Exhibit 4.1
EXECUTION COPY
==============================================================================
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
__________________________________
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2006
__________________________________
ASSET-BACKED CERTIFICATES, SERIES 2006-15
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
Page
----
ARTICLE I.
DEFINITIONS
<S>
<C>
Section 1.01 Defined
Terms...................................................................................5
Section 1.02 Certain
Interpretive
Provisions................................................................44
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance
of Mortgage
Loans...................................................................45
Section 2.02 Acceptance
by Trustee of the Mortgage
Loans....................................................52
Section 2.03
Representations, Warranties and Covenants of the Master Servicer
and the Sellers...............58
Section 2.04
Representations and Warranties of the
Depositor................................................75
Section 2.05 Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases................76
Section 2.06
Authentication and Delivery of
Certificates....................................................77
Section 2.07 Covenants
of the Master
Servicer...............................................................77
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master
Servicer to Service Mortgage
Loans......................................................77
Section 3.02
Subservicing; Enforcement of the Obligations of Master
Servicer................................79
Section 3.03 Rights of
the Depositor, the Sellers, the Certificateholders, the NIM
Insurer, the
Class A-5B Insurer and the Trustee in Respect of the Master
Servicer...........................80
Section 3.04 Trustee to
Act as Master
Servicer..............................................................81
Section 3.05 Collection
of Mortgage Loan Payments; Certificate Account; Distribution
Account;
Pre-Funding Account; Seller Shortfall Interest
Requirement.....................................81
Section 3.06 Collection
of Taxes, Assessments and Similar Items; Escrow
Accounts............................85
Section 3.07 Access to
Certain Documentation and Information Regarding the Mortgage
Loans...................85
Section 3.08 Permitted
Withdrawals from the Certificate Account, Distribution Account,
Carryover
Reserve Fund and the Principal Reserve
Fund....................................................86
Section 3.09
[Reserved].....................................................................................88
Section 3.10
Maintenance of Hazard
Insurance................................................................88
Section 3.11
Enforcement of Due-On-Sale Clauses; Assumption
Agreements......................................89
Section 3.12
Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds and
Realized Losses; Repurchase of Certain Mortgage
Loans..........................................90
Section 3.13 Trustee to
Cooperate; Release of Mortgage
Files................................................94
Section 3.14 Documents,
Records and Funds in Possession of Master Servicer to be Held for
the
Trustee........................................................................................95
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<PAGE>
Section 3.15 Servicing
Compensation.........................................................................95
Section 3.16 Access to
Certain
Documentation................................................................96
Section 3.17 Annual
Statement as to
Compliance..............................................................96
Section 3.18
[Reserved.]....................................................................................97
Section 3.19 The
Corridor
Contract..........................................................................97
Section 3.20 Prepayment
Charges.............................................................................98
Section 3.21
[Reserved].....................................................................................99
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances;
Remittance
Reports...................................................................99
Section 4.02 Reduction
of Servicing Compensation in Connection with Prepayment Interest
Shortfalls.........100
Section 4.03
[Reserved]....................................................................................100
Section 4.04
Distributions.................................................................................101
Section 4.05 Monthly
Statements to
Certificateholders......................................................105
Section 4.06 Class A-5B
Policy; Rights of the Class A-5B
Insurer...........................................107
Section 4.07 Carryover
Reserve
Fund........................................................................110
Section 4.08 Credit
Comeback Excess
Account................................................................111
Section 4.09
[Reserved]....................................................................................112
ARTICLE V.
THE CERTIFICATES
Section 5.01 The
Certificates..............................................................................113
Section 5.02
Certificate Register; Registration of Transfer and Exchange of
Certificates...................114
Section 5.03 Mutilated,
Destroyed, Lost or Stolen
Certificates.............................................118
Section 5.04 Persons
Deemed
Owners.........................................................................118
Section 5.05 Access to
List of Certificateholders' Names and
Addresses.....................................118
Section 5.06 Book-Entry
Certificates.......................................................................119
Section 5.07 Notices to
Depository.........................................................................120
Section 5.08 Definitive
Certificates.......................................................................120
Section 5.09
Maintenance of Office or
Agency...............................................................120
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective
Liabilities of the Depositor, the Master Servicer and the
Sellers..................121
Section 6.02 Merger or
Consolidation of the Depositor, the Master Servicer or the
Sellers..................121
Section 6.03 Limitation
on Liability of the Depositor, the Sellers, the Master Servicer,
the NIM
Insurer and
Others............................................................................121
Section 6.04 Limitation
on Resignation of Master
Servicer..................................................122
Section 6.05 Errors and
Omissions Insurance; Fidelity
Bonds................................................123
ii
<PAGE>
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of
Default.............................................................................123
Section 7.02 Trustee to
Act; Appointment of
Successor......................................................125
Section 7.03
Notification to
Certificateholders............................................................127
ARTICLE VIII.
CONCERNING THE TRUSTEE
Section 8.01 Duties of
Trustee.............................................................................127
Section 8.02 Certain
Matters Affecting the
Trustee.........................................................129
Section 8.03 Trustee
Not Liable for Mortgage
Loans.........................................................130
Section 8.04 Trustee
May Own
Certificates..................................................................130
Section 8.05 Master
Servicer to Pay Trustee's Fees and
Expenses............................................130
Section 8.06
Eligibility Requirements for
Trustee..........................................................131
Section 8.07
Resignation and Removal of
Trustee............................................................131
Section 8.08 Successor
Trustee.............................................................................132
Section 8.09 Merger or
Consolidation of
Trustee............................................................133
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.................................................133
Section 8.11 Tax
Matters...................................................................................135
Section 8.12
[Reserved]....................................................................................137
Section 8.13 Access to
Records of the
Trustee..............................................................137
Section 8.14
Suits for
Enforcement.........................................................................137
ARTICLE IX.
TERMINATION
Section 9.01
Termination upon Liquidation or Repurchase of all Mortgage
Loans..............................138
Section 9.02 Final
Distribution on the
Certificates........................................................139
Section 9.03 Additional
Termination
Requirements...........................................................141
Section 9.04 Auction of
the Mortgage Loans and REO
Properties..............................................141
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment.....................................................................................144
Section 10.02 Recordation of
Agreement;
Counterparts........................................................146
Section 10.03 Governing
Law.................................................................................146
Section 10.04 Intention of
Parties..........................................................................147
Section 10.05
Notices.......................................................................................148
Section 10.06 Severability of
Provisions....................................................................149
Section 10.07
Assignment....................................................................................150
Section 10.08 Limitation on
Rights of
Certificateholders....................................................150
Section 10.09 Inspection and
Audit
Rights...................................................................150
Section 10.10 Certificates
Nonassessable and Fully
Paid.....................................................151
Section 10.11 Rights of NIM
Insurer.........................................................................151
iii
<PAGE>
ARTICLE XI.
EXCHANGE ACT REPORTING
Section 11.01 Filing
Obligations............................................................................152
Section 11.02 Form 10-D
Filings.............................................................................152
Section 11.03 Form 8-K
Filings..............................................................................153
Section 11.04 Form 10-K
Filings.............................................................................154
Section 11.05 Sarbanes-Oxley
Certification..................................................................154
Section 11.06 Form 15
Filing................................................................................155
Section 11.07 Report on
Assessment of Compliance and
Attestation............................................155
Section 11.08 Use of
Subservicers and
Subcontractors........................................................156
Section 11.09
Amendments....................................................................................157
Section 11.10 Reconciliation
of
Accounts....................................................................158
</TABLE>
Exhibits
--------
EXHIBIT A
Forms of Certificates
EXHIBIT A-1
Form of Class A-1 Certificate
EXHIBIT A-2
Form of Class A-2 Certificate
EXHIBIT A-3
Form of Class A-3 Certificate
EXHIBIT A-4
Form of Class A-4 Certificate
EXHIBIT A-5
Form of Class A-5A Certificate
EXHIBIT A-6
Form of Class A-5B Certificate
EXHIBIT A-7
Form of Class A-6 Certificate
EXHIBIT A-8
Form of Class M-1 Certificate
EXHIBIT A-9
Form of Class M-2 Certificate
EXHIBIT A-10
Form of Class M-3 Certificate
EXHIBIT A-11
Form of Class M-4 Certificate
EXHIBIT A-12
Form of Class M-5 Certificate
EXHIBIT A-13
Form of Class M-6 Certificate
EXHIBIT A-14
Form of Class M-7 Certificate
EXHIBIT A-15
Form of Class M-8 Certificate
EXHIBIT A-16
Form of Class B Certificate
EXHIBIT B
Form of Class P Certificate
EXHIBIT C
Form of Class C Certificate
EXHIBIT D
Form of Class A-R Certificate
EXHIBIT E
Form of Tax Matters Person Certificate
EXHIBIT F
Mortgage Loan Schedule
EXHIBIT F-1
List of Mortgage Loans
EXHIBIT F-2
Mortgage Loans for which All or a Portion of a
Related Mortgage File is not Delivered to the
Trustee on or prior to the Closing Date
EXHIBIT G
Forms of Certification of Trustee
EXHIBIT G-1
Form of Initial Certification of Trustee (Initial
Mortgage Loans)
EXHIBIT G-2
Form of Interim Certification of Trustee
EXHIBIT G-3
Form of Delay Delivery Certification
iv
<PAGE>
EXHIBIT G-4
Form of Initial Certification of Trustee (Subsequent
Mortgage Loans)
EXHIBIT H
Form of Final Certification of Trustee
EXHIBIT I
Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1
Form of Transferor Certificate for Class A-R
Certificates
EXHIBIT J-2
Form of Transferor Certificate for Private
Certificates
EXHIBIT K
Form of Investment Letter (Non-Rule 144A)
EXHIBIT L
Form of Rule 144A Letter
EXHIBIT M
Form of Request for Document Release
EXHIBIT N
Form of Request for File Release
EXHIBIT O
Copy of Depository Agreement
EXHIBIT P
Form of Subsequent Transfer Agreement
EXHIBIT Q
Form of Corridor Contract
EXHIBIT R
Class A-5B Policy
EXHIBIT S-1
Form of Corridor Contract Assignment Agreement
EXHIBIT S-2
Form of Corridor Contract Administration Agreement
EXHIBIT T
Officer's Certificate with respect to Prepayments
EXHIBIT U
[RESERVED]
EXHIBIT V
[RESERVED]
EXHIBIT W
Form of Monthly Statement
EXHIBIT X-1
Form of Performance Certification (Subservicer)
EXHIBIT X-2
Form of Performance Certification (Trustee)
EXHIBIT Y
Form of Servicing Criteria to be Addressed in
Assessment of Compliance Statement
EXHIBIT Z
List of Item 1119 Parties
EXHIBIT AA
Form of Sarbanes-Oxley Certification (Replacement
Master Servicer)
SCHEDULE I
Prepayment Charge Schedule and Prepayment Charge
Summary
SCHEDULE II
Collateral Schedule
v
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of September 1, 2006,
by
and among CWABS, INC., a Delaware corporation, as depositor (the
"Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller
("CHL" or a
"Seller"), PARK MONACO INC., a Delaware corporation, as a seller
("Park
Monaco" or a "Seller"), PARK SIENNA LLC, a Delaware limited
liability company,
as a seller ("Park Sienna" or a "Seller", and together with CHL and
Park
Monaco, the "Sellers"), COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited
partnership, as master servicer (the "Master Servicer"), and THE
BANK OF NEW
YORK, a New York banking corporation, as trustee (the
"Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed
to the Trustee in return for the Certificates. The Trust Fund
(excluding the
Credit Comeback Excess Account, the Carryover Reserve Fund, the
assets held in
the Pre-Funding Account and the Trust Fund's rights with respect to
payments
received under the Corridor Contract) for federal income tax
purposes will
consist of two REMICs (the"Subsidiary REMIC" and the "Master
REMIC"). Each
Certificate, other than the Class A-R Certificate, will represent
ownership of
one or more regular interests in the Master REMIC for purposes of
the REMIC
Provisions. The Class A-R Certificate represents ownership of the
sole class
of residual interest in the Subsidiary REMIC and the Master REMIC.
The Master
REMIC will hold as assets the several classes of uncertificated
Subsidiary
REMIC Interests (other than the SR-R Interest). Each Subsidiary
REMIC Interest
(other than the SR-R Interest) is hereby designated as a regular
interest in
the Subsidiary REMIC. The Subsidiary REMIC will hold as assets all
property of
the Trust Fund (excluding the Credit Comeback Excess Account, the
Carryover
Reserve Fund, the assets held in the Pre-Funding Account and the
Trust Fund's
rights with respect to payments received under the Corridor
Contract). The
latest possible maturity date of all REMIC regular interests
created in this
Agreement shall be the Latest Possible Maturity Date.
SUBSIDIARY REMIC:
The following table specifies the initial balances and
pass-through
rates of the Subsidiary REMIC Interests:
<TABLE>
<CAPTION>
Initial Principal
Pass-Through
Corresponding Class
Subsidiary REMIC Interests
Balance
Rate
of Certificates
----------------------------------------- -------------------
----------------
----------------------
<S>
<C>
<C>
<C>
SR-A-1..................................
(1)
(3)
Class A-1
SR-A-2..................................
(1)
(3)
Class A-2
SR-A-3..................................
(1)
(3)
Class A-3
SR-A-4..................................
(1)
(3)
Class A-4
SR-A-5A.................................
(1)
(3)
Class A-5A
SR-A-5B.................................
(1)
(3)
Class A-5B
SR-A-6..................................
(1)
(3)
Class A-6
SR-M-1..................................
(1)
(3)
Class M-1
SR-M-2..................................
(1)
(3)
Class M-2
SR-M-3..................................
(1)
(3)
Class M-3
<PAGE>
SR-M-4..................................
(1)
(3)
Class M-4
SR-M-5..................................
(1)
(3)
Class M-5
SR-M-6..................................
(1)
(3)
Class M-6
SR-M-7..................................
(1)
(3)
Class M-7
SR-M-8..................................
(1)
(3)
Class M-8
SR-B....................................
(1)
(3)
Class B
SR-C....................................
(2)
(3)
Class C
SR-$100.................................
$100
(4)
Class A-R
SR-P....................................
$100
(5)
Class P
SR-R....................................
(6)
(6)
N/A
</TABLE>
(1) On each Distribution Date, following the allocation of
scheduled
principal, principal prepayments and Realized Losses, this
Subsidiary REMIC
Interest will have a principal balance that is equal to 100% of
its
corresponding Class of Certificates issued by the Master REMIC
(2) The Class SR-C Interest will have an initial principal balance
that is
equal to the Overcollateralized Amount.
(3) The pass-through rate with respect to any Distribution Date
(and the
related Accrual Period) for this Subsidiary REMIC Interest is a per
annum rate
equal to the weighted average of the Adjusted Net Mortgage Rates of
the
Mortgage Loans.
(4) This Subsidiary REMIC Interest pays no interest.
(5) The SR-P Interest is entitled to all Prepayment Charges
collected with
respect to the Mortgage Loans. It pays no interest.
(6) The SR-R Interest is the sole class of residual interest in the
Subsidiary
REMIC. It has no principal balance and pays no principal or
interest.
On
each Distribution Date, the Interest Funds and the Principal
Distribution Amount shall be distributed with respect to the
Subsidiary REMIC
Interests in the following manner:
(1)
Interest. Interest is to be distributed with respect to each
Subsidiary REMIC Interest at the rate, or according to the
formulas,
described above.
(2)
Prepayment Charges. All Prepayment Charges will be allocated to
the
Class SR-P Interest.
(3)
Principal. Principal shall be allocated among the Subsidiary
REMIC
Interests in the same manner that it is allocated among their
corresponding Classes of Certificates.
On
each Distribution Date, Realized Losses (and increases in
Principal
Balances attributable to Subsequent Recoveries) shall be allocated
among the
Subsidiary REMIC Interests in the same manner that Realized Losses
(and
increases in Class Certificate Balances attributable to Subsequent
Recoveries)
are allocated among each Subsidiary REMIC Interest's Corresponding
Class of
Certificates.
2
<PAGE>
MASTER REMIC
The following table specifies the class designation, interest
rate,
and principal amount for each class of Master REMIC Interest:
<TABLE>
<CAPTION>
Original Certificate
Class
Principal Balance
Pass-Through Rate
------------------------------------
----------------------------- -----------------------
<S>
<C>
<C>
Class A-1..........................
$287,551,000
(1)
Class A-2..........................
$66,269,000
(1)
Class A-3..........................
$194,298,000
(1)
Class A-4..........................
$71,654,000
(1)
Class A-5A.........................
$56,228,000
(1)
Class A-5B.........................
$50,000,000
(1)
Class A-6..........................
$100,000,000
(1)
Class M-1..........................
$29,000,000
(1)
Class M-2..........................
$27,000,000
(1)
Class M-3..........................
$15,500,000
(1)
Class M-4..........................
$14,000,000
(1)
Class M-5..........................
$13,000,000
(1)
Class M-6..........................
$12,500,000
(1)
Class M-7..........................
$12,000,000
(1)
Class M-8..........................
$7,000,000
(1)
Class B............................
$10,000,000
(1)
Class C............................
(2)
(3)
Class P............................
$100
(4)
Class A-R..........................
$100
(5)
</TABLE>
(1) The Certificates
will accrue interest at the related Pass-Through Rates
identified in this Agreement.
(2) For federal income
tax purposes, the Class C Certificates will be treated
as
having a Certificate Principal Balance equal to the
Overcollateralized
Amount.
(3) For each Interest
Accrual Period the Class C Certificates are entitled to
an
amount (the "Class C Distributable Amount") equal to the sum of
(a)
the
interest payable on the SR-C Interest and (b) a specified portion
of
the
interest payable on each Subsidiary REMIC Regular Interest
(other
than
the SR-$100, SR-C and SR-P Interests) equal to the excess of
the
Pass-Through Rate for such Class of Subsidiary REMIC Regular
Interest
over
the Pass-Through Rate of the Corresponding Class of Master
REMIC
Certificates. The Pass-Through Rate of the Class C Certificates
shall be
a
rate sufficient to entitle it to an amount equal to all
interest
accrued on the Mortgage Loans less the interest accrued on the
other
interests issued by the Master REMIC. The Class C Distributable
Amount
for
any Distribution Date is payable from current interest on the
Mortgage Loans and any related Overcollateralization Reduction
Amount for
that
Distribution Date.
3
<PAGE>
(4) For each
Distribution Date the Class P Certificates are entitled to all
Prepayment Charges distributed with respect to the SR-P
Interest.
(5) The Class A-R
Certificates represent the sole class of residual interest
in
each REMIC created hereunder. The Class A-R Certificates are
not
entitled to distributions of interest.
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 REMIC
regular interests, without creating any shortfall--actual or
potential (other
than for credit losses)-- to any REMIC regular interest. It is not
intended
that the Class A-R Certificates be entitled to any cash flows
pursuant to this
Agreement except as provided in Section 3.08(a) hereunder.
4
<PAGE>
ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires, shall have the following
meanings:
Acceptable Bid Amount: Either (i) a bid equal to or greater than
the
Minimum Auction Amount or (ii) the highest bid submitted by a
Qualified Bidder
in an auction if the Directing Certificateholder agrees to pay the
related
Auction Supplement Amount.
Account: Any Escrow Account, the Carryover Reserve Fund, the
Certificate Account, the Credit Comeback Excess Account, the
Distribution
Account, the Pre-Funding Account, the Principal Reserve Fund or any
other
account related to the Trust Fund or the Mortgage Loans.
Accrual Period: With respect to any Distribution Date and each
Class
of Adjustable Rate Certificates, the period commencing on the
immediately
preceding Distribution Date (or, in the case of the first
Distribution Date,
the Closing Date) and ending on the day immediately preceding
such
Distribution Date. With respect to any Distribution Date and each
Class of
Fixed Rate Certificates and the Class C Certificates, the calendar
month
preceding the month in which such Distribution Date occurs. All
calculations
of interest on the Adjustable Rate Certificates will be made on the
basis of
the actual number of days elapsed in the related Accrual Period and
on a
360-day year. All calculations of interest on the Fixed Rate
Certificates and
Class C Certificates will be made on the basis of a 360-day year
consisting of
twelve 30-day months.
Additional Designated Information: As defined in Section 11.02.
Adjustable Rate Certificates: The Class A-1 Certificates.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the
Mortgage
Rate less the related Expense Fee Rate.
Advance: The aggregate of the advances required to be made by
the
Master Servicer with respect to any Distribution Date pursuant to
Section
4.01, the amount of any such advances being equal to the aggregate
of payments
of principal of, and interest on the Stated Principal Balance of,
the Mortgage
Loans (net of the Servicing Fees) that were due on the related Due
Date and
not received by the Master Servicer as of the close of business on
the related
Determination Date including an amount equivalent to interest on
the Stated
Principal Balance of each Mortgage Loan as to which the related
Mortgaged
Property is an REO Property or as to which the related Mortgaged
Property has
been liquidated but such Mortgage Loan has not yet become a
Liquidated
Mortgage Loan; provided, however, that the net monthly rental
income (if any)
from such REO Property deposited in the Certificate Account for
such
Distribution Date pursuant to Section 3.12 may be used to offset
such Advance
for the related REO Property;
5
<PAGE>
provided, further, that for the avoidance of doubt, no Advances
shall be
required to be made in respect of any Liquidated Mortgage Loan.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms
herein.
Amount Held for Future Distribution: As to any Distribution
Date,
the aggregate amount held in the Certificate Account at the close
of business
on the immediately preceding Determination Date on account of (i)
all
Scheduled Payments or portions thereof received in respect of the
Mortgage
Loans due after the related Due Date, (ii) Principal Prepayments
received in
respect of such Mortgage Loans after the last day of the related
Prepayment
Period and (iii) Liquidation Proceeds and Subsequent Recoveries
received in
respect of such Mortgage Loans after the last day of the related
Due Period.
Applied Realized Loss Amount: With respect to any Distribution
Date,
the amount, if any, by which, the aggregate Certificate Principal
Balance of
the Interest-Bearing Certificates (after all distributions of
principal on
such Distribution Date) exceeds the sum of (x) the aggregate Stated
Principal
Balance of the Mortgage Loans for such Distribution Date and (y)
the amount on
deposit in the Pre-Funding Account.
Appraised Value: The appraised value of the Mortgaged Property
based
upon the appraisal made for the originator of the related Mortgage
Loan by an
independent fee appraiser at the time of the origination of the
related
Mortgage Loan, or the sales price of the Mortgaged Property at the
time of
such origination, whichever is less, or with respect to any
Mortgage Loan
originated in connection with a refinancing, the appraised value of
the
Mortgaged Property based upon the appraisal made at the time of
such
refinancing.
Auction Supplement Amount: As defined in Section 9.04(c).
Bankruptcy Code: Title 11 of the United States Code.
Bid Date: As defined in Section 9.04(b).
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the
ownership of
which is reflected on the books of the Depository or on the books
of a person
maintaining an account with the Depository (directly, as a
"Depository
Participant", or indirectly, as an indirect participant in
accordance with the
rules of the Depository and as described in Section 5.06). As of
the Closing
Date, each Class of Interest-Bearing Certificates constitutes a
Class of
Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii)
a day on which the Class A-5B Insurer or banking institutions in
the State of
New York or California or the city in which the Corporate Trust
Office of the
Trustee is located are authorized or obligated by law or executive
order to be
closed.
Carryover Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee pursuant to Section 4.07 in the
name of
the Trustee for the benefit of the Certificateholders and
designated "The Bank
of New York in trust for registered Holders of
6
<PAGE>
CWABS, Inc., Asset-Backed Certificates, Series 2006-15". Funds in
the
Carryover Reserve Fund shall be held in trust for the
Certificateholders for
the uses and purposes set forth in this Agreement.
Certificate: Any one of the certificates of any Class executed
and
authenticated by the Trustee in substantially the forms attached
hereto as
Exhibits A-1 through A-16, Exhibit B, Exhibit C, Exhibit D and
Exhibit E.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section
3.05(b) with a
depository institution in the name of the Master Servicer for the
benefit of
the Trustee on behalf of the Certificateholders and the Class A-5B
Insurer and
designated "Countrywide Home Loans Servicing LP in trust for
registered
Holders of CWABS, Inc., Asset-Backed Certificates, Series 2006-15".
