related amount of overcollateralization released for that Payment Date.
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 Lower
Tier 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.
Section 3.12 Tax Matters.
(a) The assets of the Trust with respect to which a REMIC election is
to be made as provided in Section 3.11 are intended to be a real estate mortgage
investment conduit as defined in and in accordance with the REMIC Provisions,
and the affairs of the Trust shall be conducted so that each REMIC created
pursuant to Section 3.11 qualifies as a real estate mortgage investment conduit
as defined in the REMIC Provisions.
(b) The Trust shall require that the Indenture provide that the
Indenture Trustee act as agent on behalf of the Trust and as such agent it
shall:
(1) prepare and file in a timely manner a U.S. Real Estate
Mortgage Investment Conduit Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and
file with the Internal Revenue Service and applicable state or local
tax authorities income tax or information returns for each taxable year
for each REMIC as required by the Code or state or local tax laws,
regulations, or rules, and furnish to the Holders of the Notes and the
Certificates any schedules, statements, or information required by the
Code or state or local tax laws, regulations, or rules;
(2) within thirty days of the Closing Date, furnish 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 Notes and the
20
Certificates may contact for tax information relating to the Notes and
the Certificates, together with such additional information as may be
required by Form 8811, and update such information as required by the
Code for the Trust;
(3) make elections on behalf of each REMIC to be treated as a
REMIC on the federal tax return of each REMIC for its first taxable
year (and, if necessary, under applicable state law);
(4) prepare and forward to the Holders of the Notes and the
Certificates 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 the calculation of any original issue discount;
(5) provide any information necessary for the computation of
any tax imposed on any transfer of a Residual Certificate (the
reasonable cost of computing and furnishing such information may be
charged to the person liable for the tax);
(6) not knowingly or intentionally take any action or omit to
take any action that would cause the termination of the REMIC tax
status of any REMIC;
(7) pay, from the sources specified in Section 3.12(c) of this
Trust Agreement, any federal or state tax, including prohibited
transaction taxes as described below, imposed on any REMIC before its
termination when and as they become payable (but the Indenture Trustee
or any other appropriate person may contest any such tax in appropriate
proceedings and the Indenture Trustee may withhold payment of the tax,
if permitted by law, pending the outcome of such proceedings);
(8) ensure that federal, state, or local income tax or
information returns are signed as required by the Code or state or
local laws;
(9) maintain records relating to each REMIC necessary to
prepare the foregoing returns, schedules, statements, or information,
including the income, expenses, assets, and liabilities of each REMIC,
and the fair market value and adjusted basis of the assets determined
as required by the Code; and
(10) subject to the succeeding sentence, represent, at the
expense of the Sponsor, any REMIC 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, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating
to any tax item of any REMIC, and otherwise act on behalf of any REMIC
regarding any tax matter involving it. The Indenture Trustee, as and
when necessary and appropriate, may agree to represent the trust 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 the trust provided for herein,
enter into settlement agreements with any governmental taxing agency,
extend any statute of limitation relating to any tax matter of the
trust provided for herein, and otherwise act on behalf of
21
the trust provided for herein in relation to any tax matter involving
the trust. The fees for any representation or other assistance rendered
by the Indenture Trustee in connection with the tax-related services
described in the preceding sentence will be set forth in a separate
agreement and payable by the Sponsor, if necessary.
To enable the Indenture Trustee to perform its duties, the Issuer shall
provide to the Indenture Trustee within ten days after the Closing Date any
information that the Indenture Trustee requests in writing and determines to be
relevant for tax purposes to the valuations and offering prices of the Notes and
the Certificates, including the price, yield, prepayment assumption, and
projected cash flows of the Notes and the Certificates and the Mortgage Loans.
Thereafter, the Issuer shall provide to the Indenture Trustee promptly upon
written request therefor, any additional information that the Indenture Trustee
requests to enable it to perform these duties.
(c) The Trust shall require that the Transaction Documents provide that
if any tax is imposed on "prohibited transactions" of any REMIC as defined in
Section 860F(a)(2) of the Code, on the "net income from foreclosure property" of
a REMIC as defined in section 860G(c) of the Code, on any contribution to a
REMIC after the Startup Day pursuant to Section 860G(d) of the Code, or any
other tax is imposed on any REMIC (including any federal, state, or local tax),
the tax shall be paid by
o the Indenture Trustee, if the tax arises out of a
breach by the Indenture Trustee of any of its obligations
described in Section 3.12(b) and included in the Indenture,
o the Master Servicer, in the case of any minimum tax
imposed on any REMIC pursuant to Sections 23153 and 24874 of
the California Revenue and Taxation Code, or if the tax arises
out of a breach by the Master Servicer or a Seller of any of
their obligations under any Transaction Document,
o the Seller, if the tax arises out of the Seller's
obligation to repurchase a Mortgage Loan pursuant to Section
2.02(b) or 2.04(d) of the Sale and Servicing Agreement, or
o in all other cases, or if any liable party fails to
honor its obligations to pay the tax as provided above, the
tax will be paid
FIRST, from amounts otherwise to be distributed on the Class C
Certificates,
SECOND, from amounts otherwise to be distributed on the Class
R-1 Certificates, and
THIRD, from amounts otherwise to be distributed on the Notes
as provided in the Indenture.
22
(d) The Indenture shall provide that the Indenture Trustee shall treat
the rights of the holders of Principal Amount Notes to receive payments from the
Basis Risk Carryforward Reserve Fund as rights in a notional principal contract
written by the Holders of the Class C Certificates in respect of any Basis Risk
Carryforward distributed in favor of the holders of the Principal Amount Notes.
Thus, the Principal Amount Notes and the Class C Certificates shall be treated
as representing ownership of not only Master REMIC regular interests, but also
ownership of an interest in an interest rate cap contract.
(e) The Indenture shall provide that the Indenture Trustee shall treat
the Basis Risk Carryforward Reserve Fund as an outside reserve fund within the
meaning of Treasury Regulation 1.860G-2(h) that is owned by the Holders of the
Class C Certificates, and that is not an asset of any REMIC.
ARTICLE 4
ACTIONS BY OWNER TRUSTEE
Section 4.01 Prior Notice to Certificateholders Regarding Certain
Matters.
(a) The Owner Trustee shall give the Certificateholders thirty days'
written notice before taking any of the following actions on behalf of the
Trust. Within thirty days of the date of the notice the Certificateholders may
instruct the Owner Trustee in writing not to take the proposed action or may
provide alternative direction. Thirty days after giving the notice, if the Owner
Trustee has not been instructed otherwise by a majority in interest of the
Holders of the Certificates, then the Owner Trustee may:
(1) initiate any claim or lawsuit by the Trust, or compromise
any action, claim, or lawsuit brought by or against the Trust;
(2) file an amendment to the Certificate of Trust;
(3) amend the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(4) amend the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required, but
the amendment materially adversely affects the interests of the
Certificateholders;
(5) amend the Administration Agreement; and
(6) appoint a successor Certificate Paying Agent, Certificate
Registrar, Administrator, or Indenture Trustee under the Indenture, or
consent to the assignment by the Transfer Agent and Registrar,
Administrator, or Indenture Trustee of its obligations under the
Indenture.
If the Trust has more than one holder of its Certificates, then the
Holders may only give instructions that are agreed to by the majority of the
Holders (based on the Holders' percentage ownership of the entire Certificate
Interest).
23
(b) Notwithstanding Section 4.01(a), without prior notice to
the Certificateholders the Owner Trustee may, on behalf of the Trust:
(1) initiate a claim or lawsuit by the Trust for
collection of Assets;
(2) file an amendment to the Certificate of Trust
whenever the amendment is required by the Statutory Trust
Statute; or
(3) amend the Administration Agreement to cure any
ambiguity or mistake or effect any other amendment that would
not materially adversely affect the interests of the
Certificateholders.
The foregoing provisions of this Section 4.01 do not create a duty on
the part of the Owner Trustee to take any of the actions described above.
Section 4.02 Action by Certificateholders Regarding Certain Matters.
Except when directed by the Certificateholders and with the prior
written consent of the Credit Enhancer in the case of (a), (b), or (c) below,
the Owner Trustee may not (a) remove the Administrator pursuant to Section 7(c)
of the Administration Agreement, (b) appoint a successor Administrator pursuant
to Section 7(e) of the Administration Agreement, (c) remove the Master Servicer
under the Sale and Servicing Agreement, or (d) except as expressly provided in
the Indenture, sell Assets after the termination of the Indenture.
Section 4.03 Action by Certificateholders Regarding Bankruptcy.
Except upon delivery to the Owner Trustee by each Certificateholder of
a certificate certifying that the Certificateholder reasonably believes that the
Trust is insolvent, the Owner Trustee may not commence a voluntary proceeding in
bankruptcy relating to the Trust.
Section 4.04 Restrictions on Certificateholder's Power.
A Certificateholder shall not direct the Owner Trustee to take or to
refrain from taking any action if that action or inaction would be contrary to
any obligation of the Trust, or the Owner Trustee under this Agreement or any of
the other Transaction Documents or would be contrary to Section 2.03. The Owner
Trustee shall not be obligated to follow that direction if given.
Section 4.05 Majority Interest.
Except as expressly provided in this Agreement, any action that may be
taken by the Certificateholders under this Agreement shall be taken by
Certificateholders by a majority of the holders voting per capita.
24
ARTICLE 5
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.01 Application of Trust Funds.
(a) On each Distribution Date, the Certificate Paying Agent shall
distribute to the Certificateholders any funds made available to it under
Section 8.01 or 8.03 of the Indenture
(1) on the first Distribution Date, to the Holders of the
Class R-2 Certificates in reduction of their certificate principal
balance any funds distributed to the Issuer pursuant to Section 8.01(d)
of the Indenture;
(2) if the funds are for Net Draw Principal Payments pursuant
to Section 8.03(e)(i) of the Indenture, to the Holders of the Class R-1
Certificate until the Class R-1 Balance is reduced to zero,
(3) if the funds are distributed pursuant to Section
8.03(g)(iii) of the Indenture, to the Holders of the Class E-P
Certificate any remaining Charged-Off Loan Proceeds;
(4) if the funds are distributed pursuant to Section
8.03(e)(iii) of the Indenture, to the Holders of the Class C
Certificate until the Class C Balance is reduced to zero, and any
remaining amount to the Holders of the Class C Certificate;
(5) to the Holders of the Class C Certificate in an amount
equal to the Class C Share of the funds that are distributed to the
Issuer pursuant to Section 8.03(a)(ix) of the Indenture;
(6) to the Holders of the Class R-1 Certificate in an amount
equal to the Class R-1 Share of the distribution if the funds are
distributed to the Issuer pursuant to Section 8.03(a)(ix) of the
Indenture;
(7) to the Holders of the Class C Certificate in an amount
equal to the excess of
o the Class C Share of the distribution if the funds
are distributed to the Issuer pursuant to Section 8.03(e)(ii),
over
o the Subordinated Transferor Collections for that
Payment Date; and
(8) to the Holders of the Class R-1 Certificate the excess of
any amount distributed to the Issuer pursuant to Section 8.03(e)(ii)
over the amount to be distributed to the Holder of the Class C
Certificate in Subsection (6) above.
(b) If any withholding tax is imposed on the Trust's payment (or
allocations of income) to the Certificateholders, the withholding tax shall
reduce the amount otherwise distributable to the Certificateholders in
accordance with this Section. The Certificate Paying Agent is authorized and
directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by the Trust.
