EXHIBIT 99.5
CWHEQ, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK GRANADA LLC,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2006
HOME EQUITY LOAN ASSET BACKED CERTIFICATES, SERIES 2006-S4
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Table of Contents
Page
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ARTICLE I. DEFINITIONS
5
Section 1.01 Defined
Terms...................................................................................5
Section 1.02 Certain
Interpretive
Provisions................................................................40
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
41
Section 2.01 Conveyance
of Mortgage
Loans...................................................................41
Section 2.02 Acceptance
by Trustee of the Mortgage
Loans....................................................48
Section 2.03
Representations, Warranties and Covenants of the Master Servicer
and the Sellers...............54
Section 2.04
Representations and Warranties of the
Depositor................................................71
Section 2.05 Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases................72
Section 2.06
Authentication and Delivery of
Certificates....................................................73
Section 2.07 Covenants
of the Master
Servicer...............................................................73
Section 2.08 Sponsor
Loss Coverage
Obligation...............................................................74
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
74
Section 3.01 Master
Servicer to Service Mortgage
Loans......................................................74
Section 3.02
Subservicing; Enforcement of the Obligations of Master
Servicer................................76
Section 3.03 Rights of
the Depositor, the Sellers, the Certificateholders, the NIM
Insurer, the
Certificate Insurer and the Trustee in Respect of the Master
Servicer..........................77
Section 3.04 Trustee to
Act as Master
Servicer..............................................................77
Section 3.05 Collection
of Mortgage Loan Payments; Certificate Account; Distribution
Account;
Pre-Funding Account; Seller Shortfall Interest Requirement; Premium
Account....................78
Section 3.06 Collection
of Taxes, Assessments and Similar Items; Escrow
Accounts............................82
Section 3.07 Access to
Certain Documentation and Information Regarding the Mortgage
Loans...................82
Section 3.08 Permitted
Withdrawals from the Certificate Account, Distribution Account,
Carryover
Reserve Fund and the Principal Reserve
Fund....................................................83
Section 3.09
[Reserved].....................................................................................86
Section 3.10
Maintenance of Hazard
Insurance................................................................86
Section 3.11
Enforcement of Due-On-Sale Clauses; Assumption
Agreements......................................87
Section 3.12
Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds and
Realized Losses; Repurchase of Certain Mortgage
Loans..........................................88
Section 3.13 Trustee to
Cooperate; Release of Mortgage
Files................................................91
Section 3.14 Documents,
Records and Funds in Possession of Master Servicer to be Held for
the
Trustee........................................................................................92
<PAGE>
Section 3.15 Servicing
Compensation.........................................................................93
Section 3.16 Access to
Certain
Documentation................................................................93
Section 3.17 Annual
Statement as to
Compliance..............................................................94
Section 3.18 The
Corridor
Contract..........................................................................94
Section 3.19
[Reserved].....................................................................................95
Section 3.20 Prepayment
Charges.............................................................................95
ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
96
Section 4.01 Advances;
Remittance
Reports...................................................................96
Section 4.02 Reduction
of Servicing Compensation in Connection with Prepayment Interest
Shortfalls..........98
Section 4.03
[Reserved].....................................................................................98
Section 4.04
Distributions..................................................................................98
Section 4.05 Monthly
Statements to
Certificateholders......................................................102
Section 4.06
Certificate Insurance Policy; Rights of the Certificate
Insurer...............................103
Section 4.07
Termination of the Credit Insurance
Policy....................................................107
Section 4.08 Carryover
Reserve
Fund........................................................................107
ARTICLE V. THE CERTIFICATES
109
Section 5.01 The
Certificates..............................................................................109
Section 5.02
Certificate Register; Registration of Transfer and Exchange of
Certificates...................110
Section 5.03 Mutilated,
Destroyed, Lost or Stolen
Certificates.............................................114
Section 5.04 Persons
Deemed
Owners.........................................................................114
Section 5.05 Access to
List of Certificateholders' Names and
Addresses.....................................114
Section 5.06 Book-Entry
Certificates.......................................................................115
Section 5.07 Notices to
Depository.........................................................................116
Section 5.08 Definitive
Certificates.......................................................................116
Section 5.09
Maintenance of Office or
Agency...............................................................116
ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
117
Section 6.01 Respective
Liabilities of the Depositor, the Master Servicer and the
Sellers..................117
Section 6.02 Merger or
Consolidation of the Depositor, the Master Servicer or the
Sellers..................117
Section 6.03 Limitation