Funds in
the Certificate Account shall be held in trust for the
Certificateholders and
the Class A-5B Insurer for the uses and purposes set forth in this
Agreement.
Certificate Owner: With respect to a Book-Entry Certificate,
the
person that is the beneficial owner of such Book-Entry
Certificate.
Certificate Principal Balance: As to any Certificate (other than
the
Class C Certificates) and as of any Distribution Date, the Initial
Certificate
Principal Balance of such Certificate (A) less the sum of (i) all
amounts
distributed with respect to such Certificate in reduction of the
Certificate
Principal Balance thereof on previous Distribution Dates pursuant
to Section
4.04(b), (ii) with respect to the Class A-5B Certificates only,
payments under
the Class A-5B Policy relating to principal (except that any
payment under the
Class A-5B Policy with respect to an Applied Realized Loss Amount
allocated to
the Class A-5B Certificates shall not result in a further reduction
of the
Certificate Principal Balance of the Class A-5B Certificates) and
(iii) any
Applied Realized Loss Amounts allocated to such Certificate on
previous
Distribution Dates pursuant to Section 4.04(g), and (B) increased
by any
Subsequent Recoveries allocated to such Certificate pursuant to
Section
4.04(h) on such Distribution Date; provided that to the extent an
Applied
Realized Loss Amount with respect to the Class A-5B Certificates
was covered
under the Class A-5B Policy, the Certificate Principal Balance
thereof shall
not be increased by any Subsequent Recovery. References herein to
the
Certificate Principal Balance of a Class of Certificates shall mean
the
Certificate Principal Balances of all Certificates in such Class.
The Class C
Certificates do not have a Certificate Principal Balance. With
respect to any
Certificate (other than the Class C Certificates) of a Class and
any
Distribution Date, the portion of the Certificate Principal Balance
of such
Class represented by such Certificate equal to the product of the
Percentage
Interest evidenced by such Certificate and the Certificate
Principal Balance
of such Class. Exclusively for the purpose of determining any
subrogation
rights of the Class A-5B Insurer arising under Section 4.06 hereof,
the
"Certificate Principal Balance" of the Class A-5B Certificates
shall not be
reduced by the amount of any payments made by the Class A-5B
Insurer in
respect of principal of such Certificates under the Class A-5B
Policy, except
to the extent such payment shall have been reimbursed to the Class
A-5B
Insurer pursuant to the provisions of this Agreement.
Certificate Register: The register maintained pursuant to
Section
5.02 hereof.
7
<PAGE>
Certificateholder or Holder: The person in whose name a
Certificate
is registered in the Certificate Register (initially, Cede &
Co., as nominee
for the Depository, in the case of any Class of Book-Entry
Certificates),
except that solely for the purpose of giving any consent pursuant
to this
Agreement, any Certificate registered in the name of the Depositor
or any
affiliate of the Depositor shall be deemed not to be Outstanding
and the
Voting Interest evidenced thereby shall not be taken into account
in
determining whether the requisite amount of Voting Interests
necessary to
effect such consent has been obtained; provided that if any such
Person
(including the Depositor) owns 100% of the Voting Interests
evidenced by a
Class of Certificates, such Certificates shall be deemed to be
Outstanding for
purposes of any provision hereof (other than the second sentence of
Section
10.01 hereof) that requires the consent of the Holders of
Certificates of a
particular Class as a condition to the taking of any action
hereunder. The
Trustee is entitled to rely conclusively on a certification of the
Depositor
or any affiliate of the Depositor in determining which Certificates
are
registered in the name of an affiliate of the Depositor.
Certification Party: As defined in Section 11.05.
Certifying Person: As defined in Section 11.05.
CHL: Countrywide Home Loans, Inc., a New York corporation, and
its
successors and assigns.
CHL Mortgage Loans: The Mortgage Loans identified as such on
the
Mortgage Loan Schedule for which CHL is the applicable Seller.
Class: All Certificates bearing the same Class designation as
set
forth in Section 5.01 hereof.
Class A-1 Certificate: Any Certificate designated as a "Class
A-1
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to distributions as set forth herein.
Class A-2 Certificate: Any Certificate designated as a "Class
A-2
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to distributions as set forth herein.
Class A-3 Certificate: Any Certificate designated as a "Class
A-3
Certificate" on the face thereof, in the form of Exhibit A-3
hereto,
representing the right to distributions as set forth herein.
Class A-4 Certificate: Any Certificate designated as a "Class
A-4
Certificate" on the face thereof, in the form of Exhibit A-4
hereto,
representing the right to distributions as set forth herein.
Class A-5A Certificate: Any Certificate designated as a "Class
A-5A
Certificate" on the face thereof, in the form of Exhibit A-5
hereto,
representing the right to distributions as set forth herein.
8
<PAGE>
Class A-5B Certificate: Any Certificate designated as a "Class
A-5B
Certificate" on the face thereof, in the form of Exhibit A-6
hereto,
representing the right to distributions as set forth herein.
Class A-5B Insurer: Financial Security Assurance Inc., a
subsidiary
of Financial Security Assurances Holdings Ltd., organized and
created under
the laws of the State of New York, or any successor thereto.
Class A-5B Insurer Contact Person: The officer designated by
the
Master Servicer to provide information to the Class A-5B Insurer
pursuant to
Section 4.06(i).
Class A-5B Insurer Default: A default by the Class A-5B Insurer
on
its obligations under the Class A-5B Policy.
Class A-5B Late Payment Rate: The rate of interest publicly
announced by Citibank, N.A. at its principal office in New York,
New York, as
its prime rate (any change in such prime rate of interest to be
effective on
the date such change is announced by Citibank, N.A.) plus 3%. The
Class A-5B
Late Payment Rate shall be computed on the basis of a year of 365
days
calculating the actual number of days elapsed. In no event shall
the Class
A-5B Late Payment Rate exceed the maximum rate permissible under
law
applicable to this Agreement limiting interest rates.
Class A-5B Policy: The irrevocable Financial Guaranty Insurance
Policy, No. 51761-N, including any endorsements thereto, issued by
the Class
A-5B Insurer with respect to the Class A-5B Certificates, in the
form attached
hereto as Exhibit R.
Class A-5B Policy Payments Account: The separate Eligible
Account
created and maintained by the Trustee pursuant to Section 4.06(c)
in the name
of the Trustee for the benefit of the Class A-5B Certificateholders
and
designated "The Bank of New York in trust for registered holders of
CWABS,
Inc., Asset-Backed Certificates, Series 2006-15, Class A-5B". Funds
in the
Class A-5B Policy Payments Account shall be held in trust for the
Class A-5B
Certificateholders for the uses and purposes set forth in this
Agreement.
Class A-5B Policy Premium Rate: 0.08% per annum.
Class A-5B Premium: With respect to the Class A-5B Policy and
(x)
the first Distribution Date, an amount equal to the product of (x)
the initial
Certificate Principal Balance of the Class A-5B Certificates, (y)
the Class
A-5B Policy Premium Rate and (z) a fraction, the numerator of which
is the
number of days from and including the Closing Date to but excluding
the first
Distribution Date, and the denominator of which is 30, and (y) each
subsequent
Distribution Date, an amount equal to the product of (i)
one-twelfth (1/12) of
the Class A-5B Policy Premium Rate and (ii) the Certificate
Principal Balance
of the Class A-5B Certificates immediately prior to such
Distribution Date.
Class A-5B Reimbursement Amount: With respect to any
Distribution
Date, (i) the amount of all Guaranteed Distributions paid and all
other
payments made by the Class A-5B Insurer pursuant to the Class A-5B
Policy for
which the Class A-5B Insurer has not been reimbursed prior to
such
Distribution Date pursuant to Section 4.04 hereof, plus (ii)
interest
9
<PAGE>
accrued on such amount not previously repaid, calculated at the
Class A-5B
Late Payment Rate from the date such payments were made.
Class A-6 Certificate: Any Certificate designated as a "Class
A-6
Certificate" on the face thereof, in the form of Exhibit A-7
hereto,
representing the right to distributions as set forth herein.
Class A-6 Portion: With respect to any Distribution Date, a
percentage, expressed as a fraction, the numerator of which is the
Certificate
Principal Balance of the Class A-6 Certificates immediately prior
to such
Distribution Date and the denominator of which is the aggregate
Certificate
Principal Balance of all Classes of the Class A Certificates
immediately prior
to such Distribution Date.
Class A Certificate: Any Class A-1, Class A-2, Class A-3, Class
A-4,
Class A-5A, Class A-5B, or Class A-6 Certificate.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (1) the aggregate Certificate
Principal
Balance of the Class A Certificates immediately prior to such
Distribution
Date, over (2) the lesser of (x) 65.20% of the aggregate Stated
Principal
Balance of the Mortgage Loans for such Distribution Date and (y)
the aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date
minus the OC Floor.
Class A-R Certificate: Any Certificate designated as a "Class
A-R
Certificate" on the face thereof, in the form of Exhibit D hereto
or, in the
case of the Tax Matters Person Certificate, Exhibit E hereto, in
either case
representing the right to distributions as set forth herein.
Class B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-16
hereto,
representing the right to distributions as set forth herein.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit C
hereto,
representing the right to distributions as set forth herein.
Class C Distributable Amount: As defined in the Preliminary
Statement.
Class M-1 Certificate: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the form of Exhibit A-8
hereto,
representing the right to distributions as set forth herein.
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the form of Exhibit A-9
hereto,
representing the right to distributions as set forth herein.
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the form of Exhibit A-10
hereto,
representing the right to distributions as set forth herein.
10
<PAGE>
Class M-4 Certificate: Any Certificate designated as a "Class
M-4
Certificate" on the face thereof, in the form of Exhibit A-11
hereto,
representing the right to distributions as set forth herein.
Class M-5 Certificate: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, in the form of Exhibit A-12
hereto,
representing the right to distributions as set forth herein.
Class M-6 Certificate: Any Certificate designated as a "Class
M-6
Certificate" on the face thereof, in the form of Exhibit A-13
hereto,
representing the right to distributions as set forth herein.
Class M-7 Certificate: Any Certificate designated as a "Class
M-7
Certificate" on the face thereof, in the form of Exhibit A-14
hereto,
representing the right to distributions as set forth herein.
Class M-8 Certificate: Any Certificate designated as a "Class
M-8
Certificate" on the face thereof, in the form of Exhibit A-15
hereto,
representing the right to distributions as set forth herein.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit B
hereto,
representing the right to distributions as set forth herein.
Class P Principal Distribution Date: The first Distribution
Date
that occurs after the end of the latest Prepayment Charge Period
for all
Mortgage Loans that have a Prepayment Charge Period.
Closing Date: September 29, 2006.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collateral Schedule: Schedule II hereto.
Commission: The U. S. Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date,
an
amount equal to the lesser of (x) one-half of the Servicing Fee for
the
related Due Period and (y) the aggregate Prepayment Interest
Shortfalls for
the Mortgage Loans for such Distribution Date.
Confirmation: The confirmation, reference number FXNEC8619, with
a
trade date of August 21, 2006 evidencing a transaction between the
Corridor
Contract Counterparty and CHL relating to the Corridor
Contract.
Corporate Trust Office: The designated office of the Trustee in
the
State of New York where at any particular time its corporate trust
business
with respect to this Agreement shall be administered, which office
at the date
of the execution of this Agreement is located at
11
<PAGE>
101 Barclay Street, New York, New York 10286 (Attention: Corporate
Trust MBS
Administration), telephone: (212) 815-3236, facsimile: (212)
815-3986.
Corridor Contract: With respect to the Class A-1 Certificates,
the
transaction evidenced by the related Confirmation (as assigned to
the Corridor
Contract Administrator pursuant to the Corridor Contract
Assignment
Agreement), a form of which is attached hereto as Exhibit Q.
Corridor Contract Administration Agreement: The corridor
contract
administration agreement dated as of the Closing Date among CHL,
the Trustee
and the Corridor Contract Administrator, a form of which is
attached hereto as
Exhibit S-2.
Corridor Contract Administrator: The Bank of New York, in its
capacity as corridor contract administrator under the Corridor
Contract
Administration Agreement.
Corridor Contract Assignment Agreement: The Assignment
Agreement
dated as of the Closing Date among CHL, the Corridor Contract
Administrator
and the Corridor Contract Counterparty, a form of which is attached
hereto as
Exhibit S-1.
Corridor Contract Counterparty: Bear Stearns Financial Products
Inc.
and its successors.
Corridor Contract Termination Date: The Distribution Date in
July
2008.
Credit Bureau Risk Score: A statistical credit score obtained by
CHL
in connection with the origination of a Mortgage Loan.
Credit Comeback Excess Account: The separate Eligible Account
created and initially maintained by the Trustee pursuant to Section
4.08 in
the name of the Trustee for the benefit of the Certificateholders
and the
Class A-5B Insurer and designated "The Bank of New York in trust
for
registered Holders of CWABS, Inc., Asset-Backed Certificates,
Series 2006-15".
Funds in the Credit Comeback Excess Account shall be held in trust
for the
Certificateholders and the Class A-5B Insurer for the uses and
purposes set
forth in this Agreement.
Credit Comeback Excess Amount: With respect to the Credit
Comeback
Loans and any Master Servicer Advance Date, the portion of the sum
of the
following (without duplication) attributable to the excess, if any,
of the
actual mortgage rate on each Credit Comeback Loan and the Mortgage
Rate on
such Credit Comeback Loan: (i) all scheduled interest collected
during the
related Due Period with respect to the Credit Comeback Loans, (ii)
all
interest on prepayments received during the related Prepayment
Period with
respect to the Credit Comeback Loans, other than Prepayment
Interest Excess,
(iii) all Advances relating to interest with respect to the Credit
Comeback
Loans, (iv) all Compensating Interest with respect to the Credit
Comeback
Loans and (v) Liquidation Proceeds with respect to the Credit
Comeback Loans
collected during the related Due Period (to the extent such
Liquidation
Proceeds relate to interest), less all Nonrecoverable Advances
relating to
interest reimbursed during the related Due Period.
12
<PAGE>
Credit Comeback Excess Cashflow: With respect to any
Distribution
Date, any amounts in the Credit Comeback Excess Account available
for such
Distribution Date.
Credit Comeback Loan: Any Mortgage Loan for which the related
Mortgage Rate is subject to reduction (not exceeding 0.375% per
annum) for
good payment history of Scheduled Payments by the related
Mortgagor.
Cumulative Loss Trigger Event: With respect to a Distribution
Date
on or after the Stepdown Date, a Cumulative Loss Trigger Event will
be in
effect if (x) the aggregate amount of Realized Losses on the
Mortgage Loans
from the Cut-off Date for each such Mortgage Loan to (and
including) the last
day of the related Due Period (reduced by the aggregate amount of
any
Subsequent Recoveries received through the last day of that Due
Period)
exceeds (y) the applicable percentage, for such Distribution Date,
of the sum
of the aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans
and the Pre-Funded Amount, as set forth below:
<TABLE>
<CAPTION>
Distribution Date
Percentage
-----------------
----------
<S>
<C>
October 2008 -- September 2009..................... 0.70% with
respect to October 2008, plus an
additional 1/12th of 0.95% for each month
thereafter through September 2009
October 2009 -- September 2010..................... 1.65% with
respect to October 2009, plus an
additional 1/12th of 1.15% for each month
thereafter through September 2010
October 2010 -- September 2011..................... 2.80% with
respect to October 2010, plus an
additional 1/12th of 0.90% for each month
thereafter through September 2011
October 2011 -- September 2012..................... 3.70% with
respect to October 2011, plus an
additional 1/12th of 0.70% for each month
thereafter through September 2012
October 2012 -- September 2013..................... 4.40% with
respect to October 2012, plus an
additional 1/12th of 0.20% for each month
thereafter through September 2013
October 2013 and thereafter....................... 4.60%
</TABLE>
Current Interest: With respect to each Class of
Interest-Bearing
Certificates and each Distribution Date, the interest accrued at
the
applicable Pass-Through Rate for the applicable Accrual Period on
the
Certificate Principal Balance of such Class immediately prior to
such
Distribution Date.
13
<PAGE>
Cut-off Date: When used with respect to any Mortgage Loan the
"Cut-off Date" shall mean the Initial Cut-off Date or the related
Subsequent
Cut-off Date, as the case may be.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
Cut-off Date
after application of all payments of principal due on or prior to
the Cut-off
Date, whether or not received, and all Principal Prepayments
received on or
prior to the Cut-off Date, but without giving effect to any
installments of
principal received in respect of Due Dates after the Cut-off
Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding
under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan
that became
final and non-appealable, except such a reduction resulting from a
Deficient
Valuation or any other reduction that results in a permanent
forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation
by a court of competent jurisdiction of the Mortgaged Property in
an amount
less than the then outstanding indebtedness under such Mortgage
Loan, or any
reduction in the amount of principal to be paid in connection with
any
Scheduled Payment that results in a permanent forgiveness of
principal, which
valuation or reduction results from an order of such court that is
final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans
identified on the schedule of Mortgage Loans hereto set forth on
Exhibit F-2
hereof for which all or a portion of a related Mortgage File is not
delivered
to the Trustee on or prior to the Closing Date, and (ii) the
Subsequent
Mortgage Loans identified on the schedule of Subsequent Mortgage
Loans set
forth in Annex A to each related Subsequent Transfer Agreement for
which all
or a portion of the related Mortgage File is not delivered to the
Trustee on
or prior to the related Subsequent Transfer Date. The Depositor
shall deliver
(or cause delivery of) the Mortgage Files to the Trustee: (A) with
respect to
at least 50% of the Initial Mortgage Loans, not later than the
Closing Date
and with respect to at least 10% of the Subsequent Mortgage Loans
conveyed on
a Subsequent Transfer Date, not later than such Subsequent Transfer
Date, (B)
with respect to at least an additional 40% of the Initial Mortgage
Loans, not
later than 20 days after the Closing Date, and not later than 20
days after
the relevant Subsequent Transfer Date with respect to the remaining
Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date, and (C)
with respect
to the remaining Initial Mortgage Loans, not later than thirty days
after the
Closing Date. To the extent that Countrywide Home Loans, Inc. shall
be in
possession of any Mortgage Files with respect to any Delay Delivery
Mortgage
Loan, until delivery of such Mortgage File to the Trustee as
provided in
Section 2.01, Countrywide Home Loans, Inc. shall hold such files as
agent and
in trust for the Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by
a Replacement Mortgage Loan.
14
<PAGE>
Delinquency Trigger Event: With respect to any Distribution Date
on
or after the Stepdown Date, a Delinquency Trigger Event will be in
effect if
the Rolling Sixty-Day Delinquency Rate for Outstanding Mortgage
Loans equals
or exceeds the product of (x) the Senior Enhancement Percentage for
such
Distribution Date and (y) the applicable percentage listed below
for the most
senior Class of Interest-Bearing Certificates:
Class
Percentage
------------------------
----------------------
A.....................
45.98%
M-1...................
55.18%
M-2...................
67.80%
M-3...................
78.05%
M-4...................
90.40%
M-5...................
105.97%
M-6...................
126.99%
M-7...................
156.87%
M-8...................
181.83%
B.....................
235.31%
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof as the "Initial Certificate Balance of this
Certificate"
or, if not the foregoing, the Percentage Interest appearing on the
face
thereof, as applicable.
Depositor: CWABS, Inc., a Delaware corporation, or its successor
in
interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is Cede & Co., or any other
organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially be
the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5)
of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Book-Entry
Certificates,
the agreement among the Depositor and the initial Depository, dated
as of the
Closing Date, substantially in the form of Exhibit O.
Depository Participant: A broker, dealer, bank or other
financial
institution or other person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to any Distribution Date, the
15th
day of the month of such Distribution Date or, if such 15th day is
not a
Business Day, the immediately preceding Business Day.
Directing Certificateholder: As defined in Section 9.04(a).
15
<PAGE>
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(c) in the name
of the
Trustee for the benefit of the Certificateholders and the Class
A-5B Insurer
and designated "The Bank of New York, in trust for registered
Holders of
CWABS, Inc., Asset-Backed Certificates, Series 2006-15". Funds in
the
Distribution Account shall be held in trust for the
Certificateholders and the
Class A-5B Insurer for the uses and purposes set forth in this
Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
1:00
p.m. Pacific time on the Business Day immediately preceding such
Distribution
Date.
Distribution Date: The 25th day of each month, or if such day is
not
a Business Day, on the first Business Day thereafter, commencing in
October
2006.
Due Date: With respect to any Mortgage Loan and Due Period, the
due
date for Scheduled Payments of interest and/or principal on that
Mortgage Loan
occurring in such Due Period as provided in the related Mortgage
Note.
Due Period: With
respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the
calendar month
in which such Distribution Date occurs and ending on the first day
of the
month in which such Distribution Date occurs.
EDGAR: The Commission's Electronic Data Gathering, Analysis,
and
Retrieval system.
Eligible Account: Any of (i) an account or accounts maintained
with
a federal or state chartered depository institution or trust
company, the
long-term unsecured debt obligations and short-term unsecured debt
obligations
of which (or, in the case of a depository institution or trust
company that is
the principal subsidiary of a holding company, the debt obligations
of such
holding company, if Moody's is not a Rating Agency) are rated by
each Rating
Agency in one of its two highest long-term and its highest
short-term rating
categories respectively, at the time any amounts are held on
deposit therein,
or (ii) an account or accounts in a depository institution or trust
company in
which such accounts are insured by the FDIC (to the limits
established by the
FDIC) and the uninsured deposits in which accounts are otherwise
secured such
that, as evidenced by an Opinion of Counsel delivered to the
Trustee and to
each Rating Agency, the Certificateholders have a claim with
respect to the
funds in such account or a perfected first priority security
interest against
any collateral (which shall be limited to Permitted Investments)
securing such
funds that is superior to claims of any other depositors or
creditors of the
depository institution or trust company in which such account is
maintained,
or (iii) a trust account or accounts maintained with the corporate
trust
department of a federal or state chartered depository institution
or trust
company having capital and surplus of not less than $50,000,000,
acting in its
fiduciary capacity or (iv) any other account acceptable to the
Rating Agencies
without reduction or withdrawal of their then-current ratings of
the
Certificates (without regard to the Class A-5B Policy, in the case
of the
Class A-5B Certificates) as evidenced by a letter from each Rating
Agency to
the Trustee. Eligible Accounts may bear interest, and may include,
if
otherwise qualified under this definition, accounts maintained with
the
Trustee.
Eligible Repurchase Month: As defined in Section 3.12(d)
hereof.
16
<PAGE>
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the applicable
requirements of
the Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, Class
P
Certificates, Class C Certificates and Certificates of any Class
that does not
have or no longer has a rating of BBB- or its equivalent, or
better, from at
least one Rating Agency.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As
defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum
of
(i) the amount remaining after the distribution of interest to
Certificateholders for such Distribution Date pursuant to Section
4.04(a)(iv),
(ii) the amount remaining after the distribution of principal
to
Certificateholders for such Distribution Date, pursuant to
Section
4.04(b)(1)(C) or 4.04(b)(2)(D) and (iii) the Overcollateralization
Reduction
Amount for such Distribution Date.
Excess Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of the Overcollateralized
Amount for
such Distribution Date over the Overcollateralization Target Amount
for such
Distribution Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any Liquidation Proceeds and
Subsequent
Recoveries are in excess of the sum of (i) the unpaid principal
balance of
such Liquidated Mortgage Loan as of the date of liquidation of such
Liquidated
Mortgage Loan plus (ii) interest at the Mortgage Rate from the Due
Date as to
which interest was last paid or advanced to Certificateholders (and
not
reimbursed to the Master Servicer) up to the Due Date in the month
in which
Liquidation Proceeds are required to be distributed on the Stated
Principal
Balance of such Liquidated Mortgage Loan outstanding during each
Due Period as
to which such interest was not paid or advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended,
and
the rules and regulations promulgated thereunder.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and
Form
10-K required to be filed by the Depositor with respect to the
Trust Fund
under the Exchange Act.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of
(i)
the Servicing Fee Rate, (ii) the Trustee Fee Rate and (iii) with
respect to
any Mortgage Loan covered by a lender paid mortgage insurance
policy, the
related mortgage insurance premium rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date, the lesser of (1) the Overcollateralization
Deficiency
Amount and (2) the Excess Cashflow and Credit Comeback Excess
Cashflow
available for payment thereof.