25
This authorization shall not prevent the Certificate Paying Agent from
contesting any tax in appropriate proceedings and withholding payment of the tax
pending the outcome of the proceedings if permitted by law. The amount of any
withholding tax imposed on any distributions shall be treated as cash
distributed to the Certificateholder at the time it is withheld by the Trust and
remitted to the appropriate taxing authority. If withholding tax might be
payable on a distribution to a non-U.S. Certificateholder, the Certificate
Paying Agent may in its sole discretion withhold an appropriate amount to cover
that possibility.
(c) Any Liquidation Loss Amount which is not Investor Loss Amount
allocated to the Certificates will be first allocated to the Class C Balance
until it is reduced to zero and then to the Class R-1 Balance until it is
reduced to zero.
Section 5.02 Method of Payment.
Distributions required to be made to a Certificateholder on any Payment
Date shall be made by wire transfer of immediately available funds to the
account of the Certificateholder at a bank or other entity having appropriate
facilities if the Certificateholder so notifies the Certificate Registrar in
writing at least five Business Days before the Payment Date. If appropriate
notice is not given by a Certificateholder, then distributions to that
Certificateholder shall be by check mailed to it at its address in the
Certificate Register.
ARTICLE 6
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01 General Authority.
The Owner Trustee is authorized and directed to execute and deliver the
Transaction Documents to which the Trust is to be a party and each other
document contemplated by the Transaction Documents in such form as the Depositor
shall approve, as evidenced conclusively by the Owner Trustee's execution of it.
In addition to the foregoing, the Owner Trustee is authorized, but shall not be
obligated, to take all actions permitted or required of the Trust pursuant to
the Transaction Documents. The Owner Trustee is further authorized to take any
action the Administrator recommends regarding the Transaction Documents.
Section 6.02 General Duties.
The Owner Trustee shall discharge all of its responsibilities pursuant
to this Agreement and the other Transaction Documents to which the Trust is a
party and administer the Trust in the interest of the Certificateholders,
subject to this Agreement and the other Transaction Documents. The Owner Trustee
shall be considered to have discharged its obligations under this Agreement and
the other Transaction Documents to the extent the Administrator has agreed in
the Administration Agreement to perform any act or to discharge any duty of the
Owner Trustee or the Trust under this Agreement or any other Transaction
Document. The Owner Trustee shall
26
not be liable for the failure of the Administrator to carry out its obligations
under the Administration Agreement or the other Transaction Documents.
Section 6.03 Action on Instruction.
(a) Subject to Article IV and in accordance with the Transaction
Documents, the Certificateholders may by written instruction direct the Owner
Trustee in the management of the Trust. Such direction may be exercised at any
time by written instruction of the Certificateholders pursuant to Article IV.
(b) The Owner Trustee is not required to take any action under this
Agreement or any other Transaction Document if the Owner Trustee reasonably
determines, or is advised by counsel, that the action
(1) is likely to result in liability on the part of the Owner
Trustee,
(2) is contrary to the terms of this Agreement or of any other
Transaction Document, or
(3) is contrary to law.
(c) Whenever the Owner Trustee is
(1) unable to decide between alternative courses of action
under this Agreement or any other Transaction Document,
(2) unsure about the application of any provision of this
Agreement or any other Transaction Document or it appears to be in
conflict with any other applicable provision, or
(3) if this Agreement permits any determination by the Owner
Trustee or is silent or is incomplete about the course of action that
the Owner Trustee is required to take regarding a particular set of
facts,
the Owner Trustee may give appropriate notice to the Certificateholders
requesting instruction and, if the Owner Trustee in good faith follows any
instructions it receives, the Owner Trustee shall not be liable to the
Certificateholders on account of its action or inaction. If the Owner Trustee
has not received appropriate instruction within ten days of the notice (or
within any shorter period necessary under the circumstances) it may, but shall
be under no duty to, take or refrain from taking any action not inconsistent
with this Agreement or the other Transaction Documents that it deems to be in
the best interests of the Certificateholders, and shall have no liability to the
Certificateholders for its action or inaction.
(d) The Owner Trustee may enter into any amendment of any Transaction
Document as to which the Rating Agency Condition is satisfied (without regard to
the Policy, as defined in the Indenture), and when so requested by the
Certificateholders, the Owner Trustee shall enter into any amendment of any
Transaction Documents:
27
(1) that does not impose further obligations or liabilities on
the Owner Trustee,
(2) that the Credit Enhancer has consented to, and
(3) as to which either the Rating Agency Condition is
satisfied or Holders of not less than 66 2/3% of the aggregate
Outstanding Amount of the Notes have consented.
Section 6.04 No Duties Except as Specified in the Agreement or in
Instructions.
The Owner Trustee shall not have any duty to manage, make any payment
on, register, record, sell, dispose of, or otherwise deal with any Assets, or to
otherwise take or refrain from taking any action under any document contemplated
by this Agreement or any other Transaction Document to which the Trust is a
party, except as expressly provided by this Agreement or in any written
instruction received by the Owner Trustee under Section 6.03. No implied duties
or obligations shall be read into this Agreement or any other Transaction
Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any Financing or Continuation Statement in any public
office at any time or otherwise to perfect or maintain the perfection of any
security interest or lien granted to it under the Sale and Servicing Agreement
or to prepare or file any filing with the Securities and Exchange Commission for
the Trust or to record this Agreement or any other Transaction Document.
Wilmington Trust Company, in its individual capacity, shall, at its own cost and
expense, promptly take all action necessary to discharge any liens on any part
of any Assets resulting from actions by, or claims against, Wilmington Trust
Company, in its individual capacity, that are not related to the ownership or
the administration of the Assets.
Section 6.05 No Action Except Under Specified Documents or
Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of, or
otherwise deal with any part of any Assets, except as provided in this
Agreement, pursuant to the other relevant Transaction Documents, and in
accordance with any instruction delivered to the Owner Trustee pursuant to
Section 6.03.
Section 6.06 Restrictions.
The Owner Trustee shall not take any action that is inconsistent with
the stated purposes of the Trust in Section 2.03. The Certificateholders, by
their acceptance of their Certificates, agree not to direct the Owner Trustee to
take action that would violate the Agreement or any other Transaction Document.
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ARTICLE 7
CONCERNING OWNER TRUSTEE
Section 7.01 Acceptance of Trusts and Duties.
The Owner Trustee accepts the trusts created by this Agreement and
agrees to perform its duties under it. The Owner Trustee also agrees to disburse
all moneys actually received by it constituting part of any Assets on the terms
of the Transaction Documents. The Owner Trustee shall not be accountable under
this Agreement or any other Transaction Document under any circumstances except
(1) for its own willful misconduct or gross negligence or (2) for the inaccuracy
of any representation or warranty in Section 7.03. In particular, but not in
limitation (and subject to the exceptions in the preceding sentence):
(a) The Owner Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Owner Trustee.
(b) The Owner Trustee shall not be liable regarding any action taken or
omitted to be taken by it in accordance with instructions from the Administrator
or the Certificateholders.
(c) No provision of this Agreement or any other Transaction Document
shall require the Owner Trustee to expend or risk its funds or otherwise incur
any financial liability in the performance of any of its rights under this
Agreement or any other Transaction Document if the Owner Trustee has reasonable
grounds for believing that repayment of those funds or adequate indemnity
against the risk or liability is not reasonably assured to it.
(d) Under no circumstances shall the Owner Trustee be liable for
indebtedness under any of the Transaction Documents, including the principal and
interest on any of Notes.
(e) The Owner Trustee shall not be responsible for the validity or
sufficiency of this Agreement or for its due execution by the Depositor or for
the form, character, genuineness, sufficiency, value, or validity of any of the
Assets, or for the validity or sufficiency of the Transaction Documents, other
than the certificate of authentication on the Certificates.
(f) The Owner Trustee shall not be liable to any Noteholder or
Certificateholder, other than as expressly provided for in this Agreement or
expressly agreed to in the other Transaction Documents.
(g) The Owner Trustee shall not be liable for the default or misconduct
of the Depositor, the Indenture Trustee, the Administrator, or the Master
Servicer under any of the Transaction Documents or otherwise. The Owner Trustee
shall have no duty to perform the obligations of the Trust or the Owner Trustee
or any other person under this Agreement or the other Transaction Documents that
are required to be performed by the Administrator under the Administration
Agreement, the Indenture Trustee under the Indenture, the Master Servicer
29
under the Sale and Servicing Agreement, or the Depositor under the Sale and
Servicing Agreement, or any other person under any other Transaction Document.
(h) The Owner Trustee need not exercise any of the rights or powers
vested in it by this Agreement, or to institute, conduct, or defend any
litigation under this Agreement or any other Transaction Document or otherwise,
at the request, order, or direction of the Certificateholders, unless one or
more Certificateholders have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs and liabilities that may be incurred by the
Owner Trustee thereby.
(i) The right of the Owner Trustee to perform any discretionary act in
this Agreement or in any other Transaction Document shall not be construed as a
duty, and the Owner Trustee shall not be answerable other than for its gross
negligence or willful misconduct in the performance of any discretionary act.
Section 7.02 Furnishing Documents.
The Owner Trustee shall furnish to the Certificateholders, promptly on
written request, copies of all reports, notices, requests, demands,
certificates, financial statements, and any other instruments furnished to the
Owner Trustee under the Transaction Documents.
Section 7.03 Representations and Warranties.
Wilmington Trust Company hereby represents and warrants to the
Depositor that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver, and perform its obligations
under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution and delivery by it of this Agreement, nor the
consummation by it of the transactions contemplated by this Agreement, nor
compliance by it with any of the provisions of this Agreement will contravene
any federal or Delaware law, governmental rule, or regulation governing the
banking or trust powers of the Owner Trustee, or any judgment or order binding
on it, or constitute a default under its charter documents or bylaws.
Section 7.04 Reliance; Advice of Counsel.
(a) The Owner Trustee shall not be liable to anyone in acting under
this Agreement on any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond, or other document or paper
believed by it to be genuine or believed by it to be signed by the proper
parties. The Owner Trustee may accept a certified copy of a resolution of the
board of directors or other governing body of any corporate party as conclusive
evidence that the resolution has been duly adopted and that it is in full force
and effect. As to any fact or
30
matter the method of determination of which is not specifically prescribed in
this Agreement, the Owner Trustee may for all purposes of this Agreement
conclusively rely on a certificate, signed by a Responsible Officer of the
relevant party, as to the fact or matter, and that certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance on it.
(b) In the exercise or administration of the trusts under this
Agreement and in the performance of its obligations under this Agreement or the
other Transaction Documents, the Owner Trustee (1) may act directly or through
its agents or attorneys under agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of those agents
or attorneys if they were selected by the Owner Trustee with reasonable care and
(2) may consult with counsel, accountants, and other skilled persons it selects
with reasonable care. The Owner Trustee shall not be liable for anything done,
suffered, or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants, or other persons.
Section 7.05 Not Acting in Individual Capacity.
Except as provided in this Article, (1) in acting in the capacity of
Owner Trustee pursuant to the trusts created by this Agreement, Wilmington Trust
Company acts solely as Owner Trustee under this Agreement and not in its
individual capacity, and (2) all persons having any claim against the Owner
Trustee under this Agreement or any other Transaction Document shall look only
to the Assets for payment or satisfaction of that claim.
Section 7.06 Owner Trustee Not Liable for Certificates or Payment
Obligations.