on Liability of the Depositor, the Sellers, the Master Servicer,
the NIM
Insurer and
Others............................................................................117
Section 6.04
Limitation on Resignation of Master
Servicer..................................................118
Section 6.05 Errors and
Omissions Insurance; Fidelity
Bonds................................................119
ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER
119
Section 7.01 Events of
Default.............................................................................119
Section 7.02 Trustee to
Act; Appointment of
Successor......................................................121
Section 7.03
Notification to
Certificateholders............................................................123
<PAGE>
ARTICLE VIII. CONCERNING THE TRUSTEE
123
Section 8.01 Duties of
Trustee.............................................................................123
Section 8.02 Certain
Matters Affecting the
Trustee.........................................................125
Section 8.03 Trustee
Not Liable for Mortgage
Loans.........................................................126
Section 8.04 Trustee
May Own
Certificates..................................................................126
Section 8.05 Master
Servicer to Pay Trustee's Fees and
Expenses............................................126
Section 8.06
Eligibility Requirements for
Trustee..........................................................127
Section 8.07
Resignation and Removal of
Trustee............................................................127
Section 8.08 Successor
Trustee.............................................................................128
Section 8.09 Merger or
Consolidation of
Trustee............................................................129
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.................................................129
Section 8.11 Tax
Matters...................................................................................131
Section 8.12 Access to
Records of the
Trustee..............................................................133
Section 8.13 Suits for
Enforcement.........................................................................133
Section 8.14 Monitoring
of Significance
Percentage.........................................................134
ARTICLE IX. TERMINATION
134
Section 9.01
Termination upon Liquidation or Repurchase of all Mortgage
Loans..............................134
Section 9.02 Final
Distribution on the
Certificates........................................................135
Section 9.03 Additional
Termination
Requirements...........................................................137
ARTICLE X. MISCELLANEOUS PROVISIONS
138
Section 10.01
Amendment.....................................................................................138
Section 10.02 Recordation of
Agreement;
Counterparts........................................................140
Section 10.03 Governing
Law.................................................................................140
Section 10.04 Intention of
Parties..........................................................................140
Section 10.05
Notices.......................................................................................142
Section 10.06 Severability of
Provisions....................................................................143
Section 10.07
Assignment....................................................................................143
Section 10.08 Limitation on
Rights of
Certificateholders....................................................143
Section 10.09 Inspection and
Audit
Rights...................................................................144
Section 10.10 Certificates
Nonassessable and Fully
Paid.....................................................144
Section 10.11 Rights of NIM
Insurer.........................................................................144
ARTICLE XI. EXCHANGE ACT REPORTING
146
Section 11.01 Filing
Obligations............................................................................146
Section 11.02 Form 10-D
Filings.............................................................................146
Section 11.03 Form 8-K
Filings..............................................................................147
Section 11.04 Form 10-K
Filings.............................................................................147
Section 11.05 Sarbanes-Oxley
Certification..................................................................148
Section 11.06 Form 15
Filing................................................................................149
Section 11.07 Report on
Assessment of Compliance and
Attestation............................................149
Section 11.08 Use of
Subservicers and
Subcontractors........................................................150
<PAGE>
Section 11.09
Amendments....................................................................................151
Section 11.10 Reconciliation
of
Accounts....................................................................151
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-5 Certificate
EXHIBIT A-6
Form of Class A-6 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
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 Class A-1 Corridor Contract
EXHIBIT R
Form of Certificate Insurance 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-1
[Reserved]
EXHIBIT V-2
[Reserved]
EXHIBIT V-3
[Reserved]
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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
<PAGE>
</TABLE>
POOLING AND SERVICING AGREEMENT, dated as of August 1, 2006, by
and among CWHEQ, INC., a Delaware corporation, as depositor (the
"Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller
("CHL" or a
"Seller"), PARK GRANADA LLC, a Delaware corporation, as a seller
("Park
Granada" or a "Seller"), PARK MONACO INC., a Delaware corporation,
as a seller
("Park Monaco" or a "Seller"), PARK SIENNA LLC, a Delaware limited
liability
company, as a seller ("Park Sienna" or a "Seller", and together
with CHL, Park
Granada and Park Monaco, the "Sellers"), COUNTRYWIDE HOME LOANS
SERVICING LP,
a Texas limited partnership, as master servicer (the "Master
Servicer"), and
THE BANK OF NEW YORK, a New York banking corporation, as trustee
(the
"Trustee").