17
<PAGE>
Fannie Mae: The Federal National Mortgage Association, a
federally
chartered and privately owned corporation organized and existing
under the
Federal National Mortgage Association Charter Act, or any successor
thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Fiscal Agent: As defined in the Class A-5B Policy.
Fitch: Fitch Ratings and its successors.
Five-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage
Rate that is fixed for 60 months after origination thereof before
such
Mortgage Rate becomes subject to adjustment.
Fixed Rate Certificates: The Class A-2, Class A-3, Class A-4,
Class
A-5A, Class A-5B and Class A-6 Certificates and the Subordinate
Certificates.
Form 10-D Disclosure Item: With respect to any Person, any
material
litigation or governmental proceedings pending against such Person,
or against
any of the Trust Fund, the Depositor, the Trustee, any co-trustee,
the Master
Servicer or any Subservicer, if such Person has actual knowledge
thereof.
Form 10-K Disclosure Item: With respect to any Person, (a) Form
10-D
Disclosure Item, and (b) any affiliations or relationships between
such Person
and any Item 1119 Party.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States created and existing under
Title III of
the Emergency Home Finance Act of 1970, as amended, or any
successor thereto.
Funding Period: The period from the Closing Date to and
including
the earlier to occur of (x) the date the amount in the Pre-Funding
Account is
less than $175,000 and (y) November 13, 2006.
Guaranteed Distributions: As defined in the Class A-5B Policy.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the Initial
Mortgage
Loans due after the Initial Cut-off Date and received by the Master
Servicer
before the Closing Date and not applied in computing the Cut-off
Date
Principal Balance thereof and (ii) interest on the Initial Mortgage
Loans due
after the Initial Cut-off Date and received by the Master Servicer
before the
Closing Date.
Initial Certificate Principal Balance: With respect to any
Certificate (other than the Class C Certificates) the Certificate
Principal
Balance of such Certificate or any predecessor Certificate on the
Closing
Date.
Initial Cut-off Date: In the case of any Initial Mortgage Loan,
the
later of (x) September 1, 2006 and (y) the date of origination of
such
Mortgage Loan.
18
<PAGE>
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trustee
on
the Closing Date pursuant to this Agreement as identified on the
Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
Insolvency Proceeding: As defined in Section 4.06(h).
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy including all riders and
endorsements thereto
in effect with respect to such Mortgage Loan, including any
replacement policy
or policies for any Insurance Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans
(other than by the Class A-5B Insurer under the Class A-5B Policy)
pursuant to
any Insurance Policy or any other insurance policy covering a
Mortgage Loan,
to the extent such proceeds are payable to the mortgagee under the
Mortgage,
the Master Servicer or the trustee under the deed of trust and are
not applied
to the restoration of the related Mortgaged Property or released to
the
Mortgagor in accordance with the procedures that the Master
Servicer would
follow in servicing mortgage loans held for its own account, in
each case
other than any amount included in such Insurance Proceeds in
respect of
Insured Expenses and received either prior to or in connection with
such
Mortgage Loan becoming a Liquidated Mortgage Loan.
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the Mortgage Loans.
Interest-Bearing Certificates: The Fixed Rate Certificates and
the
Adjustable Rate Certificates.
Interest Carry Forward Amount: With respect to each Class of
Interest-Bearing Certificates and each Distribution Date, the
excess of (i)
the Current Interest for such Class with respect to prior
Distribution Dates
over (ii) the amount actually distributed to such Class with
respect to
interest on such prior Distribution Dates.
Interest Determination Date: With respect to the first Accrual
Period for the Adjustable Rate Certificates, September 27, 2006.
With respect
to any Accrual Period for the Adjustable Rate Certificates
thereafter, the
second LIBOR Business Day preceding the commencement of such
Accrual Period.
Interest Funds: With respect to any Distribution Date, the
Interest
Remittance Amount for such Distribution Date, less the Trustee Fee
for such
Distribution Date.
Interest Remittance Amount: With respect to any Distribution
Date,
(x) the sum, without duplication, of (i) all scheduled interest
collected
during the related Due Period (for the avoidance of doubt, other
than Credit
Comeback Excess Amounts) with respect to the related Mortgage Loans
less the
related Servicing Fee, (ii) all interest on prepayments received
during the
related Prepayment Period with respect to such Mortgage Loans,
other than
Prepayment Interest Excess, (iii) all Advances relating to interest
with
respect to such Mortgage Loans, (iv) all related Compensating
Interest with
respect to such Mortgage Loans, (v) Liquidation Proceeds with
respect to such
Mortgage Loans collected during the related Due Period (to the
extent such
Liquidation Proceeds relate to interest) and (vi) the related
Seller Shortfall
Interest Requirement,
19
<PAGE>
less (y) all reimbursements to the Master Servicer during the
related Due
Period for Advances of interest previously made.
Investment Letter: As defined in Section 5.02(b).
Item 1119 Party: The Depositor, any Seller, the Master Servicer,
the
Trustee, any Subservicer, any originator identified in the
Prospectus
Supplement, the Corridor Contract Counterparty and any other
material
transaction party, as identified in Exhibit Z hereto, as updated
pursuant to
Section 11.04.
Latest Possible Maturity Date: The Distribution Date following
the
third anniversary of the scheduled maturity date of the Mortgage
Loan having
the latest scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of
London,
England and New York City, U.S.A. are open and conducting
transactions in
foreign currency and exchange.
Limited Exchange Act Reporting Obligations: The obligations of
the
Master Servicer under Section 3.17(b), Section 6.02 and Section
6.04 with
respect to notice and information to be provided to the Depositor
and Article
XI (except Section 11.07(a)(1) and (2)).
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan that has been liquidated through
deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization
as provided
by applicable law governing the real property subject to the
related Mortgage
and any security agreements and as to which the Master Servicer has
certified
in the related Prepayment Period that it has received all amounts
it expects
to receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of
Mortgage
Loans, whether through trustee's sale, foreclosure sale or
otherwise or
amounts received in connection with any condemnation or partial
release of a
Mortgaged Property and any other proceeds received in connection
with an REO
Property received in connection with or prior to such Mortgage Loan
becoming a
Liquidated Mortgage Loan (other than the amount of such net
proceeds
representing any profit realized by the Master Servicer in
connection with the
disposition of any such properties), less the sum of related
unreimbursed
Advances, Servicing Fees and Servicing Advances.
Loan Number and Borrower Identification Mortgage Loan Schedule:
With
respect to any Subsequent Transfer Date, the Loan Number and
Borrower
Identification Mortgage Loan Schedule delivered in connection with
such
Subsequent Transfer Date pursuant to Section 2.01(f). Each Loan
Number and
Borrower Identification Mortgage Loan Schedule shall contain the
information
specified in the definition of "Mortgage Loan Schedule" with
respect to the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer
Date, and each
Loan Number and Borrower Identification Mortgage Loan Schedule
shall be deemed
to be included in the Mortgage Loan Schedule.
20
<PAGE>
Loan-to-Value Ratio: The fraction, expressed as a percentage,
the
numerator of which is the original principal balance of the related
Mortgage
Loan and the denominator of which is the Appraised Value of the
related
Mortgaged Property.
Majority Holder: The Holders of Certificates evidencing at least
51%
of the Voting Rights allocated to such Class of Certificates.
Master REMIC: As defined in the Preliminary Statement.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its
capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date, the
Business Day immediately preceding such Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The amounts
(i)
payable by the Master Servicer in respect of any Prepayment Charges
waived
other than in accordance with the standard set forth in the first
sentence of
Section 3.20(a), or (ii) collected from the Master Servicer in
respect of a
remedy for the breach of the representation made by CHL set forth
in Section
3.20(c).
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
Minimum Auction Amount: With respect to any auction of the
Mortgage
Loans and any REO Properties pursuant to Section 9.04, the sum of
(i) the
Termination Price that would be payable by the NIM Insurer if the
Optional
Termination were exercised in the following calendar month pursuant
to Section
9.01 and (ii) all reasonable fees and expenses incurred by the
Trustee in
connection with any auction conducted pursuant to Section 9.04.
Modified Mortgage Loan: As defined in Section 3.12(a).
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage
Loan and its
successors and assigns.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
Moody's: Moody's Investors Service, Inc. and its successors.
21
<PAGE>
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on or first priority ownership interest in an estate in
fee simple
in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents
delivered to the Trustee to be added to the Mortgage File pursuant
to this
Agreement.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to
time amended by the Master Servicer to reflect the deletion of
Liquidated
Mortgage Loans and Deleted Mortgage Loans and the addition of (x)
Replacement
Mortgage Loans pursuant to the provisions of this Agreement and (y)
Subsequent
Mortgage Loans pursuant to the provisions of this Agreement and any
Subsequent
Transfer Agreement) transferred to the Trustee as part of the Trust
Fund and
from time to time subject to this Agreement, attached hereto as
Exhibit F-1,
setting forth in the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii)
the Appraised Value;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is
either (a) a detached single-family dwelling, (b) a two-family
residential property, (c) a three-family residential property, (d)
a
four-family residential property, (e) planned unit development,
(f)
a low-rise condominium unit, (g) a high-rise condominium unit or
(h)
manufactured housing;
(xi) a code indicating whether such Mortgage Loan is a Credit
Comeback Loan;
(xii) the purpose of the Mortgage Loan;
(xiii) the Mortgage Rate as of the Cut-off Date;
22
<PAGE>
(xiv) a code indicating whether the Mortgage Loan is a CHL
Mortgage Loan, a Park Monaco Mortgage Loan or a Park Sienna
Mortgage
Loan; and
(xv) the premium rate for any lender-paid mortgage insurance,
if applicable.
Such schedule shall also set forth the total of the amounts
described under
(v) above for all of the Mortgage Loans. The Mortgage Loan Schedule
shall be
deemed to include each Loan Number and Borrower Identification
Mortgage Loan
Schedule delivered pursuant to Section 2.01(f) and all the related
Subsequent
Mortgage Loans and Subsequent Mortgage Loan information included
therein.
Mortgage Loans: Such of the mortgage loans transferred and
assigned
to the Trustee pursuant to the provisions hereof and any Subsequent
Transfer
Agreement as from time to time are held as part of the Trust Fund
(including
any REO Property), the mortgage loans so held being identified in
the Mortgage
Loan Schedule, notwithstanding foreclosure or other acquisition of
title of
the related Mortgaged Property. Any mortgage loan that was intended
by the
parties hereto to be transferred to the Trust Fund as indicated by
such
Mortgage Loan Schedule which is in fact not so transferred for any
reason,
including a breach of the representation contained in Section 2.02
hereof,
shall continue to be a Mortgage Loan hereunder until the Purchase
Price with
respect thereto has been paid to the Trust Fund.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note
from time to time; provided, however, the Mortgage Rate for each
Credit
Comeback Loan shall be treated for all purposes of payments on
the
Certificates, including the calculation of the Pass-Through Rates
and the
applicable Net Rate Cap, as reduced by 0.375% on the Due Date
following the
end of each of the first four annual periods after the origination
date,
irrespective of whether the Mortgagor qualifies for the reduction
by having a
good payment history.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor:
The obligors on a Mortgage Note.
NAS Factor: For any Distribution Date set forth below, the
percentage set forth in the following table:
Distribution Date
Percentage
------------------------------------------------------
----------------
October 2006 -- September 2009........................
0%
October 2009 -- September 2011........................
45%
October 2011 -- September 2012........................
80%
October 2012 -- September 2013........................
100%
October 2013 and thereafter...........................
300%
23
<PAGE>
NAS Principal Distribution Amount: For any Distribution Date,
an
amount equal to the product of (i) the Class A-6 Portion for such
Distribution
Date, (ii) any amounts distributed to the Class A Certificates
pursuant to
Section 4.04(b) and 4.04(c)(1) for such Distribution Date and (iii)
the NAS
Factor for such Distribution Date.
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the
per annum rate equal to the Mortgage Rate less the Servicing Fee
Rate.
"Net Rate Cap" for each Distribution Date is equal to:
(i) with respect to each Class of Interest-Bearing Certificates
(other than the Class A-5B Certificates), the weighted average
Adjusted
Net
Mortgage Rate of the Mortgage Loans as of the first day of the
related Due Period (after giving effect to Principal Prepayments
received
during the Prepayment Period that ends during such Due Period),
adjusted,
in
the case of the Class A-1 Certificates only, to an effective
rate
reflecting the calculation of interest on the basis of the actual
number
of
days elapsed during the related Accrual Period and a 360-day year,
and
(ii) with respect to the Class A-5B Certificates, the Net Rate
Cap
for
the other classes of Interest-Bearing Certificates less the
Class
A-5B
Premium Rate.
Net Rate Carryover: With respect to any Class of
Interest-Bearing
Certificates and any Distribution Date, the sum of (A) the excess
of (i) the
amount of interest that such Class would otherwise have accrued for
such
Distribution Date had the Pass-Through Rate for such Class and the
related
Accrual Period not been determined based on the applicable Net Rate
Cap, over
(ii) the amount of interest accrued on such Class at the applicable
Net Rate
Cap for such Distribution Date and (B) the Net Rate Carryover for
such Class
for all previous Distribution Dates not previously paid pursuant to
Section
4.04, together with interest thereon at the then-applicable
Pass-Through Rate
for such Class, without giving effect to the applicable Net Rate
Cap.
NIM Insurer: Any insurer guarantying at the request of CHL
certain
payments under notes backed or secured by the Class C or Class P
Certificates.
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Master Servicer that, in the good faith
judgment of
the Master Servicer, will not or, in the case of a current
delinquency, would
not, be ultimately recoverable by the Master Servicer from the
related
Mortgagor, related Liquidation Proceeds or otherwise.
Non-United States Person: A Person that is not a citizen or
resident
of the United States, a corporation, partnership, or other entity
(treated as
a corporation or a partnership for federal income tax purposes)
created or
organized in or under the laws of the United States, any state
thereof or the
District of Columbia, an estate whose income from sources without
the United
States is includible in gross income for United States federal
income tax
purposes regardless of its connection with the conduct of a trade
or business
within the United States, or a trust if a court within the United
States is
able to exercise primary supervision over the
24
<PAGE>
administration of the trust and one or more United States persons
have
authority to control all substantial decisions of the trustor.
OC Floor: With respect to any Distribution Date, an amount equal
to
0.50% of the sum of the aggregate Cut-off Date Principal Balance of
the
Initial Mortgage Loans and the Pre-Funded Amount.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman
of the
Board, the President, a Managing Director, a Vice President
(however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the
Depositor,
(ii) in the case of the Master Servicer, signed by the President,
an Executive
Vice President, a Vice President, an Assistant Vice President, the
Treasurer,
or one of the Assistant Treasurers or Assistant Secretaries of
Countrywide GP,
Inc., its general partner, (iii) if provided for in this Agreement,
signed by
a Servicing Officer, as the case may be, and delivered to the
Depositor and
the Trustee, as the case may be, as required by this Agreement, or
(iv) in the
case of any other Person, signed by an authorized officer of such
Person.
One-Month LIBOR: With respect to any Accrual Period for the
Adjustable Rate Certificates, the rate determined by the Trustee on
the
related Interest Determination Date on the basis of the rate for
U.S. dollar
deposits for one month as quoted on the Bloomberg Terminal on such
Interest
Determination Date; provided that the parties hereto acknowledge
that
One-Month LIBOR calculated for the first Accrual Period for the
Adjustable
Rate Certificates shall equal 5.32438% per annum. If such rate is
not quoted
on the Bloomberg Terminal (or if such service is no longer offered,
such other
service for displaying One-Month LIBOR or comparable rates as may
be
reasonably selected by the Trustee), One-Month LIBOR for the
applicable
Accrual Period for the Adjustable Rate Certificates will be the
Reference Bank
Rate. If no such quotations can be obtained by the Trustee and no
Reference
Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to
the preceding Accrual Period for the Adjustable Rate
Certificates.
Opinion of Counsel: A written opinion of counsel, who may be
counsel
for the Depositor or the Master Servicer, reasonably acceptable to
each
addressee of such opinion; provided that with respect to Section
6.04 or
10.01, or the interpretation or application of the REMIC
Provisions, such
counsel must (i) in fact be independent of the Depositor and the
Master
Servicer, (ii) not have any direct financial interest in the
Depositor or the
Master Servicer or in any affiliate of either and (iii) not be
connected with
the Depositor or the Master Servicer as an officer, employee,
promoter,
underwriter, trustee, partner, director or person performing
similar
functions.
Optional Termination: The termination of the Trust Fund
provided
hereunder pursuant to clause (a) of the first sentence of Section
9.01.
Optional Termination Date: The first Distribution Date on which
the
aggregate Stated Principal Balance of the Mortgage Loans is less
than or equal
to 10% of the sum of the aggregate Cut-off Date Principal Balance
of the
Initial Mortgage Loans and the Pre-Funded Amount.
25
<PAGE>
Original Value: The value of the property underlying a Mortgage
Loan
based, in the case of the purchase of the underlying Mortgaged
Property, on
the lower of an appraisal satisfactory to the Master Servicer or
the sales
price of such property or, in the case of a refinancing, on an
appraisal
satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage
Loan with a Stated Principal Balance greater than zero that was not
the
subject of a Principal Prepayment in full, and that did not become
a
Liquidated Mortgage Loan, prior to the end of the related
Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the
Overcollateralization
Target Amount exceeds the Overcollateralized Amount on such
Distribution Date
(after giving effect to distribution of the Principal Distribution
Amount
(other than the portion thereof consisting of the Extra Principal
Distribution
Amount) on such Distribution Date).
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (i) the
Excess
Overcollateralization Amount for such Distribution Date and (ii)
the Principal
Remittance Amount for such Distribution Date.
Overcollateralization Target Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date, an amount equal
to 3.40% of
the sum of the aggregate Cut-off Date Principal Balance of the
Initial
Mortgage Loans and the Pre-Funded Amount and (b) on or after the
Stepdown
Date, the greater of (i) an amount equal to 6.80% of the aggregate
Stated
Principal Balance of the Mortgage Loans for the current
Distribution Date and
(ii) the OC Floor; provided, however, that if a Trigger Event is in
effect on
any Distribution Date, the Overcollateralization Target Amount will
be the
Overcollateralization Target Amount as in effect for the prior
Distribution
Date.
Overcollateralized Amount: With respect to any Distribution
Date,
the amount, if any, by which (x) the sum of the aggregate Stated
Principal
Balance of the Mortgage Loans for such Distribution Date and any
amount on
deposit in the Pre-Funding Account exceeds (y) the aggregate
Certificate
Principal Balance of the Interest-Bearing Certificates as of such
Distribution
Date (after giving effect to distribution of the Principal
Remittance Amounts
to be made on such Distribution Date and, in the case of the
Distribution Date
immediately following the end of the Funding Period, any amounts to
be
released from the Pre-Funding Account).
26
<PAGE>
Ownership Interest: As to any Certificate, any ownership interest
in
such Certificate including any interest in such Certificate as the
Holder
thereof and any other interest therein, whether direct or indirect,
legal or
beneficial.
Park Monaco: Park Monaco Inc., a Delaware corporation, and its
successors and assigns.
Park Monaco Mortgage Loans: The Mortgage Loans identified as such
on
the Mortgage Loan Schedule for which Park Monaco is the applicable
Seller.
Park Sienna: Park Sienna LLC, a Delaware limited liability
company,
and its successors and assigns.
Park Sienna Mortgage Loans: The Mortgage Loans identified as such
on
the Mortgage Loan Schedule for which Park Sienna is the applicable
Seller.
Pass-Through Margin: With respect to the Class A-1 Certificates
means 0.110%.
Pass-Through Rate: With respect to any Accrual Period and the
Class
A-1 Certificates, the lesser of (x) One-Month LIBOR for such
Accrual Period
plus the Pass-Through Margin for such Class and Accrual Period and
(y) the
applicable Net Rate Cap for such Class and the related Distribution
Date. With
respect to any Accrual Period and each Class of Fixed Rate
Certificates, the
lesser of (x) the per annum rate set forth in the following table
for such
Class and Accrual Period and (y) the applicable Net Rate Cap for
such Class
and the related Distribution Date.
Pass-Through
Pass-Through
Rate (1)
Rate (2)
Class
A-2............................
5.683%
5.683%
Class
A-3............................
5.689%
5.689%
Class
A-4............................
5.961%
5.961%
Class
A-5A...........................
6.265%
6.765%
Class
A-5B...........................
6.186%
6.686%
Class
A-6............................
5.826%
5.826%
Class
M-1............................
6.122%
6.122%
Class
M-2............................
6.142%
6.142%
Class
M-3............................
6.221%
6.221%
Class
M-4............................
6.320%
6.320%
Class
M-5............................
6.419%
6.419%
Class
M-6............................
6.568%
6.568%
Class
M-7............................
6.850%
6.850%
Class
M-8............................
6.850%
6.850%
Class
B..............................
6.850%
6.850%
(1) For each Accrual Period relating to any Distribution Date
occurring on or
prior to
the Optional Termination Date.
(2) For each Accrual Period relating to any Distribution Date
occurring after
the
Optional Termination Date.
27
<PAGE>
Percentage Interest: With respect to any Interest-Bearing
Certificate, a fraction, expressed as a percentage, the numerator
of which is
the Certificate Principal Balance represented by such Certificate
and the
denominator of which is the aggregate Certificate Principal Balance
of the
related Class. With respect to the Class C, Class P and Class
A-R
Certificates, the portion of the Class evidenced thereby, expressed
as a
percentage, as stated on the face of such Certificate.
Performance Certification: As defined in Section 11.05.