The recitals in this Agreement and in the Certificates (other than the
signature and authentication of the Owner Trustee on the Certificates) shall be
taken as the statements of the Depositor, and the Owner Trustee assumes no
responsibility for their correctness. The Owner Trustee makes no representations
as to the validity or sufficiency of this Agreement, of any other Transaction
Document, of the Certificates (other than the signature and authentication of
the Owner Trustee on the Certificates), of any Mortgage Loan or related
documents. The Owner Trustee shall not have any responsibility for
(1) the legality, validity, and enforceability of any Mortgage
Loan, or
(2) the perfection and priority of any security interest
created in any Mortgage Loan or the maintenance of that perfection and
priority, or
(3) the sufficiency of the Assets or their ability to generate
the payments to be distributed under this Agreement or the Noteholders
under the Indenture, or
(4) the performance or enforcement of any Mortgage Loan, or
(5) the compliance by the Depositor or the Master Servicer
with any warranty or representation made under any Transaction Document
or in any related document, or
31
(6) any action of the Administrator, the Indenture Trustee, or
the Master Servicer or any subservicer taken in the name of the Owner
Trustee.
Section 7.07 Owner Trustee May Own Notes.
Wilmington Trust Company in its individual or any other capacity may
become the owner or pledgee of the Notes and may deal with the Depositor, the
Administrator, the Indenture Trustee, and the Master Servicer in banking
transactions with the same rights as it would have if it were not Owner Trustee.
ARTICLE 8
COMPENSATION OF OWNER TRUSTEE
Section 8.01 Owner Trustee's Fees.
The Owner Trustee shall receive, as compensation from the Sponsor for
its services under this Agreement, fees that have been separately agreed on in a
fee agreement between the Sponsor and the Owner Trustee.
Section 8.02 Reimbursement and Indemnification.
(a) The Owner Trustee shall be entitled to be reimbursed for its
reasonable expenses (including reasonable attorneys' fees) incurred in the
performance of its duties as Owner Trustee under this Agreement, except to the
extent that such expenses arise out of or result from
o the Owner Trustee's own willful misconduct, bad faith, or
gross negligence,
o the inaccuracy of any of the Owner Trustee's
representations or warranties in Section 7.03,
o taxes based on or measured by any fees, commissions, or
compensation received by the Owner Trustee for acting as such in
connection with any of the transactions contemplated by this
Agreement or any other Transaction Document, or
o the Owner Trustee's failure to use reasonable care to
receive, manage, and disburse moneys actually received by it in
accordance with this Agreement.
(b) The Owner Trustee is hereby indemnified against any liabilities,
obligations, indemnity obligations, losses (excluding loss of anticipated
profits), damages, claims, actions, suits, judgments, out-of-pocket costs,
expenses, and disbursements (including legal and consultants' fees and expenses)
and taxes of any kind whatsoever (collectively, the "Liabilities") that may be
imposed on, incurred by, or asserted at any time against it in any way relating
to or arising out of the Trust Estate, any of the properties included in the
Trust Estate, the administration of the Trust Estate, or any action or inaction
of the Owner Trustee under this
32
Agreement or under the Transaction Documents, except to the extent that such
Liabilities arise out of or result from
o the Owner Trustee's own willful misconduct, bad faith, or
gross negligence,
o the inaccuracy of any of the Owner Trustee's
representations or warranties in Section 7.03,
o taxes based on or measured by any fees, commissions, or
compensation received by the Owner Trustee for acting as such in
connection with any of the transactions contemplated by this
Agreement or any other Transaction Document, or
o the Owner Trustee's failure to use reasonable care to
receive, manage, and disburse moneys actually received by it in
accordance with this Agreement.
(c) Any amounts payable to the Owner Trustee under this Section 8.02
shall be payable, first, out of amounts on deposit in the Collection Account
before payments on the Certificates, second, to the extent not paid pursuant to
clause first within 60 days of first being incurred, by the Holder of the R-1
Certificates, and third, to the extent not paid pursuant to clause first and
second within 60 days of first being incurred, by Countrywide Home Loans, Inc.
(d) The indemnities in this Section 8.02 shall survive the termination
of this Agreement and the removal or resignation of the Owner Trustee under this
Agreement.
(e) Losses, claims, damages, liabilities, and expenses in any way
attributable to defaults on the Mortgage Loans are excluded from the coverage of
the provisions of this Section.
Section 8.03 Payments to Owner Trustee.
Any amounts paid to the Owner Trustee pursuant to this Article shall
not be a part of the Assets immediately after their payment. All amounts then
due to the Owner Trustee from the Trust, the Depositor, or the Master Servicer
under any Transaction Document shall be paid in full before any payments to the
Depositor or any holder of a Certificate.
ARTICLE 9
TERMINATION OF AGREEMENT
Section 9.01 Termination of Agreement.
(a) The Trust shall dissolve when the Trust has made the final
distribution of all moneys or other property or proceeds of all Assets in
accordance with the Transaction Documents, and Article V. The bankruptcy,
liquidation, or dissolution of any Certificateholder shall not (x) terminate
this Agreement or the Trust, (y) entitle that Certificateholder's legal
representatives to obtain an accounting or to take any action in any court for a
partition or
33
winding up of any part of the Trust or the Assets, or (z) otherwise affect the
rights and obligations of the parties to this Agreement.
(b) Except as provided in Section 9.01(a), neither the Depositor nor
the Certificateholders may dissolve, revoke, or terminate the Trust.
(c) On the winding up of the Trust and payment of all liabilities of
the Trust in accordance with Section 3808 of the Statutory Trust Statute, the
Owner Trustee shall cancel the Certificate of Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware in accordance
with the provisions of the Statutory Trust Statute. The Owner Trustee may rely
on the directions of the Administrator with respect to winding up the Trust.
Thereupon, this Agreement (other than Article VIII) and the Trust shall
terminate.
ARTICLE 10
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01 Resignation or Removal of Owner Trustee.
The Owner Trustee may at any time resign and be discharged from the
trusts created by this Agreement by giving written notice of resignation to the
Administrator, and the Depositor. When it receives a notice of resignation, the
Administrator shall promptly appoint in writing a successor Owner Trustee,
delivered to the resigning Owner Trustee and to the successor Owner Trustee. If
no successor Owner Trustee has been so appointed and assumed trusteeship within
thirty days after the notice of resignation, the resigning Owner Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Owner Trustee.
The Administrator may remove the Owner Trustee if at any time the Owner
Trustee is legally unable to act, or an Insolvency Event occurs with respect to
the Owner Trustee. If the Administrator removes the Owner Trustee under the
authority of the preceding sentence, the Administrator shall promptly appoint a
successor Owner Trustee in writing delivered to the outgoing Owner Trustee and
to the successor Owner Trustee, and shall pay all fees and expenses owed to the
outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee shall not become effective until acceptance of the
appointment by the successor Owner Trustee pursuant to Section 10.02 and payment
of all fees and expenses of the outgoing Owner Trustee. The Administrator shall
provide notice of any resignation or removal of the Owner Trustee to each of the
Rating Agencies, the Depositor, and the Credit Enhancer.
Section 10.02 Successor Owner Trustee.
Any successor Owner Trustee appointed pursuant to Section 10.01 shall
execute and deliver to the Administrator, the Depositor, and to the predecessor
Owner Trustee an instrument accepting appointment as trustee under this
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective. The successor Owner
34
Trustee shall become fully vested with all the rights and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Owner Trustee without any further act, deed, or conveyance. The predecessor
Owner Trustee shall promptly deliver to the successor Owner Trustee all
documents, statements, and monies held by it under this Agreement. The
Administrator and the predecessor Owner Trustee shall execute and deliver any
instruments and do anything else for fully and certainly vesting and confirming
in the successor Owner Trustee all rights and obligations under this Agreement.
When a successor Owner Trustee accepts its appointment pursuant to this
Section, the Administrator shall mail notice of the change in trustee to the
Certificateholders, the Depositor, the Indenture Trustee, the Noteholders, the
Credit Enhancer, and the Rating Agencies. If the Administrator fails to mail
that notice within ten days after acceptance of appointment by the successor
Owner Trustee, the successor Owner Trustee shall mail that notice at the expense
of the Administrator.
The successor Owner Trustee shall file an amendment to the Certificate
of Trust with the Secretary of State of the State of Delaware identifying the
name and principal place of business in the State of Delaware of the successor
Owner Trustee.
Section 10.03 Merger or Consolidation of Owner Trustee.
Any person into which the Owner Trustee may be merged or converted or
with which it may be consolidated, or any person resulting from any merger,
conversion, or consolidation to which the Owner Trustee is a party, or any
person succeeding to all or substantially all of the corporate trust business of
the Owner Trustee, shall be the successor of the Owner Trustee under this
Agreement without the execution or filing of any instrument or any further act
on the part of any of the parties to this Agreement, anything to the contrary
notwithstanding. The Owner Trustee shall mail notice of the merger or
consolidation or other action to each Rating Agency.
Section 10.04 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 Assets may at any time be located, the Administrator and the
Owner Trustee acting jointly shall execute and deliver all instruments to
appoint persons approved by the Administrator, and Owner Trustee to act as
co-trustee, jointly with the Owner Trustee, or as separate trustee, of all or
any part of the Assets, and to vest in that person, in that capacity, such title
to the Assets or any part thereof and, subject to the other provisions of this
Section, such rights and obligations as the Administrator and the Owner Trustee
consider appropriate. If the Administrator has not joined in the appointment
within fifteen days after the receipt by it of a request so to do, the Owner
Trustee alone may make the appointment. No notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.02.
Each separate trustee and co-trustee shall be appointed and act subject
to the following provisions and conditions:
35
(a) All rights and obligations conferred or imposed on the Owner
Trustee shall be conferred on and exercised or performed by the Owner Trustee
and the separate trustee or co-trustee jointly (the separate trustee or
co-trustee is not authorized to act separately without the Owner Trustee joining
in the act), except to the extent that under applicable law the Owner Trustee is
incompetent or unqualified to perform the acts, in which case those rights and
obligations (including the holding of title to the Assets or any portion of them
in that jurisdiction) shall be exercised and performed singly by the separate
trustee or co-trustee, but solely at the direction of the Owner Trustee;
(b) No trustee under this Agreement shall be personally liable for any
act or omission of any other trustee under this Agreement; and
(c) The Administrator and the Owner Trustee acting jointly 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 Owner Trustee shall
be considered 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 the conditions of
this Article. 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 Owner Trustee or separately,
as may be provided in the instrument of appointment. Each instrument of
appointment shall be filed with the Owner Trustee and a copy of it given to the
Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act with respect to 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, and obligations shall vest in and be exercised by
the Owner Trustee, to the extent permitted by law, without the appointment of a
new or successor co-trustee or separate trustee.
ARTICLE 11
MISCELLANEOUS
Section 11.01 Supplements and Amendments.
(a) This Agreement may be amended in any way by the Depositor and the
Owner Trustee, with the consent of any affected Certificateholder and the Credit
Enhancer, but only if the Rating Agency Condition is satisfied and the amendment
would not cause any adverse tax event for any Noteholder. In addition, if the
Owner Indenture Trustee has been provided an Opinion of Counsel to the effect
that such action is necessary or helpful to, as applicable, maintain such
qualification, avoid or minimize the risk of the imposition of such a tax, or
36
comply with any such requirements of the Code, then this Agreement may be
amended by the Depositor and the Owner Trustee, with the consent of the Credit
Enhancer but without the consent of any Certificateholder,
(1) to modify, eliminate, or add to the provisions of this
Agreement to the extent appropriate to maintain the qualification of
the Trust as a REMIC under the Code,
(2) to avoid or minimize the risk of the imposition of any tax
on the Trust pursuant to the Code that would be a claim against the
Trust at any time before the final redemption of the Certificates, or
(3) to comply with any other requirements of the Code.