PRELIMINARY STATEMENT
The
Depositor is the owner of the Trust Fund that is hereby conveyed
to
the Trustee in return for the Certificates. As provided herein, the
Trustee
will elect that the Trust Fund (excluding the Carryover Reserve
Fund, the
assets held in the Pre-Funding Account and the Trust Fund's rights
with
respect to payments received under the Corridor Contract) be
treated for
federal income tax purposes as two real estate mortgage investment
conduits
(each a "REMIC" or, in the alternative, the "Subsidiary REMIC" and
the "Master
REMIC"). The Subsidiary REMIC will hold as assets all property of
the Trust,
other than the Carryover Reserve Fund, the Pre-Funding Account and
the Trust
Fund's rights with respect to payments received under the Corridor
Contract,
and will be evidenced by (i) the Subsidiary REMIC Regular
Interests, which
will be uncertificated and will represent the "REMIC regular
interests" in the
Subsidiary REMIC, and (ii) the Class S-A-R Interest, which will
represent the
"REMIC residual interest" in the Subsidiary REMIC. The Master REMIC
will hold
as assets the Subsidiary REMIC Regular Interests and will be
evidenced by the
Certificates, each of which (other than the Class A-R Certificate)
will
represent ownership of one or more REMIC regular interests in the
Master
REMIC. The Class A-R Certificate will represent ownership of the
sole Class of
the REMIC residual interest in each REMIC created hereunder. The
latest
possible maturity date, for federal income tax purposes, of all
REMIC regular
interests created herein shall be the Latest Possible Maturity
Date.
The Subsidiary REMIC
The
Subsidiary REMIC Regular Interests will have the principal
balances,
pass-through rates and corresponding Classes of Certificates as set
forth in
the following table:
-------------------------------------------------------------------------------
Corresponding
Subsidiary
REMIC Initial
Principal
Pass-Through
Class of
Regular
Interests
Balance
Rate
Certificates
-------------------------------------------------------------------------------
SR-A-1................
(1)
(2)
A-1
SR-A-2................
(1)
(2)
A-2
SR-A-3................
(1)
(2)
A-3
SR-A-4................
(1)
(2)
A-4
SR-A-5................
(1)
(2)
A-5
SR-A-6................
(1)
(2)
A-6
SR-C..................
(3)
(2)
C
<PAGE>
SR-$100...............
$100.00
(4)
N/A
SR-P..................
$100.00
(4)
P
SR-A-R................
(5)
(5)
N/A
-------------------------------------------------------------------------------
(1) The Class
SR-A-1 Interest, Class SR-A-2 Interest, Class SR-A-3 Interest,
Class
SR-A-4 Interest, Class SR-A-5 Interest and Class SR-A-6
Interest
(the
"Accretion Directed Classes") will each have a principal
balance
that is
equal to 100% of its Corresponding Class of Certificates and on
each
Distribution Date, interest, principal payments and Realized
Losses
shall be
allocated so as to cause each of the Accretion Directed Classes
to
continue to equal 100% of its Corresponding Class of
Certificates.
(2) The interest
rate with respect to any Distribution Date (and the related
Interest
Accrual Period) for this Subsidiary REMIC Interest is a per
annum rate
equal to the weighted average Adjusted Net Mortgage Rate of
the
Mortgage Loans.
(3) The SR-C
Interest shall have a principal balance equal to the initial
Mortgage
Loan overcollateralization. The initial Mortgage Loan
overcollateralization is the excess of Cut-off Date Principal
Balance of
the
Mortgage Loans over the aggregate Certificate Principal Balance
of
the Class
A Certificates.
(4) The SR-$100
Interest and the Class SR-P Interest do not pay any
interest.
All Prepayment Charges are allocated to the Class SR-P
Interest.
(5) The Class SR-A-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, the Principal
Distribution
Amount and the Prepayment Charges payable with respect to the
Mortgage Loans
will be payable with respect to the Subsidiary REMIC Regular
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 are allocated to the
Class SR-P
Interest.
(3)
Principal. Principal shall be allocated among the Subsidiary
REMIC
Interests
according to the formulas described above.