Permitted Investments: At any time, any one or more of the
following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit
of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving
the
highest long-term debt rating of each Rating Agency, or such
lower
rating as each Rating Agency has confirmed in writing is
sufficient
for the ratings originally assigned to the Certificates by such
Rating Agency (without regard to the Class A-5B Policy, in the
case
of the Class A-5B Certificates);
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating
of
each Rating Agency, or such lower rating as each Rating Agency
has
confirmed in writing is sufficient for the ratings originally
assigned to the Certificates by such Rating Agency (without
regard
to the Class A-5B Policy, in the case of the Class A-5B
Certificates);
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal
and/or state banking authorities, provided that the commercial
paper
and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the
commercial
paper or long-term unsecured debt obligations of such holding
company, but only if Moody's is not a Rating Agency) are then
rated
one of the two highest long-term and the highest short-term
ratings
of each
such Rating Agency for such securities, or such lower
ratings as each Rating Agency has confirmed in writing is
sufficient
for the ratings originally assigned to the Certificates by such
Rating Agency (without regard to the Class A-5B Policy, in the
case
of the Class A-5B Certificates);
(v) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into
with a depository institution or trust company (acting as
principal)
described in clause (iv) above;
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(vi) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the
face
amount thereof) bearing interest or sold at a discount issued by
any
corporation incorporated under the laws of the United States or
any
state thereof which, at the time of such investment, have one of
the
two highest long term ratings of each Rating Agency (except (x)
if
the Rating Agency is Moody's, such rating shall be the highest
commercial paper rating of S&P for any such securities) and
(y), or
such lower rating as each Rating Agency has confirmed in writing
is
sufficient for the ratings originally assigned to the
Certificates
by such Rating Agency (without regard to the Class A-5B Policy,
in
the case of the Class A-5B Certificates);
(vii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the
time
such interests are held in such fund has the highest applicable
long
term rating by each Rating Agency or such lower rating as each
Rating Agency has confirmed in writing is sufficient for the
ratings
originally assigned to the Certificates by such Rating Agency
(without regard to the Class A-5B Policy, in the case of the
Class
A-5B Certificates);
(viii) short term investment funds sponsored by any trust
company or national banking association incorporated under the
laws
of the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in their
respective
highest applicable rating category or such lower rating as each
Rating Agency has confirmed in writing is sufficient for the
ratings
originally assigned to the Certificates by such Rating Agency
(without regard to the Class A-5B Policy, in the case of the
Class
A-5B Certificates); and
(ix) such other relatively risk free investments having a
specified stated maturity and bearing interest or sold at a
discount
acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by
any Rating Agency (without regard to the Class A-5B
Policy, in the case of the Class A-5B Certificates), as evidenced
by
a signed writing delivered by each Rating Agency, and
reasonably
acceptable to the NIM Insurer, as evidenced by a signed writing
delivered by the NIM Insurer;
provided, that no such instrument shall be a Permitted Investment
if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or (iii) is purchased at a deep discount; provided further
that no
such instrument shall be a Permitted Investment (A) if such
instrument
evidences principal and interest payments derived from obligations
underlying
such instrument and the interest payments with respect to such
instrument
provide a yield to maturity of greater than 120% of the yield to
maturity at
par of such underlying obligations, or (B) if it may be redeemed at
a price
below the purchase price (the foregoing clause (B) not to apply to
investments
in units of money market funds pursuant to clause (vii) above);
provided
further that no amount beneficially owned by any REMIC (including,
without
limitation, any amounts collected by the Master Servicer but not
yet deposited
in the Certificate Account) may be invested in investments (other
than money
market funds) treated as equity interests for Federal income tax
purposes,
unless the Master Servicer shall receive an Opinion of Counsel, at
the expense
of Master
29
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Servicer, to the effect that such investment will not adversely
affect the
status of any such REMIC as a REMIC under the Code or result in
imposition of
a tax on any such REMIC. Permitted Investments that are subject to
prepayment
or call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United
States,
any State or political subdivision thereof, or any agency or
instrumentality
of any of the foregoing, (ii) a foreign government, International
Organization
or any agency or instrumentality of either of the foregoing, (iii)
an
organization (except certain farmers' cooperatives described in
section 521 of
the Code) that is exempt from tax imposed by Chapter 1 of the Code
(including
the tax imposed by section 511 of the Code on unrelated business
taxable
income) on any excess inclusions (as defined in section 860E(c)(1)
of the
Code) with respect to any Class A-R Certificate, (iv) rural
electric and
telephone cooperatives described in section 1381(a)(2)(C) of the
Code, (v) an
"electing large partnership" as defined in section 775 of the Code,
(vi) a
Person that is not a citizen or resident of the United States, a
corporation,
partnership, or other entity (treated as a corporation or a
partnership for
federal income tax purposes) created or organized in or under the
laws of the
United States, any state thereof or the District of Columbia, or an
estate
whose income from sources without the United States is includible
in gross
income for United States federal income tax purposes regardless of
its
connection with the conduct of a trade or business within the
United States,
or a trust if a court within the United States is able to exercise
primary
supervision over the administration of the trust and one or more
United States
Persons have authority to control all substantial decisions of the
trustor
unless such Person has furnished the transferor and the Trustee
with a duly
completed Internal Revenue Service Form W-8ECI, and (vii) any other
Person so
designated by the Trustee based upon an Opinion of Counsel that the
Transfer
of an Ownership Interest in a Class A-R Certificate to such Person
may cause
any REMIC formed hereunder to fail to qualify as a REMIC at any
time that any
Certificates are Outstanding. The terms "United States," "State"
and
"International Organization" shall have the meanings set forth in
section 7701
of the Code or successor provisions. A corporation will not be
treated as an
instrumentality of the United States or of any State or political
subdivision
thereof for these purposes if all of its activities are subject to
tax and,
with the exception of the Federal Home Loan Mortgage Corporation, a
majority
of its board of directors is not selected by such government
unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Plan: An "employee benefit plan" as defined in section 3(3) of
ERISA
that is subject to Title I of ERISA, a "plan" as defined in section
4975 of
the Code that is subject to section 4975 of the Code, or any Person
investing
on behalf of or with plan assets (as defined in 29 CFR
ss.2510.3-101 or
otherwise under ERISA) of such an employee benefit plan or
plan.
Pool Stated Principal Balance: The aggregate of the Stated
Principal
Balances of the Mortgage Loans which were Outstanding Mortgage
Loans.
Preference Claim: As defined in Section 4.06(h).
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Pre-Funded Amount: The amount deposited in the Pre-Funding
Account
on the Closing Date, which shall equal $73,042,386.65.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of
the Trustee
for the benefit of the Certificateholders and the Class A-5B
Insurer and
designated "The Bank of New York, in trust for registered holders
of CWABS,
Inc., Asset-Backed Certificates, Series 2006-15." Funds in the
Pre-Funding
Account shall be held in trust for the Certificateholders for the
uses and
purposes set forth in this Agreement and shall not be a part of any
REMIC
created hereunder, provided, however that any investment income
earned from
Permitted Investments made with funds in the Pre-Funding Account
will be for
the account of CHL.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the
Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges
or
premiums, if any, due in connection with a full or partial
prepayment of such
Mortgage Loan within the related Prepayment Charge Period in
accordance with
the terms thereof (other than any Master Servicer Prepayment Charge
Payment
Amount).
Prepayment Charge Period: With respect to any Mortgage Loan,
the
period of time during which a Prepayment Charge may be imposed.
Prepayment Charge Schedule: As of the Initial Cut-off Date with
respect to each Initial Mortgage Loan and as of the Subsequent
Cut-off Date
with respect to each Subsequent Mortgage Loan, a list attached
hereto as
Schedule I (including the Prepayment Charge Summary attached
thereto), setting
forth the following information with respect to each Prepayment
Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of
the Cut-off Date.
As of the Closing Date, the Prepayment Charge Schedule shall
contain
the necessary information for each Initial Mortgage Loan. The
Prepayment
Charge Schedule shall be amended by the Master Servicer upon the
sale of any
Subsequent Mortgage Loans to the Trust Fund. In addition, the
Prepayment
Charge Schedule shall be amended from time to time by the Master
Servicer in
accordance with the provisions of this Agreement and a copy of each
related
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<PAGE>
amendment shall be furnished by the Master Servicer to the Class P
and Class C
Certificateholders and the NIM Insurer.
Prepayment Interest Excess: With respect to any Distribution
Date,
for each Mortgage Loan that was the subject of a Principal
Prepayment during
the period from the related Due Date to the end of the related
Prepayment
Period, any payment of interest received in connection therewith
(net of any
applicable Servicing Fee) representing interest accrued for any
portion of
such month of receipt.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a partial
Principal
Prepayment or a Principal Prepayment in full during the period from
the
beginning of the related Prepayment Period to the Due Date in such
Prepayment
Period (other than a Principal Prepayment in full resulting from
the purchase
of a Mortgage Loan pursuant to Section 2.02, 2.03, 2.04, 3.12 or
9.01 hereof)
and for each Mortgage Loan that became a Liquidated Mortgage Loan
during the
related Due Period, the amount, if any, by which (i) one month's
interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of
such
Mortgage Loan immediately prior to such prepayment (or liquidation)
or in the
case of a partial Principal Prepayment on the amount of such
prepayment (or
Liquidation Proceeds) exceeds (ii) the amount of interest paid or
collected in
connection with such Principal Prepayment or such Liquidation
Proceeds.
Prepayment Period: As to any Distribution Date and related Due
Date,
the period beginning with the opening of business on the sixteenth
day of the
calendar month preceding the month in which such Distribution Date
occurs (or,
with respect to the first Distribution Date, the period beginning
with the
opening of business on September 2, 2006) and ending on the close
of business
on the fifteenth day of the month in which such Distribution Date
occurs.
Prime Rate: The prime commercial lending rate of The Bank of
New
York, as publicly announced to be in effect from time to time. The
Prime Rate
shall be adjusted automatically, without notice, on the effective
date of any
change in such prime commercial lending rate. The Prime Rate is
not
necessarily The Bank of New York's lowest rate of interest.
Principal Distribution Amount: With respect to each
Distribution
Date, the sum of (i) the Principal Remittance Amount for such
Distribution
Date, (ii) the Extra Principal Distribution Amount for such
Distribution Date,
and (iii) with respect to the Distribution Date immediately
following the end
of the Funding Period, the amount, if any, remaining in the
Pre-Funding
Account at the end of the Funding Period (net of any investment
income
therefrom), minus (iv) any Overcollateralization Reduction
Amount.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan (including
loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and
9.01
hereof) that is received in advance of its scheduled Due Date to
the extent it
is not accompanied by an amount as to interest representing
scheduled interest
due on any date or dates in any month or months subsequent to the
month of
prepayment. Partial Principal Prepayments shall be applied by the
Master
Servicer in accordance with the terms of the related Mortgage
Note.
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<PAGE>
Principal Remittance Amount: With respect to any Distribution
Date,
(a) the sum, without duplication, of: (i) the scheduled principal
collected
with respect to the Mortgage Loans during the related Due Period or
advanced
with respect to such Distribution Date, (ii) Principal Prepayments
collected
in the related Prepayment Period, with respect to the Mortgage
Loans, (iii)
the Stated Principal Balance of each Mortgage Loan that was
repurchased by a
Seller or purchased by the Master Servicer with respect to such
Distribution
Date, (iv) the amount, if any, by which the aggregate unpaid
principal balance
of any Replacement Mortgage Loans delivered by the Sellers in
connection with
a substitution of a Mortgage Loan is less than the aggregate unpaid
principal
balance of any Deleted Mortgage Loans and (v) all Liquidation
Proceeds (to the
extent such Liquidation Proceeds related to principal) and
Subsequent
Recoveries collected during the related Due Period; less (b) all
Advances
relating to principal and certain expenses reimbursable pursuant to
Section
6.03 and reimbursed during the related Due Period.
Principal Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee pursuant to Section 3.08 in the
name of
the Trustee for the benefit of the Certificateholders and
designated "The Bank
of New York in trust for registered Holders of CWABS, Inc.,
Asset-Backed
Certificates, Series 2006-15". Funds in the Principal Reserve Fund
shall be
held in trust for the Certificateholders for the uses and purposes
set forth
in this Agreement.
Private Certificates: The Class M-7, Class M-8, Class B, Class C
and
Class P Certificates.
Prospectus: The prospectus dated August 28, 2006, relating to
asset-backed securities to be sold by the Depositor.
Prospectus Supplement: The prospectus supplement dated September
27,
2006 relating to the public offering of the certain Classes of
Certificates
offered thereby.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to
be
(1) repurchased by a Seller or purchased by the Master Servicer,
as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2)
repurchased
by the Depositor pursuant to Section 2.04 hereof, or (y) that the
Master
Servicer has a right to purchase pursuant to Section 3.12 hereof,
an amount
equal to the sum of (i) 100% of the unpaid principal balance (or,
if such
purchase or repurchase, as the case may be, is effected by the
Master
Servicer, the Stated Principal Balance) of the Mortgage Loan as of
the date of
such purchase, (ii) accrued interest thereon at the applicable
Mortgage Rate
(or, if such purchase or repurchase, as the case may be, is
effected by the
Master Servicer, at the Net Mortgage Rate) from (a) the date
through which
interest was last paid by the Mortgagor (or, if such purchase or
repurchase,
as the case may be, is effected by the Master Servicer, the date
through which
interest was last advanced and not reimbursed by the Master
Servicer) to (b)
the Due Date in the month in which the Purchase Price is to be
distributed to
Certificateholders and (iii) any costs, expenses and damages
incurred by the
Trust Fund resulting
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<PAGE>
from any violation of any predatory or abusive lending law in
connection with
such Mortgage Loan.
Qualified Bidder: With respect to any auction pursuant to
Section
9.04, any institution that is a regular purchaser and/or seller in
the
secondary market of residential mortgage loans as determined by the
Trustee
(or any advisor on its behalf), in its sole discretion, and any
holder of an
interest in the Class C Certificates; provided, however, that
neither CHL nor
any of its affiliates shall constitute a Qualified Bidder.
Rating Agency: Each of Moody's, S&P and Fitch. If any such
organization or its successor is no longer in existence, "Rating
Agency" shall
be a nationally recognized statistical rating organization, or
other
comparable Person, identified as a "Rating Agency" in the
Underwriter's
Exemption and designated by the Depositor, notice of which
designation shall
be given to the Trustee. References herein to a given rating
category of a
Rating Agency shall mean such rating category without giving effect
to any
modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an
amount (not less than zero or more than the Stated Principal
Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the
Stated
Principal Balance of such Liquidated Mortgage Loan as of the date
of such
liquidation, minus (ii) the Liquidation Proceeds, if any, received
in
connection with such liquidation during the month in which such
liquidation
occurs, to the extent applied as recoveries of principal of the
Liquidated
Mortgage Loan. With respect to each Mortgage Loan that has become
the subject
of a Deficient Valuation, (i) if the value of the related Mortgaged
Property
was reduced below the principal balance of the related Mortgage
Note, the
amount by which the value of the Mortgaged Property was reduced
below the
principal balance of the related Mortgage Note, and (ii) if the
principal
amount due under the related Mortgage Note has been reduced, the
difference
between the principal balance of the Mortgage Loan outstanding
immediately
prior to such Deficient Valuation and the principal balance of the
Mortgage
Loan as reduced by the Deficient Valuation.
Record Date: With respect to any Distribution Date and the
Adjustable Rate Certificates, the Business Day immediately
preceding such
Distribution Date, or if such Certificates are no longer
Book-Entry
Certificates, the last Business Day of the month preceding the
month of such
Distribution Date. With respect to any Distribution Date and the
Fixed Rate
Certificates and the Class A-R and Class C and Class P
Certificates, the last
Business Day of the month preceding the month of such Distribution
Date.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest
whole multiple
of 0.03125%) of the offered rates for United States dollar deposits
for one
month that are quoted by the Reference Banks as of 11:00 a.m., New
York City
time, on the related Interest Determination Date to prime banks in
the London
interbank market for a period of one month in amounts approximately
equal to
the outstanding aggregate Certificate Principal Balance of the
Adjustable Rate
Certificates on such Interest Determination Date, provided that at
least two
such Reference Banks provide such rate. If fewer than two offered
rates
appear, the Reference Bank Rate will be the arithmetic mean
(rounded upwards,
if necessary, to the nearest whole multiple of 0.03125%) of the
rates quoted
by one or more major banks in New York City, selected by the
Trustee, as of
11:00 a.m., New
34
<PAGE>
York City time, on such date for loans in U.S. dollars to leading
European
banks for a period of one month in amounts approximately equal to
the
aggregate Certificate Principal Balance of the Adjustable Rate
Certificates on
such Interest Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and NatWest,
N.A.,
provided that if any of the foregoing banks are not suitable to
serve as a
Reference Bank, then any leading banks selected by the Trustee
which are
engaged in transactions in Eurodollar deposits in the
international
Eurocurrency market (i) with an established place of business in
London,
England, (ii) not controlling, under the control of or under common
control
with the Depositor, CHL or the Master Servicer and (iii) which have
been
designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than the Class A-R
Certificates.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended
from time to time, and subject to such clarification and
interpretation as
have been provided by the Commission in the adopting release
(Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506,
1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be
provided by
the Commission or its staff from time to time and publicly
available.
Relief Act: The Servicemembers Civil Relief Act.
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits which appear at section
860A
through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions,
and regulations and rulings promulgated thereunder, as the
foregoing may be in
effect from time to time.
Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM Insurer in accordance with
Section 4.04.
REO Property: A Mortgaged Property acquired by the Master
Servicer
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a
Seller
for a Deleted Mortgage Loan which must, on the date of such
substitution, as
confirmed in a Request for File Release, (i) have a Stated
Principal Balance,
after deduction of the principal portion of the Scheduled Payment
due in the
month of substitution, not in excess of, and not less than 90% of
the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) have the same
or higher
credit quality characteristics than that of the Deleted Mortgage
Loan; (iii)
be accruing interest at a fixed rate not more than 1% per annum
higher or
lower than that of the Deleted Mortgage Loan; (iv) have a
Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (v) have a
remaining term to
maturity not greater than (and not more than one year less than)
that of the
Deleted Mortgage Loan; (vi) not permit conversion of the Mortgage
Rate from a
fixed rate to a variable rate or vice versa; (vii) provide for a
Prepayment
Charge on terms substantially similar
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<PAGE>
to those of the Prepayment Charge, if any, of the Deleted Mortgage
Loan;
(viii) have the same occupancy type and lien priority as the
Deleted Mortgage
Loan; and (ix) comply with each representation and warranty set
forth in
Section 2.03 as of the date of substitution; provided, however,
that
notwithstanding the foregoing, to the extent that compliance with
clause (ix)
of this definition would cause a proposed Replacement Mortgage Loan
to fail to
comply with one or more of clauses (i), (ii), (iii), (vii) and/or
(viii) of
this definition, then such proposed Replacement Mortgage Loan must
comply with
clause (ix) and need not comply with one or more of clauses (i),
(ii), (iii),
(vii) and/or (viii), to the extent, and only to the extent,
necessary to
assure that the Replacement Mortgage Loan otherwise complies with
clause (ix).
Reportable Event: Any event required to be reported on Form 8-K,
and
in any event, the following:
(a) entry into a definitive agreement related to the Trust Fund,
the
Certificates or the Mortgage Loans, or an amendment to a
Transaction Document,
even if the Depositor is not a party to such agreement (e.g., a
servicing
agreement with a servicer contemplated by Item 1108(a)(3) of
Regulation AB);
(b) termination of a Transaction Document (other than by
expiration
of the agreement on its stated termination date or as a result of
all parties
completing their obligations under such agreement), even if the
Depositor is
not a party to such agreement (e.g., a servicing agreement with a
servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to the Master Servicer only, if the Master
Servicer
becomes aware of any bankruptcy or receivership with respect to
CHL, the
Depositor, the Master Servicer, any Subservicer, the Trustee, the
Corridor
Contract Counterparty, any enhancement or support provider
contemplated by
Items 1114(b) or 1115 of Regulation AB, or any other material
party
contemplated by Item 1101(d)(1) of Regulation AB;
(d) with respect to the Trustee, the Master Servicer and the
Depositor only, the occurrence of an early amortization,
performance trigger
or other event, including an Event of Default under this
Agreement;
(e)
any amendment to this Agreement;
(f) the resignation, removal, replacement, substitution of the
Master Servicer, any Subservicer, the Trustee or any
co-trustee;
(g) with respect to the Master Servicer only, if the Master
Servicer
becomes aware that (i) any material enhancement or support
specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation
AB that was
previously applicable regarding one or more classes of the
Certificates has
terminated other than by expiration of the contract on its stated
termination
date or as a result of all parties completing their obligations
under such
agreement; (ii) any material enhancement specified in Item
1114(a)(1) through
(3) of Regulation AB or Item 1115 of Regulation AB has been added
with respect
to one or more classes of the Certificates; or (iii) any existing
material
enhancement or support specified in Item 1114(a)(1) through (3) of
Regulation
AB or Item 1115 of Regulation AB with respect to one or more
classes of the
Certificates has been materially amended or modified; and
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<PAGE>
(h) with respect to the Trustee, the Master Servicer and the
Depositor only, a required distribution to Holders of the
Certificates is not
made as of the required Distribution Date under this Agreement.
Reporting Subcontractor: With respect to the Master Servicer or
the
Trustee, any Subcontractor determined by such Person pursuant to
Section
11.08(b) to be "participating in the servicing function" within the
meaning of
Item 1122 of Regulation AB. References to a Reporting Subcontractor
shall
refer only to the Subcontractor of such Person and shall not refer
to
Subcontractors generally.
Representing Party: As defined in Section 2.03(e).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Trustee, substantially in
the form of
Exhibit M.
Request for File Release: A Request for File Release submitted
by
the Master Servicer to the Trustee, substantially in the form of
Exhibit N.
Required Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the excess of (i) $1,000 over
(ii) the
amount of funds on deposit in the Carryover Reserve Fund after all
other
deposits and withdrawals from such account on such Distribution
Date.
Required Distributions: As defined in the Class A-5B Policy.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy that is required to be maintained from time to
time under
this Agreement.
Responsible Officer: When used with respect to the Trustee, any
Vice
President, any Assistant Vice President, the Secretary, any
Assistant
Secretary, any Trust Officer or any other officer of the Trustee
customarily
performing functions similar to those performed by any of the above
designated
officers and also to whom, with respect to a particular matter,
such matter is
referred because of such officer's knowledge of and familiarity
with the
particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any
Distribution
Date on or after the Stepdown Date, the average of the Sixty-Day
Delinquency
Rates for such Distribution Date and the two immediately
preceding
Distribution Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of
The
McGraw-Hill Companies, Inc. and its successors.
Sarbanes-Oxley Certification: As defined in Section 11.05.
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Scheduled Payment: With respect to any Mortgage Loan, the
scheduled
monthly payment of principal and/or interest due on any Due Date on
such
Mortgage Loan which is payable by the related Mortgagor from time
to time
under the related Mortgage Note, determined: (a) after giving
effect to (i)
any Deficient Valuation and/or Debt Service Reduction with respect
to such
Mortgage Loan and (ii) any reduction in the amount of interest
collectible
from the related Mortgagor pursuant to the Relief Act or any
similar state or
local law; (b) without giving effect to any extension granted or
agreed to by
the Master Servicer pursuant to Section 3.05(a); and (c) on the
assumption
that all other amounts, if any, due under such Mortgage Loan are
paid when
due.
Securities Act: The Securities Act of 1933, as amended.
Sellers: CHL, in its capacity as seller of the CHL Mortgage Loans
to
the Depositor, Park Monaco, in its capacity as seller of the Park
Monaco
Mortgage Loans to the Depositor and Park Sienna, in its capacity as
seller of
the Park Sienna Mortgage Loans to the Depositor.
Seller Shortfall Interest Requirement: With respect to the
Distribution Date in each of October 2006, November 2006 and
December 2006
means the sum of:
(a) the product of: (1) the excess of the aggregate Stated
Principal
Balance for such Distribution Date of all the Mortgage Loans in the
Mortgage
Pool (including the Subsequent Mortgage Loans, if any) owned by the
Trust Fund
at the beginning of the related Due Period, over the aggregate
Stated
Principal Balance for such Distribution Date of such Mortgage Loans
(including
such Subsequent Mortgage Loans, if any) that have a scheduled
payment of
interest due in the related Due Period, and (2) a fraction, the
numerator of
which is the weighted average Net Mortgage Rate of all the Mortgage
Loans in
the Mortgage Pool (including such Subsequent Mortgage Loans, if
any) (weighted
on the basis of the Stated Principal Balances thereof for such
Distribution
Date) and the denominator of which is 12; and
(b) the product of: (1) the amount on deposit in the
Pre-Funding
Account at the beginning of the related Due Period, and (2) a
fraction, the
numerator of which is the weighted average Net Mortgage Rate of the
Mortgage
Loans (including Subsequent Mortgage Loans, if any) owned by the
Trust Fund at
the beginning of the related Due Period (weighted on the basis of
the Stated
Principal Balances thereof for such Distribution Date) and the
denominator of
which is 12.
Senior Certificates: The Class A and Class A-R Certificates.
Senior Enhancement Percentage: With respect to a Distribution
Date
on or after the Stepdown Date, the fraction (expressed as a
percentage) (1)
the numerator of which is the excess of (a) the aggregate Stated
Principal
Balance of the Mortgage Loans for the preceding Distribution Date
over (b) (i)
before the Certificate Principal Balances of the Class A
Certificates have
been reduced to zero, the sum of the Certificate Principal Balances
of the
Senior Certificates, or (ii) after the Certificate Principal
Balances of the
Senior Certificates have been reduced to zero, the Certificate
Principal
Balance of the most senior Class of Subordinate Certificates
outstanding, as
of the preceding Master Servicer Advance Date, and (2) the
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<PAGE>
denominator of which is the aggregate Stated Principal Balance of
the Mortgage
Loans for the preceding Distribution Date.
Servicing Advances: All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in the performance by the
Master Servicer
of its servicing obligations hereunder, including, but not limited
to, the
cost of (i) the preservation, restoration and protection of a
Mortgaged
Property, (ii) any enforcement or judicial proceedings,
including
foreclosures, (iii) the management and liquidation of any REO
Property and
(iv) compliance with the obligations under Section 3.10.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date,
an amount equal to one month's interest at the Servicing Fee Rate
on the
Stated Principal Balance of such Mortgage Loan for the preceding
Distribution
Date or, in the event of any payment of interest that accompanies a
Principal
Prepayment in full made by the Mortgagor, interest at the Servicing
Fee Rate
on the Stated Principal Balance of such Mortgage Loan for the
period covered
by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per
annum.