Promptly after the execution of any amendment or consent, the Owner
Trustee shall furnish a copy of the amendment or consent to the
Certificateholders, the Credit Enhancer, the Indenture Trustee, and each Rating
Agency.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause its filing with the Secretary of State of
the State of Delaware.
The Owner Trustee may, but shall not be obligated to, enter into any
amendment that affects the Owner Trustee's own rights or obligations under this
Agreement or otherwise.
Notwithstanding any contrary provision of this Agreement, the Owner
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that the amendment will
not cause the imposition of any tax on any REMIC or the Certificateholders or
cause any REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding. In connection with the execution of any amendment to this
Agreement, the Certificate of Trust, or any amendment of any other agreement to
which the Trust is a party, the Owner Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel to the effect that the amendment is
authorized or permitted by this Agreement and the Transaction Documents.
(b) Notwithstanding anything to the contrary in this Agreement, before
the issuance of the Notes the Certificateholders may amend this Agreement
without the consent of any other party. Promptly after the execution of any
amendment pursuant to this paragraph, the Certificateholders shall furnish a
copy of the amendment to the Owner Trustee and the Credit Enhancer.
Section 11.02 Limitations on Rights of Others.
The provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Depositor, the Certificateholders, the Administrator, and, to
the extent expressly provided in this Agreement, the Indenture Trustee, the
Credit Enhancer, and the Noteholders, and nothing in this Agreement, whether
express or implied, shall be construed to give to any other person any legal or
equitable interest in the Assets or under this Agreement.
37
Section 11.03 Notices.
(a) Except where telephonic instructions or notices are specifically
authorized, all notices, demands, instructions, consents, and other
communications required or permitted under this Agreement shall be in writing
and shall be personally delivered or sent by first class or express mail
(postage prepaid), national overnight courier service, or by facsimile
transmission or other electronic communication device capable of transmitting or
creating a written record (confirmed by first class mail) and shall be
considered to be given for purposes of this Agreement on the day that the
writing is delivered to its intended recipient. Unless otherwise specified in a
notice sent or delivered in accordance with this Section, notices, demands,
instructions, and other communications in writing shall be given to or made on
the respective parties at their respective addresses indicated in the Adoption
Annex attached to the Indenture, and, in the case of telephonic instructions or
notices, by calling the telephone number indicated for the party therein.
(b) Any notice required or permitted to be given to the
Certificateholders shall be given by first-class mail, postage prepaid, at the
addresses of the Certificateholders. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder receives the notice.
Section 11.04 Severability.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
the prohibition or unenforceability without invalidating the remaining
provisions of this Agreement, and that prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable the provision in any
other jurisdiction.
Section 11.05 Separate Counterparts.
This Agreement may be executed by the parties to this Agreement in
separate counterparts, each of which when so executed and delivered shall be an
original, but all the counterparts shall together constitute but one instrument.
Section 11.06 Successors and Assigns.
All covenants and agreements in this Agreement shall be binding on, and
inure to the benefit of, each of the Depositor and its permitted assignees, the
Owner Trustee and its successors, and each Certificateholder and any of its
successors, all as provided in this Agreement. Any request, notice, direction,
consent, waiver or other instrument or action by any Certificateholder shall
bind its successors.
Section 11.07 Nonpetition Covenant.
Notwithstanding any prior termination of this Agreement, the Depositor
and the Owner Trustee, by entering into this Agreement, and each
Certificateholder, by accepting a Certificate, agree that they shall not, before
the date that is one year and one day after the termination of the Agreement,
file or participate in the filing of any petition against the Trust that could
cause the Trust to incur an Insolvency Event. Nothing in this Agreement shall
prohibit the Owner Trustee
38
from participating in or filing proofs of claim in any such proceeding
instituted by any other person.
Section 11.08 No Recourse.
Each Certificateholder by accepting a Certificate acknowledges that the
Certificate represents the beneficial interest in the Trust only and does not
represent interests in or obligations of the Depositor, the Servicer, the
Administrator, the Owner Trustee, the Indenture Trustee, or any Affiliate of any
of them and no recourse may be had against those parties or their assets, except
as may be expressly stated or contemplated in this Agreement, the other
Transaction Documents, or the Certificates.
Section 11.09 Headings.
The headings of the various Articles and Sections in this Agreement are
for convenience of reference only and shall not define or limit any of the
provisions of this Agreement.
Section 11.10 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS PROVISIONS THAT
WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
Section 11.11 Rule 144A Information.
As long as any of the securities of this Trust are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, the
Administrator on behalf of the Trust shall provide to any Noteholder or
Certificateholder and to any prospective purchaser from any of them designated
by any of them on the request of the Noteholder, Certificateholder, or
prospective purchaser, any information required to be provided the holder or
prospective purchaser to satisfy the conditions of Rule 144A(d)(4) under the
Securities Act.
Section 11.12 Third-Party Beneficiary.
The Credit Enhancer is a third-party beneficiary of this Agreement and
is entitled to the rights and benefits given to it under this Agreement as if it
were a party to this Agreement.
39
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
CWHEQ, INC.
Depositor
By: /s/ Xxxxxx Xxxxx
--------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
WILMINGTON TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Financial Services Officer
COUNTRYWIDE HOME LOANS, INC.
Master Servicer
With respect to Article 8 only
By: /s/ Xxxxxx Xxxxx
--------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
40
EXHIBIT A
FORM OF CERTIFICATE OF TRUST OF
CWHEQ REVOLVING HOME EQUITY LOAN TRUST, SERIES 200[__]-[__]
This Certificate of Trust of CWHEQ Revolving Home Equity Loan Trust,
Series 200[__]-[__] (the "Trust"), dated [_____], 200[__], is being duly
executed and filed by Wilmington Trust Company, a Delaware banking corporation,
as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12
Del. Code, ss. 3801 et seq.) (the "Act").
1. Name. The name of the statutory trust is CWHEQ Revolving Home Equity
Loan Trust, Series 200[__]-[__].
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is Wilmington Trust Company,
[________________], [_________], Delaware _____, Attention: [________________].
3. Effective Date. This Certificate of Trust shall be effective upon
its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY,
Address: not in its individual capacity,
Xxxxxx Square North but solely as owner trustee
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
By: ____________________________
Name:
Title:
X-0
XXXXXXX X-0
[FORM OF] CLASS C CERTIFICATE
This certificate has not been and will not be registered under the Securities
Act of 1933, as amended, or the securities laws of any state and may not be
resold or transferred unless it is registered pursuant to the Securities Act of
1933 and the securities laws of any state or is sold or transferred in
transactions that are exempt from registration under the Securities Act of 1933
and under applicable state law and is transferred in accordance with Section
3.10 of the Trust Agreement related to CWHEQ Revolving Home Equity Loan Trust,
Series 200[__]-[__]. Neither this certificate nor any interest in it may be
transferred unless the transferee delivers to the trustee either a
representation letter to the effect that the transferee is not an employee
benefit plan subject to the Employee Retirement Income Security Act of 1974, as
amended, a plan subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or a person acting on behalf of or using the assets of any
such plan; or an opinion of counsel in accordance with Section 3.10(c) of the
Trust Agreement related to CWHEQ Revolving Home Equity Loan Trust, Series
200[__]-[__]. Notwithstanding anything else to the contrary herein, any
purported transfer of this certificate to or on behalf of an employee benefit
plan subject to ERISA or to Section 4975 of the Code without the opinion of
counsel satisfactory to the trustee as described above shall be void.
Solely for U.S. federal income tax purposes, this certificate is a "regular
interest" in a "Real Estate Mortgage Investment Conduit" as those terms are
defined, respectively, in Sections 860G and 860D of the Code.
B-1-1
Date of Trust Agreement : [______], 200[__]
Cut-off Date : [______], 200[__]
Notional Amount : [_______]
Certificate No. : [_______]
First Distribution Date : [_______]
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATE
CWHEQ REVOLVING HOME EQUITY LOAN TRUST, SERIES 200[__]-[__]
Class C Certificate
evidencing a percentage interest in the distributions allocable to the Class C
Certificates evidencing an undivided interest in a trust consisting primarily of
a pool of adjustable rate home equity revolving credit line Mortgage Loans sold
by
CWHEQ, INC.
This Certificate does not represent an obligation of or interest in
CWHEQ, Inc. (the "Depositor"), Countrywide Home Loans, Inc., or the Owner
Trustee or any of their affiliates. Neither this Certificate nor the underlying
Assets are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [____________________________] is the registered
owner of the Percentage Interest evidenced by this Certificate in the entire
interest in the CWHEQ Revolving Home Equity Loan Trust, Series 200[__]-[__] (the
"Trust"), consisting primarily of a pool of Mortgage Loans (the "Mortgage
Loans") transferred by the Depositor and serviced by Countrywide Home Loans,
Inc. (in that capacity, the "Master Servicer"). The Trust was formed pursuant to
the Trust Agreement, dated as of [_____], 200[__] (the "Agreement"), between the
Depositor and Wilmington Trust Company, as trustee (the "Owner Trustee"), a
summary of some of the pertinent provisions of which follows. Capitalized terms
used in this Certificate without definition have the meanings assigned in the
Agreement or the Sale and Servicing Agreement. This Certificate is issued under
and is subject to the Agreement. The Holder of this Certificate by virtue of the
acceptance of it agrees to be bound by the Agreement.
This Certificate is one of the Certificates from a duly authorized
issue of Certificates designated as Revolving Home Equity Loan Asset Backed
Certificates, Series 200[__]-[__], representing, to the extent specified in the
Agreement, an undivided interest in:
(1) each Mortgage Loan, including its Asset Balance (including
all Additional Balances), the related Mortgage File, all property that
secures the Mortgage Loans, and all collections received on it after
the Cut-off Date (excluding payments due by the Cut-off Date);
(2) property that secured a Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(3) the Depositor's rights under the Purchase Agreement;
B-1-1
(4) the Depositor's rights under the hazard insurance policies
covering Mortgaged Properties; and
(5) certain other property described in the Agreement and
Section 2.01 of the Sale and Servicing Agreement (collectively, the
"Assets").
A first priority security interest in all the Assets has been granted to the
Indenture Trustee under the Indenture.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds available under the Agreement for payment
of this Certificate and that the Owner Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights, and limitations of
rights and obligations evidenced by this Certificate, and the rights and
obligations of the Owner Trustee.
The Agreement may be amended in any way by the Depositor and the Owner
Trustee, with the consent of any affected Certificateholder and the Credit
Enhancer but only if the Rating Agency Condition is satisfied and the amendment
would not cause any adverse tax event for any Noteholder.
No transfer of this Certificate shall be made unless the transfer is
exempt from the registration requirements of the Securities Act of 1933 (the
"Act") and any applicable state securities laws or is made in accordance with
the Act and those laws. In connection with any transfer of this Certificate, the
Owner Trustee will require either:
(i) the transferee to execute an investment letter acceptable
to and in form and substance satisfactory to the Owner Trustee
certifying to the Owner Trustee the facts surrounding the transfer,
which investment letter shall not be an expense of the Owner Trustee or
(ii) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Owner Trustee and the Depositor that the
transfer may be made pursuant to an exemption from the Act, describing
the applicable exemption and its basis, or is being made pursuant to
the Act, which Opinion of Counsel shall not be an expense of the Owner
Trustee or the Depositor.