The Master REMIC
The
following table specifies the class designation, pass through
rate,
and principal amount for each class of Master REMIC Interest:
-------------------------------------------------------------------------------
Class
Original
Certificate
Pass-Through
Principal Balance
Rate
-------------------------------------------------------------------------------
A-1...................... $
437,259,000
(1)
A-2...................... $
98,131,000
(2)
A-3...................... $
200,037,000
(2)
<PAGE>
A-4...................... $
85,036,000
(2)
A-5...................... $
79,537,000
(2)
A-6...................... $
100,000,000
(2)
C........................
(3)
(4)
A-R...................... $
100
(5)
P........................ $
100
(6)
-------------------------------------------------------------------------------
(1) The
Pass-Through Rate for the Class A-1 Certificates for the
Accrual
Period for any Distribution Date will be equal to the lesser of (a)
One-Month
LIBOR plus the applicable Pass-Through Margin, and (b) the Net Rate
Cap.
(2) The
Pass-Through Rates for the Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates for the Accrual Period for
any
Distribution Date will be equal to the lesser of (a) the per annum
fixed rate
for the Class set forth in the table below and (b) the Net Rate
Cap.
Class of Certificates
Pass-Through Rate
---------------------
-----------------
Class A-2...........................
5.661%
Class A-3...........................
5.804%
Class A-4...........................
5.932%
Class A-5...........................
6.236%
Class A-6...........................
5.834%
(3) For
federal income tax purposes, the Class C Certificates shall
have
a Certificate Principal Balance equal to the Overcollateralized
Amount.
(4) For
each Accrual Period the Class C Certificates are entitled to an
amount (the "Class C Distributable Amount") equal to the sum of a
(i)
specified portion of the interest on the Subsidiary REMIC Interests
(other
than the SR-P Interest, the SR-$100 Interest and the SR-C Interest)
equal to
the excess of the interest rate in respect of Subsidiary REMIC
Interests over
the Pass-Through Rate of the Corresponding Class of Certificates of
such
Subsidiary REMIC Interest and (ii) all accruals of interest and
collections of
scheduled principal and principal payments allocated to the SR-C
Interest. 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 to the extent not used to
increase
overcollateralization and any related amount of
overcollateralization released
for that Distribution Date.
(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. On the first Distribution
Date, the
Class A-R Certificates are entitled to receive $100.00 from the
Principal
Reserve Fund.
(6) For
any Distribution Date, the Class P Certificates are entitled to
all Prepayment Charges collected during the related Prepayment
Period and all
the Master Servicer Prepayment Charge Amount. On the Class P
Principal
Distribution Date, the Class P Certificates are entitled to receive
$100.00
from the Principal Reserve Fund.
<PAGE>
The
foregoing REMIC structure is intended to cause all of the cash
from
the Mortgage Loans to flow through to the Master REMIC as cash flow
on a REMIC
regular interest, without creating any shortfall--actual or
potential (other
than for credit losses) to any REMIC regular interest.
For any
purpose for which the interest rate in respect of any
Subsidiary
REMIC regular interest created hereunder is calculated, the
interest rate on
the Mortgage Loans shall be appropriately adjusted to account for
the
difference between the monthly day count convention of the Mortgage
Loans and
the monthly day count convention of the regular interests issued by
each of
the REMICs. For purposes of calculating the interest rates for each
of the
interests issued by REMIC, such rates shall be adjusted to equal a
monthly day
count convention based on a 30 day month for each Interest Period
and a
360-day year so that the Mortgage Loans and all regular interests
will be
using the same monthly day count convention.
No monies
will be remitted by CHL to the Trustee for deposit in the
Pre-Funding Account. Consequently, all references to or provisions
herein
regarding the Funding Period, Pre-Funding Amount, Pre-Funding
Account, Seller
Shortfall Interest Requirement, Subsequent Certificate Account
Deposit,
Subsequent Cut-off Date, Subsequent Mortgage Loan, Subsequent
Transfer
Agreement, Subsequent Transfer Date, Subsequent Transfer Date
Purchase Amount
and Subsequent Transfer Date Transfer Amount are inapplicable.
<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:
Account: Any Escrow Account, the Certificate Account, the
Distribution Account 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 each Class
of Fixed
Rate Certificates and the Class C Certificates will be made on the
basis of a
360-day year consisting of twelve 30-day months.
Adjustable Rate Certificates: The Class A-1 Certificates.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the
Mortgage Rate less the related Expense Fee Rate.