Servicing Officer: Any officer of the Master Servicer involved
in,
or responsible for, the administration and servicing of the
Mortgage Loans
whose name and facsimile signature appear on a list of servicing
officers
furnished to the Trustee by the Master Servicer on the Closing Date
pursuant
to this Agreement, as such list may from time to time be
amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date
on
or after the Stepdown Date, a fraction, expressed as a percentage,
the
numerator of which is the aggregate Stated Principal Balance for
such
Distribution Date of all Mortgage Loans 60 or more days delinquent
as of the
close of business on the last day of the calendar month preceding
such
Distribution Date (including Mortgage Loans in foreclosure,
bankruptcy and REO
Properties) and the denominator of which is the aggregate Stated
Principal
Balance for such Distribution Date of all Mortgage Loans.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date, the unpaid
principal balance
of the Mortgage Loan as of such date (before any adjustment to
the
amortization schedule for any moratorium or similar waiver or grace
period),
after giving effect to any partial prepayments or Liquidation
Proceeds
received prior to such date and to the payment of principal due on
or prior to
such date and irrespective any delinquency in payment by the
related
Mortgagor, and (ii) as of any other Distribution Date, the Stated
Principal
Balance of the Mortgage Loan as of its Cut-off Date, minus the sum
of (a) the
principal portion of the Scheduled Payments (x) due with respect to
such
Mortgage Loan during each Due Period ending prior to such
Distribution Date
and (y) that were received by the Master Servicer as of the close
of business
on the Determination Date related to such Distribution Date or with
respect to
which Advances were made as of the Master Servicer Advance Date
related to
such Distribution Date, (b) all Principal Prepayments with respect
to
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<PAGE>
such Mortgage Loan received by the Master Servicer during each
Prepayment
Period ending prior to such Distribution Date, (c) all Liquidation
Proceeds
collected with respect to such Mortgage Loan during each Due Period
ending
prior to such Distribution Date, to the extent applied by the
Master Servicer
as recoveries of principal in accordance with Section 3.12 and (d)
any
Realized Loss previously incurred in connection with a Deficient
Valuation.
The Stated Principal Balance of any Mortgage Loan that becomes a
Liquidated
Mortgage Loan will be zero on each date following the Due Period in
which such
Mortgage Loan becomes a Liquidated Mortgage Loan. References herein
to the
Stated Principal Balance of the Mortgage Loans at any time shall
mean the
aggregate Stated Principal Balance of all Mortgage Loans in the
Trust Fund as
of such time.
Stepdown Date: The earlier to occur of (a) the Distribution
Date
following the Distribution Date on which the aggregate Certificate
Principal
Balance of the Class A Certificates is reduced to zero, and (b) the
later to
occur of (x) the Distribution Date in October 2009 and (y) the
first
Distribution Date on which the aggregate Certificate Principal
Balance of the
Class A Certificates (after calculating anticipated distributions
on such
Distribution Date) is less than or equal to 65.20% of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution
Date.
Stepdown Target Subordination Percentage: For each Class of
Subordinate Certificates, the respective percentage indicated in
the following
table:
Stepdown Target
Subordination
Percentage
------------------------
Class
M-1..................................
29.00%
Class
M-2..................................
23.60%
Class
M-3..................................
20.50%
Class
M-4..................................
17.70%
Class
M-5..................................
15.10%
Class
M-6..................................
12.60%
Class
M-7..................................
10.20%
Class
M-8..................................
8.80%
Class
B....................................
6.80%
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as "servicing" is commonly
understood
by participants in the mortgage-backed securities market) of
Mortgage Loans
but performs one or more discrete functions identified in Item
1122(d) of
Regulation AB with respect to the Mortgage Loans under the
direction or
authority of the Master Servicer or a Subservicer or the Trustee,
as the case
may be.
Subordinate Certificates: The Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B
Certificates.
Subordinate Class Principal Distribution Amount: With respect to
any
Distribution Date and any Class of Subordinate Certificates, the
excess of (1)
the sum of (a) the
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aggregate Certificate Principal Balance of the Class A Certificates
(after
taking into account distribution of the Class A Principal
Distribution Amount
for such Distribution Date), (b) the aggregate Certificate
Principal Balance
of any Class(es) of Subordinate Certificates that are senior to the
subject
Class (in each case, after taking into account distribution of the
Subordinate
Class Principal Distribution Amount(s) for such senior Class(es)
of
Certificates for such Distribution Date), and (c) the Certificate
Principal
Balance of the subject Class of Subordinate Certificates
immediately prior to
such Distribution Date over (2) the lesser of (a) the product of
(x) 100%
minus the Stepdown Target Subordination Percentage for the subject
Class of
Certificates and (y) the aggregate Stated Principal Balance of the
Mortgage
Loans for such Distribution Date and (b) the aggregate Stated
Principal
Balance of the Mortgage Loans for such Distribution Date minus the
OC Floor;
provided, however, that if such Class of Subordinate Certificates
is the only
Class of Subordinate Certificates outstanding on such Distribution
Date, that
Class will be entitled to receive the entire remaining Principal
Distribution
Amount until the Certificate Principal Balance thereof is reduced
to zero.
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal to the aggregate of all
amounts in
respect of (i) principal of the related Subsequent Mortgage Loans
due after
the related Subsequent Cut-off Date and received by the Master
Servicer on or
before such Subsequent Transfer Date and not applied in computing
the Cut-off
Date Principal Balance thereof and (ii) interest on such Subsequent
Mortgage
Loans due after such Subsequent Cut-off Date and received by the
Master
Servicer on or before the Subsequent Transfer Date.
Subsequent Cut-off Date: In the case of any Subsequent Mortgage
Loan, the later of (x) the first day of the month of the related
Subsequent
Transfer Date and (y) the date of origination of such Subsequent
Mortgage
Loan.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the
Trustee
on a Subsequent Transfer Date, and listed on the related Loan
Number and
Borrower Identification Mortgage Loan Schedule delivered pursuant
to Section
2.01(f). When used with respect to a single Subsequent Transfer
Date,
"Subsequent Mortgage Loan" shall mean a Subsequent Mortgage Loan
conveyed to
the Trustee on such Subsequent Transfer Date.
Subsequent Recoveries: As to any Distribution Date, with respect
to
a Liquidated Mortgage Loan that resulted in a Realized Loss in a
prior
calendar month, unexpected amounts received by the Master Servicer
(net of any
related expenses permitted to be reimbursed pursuant to Section
3.08 and 3.12)
specifically related to such Liquidated Mortgage Loan after the
classification
of such Mortgage Loan as a Liquidated Mortgage Loan.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit P hereto, executed and
delivered by the
Sellers, the Depositor and the Trustee as provided in Section
2.01(d).
Subsequent Transfer Date: For any Subsequent Transfer Agreement,
the
"Subsequent Transfer Date" identified in such Subsequent Transfer
Agreement;
provided, however, the Subsequent Transfer Date for any Subsequent
Transfer
Agreement must be a
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<PAGE>
Business Day and may not be a date earlier than the date on which
the
Subsequent Transfer Agreement is executed and delivered by the
parties thereto
pursuant to Section 2.01(d).
Subsequent Transfer Date Purchase Amount: With respect to any
Subsequent Transfer Date, the "Subsequent Transfer Date Purchase
Amount"
identified in the related Subsequent Transfer Agreement which shall
be an
estimate of the aggregate Stated Principal Balances of the
Subsequent Mortgage
Loans identified in such Subsequent Transfer Agreement.
Subsequent Transfer Date Transfer Amount: With respect to any
Subsequent Transfer Date, an amount equal to the lesser of (i) the
aggregate
Stated Principal Balances as of the related Subsequent Cut-off
Dates of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer
Date, as listed
on the related Loan Number and Borrower Identification Mortgage
Loan Schedule
delivered pursuant to Section 2.01(f) and (ii) the amount on
deposit in the
Pre-Funding Account.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Subsidiary REMIC: As defined in the Preliminary Statement.
Substitution Adjustment Amount: The meaning ascribed to such
term
pursuant to Section 2.03(e).
Substitution Amount: With respect to any Mortgage Loan
substituted
pursuant to Section 2.03(e), the excess of (x) the principal
balance of the
Mortgage Loan that is substituted for, over (y) the principal
balance of the
related substitute Mortgage Loan, each balance being determined as
of the date
of substitution.
Successful Auction: An auction held pursuant to Section 9.04 at
which at least three Qualified Bidders submitted bids and at least
one of
those bids was an Acceptable Bid Amount.
Tax Matters Person: The person designated as "tax matters person"
in
the manner provided under Treasury regulation ss. 1.860F-4(d) and
Treasury
regulation ss. 301.6231(a)(7)-1. Initially, this person shall be
the Trustee.
Tax Matters Person Certificate: With respect to the Master REMIC
and
the Subsidiary REMIC, the Class A-R Certificate with a Denomination
of $0.05
and in the form of Exhibit E hereto.
Termination Price: As defined in Section 9.01.
Terminator: As defined in Section 9.01.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage
Rate that is fixed for 36 months after origination thereof before
such
Mortgage Rate becomes subject to adjustment.
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<PAGE>
Transaction Documents: This Agreement, the Class A-5B Policy and
any
other document or agreement entered into in connection with the
Trust Fund,
the Certificates or the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date on or after
the
Stepdown Date, either a Delinquency Trigger Event with respect to
that
Distribution Date or a Cumulative Loss Trigger Event with respect
to that
Distribution Date.
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and principal received on
or with
respect thereto after the Cut-off Date to the extent not applied in
computing
the Cut-off Date Principal Balance thereof, exclusive of interest
not required
to be deposited in the Certificate Account pursuant to Section
3.05(b)(2);
(ii) the Certificate Account, the Distribution Account, the
Principal Reserve
Fund, the Carryover Reserve Fund, the Credit Comeback Excess
Account, the
Pre-Funding Account and all amounts deposited therein pursuant to
the
applicable provisions of this Agreement; (iii) the rights to
receive certain
proceeds of the Corridor Contract as provided in the Corridor
Contract
Administration Agreement; (iv) property that secured a Mortgage
Loan and has
been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (v)
the mortgagee's rights under the Insurance Policies with respect to
the
Mortgage Loan; (vi) the rights of the Trustee for the benefit of
the Class
A-5B Certificateholders under the Class A-5B Policy; and (vii) all
proceeds of
the conversion, voluntary or involuntary, of any of the foregoing
into cash or
other liquid property.
Trustee: The Bank of New York, a New York banking corporation,
not
in its individual capacity, but solely in its capacity as trustee
for the
benefit of the Certificateholders under this Agreement, and any
successor
thereto, and any corporation or national banking association
resulting from or
surviving any consolidation or merger to which it or its successors
may be a
party and any successor trustee as may from time to time be serving
as
successor trustee hereunder.
Trustee Advance Notice: As defined in Section 4.01(d).
Trustee Advance Rate: With respect to any Advance made by the
Trustee pursuant to Section 4.01(d), a per annum rate of interest
determined
as of the date of such Advance equal to the Prime Rate in effect on
such date
plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i)
the Pool
Stated Principal Balance and (ii) any amounts remaining in the
Pre-Funding
Account (excluding any investment earnings thereon) with respect to
such
Distribution Date.
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<PAGE>
Trustee Fee Rate: With respect to each Mortgage Loan, the per
annum
rate agreed upon in writing on or prior to the Closing Date by the
Trustee and
the Depositor, which is 0.009% per annum.
Two-Year Hybrid
Mortgage Loan: A Mortgage Loan having a Mortgage
Rate that is fixed for 24 months after origination thereof before
such
Mortgage Rate becomes subject to adjustment.
Underwriter's Exemption: Prohibited Transaction Exemption
2002-41,
67 Fed. Reg. 54487 (2002), as amended (or any successor thereto),
or any
substantially similar administrative exemption granted by the U.S.
Department
of Labor.
Underwriter: Countrywide Securities Corporation.
Unpaid Realized Loss Amount: For any Class of Certificates and
any
Distribution Date, (x) the portion of the aggregate Applied
Realized Loss
Amount previously allocated to that Class remaining unpaid from
prior
Distribution Dates (in the case of the Class A-5B Certificates, as
reduced by
any payment made by the Class A-5B Insurer in respect of principal
of that
class under the Class A-5B Policy) minus (y) any increase in the
Certificate
Principal Balance of that Class due to the allocation of Subsequent
Recoveries
to the Certificate Principal Balance of that Class pursuant to
Section
4.04(h).
Voting Rights: The voting rights of all the Certificates that
are
allocated to any Certificates for purposes of the voting provisions
hereunder.
Voting Rights allocated to each Class of Certificates shall be
allocated 97%
to the Certificates other than the Class A-R, Class C and Class P
Certificates
(with the allocation among the Certificates to be in proportion to
the
Certificate Principal Balance of each Class relative to the
Certificate
Principal Balance of all other such Classes), and 1% to each of the
Class A-R,
Class C and Class P Certificates. Voting Rights will be allocated
among the
Certificates of each such Class in accordance with their respective
Percentage
Interests. Notwithstanding any of the foregoing, on any date on
which any
Class A-5B Certificates are outstanding or any amounts are owed the
Class A-5B
Insurer under this Agreement, unless a Class A-5B Insurer Default
shall have
occurred and be continuing, the Class A-5B Insurer will be entitled
to
exercise the Voting Rights of the Class A-5B Certificateholders,
without the
consent of the Class AF-5 Certificateholders, and the Class
A-5B
Certificateholders may exercise such rights only with the prior
written
consent of the Class A-5B Insurer.
Winning Bidder: With respect to a Successful Auction, the
Qualified
Bidder that bids the highest price.
Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined
meanings
when used in any certificate, agreement or other document delivered
pursuant
hereto unless otherwise defined therein. For purposes of this
Agreement and
all such certificates and other documents, unless the context
otherwise
requires: (a) accounting terms not otherwise defined in this
Agreement, and
accounting terms partly defined in this Agreement to the extent not
defined,
shall have the respective meanings given to them under generally
accepted
accounting principles;
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<PAGE>
(b) the words "hereof," "herein" and "hereunder" and words of
similar import
refer to this Agreement (or the certificate, agreement or other
document in
which they are used) as a whole and not to any particular provision
of this
Agreement (or such certificate, agreement or document); (c)
references to any
Section, Schedule or Exhibit are references to Sections, Schedules
and
Exhibits in or to this Agreement, and references to any paragraph,
subsection,
clause or other subdivision within any Section or definition refer
to such
paragraph, subsection, clause or other subdivision of such Section
or
definition; (d) the term "including" means "including without
limitation"; (e)
references to any law or regulation refer to that law or regulation
as amended
from time to time and include any successor law or regulation; (f)
references
to any agreement refer to that agreement as amended from time to
time; (g)
references to any Person include that Person's permitted successors
and
assigns; and (h) a Mortgage Loan is "30 days delinquent" if a
Scheduled
Payment has not been received by the close of business on the Due
Date on
which the next Scheduled Payment is due. Similarly for "60 days
delinquent,"
"90 days delinquent" and so on.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the
right, title and
interest of such Seller in and to the applicable Initial Mortgage
Loans,
including all interest and principal received and receivable by
such Seller on
or with respect to applicable Initial Mortgage Loans after the
Initial Cut-off
Date (to the extent not applied in computing the Cut-off Date
Principal
Balance thereof) or deposited into the Certificate Account by the
Master
Servicer on behalf of such Seller as part of the Initial
Certificate Account
Deposit as provided in this Agreement, other than principal due on
the
applicable Initial Mortgage Loans on or prior to the Initial
Cut-off Date and
interest accruing prior to the Initial Cut-off Date. The Master
Servicer
confirms that, on behalf of the Sellers, concurrently with the
transfer and
assignment, it has deposited into the Certificate Account the
Initial
Certificate Account Deposit.
Immediately upon the conveyance of the Initial Mortgage Loans
referred to in the preceding paragraph, the Depositor (i) sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit
of the
Certificateholders and the Class A-5B Insurer, without recourse,
all right,
title and interest in and to the Initial Mortgage Loans and (ii)
agrees to
cause the Class A-5B Insurer to deliver the Class A-5B Policy to
the Trustee.
CHL further agrees (x) to cause The Bank of New York to enter
into
the Corridor Contract Administration Agreement as Corridor
Contract
Administrator and (y) to assign all of its right, title and
interest in and to
the interest rate corridor transaction evidenced by the
Confirmation, and to
cause all of its obligations in respect of such transaction to be
assumed by,
the Corridor Contract Administrator, on the terms and conditions
set forth in
the Corridor Contract Assignment Agreement.
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(b) Subject to the execution and delivery of the related
Subsequent
Transfer Agreement as provided by Section 2.01(d) and the terms and
conditions
of this Agreement, each Seller sells, transfers, assigns, sets over
and
otherwise conveys to the Depositor, without recourse, on each
Subsequent
Transfer Date, all the right, title and interest of such Seller in
and to the
related Subsequent Mortgage Loans, including all interest and
principal
received and receivable by such Seller on or with respect to such
Subsequent
Mortgage Loans after the related Subsequent Cut-off Date (to the
extent not
applied in computing the Cut-off Date Principal Balance thereof) or
deposited
into the Certificate Account by the Master Servicer on behalf of
such Seller
as part of any related Subsequent Certificate Account Deposit as
provided in
this Agreement, other than principal due on such Subsequent
Mortgage Loans on
or prior to the related Subsequent Cut-off Date and interest
accruing prior to
the related Subsequent Cut-off Date.
Immediately upon the conveyance of the Subsequent Mortgage
Loans
referred to in the preceding paragraph, the Depositor sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit
of the
Certificateholders and the Class A-5B Insurer, without recourse,
all right,
title and interest in the Subsequent Mortgage Loans.
(c) Each Seller has entered into this Agreement in consideration
for
the purchase of the Mortgage Loans by the Depositor and has agreed
to take the
actions specified herein. The Depositor, concurrently with the
execution and
delivery of this Agreement, hereby sells, transfers, assigns and
otherwise
conveys to the Trustee for the use and benefit of the
Certificateholders,
without recourse, all right, title and interest in the portion of
the Trust
Fund not otherwise conveyed to the Trustee pursuant to Section
2.01(a) or (b).
(d) On any Business Day during the Funding Period designated by
CHL
to the Trustee, the Sellers, the Depositor and the Trustee shall
complete,
execute and deliver a Subsequent Transfer Agreement. After the
execution and
delivery of such Subsequent Transfer Agreement, on the Subsequent
Transfer
Date, the Trustee shall set aside in the Pre-Funding Account an
amount equal
to the related Subsequent Transfer Date Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the satisfaction of each of the
following
conditions:
(1) the Trustee and the Underwriter will be provided Opinions
of
Counsel addressed to the Rating Agencies as with respect to the
sale
of
the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer
Date
(such opinions being substantially similar to the opinions
delivered
on
the Closing Date to the Rating Agencies with respect to the sale
of
the
Initial Mortgage Loans on the Closing Date), to be delivered as
provided in Section 2.01(f);
(2) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans
does not
result in a reduction or withdrawal of any ratings assigned to
the
Certificates by the Rating Agencies (without regard to the Class
A-5B
Policy, in the case of the Class A-5B Certificates);
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<PAGE>
(3) the Depositor shall deliver to the Trustee an Officer's
Certificate confirming the satisfaction of each of the conditions
set
forth in this Section 2.01(e) required to be satisfied by such
Subsequent
Transfer Date;
(4) each Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date satisfies the representations and warranties
applicable to
it
under this Agreement, provided, however, that with respect to a
breach
of a
representation and warranty with respect to a Subsequent
Mortgage
Loan
set forth in this clause (4), the obligation under Section
2.03(e)
of
this Agreement of the applicable Seller, to cure, repurchase or
replace such Subsequent Mortgage Loan shall constitute the sole
remedy
against such Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee;
(5) the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date were selected in a manner reasonably believed not to
be
adverse to the interests of the Certificateholders;
(6) no Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date was 30 or more days delinquent as of the related
Cut-off
Date;
(7) following the conveyance of the Subsequent Mortgage Loans
on
such Subsequent Transfer Date, the characteristics of the
Mortgage
Loans will not vary by more than the amount specified below (other
than
(i)
the percentage of Mortgage Loans secured by Mortgaged
Properties
located in the State of California, which will not exceed 50% of
the
Mortgage Pool and (ii) the percentage of Mortgage Loans in the
Credit
Grade Categories of "C" or below, which will not exceed 15% of
the
Mortgage Pool) from the characteristics listed below; provided that
for
the
purpose of making such calculations, the characteristics for
any
Initial Mortgage Loan made will be taken as of the Initial Cut-off
Date
and
the characteristics for any Subsequent Mortgage Loans will be
taken
as
of the Subsequent Cut-off Date:
<TABLE>
<CAPTION>
Characteristic
Value
Permitted Variance
--------------------------
-----------------
------------------------
<S>
<C>
<C>
Weighted Average Mortgage Rate.........................
7.627 %
0.10%
Weighted Average Original Loan-to-Value Ratio..........
74.30 %
3.00%
Weighted Average Credit Bureau Risk Score..............
620 points
5 points
Percentage Originated under CHL's Full Documentation
Program................................................
75.52 %
3.00%
</TABLE>
(8) none of the Sellers or the Depositor is insolvent and
neither of the Sellers nor the Depositor will be rendered insolvent
by
the
conveyance of Subsequent Mortgage Loans on such Subsequent
Transfer
Date; and
(9) the Trustee and the Underwriter will be provided with an
Opinion of Counsel, which Opinion of Counsel shall not be at the
expense
of
either the Trustee or the Trust Fund, addressed to the Trustee, to
the
effect that such purchase of Subsequent
47
<PAGE>
Mortgage Loans will not (i) result in the imposition of the tax
on
"prohibited transactions" on the Trust Fund or contributions after
the
Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the
Code,
respectively or (ii) cause any REMIC formed hereunder to fail to
qualify
as a
REMIC, such opinion to be delivered as provided in Section
2.01(f).
The Trustee shall not be required to investigate or otherwise
verify
compliance with these conditions, except for its own receipt of
documents
specified above, and shall be entitled to rely on the required
Officer's
Certificate.
(f) Within six Business Days after each Subsequent Transfer
Date,
upon (1) delivery to the Trustee by the Depositor of the Opinions
of Counsel
referred to in Section 2.01(e)(1) and (e)(9), (2) delivery to the
Trustee by
CHL (on behalf of each Seller) of a Loan Number and Borrower
Identification
Mortgage Loan Schedule reflecting the Subsequent Mortgage Loans
conveyed on
such Subsequent Transfer Date, (3) deposit in the Certificate
Account by the
Master Servicer on behalf of the Sellers of the applicable
Subsequent
Certificate Account Deposit, and (4) delivery to the Trustee by the
Depositor
of an Officer's Certificate confirming the satisfaction of each of
the
conditions precedent set forth in this Section 2.01(f), the Trustee
shall pay
the applicable Seller the Subsequent Transfer Date Transfer Amount
from such
funds that were set aside in the Pre-Funding Account pursuant to
Section
2.01(d). The positive difference, if any, between the Subsequent
Transfer Date
Transfer Amount and the Subsequent Transfer Date Purchase Amount
shall be
re-invested by the Trustee in the Pre-Funding Account.
The Trustee shall not be required to investigate or otherwise
verify
compliance with the conditions set forth in the preceding
paragraph, except
for its own receipt of documents specified above, and shall be
entitled to
rely on the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the
Depositor shall deliver to the Trustee a letter of a nationally
recognized
firm of independent public accountants stating whether or not the
Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date conform to
the
characteristics described in Section 2.01(e)(6) and (7).