In connection with any transfer of this Certificate, the holder transferring
this Certificate shall indemnify the Trust against any liability that may result
if the transfer is not so exempt or is not made in accordance with any federal
and state laws.
Neither this Certificate nor any legal or beneficial interest in it may
be, directly or indirectly, purchased, transferred, sold, pledged, assigned, or
otherwise disposed of, and any
B-1-2
proposed transferee of this Certificate shall not become its registered Holder,
unless the conditions in Section 3.10 of the Agreement are satisfied.
No service charge shall be made for the registration of transfer or
exchange of this Certificate, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of this
Certificate.
The Owner Trustee, the Certificate Registrar, and any Certificate
Paying Agent will treat the person in whose name this Certificate is registered
in the Certificate Register as its owner for the purpose of receiving
distributions pursuant to Section 5.02 of the Agreement and for all other
purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar,
and any Certificate Paying Agent shall be bound by any notice to the contrary.
The obligations created by the Agreement will terminate and this
Certificate will be retired and the Trust will be dissolved when the Trust has
made the final distribution of all moneys or other property or proceeds of all
Assets in accordance with the Transaction Documents and Article V of the
Agreement. The Holder of the R-1 Certificates, with the consent of the Credit
Enhancer, may effect the transfer of all the Mortgage Loans at their termination
purchase price on any Payment Date on or after which the aggregate Note
Principal Balance of the Principal Amount Notes is less than or equal to 10% of
the Original Note Principal Balance of the Principal Amount Notes. This transfer
will result in the termination of the Agreement and the dissolution of the
Trust.
B-1-3
Unless the certificate of authentication on this Certificate has been
executed by the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
Dated: [________________]
CWHEQ Revolving Home Equity Loan Trust,
Series 200[__]-[__]
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By: _______________________________
Name:
Title:
Certificate of Authentication:
This is one of the Certificates
referenced in the within-mentioned Agreement.
THE BANK OF NEW YORK,
as Indenture Trustee
By: ________________________
Authorized Officer
X-0-0
XXXXXXX X-0
[FORM OF] CLASS E-P CERTIFICATE
This certificate has not been and will not be registered under the Securities
Act of 1933, as amended, or the securities laws of any state and may not be
resold or transferred unless it is registered pursuant to the Securities Act of
1933 and the securities laws of any state or is sold or transferred in
transactions that are exempt from registration under the Securities Act of 1933
and under applicable state law and is transferred in accordance with Section
3.10 of the Trust Agreement related to CWHEQ Revolving Home Equity Loan Trust,
Series 200[__]-[__]. Neither this certificate nor any interest in it may be
transferred unless the transferee delivers to the trustee either a
representation letter to the effect that the transferee is not an employee
benefit plan subject to the Employee Retirement Income Security Act of 1974, as
amended, a plan subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or a person acting on behalf of or using the assets of any
such plan; or an opinion of counsel in accordance with Section 3.10(c) of the
Trust Agreement related to CWHEQ Revolving Home Equity Loan Trust, Series
200[__]-[__]. Notwithstanding anything else to the contrary herein, any
purported transfer of this certificate to or on behalf of an employee benefit
plan subject to ERISA or to Section 4975 of the Code without the opinion of
counsel satisfactory to the trustee as described above shall be void.
Solely for U.S. federal income tax purposes, this certificate is a "regular
interest" in a "Real Estate Mortgage Investment Conduit" as those terms are
defined, respectively, in Sections 860G and 860D of the Code.
This Class E-P Certificate will not be entitled to payments until such time as
described in the Trust Agreement and the Indenture.
B-2-1
Date of Trust Agreement : [____________], 200[__]
Cut-off Date : [____________], 200[__]
Percentage Interest : 100%
Certificate No. : [____________]
First Distribution Date : [____________], 200[__]
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATE
CWHEQ REVOLVING HOME EQUITY LOAN TRUST, SERIES 200[__]-[__]
Class E-P Certificate
evidencing a percentage interest in the distributions
allocable to the Class E-P Certificates evidencing an
undivided interest in a trust consisting primarily of a pool
of adjustable rate home equity revolving credit line Mortgage
Loans sold by
CWHEQ, INC.
This Certificate does not represent an obligation of or an interest in,
and is not guaranteed by CWHEQ, Inc. (the "Depositor"), Countrywide Home Loans,
Inc., or the Owner Trustee or any of their affiliates. Neither this Certificate
nor the underlying Assets are guaranteed or insured by any governmental agency
or instrumentality.
This certifies that [____________________________] is the registered
owner of the Percentage Interest evidenced by this Certificate in certain
monthly distribution in the CWHEQ Revolving Home Equity Loan Trust, Series
200[__]-[__] (the "Trust"), consisting primarily of a pool of Mortgage Loans
(the "Mortgage Loans") transferred by the Depositor and serviced by Countrywide
Home Loans, Inc. (in that capacity, the "Master Servicer"). The Trust was formed
pursuant to the Trust Agreement, dated as of [_____], 200[__] (the "Agreement"),
between the Depositor and Wilmington Trust Company, as trustee (the "Owner
Trustee"), a summary of some of the pertinent provisions of which follows.
Capitalized terms used in this Certificate without definition have the meanings
assigned in the Agreement, in the Transfer Affidavit attached thereto as Annex 1
to Exhibit C-2, or the Sale and Servicing Agreement. This Certificate is issued
under and is subject to the Agreement. The Holder of this Certificate by virtue
of the acceptance of it agrees to be bound by the Agreement.
This Certificate is one of the Certificates from a duly authorized
issue of Certificates designated as Revolving Home Equity Loan Asset Backed
Certificates, Series 200[__]-[__], representing, to the extent specified in the
Agreement, an undivided interest in:
(i) each Mortgage Loan, including its Asset Balance (including
all Additional Balances), the related Mortgage File, all property that
secures the Mortgage Loans, and all collections received on it after
the Cut-off Date (excluding payments due by the Cut-off Date);
B-2-2
(ii) property that secured a Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(iii) the Depositor's rights under the Purchase Agreement;
(iv) the Depositor's rights under the hazard insurance
policies covering Mortgaged Properties; and
(v) certain other property described in the Agreement and
Section 2.01 of the Sale and Servicing Agreement (collectively, the
"Assets").
A first priority security interest in all the Assets has been granted
to the Indenture Trustee under the Indenture.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds available under the Agreement for payment
of this Certificate and that the Owner Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights, and limitations of
rights and obligations evidenced by this Certificate, and the rights and
obligations of the Owner Trustee.
The Agreement may be amended in any way by the Depositor and the Owner
Trustee, with the consent of any affected Certificateholder and the Credit
Enhancer but only if the Rating Agency Condition is satisfied and the amendment
would not cause any adverse tax event for any Noteholder.
No transfer of this Certificate shall be made unless the transfer is
exempt from the registration requirements of the Securities Act of 1933 (the
"Act") and any applicable state securities laws or is made in accordance with
the Act and those laws. In connection with any transfer of this Certificate, the
Owner Trustee will require either:
(i) the transferee to execute an investment letter acceptable
to and in form and substance satisfactory to the Owner Trustee
certifying to the Owner Trustee the facts surrounding the transfer,
which investment letter shall not be an expense of the Owner Trustee or
(ii) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Owner Trustee and the Depositor that the
transfer may be made pursuant to an exemption from the Act, describing
the applicable exemption and its basis, or is being made pursuant to
the Act, which Opinion of Counsel shall not be an expense of the Owner
Trustee or the Depositor.
No transfer of a Class E-P Certificate shall be made unless the Owner
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Owner Trustee, to the effect that such transferee
B-2-3
is not an employee benefit plan 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
or investing plan assets of any such benefit plan or arrangement, which
representation letter shall not be an expense of the Owner Trustee, the Master
Servicer or the Trust, or (ii) in the case of any such Certificate presented for
registration in the name of an employee benefit plan subject to ERISA or a plan
or arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), a trustee of any such benefit plan or arrangement or
any other person acting on behalf of any such benefit plan or arrangement, an
Opinion of Counsel satisfactory to the Owner Trustee to the effect that the
purchase and holding of such Certificate will not result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, and will not
subject the Owner Trustee or the Master Servicer to any obligation in addition
to those undertaken in the Agreement, which Opinion of Counsel shall not be an
expense of the Owner Trustee, the Master Servicer or the Trust. Notwithstanding
anything else to the contrary herein, any purported transfer of a Class E-P
Certificate to or on behalf of an employee benefit plan subject to ERISA or a
plan or arrangement subject to Section 4975 of the Code without the opinion of
counsel satisfactory to the Owner Trustee as described above shall be void and
of no effect.
Each Holder of this Class E-P Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement
In connection with any transfer of this Certificate, the holder
transferring this Certificate shall indemnify the Trust against any liability
that may result if the transfer is not so exempt or is not made in accordance
with any federal and state laws.
Neither this Certificate nor any legal or beneficial interest in it may
be, directly or indirectly, purchased, transferred, sold, pledged, assigned, or
otherwise disposed of, and any proposed transferee of this Certificate shall not
become its registered Holder, unless the conditions in Section 3.10 of the
Agreement are satisfied.
No service charge shall be made for the registration of transfer or
exchange of this Certificate, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of this
Certificate.
The Owner Trustee, the Certificate Registrar, and any Certificate
Paying Agent will treat the person in whose name this Certificate is registered
in the Certificate Register as its owner for the purpose of receiving
distributions pursuant to Section 5.02 of the Agreement and for all other
purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar,
and any Certificate Paying Agent shall be bound by any notice to the contrary.
The obligations created by the Agreement will terminate and this
Certificate will be retired and the Trust will be dissolved when the Trust has
made the final distribution of all moneys or other property or proceeds of all
Assets in accordance with the terms of the
B-2-4
Transaction Documents and Article V of the Agreement. The Holder of the R-1
Certificates, with the consent of the Credit Enhancer, may effect the transfer
of all the Mortgage Loans at their termination purchase price on or after which
the aggregate Note Principal Balance of the Principal Amount Notes is less than
or equal to 10% of the Original Note Principal Balance of the Principal Amount
Notes. This transfer will result in the termination of the Agreement and the
dissolution of the Trust.
B-2-5
Unless the certificate of authentication on this Certificate has been
executed by the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
Dated: [________________]
CWHEQ Revolving Home Equity Loan Trust,
Series 200[__]-[__]
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By: _______________________________
Name:
Title:
Certificate of Authentication:
This is one of the Certificates
referenced in the within-mentioned Agreement.
THE BANK OF NEW YORK,
as Indenture Trustee
By: ________________________
Authorized Officer
B-2-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
----------------------------------------------------------------
Dated:
--------------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to,
---------------------------------------------
-----------------------------------------------------------------------------
,
-----------------------------------------------------------------------------
for the account of ,
----------------------------------------------------------
account number , or, if mailed by check, to
------------------------ ---------
.
-----------------------------------------------------------------------------
Applicable
B-2-7
statements should be mailed to ,
-----------------------------------------------
-----------------------------------------------------------------------------
.
-----------------------------------------------------------------------------
This information is provided by , the
------------------------------------
assignee named above, or , as
------------------------------------------------
its agent.
STATE OF )
) ss.:
COUNTY OF )
On the __ day of _____________, _____ before me, a notary public in and
for said State, personally appeared ______________ __________, known to me who,
being by me duly sworn, did depose and say that he executed the foregoing
instrument.