(g) In connection with the transfer and assignment of each
Mortgage
Loan, the Depositor has delivered to, and deposited with, the
Trustee (or, in
the case of the Delay Delivery Mortgage Loans, will deliver to, and
deposit
with, the Trustee within the time periods specified in the
definition of Delay
Delivery Mortgage Loans) (except as provided in clause (vi) below)
for the
benefit of the Certificateholders, the following documents or
instruments with
respect to each such Mortgage Loan so assigned (with respect to
each Mortgage
Loan, clause (i) through (vi) below, together, the "Mortgage File"
for each
such Mortgage Loan):
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage
48
<PAGE>
Note), or, if the original Mortgage Note has been lost or
destroyed
and not replaced, an original lost note affidavit, stating that
the
original Mortgage Note was lost or destroyed, together with a
copy
of the related Mortgage Note and all such intervening
endorsements;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage, with recording information, and in the case of each
MERS
Mortgage Loan, the original Mortgage or a copy of such
Mortgage,
with recording information, noting the presence of the MIN of
the
Mortgage Loan and language indicating that the Mortgage Loan is
a
MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified
by
the public recording office in which such Mortgage has been
recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2006-15, CWABS, Inc., by The
Bank
of New York, a New York banking corporation, as trustee under
the
Pooling and Servicing Agreement dated as of September 1, 2006,
without recourse" or a copy of such assignment, with recording
information, (each such assignment, when duly and validly
completed,
to be in recordable form and sufficient to effect the assignment
of
and transfer to the assignee thereof, under the Mortgage to
which
such assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage
or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or
a
copy of such assignments, with recording information (in each
case
noting the presence of a MIN in the case of each MERS Mortgage
Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the
electronic
equivalent and all riders thereto or, in the event such
original
title policy has not been received from the insurer, such
original
or duplicate original lender's title policy and all riders
thereto
shall be delivered within one year of the Closing Date.
In addition, in connection with the assignment of any MERS
Mortgage
Loan, each Seller agrees that it will cause, at such Seller's own
expense, the
MERS(R) System to indicate (and provide evidence to the Trustee
that it has
done so) that such Mortgage Loans have been assigned by such Seller
to the
Trustee in accordance with this Agreement for the benefit of
the
Certificateholders by including (or deleting, in the case of
Mortgage Loans
which are repurchased in accordance with this Agreement) in such
computer
files (a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field
"[IDENTIFY
THE FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b)
the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field"
which
identifies the series of the
49
<PAGE>
Certificates issued in connection with such Mortgage Loans. The
Sellers
further agree that they will not, and will not permit the Master
Servicer to,
and the Master Servicer agrees that it will not, alter the codes
referenced in
this paragraph with respect to any Mortgage Loan during the term of
this
Agreement unless and until such Mortgage Loan is repurchased in
accordance
with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not
a
MERS Mortgage Loan a Seller cannot deliver the original recorded
Mortgage or
all interim recorded assignments of the Mortgage satisfying the
requirements
of clause (ii), (iii) or (iv) concurrently with the execution and
delivery
hereof, such Seller shall deliver or cause to be delivered to the
Trustee a
true copy of such Mortgage and of each such undelivered interim
assignment of
the Mortgage each certified by such Seller, the applicable title
company,
escrow agent or attorney, or the originator of such Mortgage, as
the case may
be, to be a true and complete copy of the original Mortgage or
assignment of
Mortgage submitted for recording. For any such Mortgage Loan that
is not a
MERS Mortgage Loan each Seller shall promptly deliver or cause to
be delivered
to the Trustee such original Mortgage and such assignment or
assignments with
evidence of recording indicated thereon upon receipt thereof from
the public
recording official, or a copy thereof, certified, if appropriate,
by the
relevant recording office, but in no event shall any such delivery
be made
later than 270 days following the Closing Date; provided that in
the event
that by such date such Seller is unable to deliver or cause to be
delivered
each such Mortgage and each interim assignment by reason of the
fact that any
such documents have not been returned by the appropriate recording
office, or,
in the case of each interim assignment, because the related
Mortgage has not
been returned by the appropriate recording office, such Seller
shall deliver
or cause to be delivered such documents to the Trustee as promptly
as possible
upon receipt thereof. If the public recording office in which a
Mortgage or
interim assignment thereof is recorded retains the original of such
Mortgage
or assignment, a copy of the original Mortgage or assignment so
retained, with
evidence of recording thereon, certified to be true and complete by
such
recording office, shall satisfy a Seller's obligations in Section
2.01. If any
document submitted for recording pursuant to this Agreement is (x)
lost prior
to recording or rejected by the applicable recording office, the
applicable
Seller shall immediately prepare or cause to be prepared a
substitute and
submit it for recording, and shall deliver copies and originals
thereof in
accordance with the foregoing or (y) lost after recording, the
applicable
Seller shall deliver to the Trustee a copy of such document
certified by the
applicable public recording office to be a true and complete copy
of the
original recorded document. Each Seller shall promptly forward or
cause to be
forwarded to the Trustee (x) from time to time additional original
documents
evidencing an assumption or modification of a Mortgage Loan and (y)
any other
documents required to be delivered by the Depositor or the Master
Servicer to
the Trustee within the time periods specified in this Section
2.01.
With respect to each Mortgage Loan other than a MERS Mortgage
Loan
as to which the related Mortgaged Property and Mortgage File are
located in
any jurisdiction under the laws of which the recordation of the
assignment
specified in clause (iii) above is not necessary to protect the
Trustee's and
the Certificateholders' interest in the related Mortgage Loan, as
evidenced by
an Opinion of Counsel delivered by CHL to the Trustee within 90
days of the
Closing Date (which opinion may be in the form of a "survey"
opinion and is
not required to be delivered by counsel admitted to practice law in
the
jurisdiction as to which such opinion applies), in lieu of
recording the
assignment specified in clause (iii) above, the applicable
Seller
50
<PAGE>
may deliver an unrecorded assignment in blank, in form otherwise
suitable for
recording to the Trustee; provided that if the related Mortgage has
not been
returned from the applicable public recording office, such
assignment, or any
copy thereof, of the Mortgage may exclude the information to be
provided by
the recording office. As to any Mortgage Loan other than a MERS
Mortgage Loan,
the procedures of the preceding sentence shall be applicable only
so long as
the related Mortgage File is maintained in the possession of the
Trustee in
the State or jurisdiction described in such sentence. In the event
that with
respect to Mortgage Loans other than MERS Mortgage Loans (I) any
Seller, the
Depositor, the Master Servicer or the NIM Insurer gives written
notice to the
Trustee that recording is required to protect the right, title and
interest of
the Trustee on behalf of the Certificateholders in and to any
Mortgage Loan,
(II) a court recharacterizes any sale of the Mortgage Loans as a
financing, or
(III) as a result of any change in or amendment to the laws of the
State or
jurisdiction described in the first sentence of this paragraph or
any
applicable political subdivision thereof, or any change in official
position
regarding application or interpretation of such laws, including a
holding by a
court of competent jurisdiction, such recording is so required, the
Trustee
shall complete the assignment in the manner specified in clause
(iii) above
and CHL shall submit or cause to be submitted for recording as
specified above
or, should CHL fail to perform such obligations, the Trustee shall
cause the
Master Servicer, at the Master Servicer's expense, to cause each
such
previously unrecorded assignment to be submitted for recording as
specified
above. In the event a Mortgage File is released to the Master
Servicer as a
result of the Master Servicer's having completed a Request for
Document
Release, the Trustee shall complete the assignment of the related
Mortgage in
the manner specified in clause (iii) above.
So long as the Trustee or its agent maintains an office in the
State
of California, the Trustee or its agent shall maintain possession
of and not
remove or attempt to remove from the State of California any of the
Mortgage
Files as to which the related Mortgaged Property is located in such
State. In
the event that a Seller fails to record an assignment of a Mortgage
Loan as
herein provided within 90 days of notice of an event set forth in
clause (I),
(II) or (III) of the preceding paragraph, the Master Servicer shall
prepare
and, if required hereunder, file such assignments for recordation
in the
appropriate real property or other records office. Each Seller
hereby appoints
the Master Servicer (and any successor servicer hereunder) as
its
attorney-in-fact with full power and authority acting in its stead
for the
purpose of such preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a
Principal
Prepayment between the Closing Date (in the case of Initial
Mortgage Loans) or
related Subsequent Transfer Date (in the case of Subsequent
Mortgage Loans)
and the Cut-off Date, CHL shall deposit or cause to be deposited in
the
Certificate Account the amount required to be deposited therein
with respect
to such payment pursuant to Section 3.05 hereof.
Notwithstanding anything to the contrary in this Agreement,
within
thirty days after the Closing Date (in the case of Initial Mortgage
Loans) or
within twenty days after the related Subsequent Transfer Date (in
the case of
Subsequent Mortgage Loans), CHL (on behalf of each Seller) shall
either (i)
deliver to the Trustee the Mortgage File as required pursuant to
this Section
2.01 for each Delay Delivery Mortgage Loan or (ii) (A) repurchase
the Delay
Delivery Mortgage Loan or (B) substitute the Delay Delivery
Mortgage Loan for
a Replacement Mortgage Loan, which repurchase or substitution shall
be
accomplished in the manner and subject to the
51
<PAGE>
conditions set forth in Section 2.03, provided that if CHL fails to
deliver a
Mortgage File for any Delay Delivery Mortgage Loan within the
period provided
in the prior sentence, the cure period provided for in Section 2.02
or in
Section 2.03 shall not apply to the initial delivery of the
Mortgage File for
such Delay Delivery Mortgage Loan, but rather CHL shall have five
(5) Business
Days to cure such failure to deliver. CHL shall promptly provide
each Rating
Agency with written notice of any cure, repurchase or substitution
made
pursuant to the proviso of the preceding sentence. On or before the
thirtieth
(30th) day (or if such thirtieth day is not a Business Day, the
succeeding
Business Day) after the Closing Date (in the case of Initial
Mortgage Loans)
or within twenty days after the related Subsequent Transfer Date
(in the case
of Subsequent Mortgage Loans), the Trustee shall, in accordance
with the
provisions of Section 2.02, send a Delay Delivery Certification
substantially
in the form annexed hereto as Exhibit G-3 (with any applicable
exceptions
noted thereon) for all Delay Delivery Mortgage Loans delivered
within thirty
(30) days after such date. The Trustee will promptly send a copy of
such Delay
Delivery Certification to each Rating Agency.
Each Seller has entered into this Agreement in consideration for
the
purchase of the Mortgage Loans sold by such Seller to the Depositor
and has
agreed to take the actions specified herein. The Depositor,
concurrently with
the execution and delivery of this Agreement, hereby sells,
transfers, assigns
and otherwise conveys to the Trustee for the use and benefit of
the
Certificateholders, without recourse, all right, title and interest
in the
portion of the Trust Fund not otherwise conveyed to the Trustee
pursuant to
Sections 2.01(a) or (b).
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt, subject to the
limitations
contained in and any exceptions noted in the Initial Certification
in the form
annexed hereto as Exhibit G-1 and in the list of exceptions
attached thereto,
of the documents referred to in clauses (i) and (iii) of Section
2.01(g) above
with respect to the Initial Mortgage Loans and all other assets
included in
the Trust Fund and declares that it holds and will hold such
documents and the
other documents delivered to it constituting the Mortgage Files,
and that it
holds or will hold such other assets included in the Trust Fund, in
trust for
the exclusive use and benefit of all present and future
Certificateholders and
the Class A-5B Insurer.
The Trustee agrees to execute and deliver on the Closing Date to
the
Depositor, the Master Servicer and CHL (on behalf of each Seller)
an Initial
Certification substantially in the form annexed hereto as Exhibit
G-1 to the
effect that, as to each Initial Mortgage Loan listed in the
Mortgage Loan
Schedule (other than any Initial Mortgage Loan paid in full or any
Initial
Mortgage Loan specifically identified in such certification as not
covered by
such certification), the documents described in Section 2.01(g)(i)
and, in the
case of each Initial Mortgage Loan that is not a MERS Mortgage
Loan, the
documents described in Section 2.01(g)(iii) with respect to such
Initial
Mortgage Loans as are in the Trustee's possession and based on its
review and
examination and only as to the foregoing documents, such documents
appear
regular on their face and relate to such Initial Mortgage Loan. The
Trustee
agrees to execute and deliver within 30 days after the Closing Date
to the
Depositor, the Master Servicer and CHL (on behalf of each Seller)
an Interim
Certification substantially in the form annexed hereto as Exhibit
G-2 to the
effect that, as to each Initial Mortgage Loan listed in the
Mortgage Loan
Schedule (other than any Initial Mortgage Loan paid in full or any
Initial
Mortgage Loan specifically identified in
52
<PAGE>
such certification as not covered by such certification) all
documents
required to be delivered to the Trustee pursuant to the Agreement
with respect
to such Initial Mortgage Loans are in its possession (except those
documents
described in Section 2.01(g)(vi)) and based on its review and
examination and
only as to the foregoing documents, (i) such documents appear
regular on their
face and relate to such Initial Mortgage Loan, and (ii) the
information set
forth in items (i), (iii), (iv), (v), (vii), (viii) and (xiv) of
the
definition of the "Mortgage Loan Schedule" accurately reflects
information set
forth in the Mortgage File. On or before the thirtieth (30th) day
after the
Closing Date (or if such thirtieth day is not a Business Day, the
succeeding
Business Day), the Trustee shall deliver to the Depositor, the
Master Servicer
and CHL (on behalf of each Seller) a Delay Delivery Certification
with respect
to the Initial Mortgage Loans substantially in the form annexed
hereto as
Exhibit G-3, with any applicable exceptions noted thereon. The
Trustee shall
be under no duty or obligation to inspect, review or examine such
documents,
instruments, certificates or other papers to determine that the
same are
genuine, enforceable or appropriate for the represented purpose or
that they
have actually been recorded in the real estate records or that they
are other
than what they purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee
shall
deliver to the Depositor, the Master Servicer, CHL (on behalf of
each Seller),
the Class A-5B Insurer and to any Certificateholder that so
requests, a Final
Certification with respect to the Initial Mortgage Loans
substantially in the
form annexed hereto as Exhibit H, with any applicable exceptions
noted
thereon.
In connection with the Trustee's completion and delivery of
such
Final Certification, the Trustee shall review each Mortgage File
with respect
to the Initial Mortgage Loans to determine that such Mortgage File
contains
the following documents:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note), or, if the original
Mortgage
Note has been lost or destroyed and not replaced, an original
lost
note affidavit, stating that the original Mortgage Note was lost
or
destroyed, together with a copy of the related Mortgage Note and
all
such intervening endorsements;
(ii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage or a copy of
such
Mortgage, with recording information, and in the case of each
Initial Mortgage Loan that is a MERS Mortgage Loan, the
original
Mortgage or a copy of such Mortgage, with recording
information,
noting the presence of the MIN of the Initial Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if the
Initial Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the
public
recording office in which Mortgage has been recorded;
53
<PAGE>
(iii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, a duly executed assignment of the Mortgage or
a
copy thereof with recording information, in either case in the
form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording
information,
together with all interim recorded assignments of such Mortgage or
a
copy of such assignments, with recording information (in each
case
noting the presence of a MIN in the case of each MERS Mortgage
Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the
electronic
equivalent and all riders thereto.
If, in the course of such review, the Trustee finds any document
or
documents constituting a part of such Mortgage File that do not
meet the
requirements of clauses (i)-(iv) and (vi) above, the Trustee shall
include
such exceptions in such Final Certification (and the Trustee shall
state in
such Final Certification whether any Mortgage File does not then
include the
original or duplicate original lender's title policy or a printout
of the
electronic equivalent and all riders thereto). If the public
recording office
in which a Mortgage or assignment thereof is recorded retains the
original of
such Mortgage or assignment, a copy of the original Mortgage or
assignment so
retained, with evidence of recording thereon, certified to be true
and
complete by such recording office, shall be deemed to satisfy the
requirements
of clause (ii), (iii) or (iv) above, as applicable. CHL (on its own
behalf and
on behalf of Park Monaco and Park Sienna) shall promptly correct or
cure such
defect referred to above within 90 days from the date it was so
notified of
such defect and, if CHL does not correct or cure such defect within
such
period, CHL shall either (A) if the time to cure such defect
expires prior to
the end of the second anniversary of the Closing Date, substitute
for the
related Initial Mortgage Loan a Replacement Mortgage Loan, which
substitution
shall be accomplished in the manner and subject to the conditions
set forth in
Section 2.03, or (B) purchase such Initial Mortgage Loan from the
Trust Fund
within 90 days from the date CHL was notified of such defect in
writing at the
Purchase Price of such Initial Mortgage Loan; provided that any
such
substitution pursuant to (A) above or repurchase pursuant to (B)
above shall
not be effected prior to the delivery to the Trustee of the Opinion
of Counsel
required by Section 2.05 hereof and any substitution pursuant to
(A) above
shall not be effected prior to the additional delivery to the
Trustee of a
Request for File Release. No substitution will be made in any
calendar month
after the Determination Date for such month. The Purchase Price for
any such
Initial Mortgage Loan shall be deposited by CHL in the Certificate
Account
and, upon receipt of such deposit and Request for File Release with
respect
thereto, the Trustee shall release the related Mortgage File to CHL
and shall
execute and deliver at CHL's request such instruments of transfer
or
assignment as CHL has prepared, in each case without recourse, as
shall be
necessary to vest in CHL, or a designee, the Trustee's interest in
any Initial
Mortgage Loan released pursuant hereto. If pursuant to the
foregoing
provisions CHL repurchases an Initial Mortgage Loan that is a MERS
Mortgage
Loan, the Master Servicer shall cause MERS to execute and deliver
an
assignment of the Mortgage in recordable form to transfer
54
<PAGE>
the Mortgage from MERS to CHL and shall cause such Mortgage to be
removed from
registration on the MERS(R) System in accordance with MERS' rules
and
regulations.
The Trustee shall retain possession and custody of each
Mortgage
File in accordance with and subject to the terms and conditions set
forth
herein. Each Seller shall promptly deliver to the Trustee, upon the
execution
or receipt thereof, the originals of such other documents or
instruments
constituting the Mortgage File that come into the possession of
such Seller
from time to time.
It is understood and agreed that the obligation of CHL to
substitute
for or to purchase any Mortgage Loan that does not meet the
requirements of
Section 2.02(a) above shall constitute the sole remedy respecting
such defect
available to the Trustee, the Depositor and any Certificateholder
against any
Seller.
It is understood and agreed that the obligation of CHL to
substitute
for or to purchase, pursuant to Section 2.02(a), any Initial
Mortgage Loan
whose Mortgage File contains any document or documents that does
not meet the
requirements of clauses (i)-(iv) and (vi) above and which defect is
not
corrected or cured by CHL within 90 days from the date it was
notified of such
defect, shall constitute the sole remedy respecting such defect
available to
the Trustee, the Depositor and any Certificateholder against any
Seller.
(b) The Trustee agrees to execute and deliver on the Subsequent
Transfer Date to the Depositor, the Master Servicer and CHL (on
behalf of each
Seller) an Initial Certification substantially in the form annexed
hereto as
Exhibit G-4 to the effect that, as to each Subsequent Mortgage Loan
listed in
the Mortgage Loan Schedule (other than any Subsequent Mortgage Loan
paid in
full or any Subsequent Mortgage Loan specifically identified in
such
certification as not covered by such certification), the documents
described
in Section 2.01(g)(i) and, in the case of each Subsequent Mortgage
Loan that
is not a MERS Mortgage Loan, the documents described in Section
2.01(g)(iii),
with respect to such Subsequent Mortgage Loan are in its
possession, and based
on its review and examination and only as to the foregoing
documents, such
documents appear regular on their face and relate to such
Subsequent Mortgage
Loan.
The Trustee agrees to execute and deliver within 30 days after
the
Subsequent Transfer Date to the Depositor, the Master Servicer and
CHL (on
behalf of each Seller) an Interim Certification substantially in
the form
annexed hereto as Exhibit G-2 to the effect that, as to each
Subsequent
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Subsequent
Mortgage Loan paid in full or any Subsequent Mortgage Loan
specifically
identified in such certification as not covered by such
certification), all
documents required to be delivered to it pursuant to this Agreement
with
respect to such Subsequent Mortgage Loan are in its possession
(except those
described in Section 2.01(g)(vi)) and based on its review and
examination and
only as to the foregoing documents, (i) such documents appear
regular on their
face and relate to such Subsequent Mortgage Loan, and (ii) the
information set
forth in items (i), (iii), (iv), (v), (vii), (viii) and (xiv) of
the
definition of the "Mortgage Loan Schedule" accurately reflects
information set
forth in the Mortgage File. On or before the thirtieth (30th) day
after the
Subsequent Transfer Date (or if such thirtieth day is not a
Business Day, the
succeeding Business Day), the Trustee shall deliver to the
Depositor, the
Master Servicer and CHL (on behalf of each
55
<PAGE>
Seller) a Delay Delivery Certification with respect to the
Subsequent Mortgage
Loans substantially in the form annexed hereto as Exhibit G-3, with
any
applicable exceptions noted thereon, together with a Subsequent
Certification
substantially in the form annexed hereto as Exhibit G-4. The
Trustee shall be
under no duty or obligation to inspect, review or examine such
documents,
instruments, certificates or other papers to determine that the
same are
genuine, enforceable or appropriate for the represented purpose or
that they
have actually been recorded in the real estate records or that they
are other
than what they purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date, the
Trustee shall deliver to the Depositor, the Master Servicer, CHL
(on behalf of
each Seller), the Class A-5B Insurer and to any Certificateholder
that so
requests a Final Certification with respect to the Subsequent
Mortgage Loans
substantially in the form annexed hereto as Exhibit H, with any
applicable
exceptions noted thereon.
In connection with the Trustee's completion and delivery of
such
Final Certification, the Trustee shall review each Mortgage File
with respect
to the Subsequent Mortgage Loans to determine that such Mortgage
File contains
the following documents:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
________________ without recourse", with all intervening
endorsements
that
show a complete chain of endorsement from the originator to the
Person endorsing the Mortgage Note (each such endorsement being
sufficient to transfer all right, title and interest of the party
so
endorsing, as
noteholder or assignee thereof, in and to that Mortgage
Note), or, if the original Mortgage Note has been lost or destroyed
and
not
replaced, an original lost note affidavit, stating that the
original
Mortgage Note was lost or destroyed, together with a copy of the
related
Mortgage Note and all such intervening endorsements;
(ii) in the case of each Subsequent Mortgage Loan that is not a
MERS
Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage, with recording information, and in the case of each
Subsequent
Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage
or a
copy
of such Mortgage, with recording information, noting the presence
of
the
MIN of the Subsequent Mortgage Loan and language indicating that
the
Subsequent Mortgage Loan is a MOM Loan if the Subsequent Mortgage
Loan is
a
MOM Loan, with evidence of recording indicated thereon, or a copy
of
the
Mortgage certified by the public recording office in which
Mortgage
has
been recorded;
(iii) in the case of each Subsequent Mortgage Loan that is not
a
MERS Mortgage Loan, a duly executed assignment of the Mortgage or
a
copy
thereof with recording information, in either case in the form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording
information,
together with all interim recorded assignments of such Mortgage or
a copy
of
such assignments, with recording information (in each case noting
the
presence of a MIN in the case of each MERS Mortgage Loan);
56
<PAGE>
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a
copy of lender's title policy or a printout of the electronic
equivalent and all riders thereto.
If, in the course of such review, the Trustee finds any document
or
documents constituting a part of such Mortgage File that do not
meet the
requirements of clauses (i)-(iv) and (vi) above, the Trustee shall
include
such exceptions in such Final Certification (and the Trustee shall
state in
such Final Certification whether any Mortgage File does not then
include the
original or duplicate original lender's title policy or a printout
of the
electronic equivalent and all riders thereto). If the public
recording office
in which a Mortgage or assignment thereof is recorded retains the
original of
such Mortgage or assignment, a copy of the original Mortgage or
assignment so
retained, with evidence of recording thereon, certified to be true
and
complete by such recording office, shall be deemed to satisfy the
requirements
of clause (ii), (iii) or (iv) above, as applicable. CHL shall
promptly correct
or cure such defect referred to above within 90 days from the date
it was so
notified of such defect and, if CHL does not correct or cure such
defect
within such period, CHL shall either (A) if the time to cure such
defect
expires prior to the end of the second anniversary of the Closing
Date,
substitute for the related Subsequent Mortgage Loan a Replacement
Mortgage
Loan, which substitution shall be accomplished in the manner and
subject to
the conditions set forth in Section 2.03, or (B) purchase such
Subsequent
Mortgage Loan from the Trust Fund within 90 days from the date CHL
was
notified of such defect in writing at the Purchase Price of such
Subsequent
Mortgage Loan; provided that any such substitution pursuant to (A)
above or
repurchase pursuant to (B) above shall not be effected prior to the
delivery
to the Trustee of the Opinion of Counsel required by Section 2.05
hereof and
any substitution pursuant to (A) above shall not be effected prior
to the
additional delivery to the Trustee of a Request for File Release.