---------------------------------
Notary Public
[Notarial Seal]
X-0-0
XXXXXXX X-0
[FORM OF] CLASS [R-1][R-2] CERTIFICATE
Solely for U.S. federal income tax purposes, this certificate is a "residual
interest" in a "Real Estate Mortgage Investment Conduit," as those terms are
defined, respectively, in sections 860G and 860D of the Internal Revenue Code of
1986, as amended (the "Code").
This certificate has not been and will not be registered under the Securities
Act of 1933, as amended, or the securities laws of any state and may not be
resold or transferred unless it is registered pursuant to the Securities Act of
1933 and the securities laws of any state or is sold or transferred in
transactions that are exempt from registration under the Securities Act of 1933
and under applicable state law and is transferred in accordance with Section
3.10 of the trust agreement related to CWHEQ Revolving Home Equity Loan Trust,
Series 200[__]-[__] (the "Trust Agreement"). Neither this certificate nor any
interest in it may be transferred unless the transferee delivers to the owner
trustee either (a) a representation letter to the effect that the transferee is
not an employee benefit plan subject to Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or a plan subject to Section
4975 of the Code, or a person acting on behalf of, or investing plan assets of,
any such plan, or (b) an opinion of counsel in accordance with Section 3.10(c)
of the Trust Agreement. Notwithstanding anything else to the contrary herein,
any purported transfer of this certificate to or on behalf of an employee
benefit plan subject to ERISA or a plan or arrangement subject to Section 4975
of the Code without the opinion of counsel satisfactory to the owner trustee as
described above shall be void.
[ONLY FOR CLASS R-1 CERTIFICATE-][This certificate will not be entitled to
payments until such time as described in the Trust Agreement. The holder of this
certificate is required to make certain advances of funds to the trust pursuant
to the Trust Agreement. If the holder of this certificate fails to do so it may
be required to sell this certificate to the Sponsor.]
[ONLY FOR CLASS R-1 CERTIFICATE-][This certificate may not be transferred except
to the Master Servicer, the Sponsor, the Depositor or the Trust (or an affiliate
of any of them).]
[ONLY FOR TAX MATTER PERSON CERTIFICATE-][This certificate represents the "Tax
Matters Person Residual Interest" issued under the Trust Agreement and may not
be transferred to any person except in connection with the assumption by the
transferee of the duties of the Tax Matter Person under the Trust Agreement.]
B-3-1
Date of Trust Agreement : [____________], 200[__]
Cut-off Date : [____________], 200[__]
Percentage Interest : [____________]%
Certificate No. : [____________]
First Distribution Date : [____________], 200[__]
CUSIP : [____________]
REVOLVING HOME EQUITY LOAN ASSET BACKED CERTIFICATE
CWHEQ REVOLVING HOME EQUITY LOAN TRUST, SERIES 200[__]-[__]
Class [R-1][R-2] Certificate
evidencing a percentage interest in the distributions
allocable to the Class [R-1][R-2] Certificates evidencing an
undivided interest in a trust consisting primarily of a pool
of adjustable rate home equity revolving credit line Mortgage
Loans sold by
CWHEQ, INC.
This Certificate does not represent an obligation of or an interest in,
and is not guaranteed by CWHEQ, Inc. (the "Depositor"), Countrywide Home Loans,
Inc., or the Owner Trustee or any of their affiliates. Neither this Certificate
nor the underlying Assets are guaranteed or insured by any governmental agency
or instrumentality.
This certifies that [________________] [ONLY FOR TAX MATTER PERSON
CERTIFICATE-][, as Tax Matters Person,] is the registered owner of the
Percentage Interest evidenced by this Certificate in the entire interest in the
CWHEQ Revolving Home Equity Loan Trust, Series 200[__]-[__] (the "Trust"),
consisting primarily of a pool of Mortgage Loans (the "Mortgage Loans")
transferred by the Depositor and serviced by Countrywide Home Loans, Inc. (in
that capacity, the "Master Servicer"). The Trust was formed pursuant to the
Trust Agreement, dated as of [___________], 2006 (the "Agreement"), between the
Depositor and Wilmington Trust Company, as trustee (the "Owner Trustee"), a
summary of some of the pertinent provisions of which follows. Capitalized terms
used in this Certificate without definition have the meanings assigned in the
Agreement, in the Transfer Affidavit attached thereto as Annex 1 to Exhibit C-2,
or the Sale and Servicing Agreement. This Certificate is issued under and is
subject to the Agreement. The Holder of this Certificate by virtue of the
acceptance of it agrees to be bound by the Agreement.
This Certificate is one of the Certificates from a duly authorized
issue of Certificates designated as Revolving Home Equity Loan Asset Backed
Certificates, Series 200[__]-[__], representing, to the extent specified in the
Agreement, an undivided interest in:
(vi) each Mortgage Loan, including its Asset Balance
(including all Additional Balances), the related Mortgage File, all
property that secures the Mortgage Loans, and
B-3-2
all collections received on it after the Cut-off Date (excluding
payments due by the Cut-off Date);
(vii) property that secured a Mortgage Loan that is acquired
by foreclosure or deed in lieu of foreclosure;
(viii) the Depositor's rights under the Purchase Agreement;
(ix) the Depositor's rights under the hazard insurance
policies covering Mortgaged Properties; and
(x) certain other property described in the Agreement and
Section 2.01 of the Sale and Servicing Agreement (collectively, the
"Assets").
A first priority security interest in all the Assets has been granted
to the Indenture Trustee under the Indenture.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds available under the Agreement for payment
of this Certificate and that the Owner Trustee in its individual capacity is not
personally liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
[ONLY FOR THE CLASS R-1 CERTIFICATES-][The Certificateholder, by its
acceptance of this Certificate, agrees that it will advance funds to the Trust
to purchase the Additional Balances that were not funded by Principal
Collections during a Collection Period. If the Holder of the Class R-1
Certificates fails to advance to the Trust these amounts, the Holder of the
Class R-1 Certificates will be required to sell the Class R-1 Certificates to
the Sponsor immediately upon request.]
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights, and limitations of
rights and obligations evidenced by this Certificate, and the rights and
obligations of the Owner Trustee.
The Agreement may be amended in any way by the Depositor and the Owner
Trustee, with the consent of any affected Certificateholder and the Credit
Enhancer but only if the Rating Agency Condition is satisfied and the amendment
would not cause any adverse tax event for any Noteholder.
No transfer of this Certificate shall be made unless the transfer is
exempt from the registration requirements of the Securities Act of 1933 (the
"Act") and any applicable state securities laws or is made in accordance with
the Act and those laws. In connection with any transfer of this Certificate, the
Owner Trustee will require either:
(iii) the transferee to execute an investment letter
acceptable to and in form and substance satisfactory to the Owner
Trustee certifying to the Owner Trustee the facts surrounding the
transfer, which investment letter shall not be an expense of the Owner
Trustee or
B-3-3
(iv) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Owner Trustee and the Depositor that the
transfer may be made pursuant to an exemption from the Act, describing
the applicable exemption and its basis, or is being made pursuant to
the Act, which Opinion of Counsel shall not be an expense of the Owner
Trustee or the Depositor.
Any distribution of the proceeds of any remaining assets of the Trust
Fund to which the holder of this Class [R-1][R-2] Certificate is entitled to
will be made only upon presentment and surrender of this Class [R-1][R-2]
Certificate at the Corporate Trust Office or the office or agency maintained by
the Owner Trustee in Wilmington, Delaware.
No transfer of a Class [R-1][R-2] Certificate shall be made unless the
Owner Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Owner Trustee, to the effect that such transferee is not an
employee benefit plan 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 or
investing plan assets of any such benefit plan or arrangement, which
representation letter shall not be an expense of the Owner Trustee, the Master
Servicer or the Trust, or (ii) in the case of any such Certificate presented for
registration in the name of an employee benefit plan subject to ERISA or a plan
or arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), a trustee of any such benefit plan or arrangement or
any other person acting on behalf of any such benefit plan or arrangement, an
Opinion of Counsel satisfactory to the Owner Trustee to the effect that the
purchase and holding of such Certificate will not result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, and will not
subject the Owner Trustee or the Master Servicer to any obligation in addition
to those undertaken in the Agreement, which Opinion of Counsel shall not be an
expense of the Owner Trustee, the Master Servicer or the Trust. Notwithstanding
anything else to the contrary herein, any purported transfer of a Class
[R-1][R-2] Certificate to or on behalf of an employee benefit plan subject to
ERISA or a plan or arrangement subject to Section 4975 of the Code without the
opinion of counsel satisfactory to the Owner Trustee as described above shall be
void and of no effect.
Each Holder of this Class [R-1][R-2] Certificate will be deemed to have
agreed to be bound by the restrictions of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class [R-1][R-2] Certificate must be a Permitted
Transferee, (ii) no Ownership Interest in this Class [R-1][R-2] Certificate may
be transferred without delivery to the Owner Trustee of (a) a transfer affidavit
of the proposed transferee and (b) a transfer certificate of the transferor,
each of such documents to be in the form described in the Agreement, (iii) each
person holding or acquiring any Ownership Interest in this Class [R-1][R-2]
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Owner Trustee as required pursuant to the Agreement, (iv)
each person holding or acquiring an Ownership Interest in this Class [R-1][R-2]
Certificate must agree not to transfer an Ownership Interest in this Class
[R-1][R-2] Certificate if it has
B-3-4
actual knowledge that the proposed transferee is not a Permitted Transferee and
(v) any attempted or purported transfer of any Ownership Interest in this Class
[R-1][R-2] Certificate in violation of such restrictions will be absolutely null
and void and will vest no rights in the purported transferee.
In connection with any transfer of this Certificate, the holder
transferring this Certificate shall indemnify the Trust against any liability
that may result if the transfer is not so exempt or is not made in accordance
with any federal and state laws.
Neither this Certificate nor any legal or beneficial interest in it may
be, directly or indirectly, purchased, transferred, sold, pledged, assigned, or
otherwise disposed of, and any proposed transferee of this Certificate shall not
become its registered Holder, unless the conditions in Section 3.10 of the
Agreement are satisfied.
No service charge shall be made for the registration of transfer or
exchange of this Certificate, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of this
Certificate.
The Owner Trustee, the Certificate Registrar, and any Certificate
Paying Agent will treat the person in whose name this Certificate is registered
in the Certificate Register as its owner for the purpose of receiving
distributions pursuant to Section 5.02 of the Agreement and for all other
purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar,
and any Certificate Paying Agent shall be bound by any notice to the contrary.
The obligations created by the Agreement will terminate and this
Certificate will be retired and the Trust will be dissolved when the Trust has
made the final distribution of all moneys or other property or proceeds of all
Assets in accordance with the terms of the Transaction Documents and Article V
of the Agreement. The Holder of the R-1 Certificates, with the consent of the
Credit Enhancer, may effect the transfer of all the Mortgage Loans at their
termination purchase price on or after which the aggregate Note Principal
Balance of the Principal Amount Notes is less than or equal to 10% of the
Original Note Principal Balance of the Principal Amount Notes. This transfer
will result in the termination of the Agreement and the dissolution of the
Trust.
B-3-5
Unless the certificate of authentication on this Certificate has been
executed by the Certificate Registrar by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
Dated: [________________]
CWHEQ Revolving Home Equity Loan Trust,
Series 200[__]-[__]
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By: _______________________________
Name:
Title:
Certificate of Authentication:
This is one of the Certificates
referenced in the within-mentioned Agreement.