No
substitution will be made in any calendar month after the
Determination Date
for such month. The Purchase Price for any such Subsequent Mortgage
Loan shall
be deposited by CHL in the Certificate Account and, upon receipt of
such
deposit and Request for File Release with respect thereto, the
Trustee shall
release the related Mortgage File to CHL and shall execute and
deliver at
CHL's request such instruments of transfer or assignment as CHL has
prepared,
in each case without recourse, as shall be necessary to vest in
CHL, or a
designee, the Trustee's interest in any Subsequent Mortgage Loan
released
pursuant hereto. If pursuant to the foregoing provisions CHL
repurchases a
Subsequent Mortgage Loan that is a MERS Mortgage Loan, the Master
Servicer
shall cause MERS to execute and deliver an assignment of the
Mortgage in
recordable form to transfer the Mortgage from MERS to CHL and shall
cause such
Mortgage to be removed from registration on the MERS(R) System in
accordance
with MERS' rules and regulations.
The Trustee shall retain possession and custody of each
Mortgage
File in accordance with and subject to the terms and conditions set
forth
herein. Each Seller shall promptly deliver to the Trustee, upon the
execution
or receipt thereof, the originals of such other documents or
instruments
constituting the Mortgage File that come into the possession of
such Seller
from time to time.
It is understood and agreed that the obligation of the Sellers
to
substitute for or to purchase, pursuant to Section 2.02(b), any
Subsequent
Mortgage Loan whose Mortgage File
57
<PAGE>
contains any document or documents that does not meet the
requirements of
clauses (i)-(iv) and (vi) above and which defect is not corrected
or cured by
such Seller within 90 days from the date it was notified of such
defect, shall
constitute the sole remedy respecting such defect available to the
Trustee,
the Depositor and any Certificateholder against the Sellers.
Section 2.03 Representations, Warranties and Covenants of the
Master
Servicer and the Sellers.
(a) The Master Servicer hereby represents and warrants to the
Depositor and the Trustee as follows, as of the date hereof with
respect to
the Initial Mortgage Loans, and the related Subsequent Transfer
Date with
respect to the Subsequent Mortgage Loans:
(1) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under the
laws
of
the State of Texas and is duly authorized and qualified to
transact
any
and all business contemplated by this Agreement to be conducted
by
the
Master Servicer in any state in which a Mortgaged Property is
located
or
is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business
laws
of any such state, to the extent necessary to ensure its ability
to
enforce each Mortgage Loan, to service the Mortgage Loans in
accordance
with
the terms of this Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms
hereof.
(2) The Master Servicer has the full partnership power and
authority to sell and service each Mortgage Loan, and to execute,
deliver
and
perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all
necessary
partnership action on the part of the Master Servicer the
execution,
delivery and performance of this Agreement; and this Agreement,
assuming
the
due authorization, execution and delivery hereof by the other
parties
hereto, constitutes a legal, valid and binding obligation of the
Master
Servicer, enforceable against the Master Servicer in accordance
with its
terms, except that (a) the enforceability hereof may be limited
by
bankruptcy, insolvency, moratorium, receivership and other similar
laws
relating to creditors' rights generally and (b) the remedy of
specific
performance and injunctive and other forms of equitable relief may
be
subject to equitable defenses and to the discretion of the court
before
which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master
Servicer
under this Agreement, the consummation of any other of the
transactions
contemplated by this Agreement, and the fulfillment of or
compliance with
the
terms hereof are in the ordinary course of business of the
Master
Servicer and will not (A) result in a material breach of any term
or
provision of the certificate of limited partnership,
partnership
agreement or other organizational document of the Master Servicer
or (B)
materially conflict with, result in a material breach, violation
or
acceleration of, or result in a material default under, the terms
of any
other material agreement or instrument to which the Master Servicer
is a
party or by which it may be bound, or (C) constitute a material
violation
of
58
<PAGE>
any
statute, order or regulation applicable to the Master Servicer
of
any
court, regulatory body, administrative agency or governmental
body
having jurisdiction over the Master Servicer; and the Master
Servicer is
not
in breach or violation of any material indenture or other
material
agreement or instrument, or in violation of any statute, order
or
regulation of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over it which breach or
violation
may
materially impair the Master Servicer's ability to perform or
meet
any
of its obligations under this Agreement.
(4) The Master Servicer is an approved servicer of conventional
mortgage loans for Fannie Mae and Freddie Mac and is a mortgagee
approved
by
the Secretary of Housing and Urban Development pursuant to
sections
203
and 211 of the National Housing Act.
(5) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that
would
materially and adversely affect the execution, delivery or
enforceability
of
this Agreement or the ability of the Master Servicer to service
the
Mortgage Loans or to perform any of its other obligations under
this
Agreement or any Subsequent Transfer Agreement in accordance with
the
terms hereof or thereof.
(6) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery
and
performance by the Master Servicer of, or compliance by the
Master
Servicer with, this Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Master Servicer has obtained the same.
(7) The Master Servicer is a member of MERS in good standing,
and
will comply in all material respects with the rules and procedures
of
MERS
in connection with the servicing of the Mortgage Loans for as
long
as
such Mortgage Loans are registered with MERS.
(b) CHL hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Initial Cut-off Date in the case of
the Initial
Mortgage Loans and as of the related Subsequent Cut-off Date in the
case of
the Subsequent Mortgage Loans (unless otherwise indicated or the
context
otherwise requires, percentages with respect to the Initial
Mortgage Loans in
the Trust Fund are measured by the Cut-off Date Principal Balance
of the
Initial Mortgage Loans in the Trust Fund):
(1) CHL is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the State
of New
York
and is duly authorized and qualified to transact any and all
business contemplated by this Agreement and each Subsequent
Transfer
Agreement to be conducted by CHL in any state in which a
Mortgaged
Property is located or is otherwise not required under applicable
law to
effect such qualification and, in any event, is in compliance with
the
doing business laws of any such state, to the extent necessary to
ensure
its
ability to enforce each Mortgage Loan, to sell the CHL Mortgage
Loans
in
accordance with the terms of this Agreement and each Subsequent
Transfer Agreement and to perform any of its other obligations
59
<PAGE>
under this Agreement and each Subsequent Transfer Agreement in
accordance with the terms hereof and thereof.
(2) CHL has the full corporate power and authority to sell each
CHL
Mortgage Loan, and to execute, deliver and perform, and to enter
into
and
consummate the transactions contemplated by this Agreement and
each
Subsequent Transfer Agreement and has duly authorized by all
necessary
corporate action on the part of CHL the execution, delivery and
performance of this Agreement and each Subsequent Transfer
Agreement; and
this
Agreement and each Subsequent Transfer Agreement, assuming the
due
authorization, execution and delivery hereof by the other parties
hereto,
constitutes a legal, valid and binding obligation of CHL,
enforceable
against CHL in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which
any
proceeding therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by CHL, the sale of the CHL Mortgage
Loans
by
CHL under this Agreement and each Subsequent Transfer Agreement,
the
consummation of any other of the transactions contemplated by
this
Agreement and each Subsequent Transfer Agreement, and the
fulfillment of
or
compliance with the terms hereof and thereof are in the
ordinary
course of business of CHL and will not (A) result in a material
breach of
any
term or provision of the charter or by-laws of CHL or (B)
materially
conflict with, result in a material breach, violation or
acceleration of,
or
result in a material default under, the terms of any other
material
agreement or instrument to which CHL is a party or by which it may
be
bound, or (C) constitute a material violation of any statute, order
or
regulation applicable to CHL of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
CHL;
and
CHL is not in breach or violation of any material indenture or
other
material agreement or instrument, or in violation of any statute,
order
or
regulation of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over it which breach or
violation
may
materially impair CHL's ability to perform or meet any of its
obligations under this Agreement and each Subsequent Transfer
Agreement.
(4) CHL is an approved seller of conventional mortgage loans
for
Fannie Mae and Freddie Mac and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203
and
211
of the National Housing Act.
(5) No litigation is pending or, to the best of CHL's
knowledge, threatened, against CHL that would materially and
adversely
affect the execution, delivery or enforceability of this Agreement
or any
Subsequent Transfer Agreement or the ability of CHL to sell the
CHL
Mortgage Loans or to perform any of its other obligations under
this
Agreement or any Subsequent Transfer Agreement in accordance with
the
terms hereof or thereof.
60
<PAGE>
(6) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery
and
performance by CHL of, or compliance by CHL with, this Agreement
or
any
Subsequent Transfer Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, CHL has obtained the same.
(7) The information set forth on Exhibit F-1 hereto with
respect to each Initial Mortgage Loan is true and correct in all
material
respects as of the Closing Date.
(8) CHL will treat the transfer of the CHL Mortgage Loans to
the
Depositor as a sale of the CHL Mortgage Loans for all tax,
accounting
and
regulatory purposes.
(9) None of the Mortgage Loans is 30 days or more delinquent.
(10) No Mortgage Loan had a Loan-to-Value Ratio at origination
in
excess of 100.00%.
(11) Each Mortgage Loan is secured by a valid and enforceable
first lien on the related Mortgaged Property subject only to (1)
the lien
of
non-delinquent current real property taxes and assessments, (2)
covenants, conditions and restrictions, rights of way, easements
and
other matters of public record as of the date of recording of
such
Mortgage, such exceptions appearing of record being acceptable
to
mortgage lending institutions generally or specifically reflected
in the
appraisal made in connection with the origination of the related
Mortgage
Loan
and (3) other matters to which like properties are commonly
subject
that do not materially
interfere with the benefits of the security
intended to be provided by such Mortgage.
(12) Immediately prior to the assignment of each CHL Mortgage
Loan
to the Depositor, CHL had good title to, and was the sole owner
of,
such
CHL Mortgage Loan free and clear of any pledge, lien, encumbrance
or
security interest and had full right and authority, subject to
no
interest or participation of, or agreement with, any other party,
to sell
and
assign the same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(14) There is no valid offset, claim, defense or counterclaim
to
any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such
Mortgage
Note.
(15) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property that are or may be a lien
prior
to,
or equal with, the lien of such Mortgage, except those that are
insured against by the title insurance policy referred to in item
(18)
below.
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<PAGE>
(16) As of the
Closing Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Transfer Date in the case of
the
Subsequent Mortgage Loans, to the best of CHL's knowledge, each
Mortgaged
Property is free of material damage and is in good repair.
(17) As of the Closing Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Transfer Date in the case of
the
Subsequent Mortgage Loans, neither CHL nor any prior holder of
any
Mortgage has modified the Mortgage in any material respect (except
that a
Mortgage Loan may have been modified by a written instrument that
has
been
recorded or submitted for recordation, if necessary, to protect
the
interests of the Certificateholders and the original or a copy of
which
has
been delivered to the Trustee); satisfied, cancelled or
subordinated
such
Mortgage in whole or in part; released the related Mortgaged
Property in whole or in part from the lien of such Mortgage; or
executed
any
instrument of release, cancellation, modification (except as
expressly permitted above) or satisfaction with respect
thereto.
(18) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable,
in
an amount at least equal to the Cut-off Date Principal Balance of
each
such
Mortgage Loan or a commitment (binder) to issue the same was
effective on the date of the origination of each Mortgage Loan,
each such
policy is valid and remains in full force and effect, and each
such
policy was issued by a title insurer qualified to do business in
the
jurisdiction where the Mortgaged Property is located and acceptable
to
Fannie Mae and Freddie Mac and is in a form acceptable to Fannie
Mae and
Freddie Mac, which policy insures the Sellers and successor owners
of
indebtedness secured by the insured Mortgage, as to the first
priority
lien, of the Mortgage subject to the exceptions set forth in
paragraph
(11)
above; to the best of CHL's knowledge, no claims have been made
under such mortgage title insurance policy and no prior holder of
the
related Mortgage, including any Seller, has done, by act or
omission,
anything that would impair the coverage of such mortgage title
insurance
policy.
(19) No Initial Mortgage Loan was the subject of a Principal
Prepayment in full between the Initial Cut-off Date and the Closing
Date.
No
Subsequent Mortgage Loan was the subject of a Principal Prepayment
in
full
between the Subsequent Cut-off Date and the Subsequent Transfer
Date.
(20) To the best of CHL's knowledge, all of the improvements
that were included for
the purpose of determining the Appraised Value of
the
Mortgaged Property lie wholly within the boundaries and
building
restriction lines of such property, and no improvements on
adjoining
properties encroach upon the Mortgaged Property.
(21) To the best of CHL's knowledge, no improvement located on
or
being part of the Mortgaged Property is in violation of any
applicable
zoning law or regulation. To the best of CHL's knowledge, all
inspections, licenses and certificates required to be made or
issued with
respect to all occupied portions of the Mortgaged Property and,
with
respect to the use and occupancy of the same, including but not
limited
to
certificates of occupancy and fire underwriting certificates,
have
been
made or
62
<PAGE>
obtained from the appropriate authorities, unless the lack thereof
would
not
have a material adverse effect on the value of such Mortgaged
Property, and the Mortgaged Property is lawfully occupied under
applicable law.
(22) The Mortgage Note and the related Mortgage are genuine,
and
each is the legal, valid and binding obligation of the maker
thereof,
enforceable in accordance with its terms and under applicable law,
except
that
(a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally and (b) the remedy of specific
performance
and
injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which
any
proceeding therefor may be brought. To the best of CHL's knowledge,
all
parties to the Mortgage Note and the Mortgage had legal capacity
to
execute the Mortgage Note and the Mortgage and each Mortgage Note
and
Mortgage have been duly and properly executed by such parties.
(23) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder,
and
any
and all requirements as to completion of any on-site or
off-site
improvements and as to disbursements of any escrow funds therefor
have
been
complied with. All costs, fees and expenses incurred in making,
or
closing or recording the Mortgage Loan were paid.
(24) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder
thereof
adequate for the realization against the Mortgaged Property of
the
benefits of the security, including, (i) in the case of a
Mortgage
designated as a deed of trust, by trustee's sale, and (ii)
otherwise by
judicial foreclosure.
(25) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such,
has
been properly designated and currently so serves and is named in
such
Mortgage, and no fees or expenses are or will become payable by
the
Certificateholders to the trustee under the deed of trust, except
in
connection with a trustee's sale after default by the
Mortgagor.
(26) Each Mortgage Note and each Mortgage is acceptable in form
to
Fannie Mae and Freddie Mac.
(27) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which
customary
arrangements for repayment thereof have not been made, and no
escrow
deposits or payments of other charges or payments due the Sellers
have
been
capitalized under the Mortgage or the related Mortgage Note.
(28) The origination, underwriting, servicing and collection
practices with respect to each Mortgage Loan have been in all
respects
legal, proper, prudent and customary in the mortgage lending
and
servicing business, as conducted by prudent lending institutions
which
service mortgage loans of the same type in the jurisdiction in
which the
Mortgaged Property is located.
63
<PAGE>
(29) There is no pledged account or other security other than
real
estate securing the Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(31) Each Mortgage Loan contains a customary "due on sale"
clause.
(32) No less than approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans are secured by
single
family detached dwellings. No more than approximately the
percentage
specified in the Collateral Schedule of the Initial Mortgage Loans
are
secured by two- to four-family dwellings. No more than
approximately the
percentage specified in the Collateral Schedule of the Initial
Mortgage
Loans are secured by low-rise condominium units. No more than
approximately the percentage specified in the Collateral Schedule
of the
Initial Mortgage Loans are secured by high-rise condominium units.
No
more
than approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans are secured by
manufactured
housing. No more than approximately the percentage specified in
the
Collateral Schedule of the Initial Mortgage Loans are secured by
PUDs.
(33) Each Initial Mortgage Loan was originated on or after the
date specified in the
Collateral Schedule.
(34) [RESERVED].
(35) Approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans provide for a Prepayment
Charge.
(36) On the basis of representations made by the Mortgagors in
their loan applications, no more than approximately the
percentage
specified in the Collateral Schedule of the Initial Mortgage Loans
are
secured by investor properties, and no less than approximately
the
percentage specified in the Collateral Schedule of the Initial
Mortgage
Loans respectively, are secured by owner-occupied Mortgaged
Properties
that
are primary residences.
(37) At the Cut-off Date, the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance
policy with
a
generally acceptable carrier that provides for fire and
extended
coverage and coverage for such other hazards as are customary in
the area
where the Mortgaged Property is located in an amount that is at
least
equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (a)
the
outstanding principal balance of the Mortgage Loan and (b) an
amount such
that
the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer. If
the
Mortgaged Property is a condominium unit, it is included under
the
coverage afforded by a blanket policy for the condominium unit. All
such
individual insurance policies and all flood policies referred to in
item
(38)
below contain a standard mortgagee clause naming the applicable
Seller or the original mortgagee, and its successors in interest,
as
mortgagee, and the applicable Seller has received no notice
that
64
<PAGE>
any
premiums due and payable thereon have not been paid; the
Mortgage
obligates the Mortgagor thereunder to maintain all such
insurance,
including flood insurance, at the Mortgagor's cost and expense, and
upon
the
Mortgagor's failure to do so, authorizes the holder of the
Mortgage
to
obtain and maintain such insurance at the Mortgagor's cost and
expense
and
to seek reimbursement therefor from the Mortgagor.
(38) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as
having
special flood hazards, a flood insurance policy in a form meeting
the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property
with
a
generally acceptable carrier in an amount representing coverage
not
less
than the least of (A) the original outstanding principal balance
of
the
Mortgage Loan, (B) the minimum amount required to compensate
for
damage or loss on a replacement cost basis, or (C) the maximum
amount of
insurance that is available under the Flood Disaster Protection Act
of
1973, as amended.
(39) To the best of CHL's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial
condemnation of
the
Mortgaged Property.
(40) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of CHL's
knowledge, there is no material event that, with the passage of
time or
with
notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration
under
the
Mortgage or the related Mortgage Note; and no Seller has waived
any
default, breach, violation or event of acceleration.
(41) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units
and
dwelling units in PUDs. To the best of CHL's knowledge, no
improvement to
a
Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) Any future advances made prior to the Cut-off Date have
been
consolidated with the outstanding principal amount secured by
the
Mortgage, and the secured principal amount, as consolidated, bears
a
single interest rate and single repayment term reflected on the
Mortgage
Loan
Schedule. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan. The Mortgage Note
does
not
permit or obligate the Master Servicer to make future advances to
the
Mortgagor at the option of the Mortgagor.
(44) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground
rents
that
previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every
such
item
that remains unpaid and that has been assessed, but is not yet
due
and
payable. Except for (A) payments in the nature of escrow
payments,
and
(B) interest accruing from the date of the Mortgage Note or date
of
disbursement of
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the
Mortgage proceeds, whichever is later, to the day that precedes
by
one
month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance
payments,
the
Master Servicer has not advanced funds, or induced, solicited
or
knowingly received any advance of funds by a party other than
the
Mortgagor, directly or indirectly, for the payment of any
amount
required by the Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten in
all
material respects in accordance with CHL's underwriting
guidelines
for
credit blemished quality mortgage loans or, with respect to
Mortgage
Loans purchased by CHL were underwritten in all material respects
in
accordance with customary and prudent underwriting guidelines
generally
used
by originators of credit blemished quality mortgage loans.
(46) Prior to the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a
qualified
appraiser, duly appointed by the originator, who had no interest,
direct
or
indirect, in the Mortgaged Property or in any loan made on the
security thereof, and whose compensation is not affected by the
approval
or
disapproval of the Mortgage Loan; such appraisal is in a form
acceptable to Fannie Mae and Freddie Mac.
(47) None of the Mortgage Loans is a graduated payment mortgage
loan
or a growing equity mortgage loan, and no Mortgage Loan is
subject
to a
buydown or similar arrangement.
(48) The Mortgage Rates borne by the Initial Mortgage Loans as
of
the Cut-off Date ranged between the approximate per annum
percentages
specified on the Collateral Schedule and the weighted average
Mortgage
Rate
as of the Cut-off Date was approximately the per annum rate
specified on the Collateral Schedule.
(49) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the applicable
Seller's
portfolio at the Closing Date as to which the representations
and
warranties made as to the Mortgage Loans set forth in this
Section
2.03(b) and Sections 2.03(c) and 2.03(d) can be made. No selection
was
made
in a manner that would adversely affect the interests of
Certificateholders.
(50) [RESERVED].
(51) Each of the Initial Mortgage Loans in the Mortgage Pool
has
a Due Date on or before the date specified in the Collateral
Schedule.
(52) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in
the
Prospectus Supplement.
(53) There is no obligation on the part of any Seller under the
terms of the Mortgage or related Mortgage Note to make payments
in
addition to those made by the Mortgagor.
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<PAGE>
(54) Any leasehold estate securing a Mortgage Loan has a term
of
not less than five years in excess of the term of the related
Mortgage
Loan.
(55) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without
regard
to
the rule in Treasury Regulation ss. 1.860G-2(f)(2) that treats
a
defective obligation as a qualified mortgage, or any
substantially
similar successor provision) and applicable Treasury
regulations
promulgated thereunder.
(56) No Mortgage Loan was either a "consumer credit contract"
or a
"purchase money loan" as such terms are defined in 16 C.F.R. ss.
433
nor
is any Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss.
1602(aa).
(57) To the extent required under applicable law, each
originator and subsequent mortgagee or servicer of the Mortgage
Loan
complied with all licensing requirements and was authorized to
transact
and
do business in the jurisdiction in which the related Mortgaged
Property is located at all times when it held or serviced the
Mortgage
Loan. Any and all requirements of any federal, state or local laws
or
regulations, including, without limitation, usury,
truth-in-lending, real
estate settlement procedures, consumer credit protection,
anti-predatory
lending, fair credit reporting, unfair collection practice, equal
credit
opportunity, fair housing and disclosure laws and regulations,
applicable
to
the solicitation, origination, collection and servicing of such
Mortgage Loan have been complied with in all material respects; and
any
obligations of the holder of the Mortgage Note, Mortgage and other
loan
documents have been complied with in all material respects;
servicing of
each
Mortgage Loan has been in accordance with prudent mortgage
servicing
standards, any applicable laws, rules and regulations and in
accordance
with
the terms of the Mortgage Notes, Mortgage and other loan
documents,
whether such origination and servicing was done by the applicable
Seller,
its
affiliates, or any third party which originated the Mortgage Loan
on
behalf of, or sold the Mortgage Loan to, any of them, or any
servicing
agent of any of the foregoing.
(58) The methodology used in underwriting the extension of
credit for the Mortgage Loan employs objective mathematical
principles
which relate the borrower's income, assets and liabilities to
the
proposed payment and such underwriting methodology does not rely on
the
extent of the borrower's equity in the collateral as the
principal
determining factor in approving such credit extension. Such
underwriting
methodology confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability to
make
timely payments on the Mortgage Loan.
(59) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition
of
obtaining the extension of credit. No borrower obtained a
prepaid
single-premium credit life, disability, accident or health
insurance
policy in connection with the origination of the Mortgage Loan.
(60) If the Mortgage Loan provides that the interest rate on
the
principal balance of the related Mortgage Loan may be adjusted,
all
of
the terms of the related
67
<PAGE>
Mortgage pertaining to interest rate adjustments, payment
adjustments
and
adjustments of the outstanding principal balance have been made
in
accordance with the terms of the related Mortgage Note and
applicable
law
and are enforceable and such adjustments will not affect the
priority of the Mortgage lien.
(61) The Mortgaged Property complies with all applicable laws,
rules and regulations relating to environmental matters, including
but
not
limited to those relating to radon, asbestos and lead paint and
no
Seller nor, to the best of CHL's knowledge, the Mortgagor, has
received
any
notice of any violation or potential violation of such law.
(62) There is no action, suit or proceeding pending, or to the
best
of CHL's knowledge, threatened or likely to be asserted with
respect
to
the Mortgage Loan against or affecting any Seller before or by
any
court, administrative agency, arbitrator or governmental body.