THE BANK OF NEW YORK,
as Indenture Trustee
By: ________________________
Authorized Officer
B-3-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
----------------------------------------------------------------
Dated:
--------------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to,
---------------------------------------------
-----------------------------------------------------------------------------
,
-----------------------------------------------------------------------------
for the account of ,
----------------------------------------------------------
account number , or, if mailed by check, to
------------------------ ---------
.
-----------------------------------------------------------------------------
Applicable
B-3-7
statements should be mailed to ,
-----------------------------------------------
-----------------------------------------------------------------------------
.
-----------------------------------------------------------------------------
This information is provided by , the
------------------------------------
assignee named above, or , as
------------------------------------------------
its agent.
B-3-8
STATE OF )
) ss.:
COUNTY OF )
On the __ day of _____________, _____ before me, a notary public in and
for said State, personally appeared ______________ __________, known to me who,
being by me duly sworn, did depose and say that he executed the foregoing
instrument.
---------------------------------
Notary Public
[Notarial Seal]
B-3-9
EXHIBIT C-1
FORM OF TRANSFEROR INVESTMENT LETTER
FOR CERTIFICATES
Date:
CWHEQ, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: ________________
Wilmington Trust Company, as Owner Trustee
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Re: CWHEQ Revolving Home Equity Loan Trust, Series
200[__]-[__] Revolving Home Equity Loan Asset Backed
Securities, Series 200[__]-[__] Certificates
--------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the sale by
_____________ (the "Transferor") to ______________________ (the "Transferee") of
the Certificates representing a ____% Percentage Interest (the "Transferred
Certificates"). All capitalized terms used in this certificate without
definition have the meanings given to them in the Trust Agreement, dated as of
[_____], 200 [__], between CWHEQ, Inc., as depositor, and Wilmington Trust
Company, as owner trustee. The Transferor hereby certifies, represents, and
warrants to you that:
1. The Transferor is the lawful owner of the Transferred Certificates
with the full right to transfer them free from any claims and encumbrances
whatsoever.
2. Neither the Transferor nor anyone acting on its behalf has (a)
offered, transferred, pledged, sold, or otherwise disposed of any Certificate,
any interest in any Certificate, or any other similar security to any person in
any manner, (b) solicited any offer to buy or accept a transfer, pledge, or
other disposition of any Certificate, any interest in any Certificate, or any
other similar security from any person in any manner, (c) otherwise approached
or negotiated with respect to any Certificate, any interest in any Certificate
or any
C-1-1
other similar security with any person in any manner, (d) made any general
solicitation by general advertising or in any other manner, or (e) taken any
other action that (in the case of any of the acts described in clauses (a)
through (e) of this paragraph) would constitute a distribution of any
Certificate under the Securities Act of 1933, as amended (the "Securities Act"),
or would render the disposition of any Certificate a violation of Section 5 of
the Securities Act or any state securities laws, or would require registration
or qualification of any Certificate pursuant to the Securities Act or any state
securities laws.
3. The Transferor and any person acting on behalf of the Transferor in
this matter reasonably believe that the Transferee is a "qualified institutional
buyer" as that term is defined in Rule 144A ("Rule 144A") under the Securities
Act (a "Qualified Institutional Buyer") purchasing for its own account or for
the account of a Qualified Institutional Buyer. In determining whether the
Transferee is a Qualified Institutional Buyer, the Transferor and any person
acting on behalf of the Transferor in this matter have relied on the following
to establish the Transferee's ownership and discretionary investments of
securities (check one or more):
|_| The Transferee's most recent publicly available financial
statements, which statements present the information as of a
date within 16 months preceding the date of sale of the
Transferred Certificate in the case of a U.S. purchaser and
within 18 months preceding such date of sale for a foreign
purchaser; or
|_| The most recent publicly available information appearing in
documents filed by the Transferee with the Securities and
Exchange Commission or another United States federal, state,
or local governmental agency or self-regulatory organization,
or with a foreign governmental agency or self-regulatory
organization, which information is as of a date within 16
months preceding the date of sale of the Transferred
Certificate in the case of a U.S. purchaser and within 18
months preceding such date of sale for a foreign purchaser; or
|_| The most recent publicly available information appearing in a
recognized securities manual, which information is as of a
date within 16 months preceding the date of sale of the
Transferred Certificate in the case of a U.S. purchaser and
within 18 months preceding such date of sale for a foreign
purchaser; or
|_| A certification by the chief financial officer, a person
fulfilling an equivalent function, or other executive officer
of the Transferee, specifying the amount of securities owned
and invested on a discretionary basis by the Transferee as of
a specific date on or since the close of the Transferee's most
recent fiscal year, or, in the case of a Transferee that is a
member of a "family of investment companies," as that term is
defined in Rule 144A, a certification by an executive officer
of the investment adviser specifying the amount of securities
owned by the "family of investment companies" as of a specific
date on or since the close of the Transferee's most recent
fiscal year.
C-1-2
4. The Transferor and any person acting on behalf of the Transferor
understand that in determining the aggregate amount of securities owned and
invested on a discretionary basis by an entity for purposes of establishing
whether such entity is a Qualified Institutional Buyer:
o the following instruments and interests shall be excluded: securities
of issuers that are affiliated with the Transferee; securities that are
part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer; securities of issuers that are part of the
Transferee's "family of investment companies," if the Transferee is a
registered investment company; bank deposit notes and certificates of
deposit; loan participations; repurchase agreements; securities owned
but subject to a repurchase agreement; and currency, interest rate, and
commodity swaps;
o the aggregate value of the securities shall be the cost of such
securities, except where the entity reports its securities holdings in
its financial statements on the basis of their market value, and no
current information with respect to the cost of those securities has
been published, in which case the securities may be valued at market;
o securities owned by subsidiaries of the entity that are consolidated
with the entity in its financial statements prepared in accordance with
generally accepted accounting principles may be included if the
investments of such subsidiaries are managed under the direction of the
entity, except that, unless the entity is a reporting company under
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
securities owned by such subsidiaries may not be included if the entity
itself is a majority-owned subsidiary that would be included in the
consolidated financial statements of another enterprise.
5. The Transferor or a person acting on its behalf has taken reasonable
steps to ensure that the Transferee is aware that the Transferor is relying on
the exemption from the provisions of Section 5 of the Securities Act provided by
Rule 144A.
6. The Transferor or a person acting on its behalf has furnished, or
caused to be furnished, to the Transferee all information regarding (a) the
Transferred Certificates and payments on them, (b) the nature and performance of
the Mortgage Loans, and (c) the Indenture, the Agreement, and the Trust Estate,
that the Transferee has requested.
Very truly yours,
______________________________________
(Transferor)
By: __________________________________
Name: ________________________________
Title: _______________________________
C-1-3
FORM OF TRANSFEREE INVESTMENT LETTER
FOR CERTIFICATES
Date:
CWHEQ, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: ________________
Wilmington Trust Company, as Owner Trustee
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Re: CWHEQ Revolving Home Equity Loan Trust, Series
200[__]-[__], Revolving Home Equity Loan Asset Backed
Securities, Series 200[__]-[__] Certificates
--------------------------------------------
Ladies and Gentlemen:
_______________________ (the "Transferee") intends to purchase from
______________________ (the "Transferor") Certificates representing a ___%
percentage interest in the entire interest in the Certificates (the "Transferred
Certificates"). The Certificates, including the Transferred Certificates, were
issued pursuant to the Agreement. All capitalized terms used in this certificate
without definition have the meanings given to them in the Trust Agreement, dated
as of [_____], 200[__], between CWHEQ, Inc., as depositor, and Wilmington Trust
Company, as owner trustee. The Transferee hereby certifies, represents, and
warrants that:
1. The Transferee is a "qualified institutional buyer" (a
"Qualified Institutional Buyer") as that term is defined in Rule 144A
("Rule 144A") under the Securities Act of 1933, as amended (the
"Securities Act"), and has completed one of the forms of certification
to that effect attached as Annex 1 and Annex 2. The Transferee is aware
that the sale to it of the Transferred Certificates is being made in
reliance on Rule 144A. The Transferee is acquiring the Transferred
Certificates for its own account or for the account of a Qualified
Institutional Buyer, and understands that the Transferred Certificates
may be resold, pledged, or transferred only to a person reasonably
believed to be a Qualified Institutional Buyer that purchases for its
own account or for the
C-1-4
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.
2. The Transferee has been furnished with all information
regarding (a) the Transferred Certificates and payments on them, (b)
the nature and performance of the Mortgage Loans, (c) the Indenture,
(d) the Agreement, and (e) any credit enhancement mechanism associated
with the Transferred Certificates, that it has requested.
3. The Transferee represents that it is not an employee
benefit plan that is subject to the Employee Retirement Income Security
Act of 1974, as amended, or a plan subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor is it acting on behalf
of or investing plan assets of any such employee benefit plan.
4. The Transferee agrees to be bound by the Agreement.
Very truly yours,
______________________________________
(Transferee)
______________________________________
By: __________________________________
Name: ________________________________
Title: _______________________________
C-1-5
ANNEX 1 TO EXHIBIT C-1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees other than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and [name of Certificate Registrar], as Certificate
Registrar, with respect to the Certificates being transferred (the "Transferred
Certificates") as described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of the
entity purchasing the Transferred Certificates (the "Transferee").
2. The Transferee is a "qualified institutional buyer" as that term is defined
in Rule 144A under the Securities Act of 1933, as amended ("Rule 144A"),
because (1) the Transferee owned or invested on a discretionary basis
$________________________ in securities (other than the excluded securities
referred to below and otherwise calculated in accordance with Rule 144A) as
of the end of the Transferee's most recent fiscal year and (2) the
Transferee satisfies the criteria in the category marked below.
|_| Corporation, etc. The Transferee is a corporation (other than
a bank, savings and loan association, or similar institution),
Massachusetts or similar statutory trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
|_| Bank. The Transferee (a) is a national bank or a banking
institution organized under the laws of any state, U.S.
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, as of a date not more than 16 months preceding the
date of sale of the Certificates in the case of a U.S. bank,
and not more than 18 months preceding such date of sale for a
foreign bank or equivalent institution.
|_| Savings and Loan. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association, or similar institution that is
supervised and examined by a state or federal authority having
supervision over those institutions or is a foreign savings
and
C-1-6
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, as of a date not more than 16 months preceding the
date of sale of the Certificates in the case of a U.S. savings
and loan association, and not more than 18 months preceding
such date of sale for a foreign savings and loan association
or equivalent institution.
|_| Broker-dealer. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934, as
amended.
|_| Insurance Company. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and that is subject to supervision by the
insurance commissioner or a similar official or agency of a
state, U.S. territory, or the District of Columbia.
|_| Investment Advisor. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940, as
amended.
3. |_| Other. (Please supply a brief description of the entity and a
cross-reference to the paragraph and subparagraph under subsection
(a)(1) of Rule 144A pursuant to which it qualifies. Note that
registered investment companies should complete Annex 2 rather than
this Annex 1.)________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
The term "securities" does not include (1) securities of issuers that
are affiliated with the Transferee, (2) securities that are part of an
unsold allotment to or subscription by the Transferee, if the
Transferee is a dealer, (3) bank deposit notes and certificates of
deposit, (4) loan participations, (5) repurchase agreements, (6)
securities owned but subject to a repurchase agreement, and (7)
currency, interest rate, and commodity swaps. For purposes of
determining the aggregate amount of securities owned or invested on a
discretionary basis by the Transferee, the Transferee did not include
any of the securities referred to in this paragraph.
4. For purposes of determining the aggregate amount of securities owned or
invested on a discretionary basis by the Transferee, the Transferee
used the cost of the securities to the Transferee, unless the
Transferee reports its securities holdings in its financial statements
on the basis of their market value, and no current information with
respect to the cost of those securities has been published, in which
case the securities were valued at market. Further, in determining the
aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if the subsidiaries are
consolidated with the Transferee in its financial statements prepared
in accordance with generally accepted accounting principles and if the
investments of the subsidiaries are managed under the
C-1-6
Transferee's direction. However, such securities were not included if
the Transferee is a majority-owned, consolidated subsidiary of another
enterprise and the Transferee is not itself a reporting company under
the Securities Exchange Act of 1934, as amended.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the
Transferred Certificates are relying and will continue to rely on the
statements made herein because one or more sales to the Transferee may
be in reliance on Rule 144A.
|_| |_| Will the Transferee be purchasing the Transferred Owner
Yes No Trust Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "no," then in each case
where the Transferee is purchasing for an account other than its own,
the account belongs to a third party that is itself a "qualified
institutional buyer" within the meaning of Rule 144A, and the
"qualified institutional buyer" status of the third party has been
established by the Transferee through one or more of the appropriate
methods contemplated by Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until that notice is given, the Transferee's purchase of the
Transferred Certificates will constitute a reaffirmation of this
certification as of the date of the purchase. In addition, if the
Transferee is a bank or savings and loan as provided above, the
Transferee agrees that it will furnish to such parties any updated
annual financial statements that become available on or before the date
of the purchase, promptly after they become available.
______________________________________
Print Name of Transferee
By: ____________________________________
Name: __________________________________
Title: _________________________________Date:
X-0-0
XXXXX 0 XX XXXXXXX C-1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[for Transferees that are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and [name of Certificate Registrar], as Certificate
Registrar, with respect to the Certificates being transferred (the "Transferred
Certificates") as described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the chief financial officer, a
person fulfilling an equivalent function, or other executive officer of
the entity purchasing the Transferred Certificates (the "Transferee")
or, if the Transferee is a "qualified institutional buyer" as that term
is defined in Rule 144A under the Securities Act of 1933, as amended
("Rule 144A"), because the Transferee is part of a Family of Investment
Companies, is an executive officer of the investment adviser (the
"Adviser").
2. The Transferee is a "qualified institutional buyer" as defined in Rule
144A because (i) the Transferee is an investment company registered
under the Investment Company Act of 1940, as amended, and (ii) as
marked below, the Transferee alone owned or invested on a discretionary
basis, or the Transferee'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 Transferee's most recent fiscal
year. For purposes of determining the amount of securities owned by the
Transferee or the Transferee's Family of Investment Companies, the cost
of the securities was used, unless the Transferee or any member of the
Transferee's Family of Investment Companies, as the case may be,
reports its securities holdings in its financial statements on the
basis of their market value, and no current information with respect to
the cost of those securities has been published, in which case the
securities of the entity were valued at market.
|_| The Transferee owned or invested on a discretionary basis
$_____________________ in securities (other than the excluded
securities referred to below and otherwise calculated in
accordance with Rule 144A) as of the end of the Transferee's
most recent fiscal year.
|_| The Transferee is part of a "Family of Investment Companies"
that owned in the aggregate $________________ in securities
(other than the excluded securities referred to below and
otherwise calculated in accordance with Rule 144A) as of the
end of the Transferee's most recent fiscal year.
3. 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
C-1-9
subsidiaries of the same parent or because one investment adviser is a
majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) bank deposit notes
and certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement
and (vi) 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 Transferee, or owned by the Transferee's
Family of Investment Companies, the securities referred to in this
paragraph were excluded.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more
sales to the Transferee will be in reliance on Rule 144A.
|_| |_| Will the Transferee be purchasing the Transferred Owner
Yes No Trust Certificates only for the Transferee's own account?
6. If the answer to the foregoing question is "no," then in each case
where the Transferee is purchasing for an account other than its own,
the account belongs to a third party that is itself a "qualified
institutional buyer" within the meaning of Rule 144A, and the
"qualified institutional buyer" status of the third party has been
established by the Transferee through one or more of the appropriate
methods contemplated by Rule 144A.
7. The undersigned will notify the parties to which this certification is
made of any changes in the information and conclusions herein. Until
that notice, the Transferee's purchase of the Transferred Certificates
will constitute a reaffirmation of this certification by the
undersigned as of the date of the purchase.
___________________________________
Print Name of Transferee or Adviser
By: _________________________
Name: _______________________
Title: ______________________IF AN ADVISER:
___________________________________
Print Name of Transferee
Date: _________________________
C-1-10
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
----------------------------------------------------------------
Dated:___________
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Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to,
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,
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for the account of ,
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account number , or, if mailed by check, to
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.
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Applicable statements should be mailed to ,
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.
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This information is provided by , the
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assignee named above, or , as
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its agent.
C-1-11
EXHIBIT C-2
[FORM OF] TRANSFER AFFIDAVIT
CWHEQ, Inc. Revolving Home Equity Loan Trust, Series 200[__]-[__]
Revolving Home Equity Loan Asset Backed Securities, Series 200[__]-[__]
Class [R-1][R-2] 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 [R-1][R-2] Certificate (the
"Certificate") issued pursuant to the Trust Agreement, dated as of
[________________] (the "Agreement"), between CWHEQ, Inc. (the "Depositor") and
Wilmington Trust Company, as trustee (the "Owner 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 or other plan or
arrangement 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
C-2-1
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.)
5. The Transferee has reviewed the provisions of Section 3.10 of the
Agreement 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 3.10 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 Owner Trustee a certificate substantially in
the form set forth as Exhibit E 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
[R-1][R-2] 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) and, unless the Transferor (or any subsequent transferor)
expressly waives such requirement, will not cause income from the Certificate to
be attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.
10. The Transferee is aware that the Class [R-1][R-2] Certificates may
be "noneconomic residual interests" within the meaning of Treasury Regulation
Section 1.860E-
C-2-1
1(c) 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
Certificate to permit the Transferor to assess the financial capability of the
Transferee to pay such taxes. The Transferee historically has paid its debts as
they have come due and intends to pay its debts as they come due in the future.
[12. Unless the Transferor (or any subsequent transferor) expressly
waives such requirement, the Transferee (and any subsequent transferee)
certifies (or will certify), respectively, that the transfer satisfies either
the "Asset Test" imposed by Treasury Regulation ss. 1.860E-1(c)(5) or the
"Formula Test" imposed by Treasury Regulation ss. 1.860E-1(c)(7).]
* * *
C-2-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf by its duly authorized officer, this_____ day of
___________, 2___.
__________________________________
PRINT 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__
C-2-4
[WAIVER OF REQUIREMENT THAT TRANSFEREE CERTIFIES TRANSFER OF CERTIFICATE
SATISFIES CERTAIN REGULATORY "SAFE HARBORS"
The Transferor hereby waives the requirement that the Transferee
certify that the transfer of the Certificate satisfies either the "Asset Test"
imposed by Treasury Regulation ss.1.860E-1(c)(5) or the "Formula Test" imposed
by Treasury Regulation ss. 1.860E-1(c)(7).
CWHEQ, INC.
By: ______________________________
Name:
Title:]
X-0-0
XXXXX 0 XX XXXXXXX X-0
Xxxxxxx Definitions
"Asset Test": A transfer satisfies the Asset Test if: (i) At the time
of the transfer, and at the close of each of the transferee's two fiscal years
preceding the transferee's fiscal year of transfer, the transferee's gross
assets for financial reporting purposes exceed $100 million and its net assets
for financial reporting purposes exceed $10 million. The gross assets and net
assets of a transferee do not include any obligation of any "related person" or
any other asset if a principal purpose for holding or acquiring the other asset
is to permit the transferee to satisfy such monetary conditions; (ii) The
transferee must be an "eligible corporation" and must agree in writing that any
subsequent transfer of the interest will be to another eligible corporation in a
transaction that satisfies paragraphs 9 through 11 of this Transfer Affidavit
and the Asset Test. A transfer fails to meet the Asset Test if the transferor
knows, or has reason to know, that the transferee will not honor the
restrictions on subsequent transfers of the Certificate; and (iii) A reasonable
person would not conclude, based on the facts and circumstances known to the
transferor on or before the date of the transfer, that the taxes associated with
the Certificate will not be paid. The consideration given to the transferee to
acquire the Certificate is only one factor to be considered, but the transferor
will be deemed to know that the transferee cannot or will not pay if the amount
of consideration is so low compared to the liabilities assumed that a reasonable
person would conclude that the taxes associated with holding the Certificate
will not be paid. For purposes of applying the Asset Test, (i) an "eligible
corporation" means any domestic C corporation (as defined in section 1361(a)(2)
of the Code) other than (A) a corporation which is exempt from, or is not
subject to, tax under section 11 of the Code, (B) an entity described in section
851(a) or 856(a) of the Code, (C) A REMIC, or (D) an organization to which part
I of subchapter T of chapter 1 of subtitle A of the Code applies; (ii) a
"related person" is any person that (A) bears a relationship to the transferee
enumerated in section 267(b) or 707(b)(1) of the Code, using "20 percent"
instead of "50 percent" where it appears under the provisions, or (B) is under
common control (within the meaning of section 52(a) and (b)) with the
transferee.
"Formula Test": A transfer satisfies the formula test if the present
value of the anticipated tax liabilities associated with holding the Certificate
does not exceed the sum of (i) the present value of any consideration given to
the transferee to acquire the Certificate; (ii) the present value of the
expected future distributions on the Certificate; and (iii) the present value of
the anticipated tax savings associated with holding the Certificate as the
issuing REMIC generates losses. For purposes of applying the Formula Test: (i)
The transferee is assumed to pay tax at a rate equal to the highest rate of tax
specified in section 11(b)(1) of the Code. If the transferee has been subject to
the alternative minimum tax under section 55 of the Code in the preceding two
years and will compute its taxable income in the current taxable year using the
alternative minimum tax rate, then the tax rate specified in section 55(b)(1)(B)
of the Code may be used in lieu of the highest rate specified in section
11(b)(1) of the Code; (ii) The transfer
C-2-6
must satisfy paragraph 9 of the Transfer Affidavit; and (iii) Present values are
computed using a discount rate equal to the Federal short-term rate prescribed
by section 1274(d) of the Code for the month of the transfer and the compounding
period used by the taxpayer.
"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" means any person other than
o the United States, any State or political
subdivision thereof, or any agency or instrumentality of any
of them,
o a foreign government, International Organization,
or any agency or instrumentality of either of them,
o 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
Residual Certificate,
o rural electric and telephone cooperatives described
in Section 1381(a)(2)(C) of the Code,
o an "electing large partnership" as defined in
Section 775 of the Code,
o a person that is not a citizen or resident of the
United States, a corporation, partnership, or other entity
created or organized in or under the laws of the United
States, any state of the United States, or the District of
Columbia, or an estate or trust 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 the authority to control all substantial
decisions of the trust unless such person has furnished the
transferor and the Owner Trustee with a duly completed
Internal Revenue Service Form W-8ECI or any applicable
successor form, and
o any other person so designated by the Depositor
based on an Opinion of Counsel that the Transfer of an
Ownership Interest in a Residual Certificate to such person
may cause any REMIC to fail to qualify as a REMIC at any time
that the Certificates are outstanding.
The terms "United States," "State," and "International Organization"
have the meanings 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
C-2-7
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.
C-2-8