(63) No action, inaction, or event has occurred and no state of
fact
exists or has existed that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any
applicable
hazard insurance policy, irrespective of the cause of such failure
of
coverage. In connection with the placement of any such insurance,
no
commission, fee, or other compensation has been or will be received
by
CHL
or any designee of CHL or any corporation in which CHL or any
officer, director, or employee had a financial interest at the time
of
placement of such insurance.
(64) Each Mortgage Loan has a fully assignable life of loan tax
service contract which may be assigned without the payment of any
fee.
(65) No Mortgagor has notified CHL or the Master Servicer on
CHL's behalf, and CHL has no knowledge, of any relief requested
or
allowed to a Mortgagor under the Relief Act or any similar state or
local
law.
(66) Each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union,
insurance
company, or mortgage banking company which is supervised and
examined by
a
federal or state authority, or by a mortgagee approved by the
Secretary
of
Housing and Urban Development pursuant to Sections 2.03 and 2.11
of
the
National Housing Act.
(67) Each Mortgage Loan was (A) originated no earlier than six
months prior to the time the applicable Seller purchased such
Mortgage
Loan
pursuant to a mortgage loan purchase agreement or other similar
agreement and (B) underwritten or reunderwritten by the applicable
Seller
in
accordance with the applicable Seller's underwriting guidelines
in
effect at the time the loan was underwritten or reunderwritten,
as
applicable.
(68) Each Mortgage Loan, at the time it was originated and as
of
the Closing Date or the related Subsequent Transfer Date, as
applicable, complied in all material respects with applicable
local,
state and federal laws, including, but not limited to, all
predatory and
abusive lending laws.
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<PAGE>
(69) None of the Mortgage Loans is a "high cost" mortgage loan
as
defined by applicable federal, state and local predatory and
abusive
lending laws.
(70) Each Prepayment Charge is enforceable and was originated
in
compliance with all applicable federal, state and local laws.
(71) None of the Mortgage Loans that are secured by property
located in the State of Illinois are in violation of the provisions
of
the
Illinois Interest Act; 815 Ill. Comp. Stat. 205/0.01 (2004).
(72) There is no Mortgage Loan in the Trust Fund that was
originated on or after March 7, 2003, which is a "high cost home
loan" as
defined under the Georgia Fair Lending Act.
(73) No Mortgage Loan in the Trust Fund is a High Cost Loan or
Covered Loan, as applicable (as such terms are defined in the
then-current Standard & Poor's LEVELS(R) Glossary) and no
Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is
governed
by
the Georgia Fair Lending Act.
(74) Each Mortgage Loan is secured by a "single family
residence" within the meaning of Section 25(e)(10) of the Code. The
fair
market value of the manufactured home securing each Mortgage Loan
was at
least equal to 80% of the adjusted issue price of the contract at
either
(i)
the time the contract was originated (determined pursuant to
the
REMIC Provisions) or (ii) the time the contract is transferred to
the
purchaser.
(75) No Mortgage Loan in the Trust Fund is a "high cost home,"
"covered" (excluding home loans defined as "covered home loans" in
the
New
Jersey Home Ownership Security Act of 2002 that were originated
between November 26, 2003 and July 7, 2004), "high risk home"
or
"predatory" loan under any applicable state, federal or local law
(or a
similarly classified loan using different terminology under a
law
imposing heightened regulatory scrutiny or additional legal
liability for
residential mortgage loans having high interest rates, points
and/or
fees).
(76) There is no Mortgage Loan in the Trust Fund that was
originated on or after October 1, 2002 and before March 7, 2003,
which is
secured by property located in the State of Georgia.
(77) The representations in Section 2.03(c)(1)-(6) and
2.03(d)(1)-(6) are true and correct.
(c) Park
Monaco hereby represents and warrants to the Depositor
and the Trustee as follows, as of the Cut-off Date:
(1) Park Monaco is duly organized as a Delaware corporation and
is
validly existing and in good standing under the laws of the State
of
Delaware and is duly authorized and qualified to transact any and
all
business contemplated by this Agreement and each Subsequent
Transfer
Agreement to be conducted by Park Monaco in any state in
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<PAGE>
which a Mortgaged Property securing a Park Monaco Mortgage Loan
is
located or is otherwise not required under applicable law to effect
such
qualification and, in any event, is in compliance with the doing
business
laws
of any such state, to the extent necessary to ensure its ability
to
enforce each Park Monaco Mortgage Loan, to sell the Park Monaco
Mortgage
Loans in accordance with the terms of this Agreement and each
Subsequent
Transfer Agreement and to perform any of its other obligations
under this
Agreement in accordance with the terms hereof.
(2) Park Monaco has the full company power and authority to
sell
each Park Monaco Mortgage Loan, and to execute, deliver and
perform,
and
to enter into and consummate the transactions contemplated by
this
Agreement and each Subsequent Transfer Agreement and has duly
authorized
by
all necessary corporate action on the part of Park Monaco the
execution, delivery and performance of this Agreement and each
Subsequent
Transfer Agreement; and this Agreement and each Subsequent
Transfer
Agreement, assuming the due authorization, execution and delivery
hereof
by
the other parties hereto, constitutes a legal, valid and
binding
obligation of Park Monaco, enforceable against Park Monaco in
accordance
with
its terms, except that (a) the enforceability hereof may be
limited
by
bankruptcy, insolvency, moratorium, receivership and other
similar
laws
relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief
may
be subject to equitable defenses and to the discretion of the
court
before which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Monaco, the sale of the Park
Monaco
Mortgage Loans by Park Monaco under this Agreement and each
Subsequent
Transfer Agreement, the consummation of any other of the
transactions
contemplated by this Agreement and each Subsequent Transfer
Agreement,
and
the fulfillment of or compliance with the terms hereof are in
the
ordinary course of business of Park Monaco and will not (A) result
in a
material breach of any term or provision of the certificate of
incorporation or by-laws of Park Monaco or (B) materially conflict
with,
result in a material breach, violation or acceleration of, or
result in a
material default under, the terms of any other material agreement
or
instrument to which Park Monaco is a party or by which it may be
bound,
or
(C) constitute a material violation of any statute, order or
regulation applicable to Park Monaco of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over
Park
Monaco; and Park Monaco is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of
any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it
which breach or violation may materially impair Park Monaco's
ability to
perform or meet any of its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park Monaco's
knowledge, threatened, against Park Monaco that would materially
and
adversely affect the
execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of
Park
Monaco to sell the Park Monaco Mortgage Loans or to
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<PAGE>
perform any of its
other obligations under this Agreement or any
Subsequent Transfer Agreement in accordance with the terms hereof
or
thereof.
(5) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery
and
performance by Park Monaco of, or compliance by Park Monaco
with,
this
Agreement or any Subsequent Transfer Agreement or the
consummation
of
the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Monaco has
obtained
the
same.
(6) Park Monaco will treat the transfer of the Park Monaco
Mortgage Loans to the Depositor as a sale of the Park Monaco
Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Monaco
Mortgage Loan to the Depositor, Park Monaco had good title to, and
was
the
sole owner of, such Park Monaco Mortgage Loan free and clear of
any
pledge, lien, encumbrance or security interest and had full right
and
authority, subject to no interest or participation of, or agreement
with,
any
other party, to sell and assign the same pursuant to this
Agreement.
(d) Park Sienna hereby represents and warrants to the Depositor
and
the Trustee as follows, as of the Cut-off Date:
(1) Park Sienna is duly organized as a Delaware limited
liability company and is validly existing and in good standing
under the
laws
of the State of Delaware and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement and
each
Subsequent Transfer Agreement to be conducted by Park Sienna in any
state
in
which a Mortgaged Property securing a Park Sienna Mortgage Loan
is
located or is otherwise not required under applicable law to effect
such
qualification and, in any event, is in compliance with the doing
business
laws
of any such state, to the extent necessary to ensure its ability
to
enforce each Park Sienna Mortgage Loan, to sell the Park Sienna
Mortgage
Loans in accordance with the terms of this Agreement and each
Subsequent
Transfer Agreement and to perform any of its other obligations
under this
Agreement in accordance with the terms hereof.
(2) Park Sienna has the full company power and authority to
sell
each Park Sienna Mortgage Loan, and to execute, deliver and
perform,
and
to enter into and consummate the transactions contemplated by
this
Agreement and each Subsequent Transfer Agreement and has duly
authorized
by
all necessary company action on the part of Park Sienna the
execution,
delivery and performance of this Agreement and each Subsequent
Transfer
Agreement; and this Agreement and each Subsequent Transfer
Agreement,
assuming the due authorization, execution and delivery hereof by
the
other parties hereto, constitutes a legal, valid and binding
obligation
of
Park Sienna, enforceable against Park Sienna in accordance with
its
terms, except that (a) the enforceability hereof may be limited
by
bankruptcy, insolvency, moratorium, receivership and other similar
laws
relating to creditors' rights generally and (b) the remedy of
specific
performance and injunctive and other forms of equitable relief may
be
71
<PAGE>
subject to equitable defenses and to the discretion of the court
before
which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Sienna, the sale of the Park
Sienna
Mortgage Loans by Park Sienna under this Agreement and each
Subsequent
Transfer Agreement, the consummation of any other of the
transactions
contemplated by this Agreement and each Subsequent Transfer
Agreement and
the
fulfillment of or compliance with the terms hereof are in the
ordinary course of business of Park Sienna and will not (A) result
in a
material breach of any term or provision of the certificate of
formation
or
limited liability company agreement of Park Sienna or (B)
materially
conflict with, result in a material breach, violation or
acceleration of,
or
result in a material default under, the terms of any other
material
agreement or instrument to which Park Sienna is a party or by which
it
may
be bound, or (C) constitute a material violation of any
statute,
order or regulation applicable to Park Sienna of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction over
Park
Sienna; and Park Sienna is not in breach or violation of any
material indenture or other
material agreement or instrument, or in
violation of any statute, order or regulation of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction over
it
which breach or violation may materially impair Park Sienna's
ability
to
perform or meet any of its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park Sienna's
knowledge, threatened, against Park Sienna that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement or any Subsequent Transfer Agreement or the ability of
Park
Sienna to sell the Park Sienna Mortgage Loans or to perform any of
its
other obligations under this Agreement or any Subsequent
Transfer
Agreement in accordance with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery
and
performance by Park Sienna of, or compliance by Park Sienna
with,
this
Agreement or any Subsequent Transfer Agreement or the
consummation
of
the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Sienna has
obtained
the
same.
(6) Park Sienna will treat the transfer of the Park Sienna
Mortgage Loans to the Depositor as a sale of the Park Sienna
Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Sienna
Mortgage Loan to the Depositor, Park Sienna had good title to, and
was
the
sole owner of, such the Park Sienna Mortgage Loan free and clear
of
any
pledge, lien, encumbrance or security interest and had full right
and
authority, subject to no interest or participation of, or agreement
with,
any
other party, to sell and assign the same pursuant to this
Agreement.
(e) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty set forth in Section 2.03(a) through (d)
that
materially and adversely affects the interests of the
Certificateholders or
the Class A-5B Insurer in any Mortgage Loan, the party discovering
such breach
shall give prompt notice thereof to the other parties, the NIM
Insurer
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<PAGE>
and the Class A-5B Insurer. Each of the Master Servicer and the
Sellers (each,
a "Representing Party") hereby covenants with respect to the
representations
and warranties set forth in Sections 2.03(a) through (d) that
within 90 days
of the earlier of the discovery by such Representing Party or
receipt of
written notice by such Representing Party from any party of a
breach of any
representation or warranty set forth herein made that materially
and adversely
affects the interests of the Certificateholders in any Mortgage
Loan or the
Class A-5B Insurer, it shall cure such breach in all material
respects and, if
such breach is not so cured, shall, (i) if such 90-day period
expires prior to
the second anniversary of the Closing Date, remove such Mortgage
Loan (a
"Deleted Mortgage Loan") from the Trust Fund and substitute in its
place a
Replacement Mortgage Loan, in the manner and subject to the
conditions set
forth in this Section; or (ii) repurchase the affected Mortgage
Loan or
Mortgage Loans from the Trustee at the Purchase Price in the manner
set forth
below; provided that (a) any such substitution pursuant to (i)
above or
repurchase pursuant to (ii) above shall not be effected prior to
the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05
hereof, (b)
any such substitution pursuant to (i) above shall not be effected
prior to the
additional delivery to the Trustee of a Request for File Release
and (c) any
such substitution pursuant to (i) above shall include a payment by
the
applicable Representing Party of any amount as calculated under
item (iii) of
the definition of "Purchase Price". Any Representing Party liable
for a breach
under this Section 2.03 shall promptly reimburse the Master
Servicer or the
Trustee for any expenses reasonably incurred by the Master Servicer
or the
Trustee in respect of enforcing the remedies for such breach. To
enable the
Master Servicer to amend the Mortgage Loan Schedule, any
Representing Party
liable for a breach under this Section 2.03 shall, unless it cures
such breach
in a timely fashion pursuant to this Section 2.03, promptly notify
the Master
Servicer whether such Representing Party intends either to
repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With
respect to the
representations and warranties described in this Section that are
made to the
best of the Representing Party's knowledge, if it is discovered by
any of the
Depositor, the Master Servicer, the Sellers or the Trustee that the
substance
of such representation and warranty is inaccurate and such
inaccuracy
materially and adversely affects the value of the related Mortgage
Loan,
notwithstanding the Representing Party's lack of knowledge with
respect to the
substance of such representation or warranty, such inaccuracy shall
be deemed
a breach of the applicable representation or warranty. Any breach
of a
representation set forth in Section 2.03(a)(8), (b)(72), (b)(75) or
(b)(76)
shall be deemed to materially and adversely affect the
Certificateholders.
With respect to a breach of a representation of Park Monaco or Park
Sienna, if
that Seller fails to cure the breach or repurchase the affected
Mortgage Loan
within the time period required by Section 2.03 hereunder, CHL
hereby agrees
to honor that Seller's obligations as set forth in this
Section.
With respect to any Replacement Mortgage Loan or Loans, the
applicable Seller delivering such Replacement Mortgage Loan shall
deliver to
the Trustee for the benefit of the Certificateholders the related
Mortgage
Note, Mortgage and assignment of the Mortgage, and such other
documents and
agreements as are required by Section 2.01, with the Mortgage Note
endorsed
and the Mortgage assigned as required by Section 2.01. No
substitution will be
made in any calendar month after the Determination Date for such
month.
Scheduled Payments due with respect to Replacement Mortgage Loans
in the Due
Period related to the Distribution Date on which such proceeds are
to be
distributed shall not be part of the Trust Fund and will be
retained by the
applicable Seller delivering such Replacement Mortgage Loan on
such
Distribution Date. For the month of substitution, distributions
to
Certificateholders will include
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<PAGE>
the Scheduled Payment due on any Deleted Mortgage Loan for the
related Due
Period and thereafter the applicable Seller shall be entitled to
retain all
amounts received in respect of such Deleted Mortgage Loan. The
Master Servicer
shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage
Loan and
the substitution of the Replacement Mortgage Loan or Loans and the
Master
Servicer shall deliver the amended Mortgage Loan Schedule to the
Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be
subject to
the terms of this Agreement in all respects, and the applicable
Seller
delivering such Replacement Mortgage Loan shall be deemed to have
made with
respect to such Replacement Mortgage Loan or Loans, as of the date
of
substitution, the representations and warranties set forth in
Section 2.03(b),
(c) or (d) with respect to such Mortgage Loan. Upon any such
substitution and
the deposit to the Certificate Account of the amount required to be
deposited
therein in connection with such substitution as described in the
following
paragraph, the Trustee shall release to the Representing Party the
Mortgage
File relating to such Deleted Mortgage Loan and held for the
benefit of the
Certificateholders and shall execute and deliver at the Master
Servicer's
direction such instruments of transfer or assignment as have been
prepared by
the Master Servicer, in each case without recourse, as shall be
necessary to
vest in the applicable Seller, or its respective designee, title to
the
Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to
this Section 2.03.
For any month in which any Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans,
the Master
Servicer will determine the amount (if any) by which the aggregate
principal
balance of all such Replacement Mortgage Loans as of the date of
substitution
is less than the Stated Principal Balance (after application of the
principal
portion of the Scheduled Payment due in the month of substitution)
of all such
Deleted Mortgage Loans. An amount equal to the aggregate of the
deficiencies
described in the preceding sentence (such amount, the "Substitution
Adjustment
Amount") shall be forwarded by the applicable Seller to the Master
Servicer
and deposited by the Master Servicer into the Certificate Account
not later
than the Determination Date for the Distribution Date relating to
the
Prepayment Period during which the related Mortgage Loan became
required to be
purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage
Loan,
the Purchase Price therefor shall be deposited in the Certificate
Account
pursuant to Section 3.05 on the Determination Date for the
Distribution Date
in the month following the month during which such Seller became
obligated to
repurchase or replace such Mortgage Loan and upon such deposit of
the Purchase
Price, the delivery of the Opinion of Counsel required by Section
2.05, if
any, and the receipt of a Request for File Release, the Trustee
shall release
the related Mortgage File held for the benefit of the
Certificateholders to
such Seller, and the Trustee shall execute and deliver at such
Person's
direction the related instruments of transfer or assignment
prepared by such
Seller, in each case without recourse, as shall be necessary to
transfer title
from the Trustee for the benefit of the Certificateholders and
transfer the
Trustee's interest to such Seller to any Mortgage Loan purchased
pursuant to
this Section 2.03. It is understood and agreed that the obligation
under this
Agreement of the Sellers to cure, repurchase or replace any
Mortgage Loan as
to which a breach has occurred and is continuing shall constitute
the sole
remedy against the Sellers respecting such breach available to
Certificateholders, the Depositor or the Trustee.
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(f) The representations and warranties set forth in this
Section
2.03 shall survive delivery of the respective Mortgage Files to the
Trustee
for the benefit of the Certificateholders with respect to each
Mortgage Loan.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master
Servicer
and the Trustee as follows, as of the date hereof and as of each
Subsequent
Transfer Date:
(1) The Depositor is duly organized and is validly existing as
a
corporation in good standing under the laws of the State of
Delaware
and
has full power and authority (corporate and other) necessary to
own
or
hold its properties and to conduct its business as now conducted by
it
and
to enter into and perform its obligations under this Agreement
and
each
Subsequent Transfer Agreement.
(2) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by, this Agreement and each Subsequent
Transfer
Agreement and has duly authorized, by all necessary corporate
action on
its
part, the execution, delivery and performance of this Agreement
and
each
Subsequent Transfer Agreement; and this Agreement and each
Subsequent Transfer Agreement, assuming the due authorization,
execution
and
delivery hereof by the other parties hereto, constitutes a
legal,
valid and binding obligation of the Depositor, enforceable against
the
Depositor in accordance with its terms, subject, as to
enforceability, to
(i)
bankruptcy, insolvency, reorganization, moratorium and other
similar
laws
affecting creditors' rights generally and (ii) general principles
of
equity, regardless of whether enforcement is sought in a proceeding
in
equity or at law.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by the Depositor, the consummation of
the
transactions contemplated by this Agreement, and the fulfillment of
or
compliance with the terms hereof are in the ordinary course of
business
of
the Depositor and will not (A) result in a material breach of any
term
or
provision of the charter or by-laws of the Depositor or (B)
materially
conflict with, result in a material breach, violation or
acceleration of,
or
result in a material default under, the terms of any other
material
agreement or instrument to which the Depositor is a party or by
which it
may
be bound or (C) constitute a material violation of any statute,
order
or
regulation applicable to the Depositor of any court, regulatory
body,
administrative agency or governmental body having jurisdiction over
the
Depositor; and the Depositor is not in breach or violation of
any
material indenture or other material agreement or instrument, or
in
violation of any statute, order or regulation of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction over
it
which breach or violation may materially impair the Depositor's
ability to perform or meet any of its obligations under this
Agreement.
(4) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that
would
materially and adversely affect the execution, delivery or
enforceability
of
this Agreement or any Subsequent Transfer
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Agreement or the ability of the Depositor to perform its
obligations
under this Agreement or any Subsequent Transfer Agreement in
accordance
with
the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or
governmental agency or body is required for the execution,
delivery
and
performance by the Depositor of, or compliance by the Depositor
with,
this
Agreement or any Subsequent Transfer Agreement or the
consummation
of
the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, the Depositor has
obtained
the
same.
The Depositor hereby represents and warrants to the Trustee
with
respect to each Mortgage Loan, as of the Closing Date or the
related
Subsequent Transfer Date, as applicable, following the transfer of
such
Mortgage Loan to it by the Sellers, the Depositor had good title to
the
Initial Mortgage Loans or related Subsequent Mortgage Loans, as
applicable,
and the related Mortgage Notes were subject to no offsets, claims,
defenses or
counterclaims.
It is understood and agreed that the representations and
warranties
set forth in the two immediately preceding paragraphs shall survive
delivery
of the Mortgage Files to the Trustee. Upon discovery by the
Depositor or the
Trustee, of a breach of any of the foregoing representations and
warranties
set forth in the immediately preceding paragraph (referred to
herein as a
"breach"), which breach materially and adversely affects the
interest of the
Certificateholders, the party discovering such breach shall give
prompt
written notice to the others and to each Rating Agency, the NIM
Insurer and
the Class A-5B Insurer. The Depositor hereby covenants with respect
to the
representations and warranties made by it in this Section 2.04 that
within 90
days of the earlier of the discovery by it or receipt of written
notice by it
from any party of a breach of any representation or warranty set
forth herein
made that materially and adversely affects the interests of the
Certificateholders or the Class A-5B Insurer in any Mortgage Loan,
it shall
cure such breach in all material respects and, if such breach is
not so cured,
shall repurchase or replace the affected Mortgage Loan or Loans in
accordance
with the procedure set forth in Section 2.03(e).
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement,
with
respect to any Mortgage Loan that is not in default or as to which
default is
not imminent, no repurchase or substitution pursuant to Sections
2.02, 2.03 or
2.04 shall be made unless the Representing Party making such
repurchase or
substitution delivers to the Trustee an Opinion of Counsel (which
such
Representing Party shall use reasonable efforts to obtain),
addressed to the
Trustee to the effect that such repurchase or substitution would
not (i)
result in the imposition of the tax on "prohibited transactions" of
the Trust
Fund or contributions after the Closing Date, as defined in
sections
860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any
REMIC
formed hereunder to fail to qualify as a REMIC at any time that
any
Certificates are outstanding. Any Mortgage Loan as to which
repurchase or
substitution was delayed pursuant to this paragraph shall be
repurchased or
the substitution therefor shall occur (subject to compliance with
Sections
2.02, 2.03 or 2.04) upon the earlier of (a) the occurrence of a
default or
imminent default with respect to such loan and (b) receipt by the
Trustee of
an Opinion of Counsel to the effect that
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such repurchase or substitution, as applicable, will not result in
the events
described in clause (i) or clause (ii) of the preceding
sentence.
(b) Upon discovery by the Depositor, any Seller, the Master
Servicer
or the Trustee that any Mortgage Loan does not constitute a
"qualified
mortgage" within the meaning of section 860G(a)(3) of the Code, the
party
discovering such fact shall promptly (and in any event within five
Business
Days of discovery) give written notice thereof to the other parties
and the
NIM Insurer. In connection therewith, the Trustee shall require
CHL, at CHL's
option, to either (i) substitute, if the conditions in Section
2.03(e) with
respect to substitutions are satisfied, a Replacement Mortgage Loan
for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage
Loan within
90 days of such discovery in the same manner as it would a Mortgage
Loan for a
breach of representation or warranty contained in Section 2.03. The
Trustee
shall reconvey to CHL the Mortgage Loan to be released pursuant
hereto in the
same manner, and on the same terms and conditions, as it would a
Mortgage Loan
repurchased for breach of a representation or warranty contained in
Section
2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the
Trust Fund and, concurrently with such transfer and assignment, has
executed,
authenticated and delivered, to or upon the order of the Depositor,
the
Certificates in authorized denominations evidencing the entire
ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the
rights referred to above for the benefit of all present and future
Holders of
the Certificates and to perform the duties set forth in this
Agreement.
Section 2.07 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor and