Advance: The aggregate of the advances required to be made by
the Master Servicer with respect to any Distribution Date pursuant
to Section
4.01, the amount of any such advances being equal to the aggregate
of payments
of principal of, and interest on the Stated Principal Balance of,
the Mortgage
Loans (net of the Servicing Fees) that were due on the related Due
Date and
not received by the Master Servicer as of the close of business on
the related
Determination Date including an amount equivalent to interest on
the Stated
Principal Balance of each Mortgage Loan as to which the related
Mortgaged
Property is an REO Property or as to which the related Mortgaged
Property has
been liquidated but such Mortgage Loan has not yet become a
Liquidated
Mortgage Loan; provided, however, that the net monthly rental
income (if any)
from such REO Property deposited in the Certificate Account for
such
Distribution Date pursuant to Section 3.12 may be used to offset
such Advance
for the related REO Property; provided, further, that for the
avoidance of
doubt, no Advances shall be required to be made in 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.
Ambac: Ambac Assurance Corporation, organized and created
under the laws of the State of Wisconsin, or any successor
thereto.
<PAGE>
Amount Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Certificate Account at the
close of
business on the immediately preceding Determination Date on account
of (i) all
Scheduled Payments or portions thereof received in respect of the
Mortgage
Loans due after the related Due Date, (ii) Principal Prepayments
received in
respect of such Mortgage Loans after the last day of the related
Prepayment
Period and (iii) Liquidation Proceeds and Subsequent Recoveries
received in
respect of such Mortgage Loans after the last day of the related
Due Period.
Applied Realized Loss Amount: With respect to any
Distribution Date, the amount, if any, by which, the aggregate
Certificate
Principal Balance of the Certificates (after all distributions of
principal on
such Distribution Date) exceeds the sum of (x) the 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.
Bankruptcy Code: Title
11 of the United States Code.
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 Certificate Insurer or banking
institutions in the
State of New York or California or the city in which the Corporate
Trust
Office of the Trustee is located are authorized or obligated by law
or
executive order to be closed.
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
CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2006-S4".
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-6, Exhibit B, Exhibit C and
Exhibit D.
Certificate Account: The separate Eligible Account created
and initially maintained by the Master Servicer pursuant to Section
3.05(b)
with a depository institution in the
<PAGE>
name of the Master Servicer for the benefit of the Trustee on
behalf of the
Certificateholders and the Certificate Insurer and designated
"Countrywide
Home Loans Servicing LP in trust for registered Holders of CWHEQ,
Inc., Home
Equity Loan Asset Backed Certificates, Series 2006-S4". Funds in
the
Certificate Account shall be held in trust for the
Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Insurance Policy: The irrevocable Certificate
Guaranty Insurance Policy, No. AB1023BE, including any endorsements
thereto,
issued by Ambac with respect to the Class A Certificates, in the
form attached
hereto as Exhibit R.
Certificate Insurance Policy Premium Rate: 0.130% per annum.
Certificate Insurance Premium: For any Distribution Date, an
amount equal to the product of (x) the Certificate Insurance Policy
Premium
Rate and (y) the aggregate Certificate Principal Balance of the
Class A
Certificates on each Distribution Date (after giving effect to
any
distributions of principal to be made on such Distribution Date).
The
Certificate Insurance Premium shall be computed on the basis of a
360-day year
consisting of twelve 30-day months.
Certificate Insurance Reimbursement Amount: As to any
Distribution Date, (i) all Insured Payments paid by the Certificate
Insurer
for which the Certificate Insurer has not been reimbursed prior to
such
Distribution Date pursuant to Section 4.04 hereof, plus (ii)
interest accrued
on such Insured Payments not previously repaid, calculated at the
Late Payment
Rate from the date the Insured Payments were made, plus (iii) any
other
amounts then due and owing to the Certificate Insurer pursuant to
the
Insurance and Indemnity Agreement plus interest accrued on such
amount not
previously reimbursed calculated at the Late Payment Rate.
Certificate Insurer: Ambac in its capacity as insurer under
the Certificate Insurance Policy, and any permitted successor or
assign.
Certificate Insurer Contact Person: The officer designated
by the Master Servicer to provide information to the Certificate
Insurer
pursuant to Section 4.06(i).
Certificate Insurer Default: As defined in Section 4.06(l).
Certificate Owner: With respect to a Book-Entry Certificate,
the person that is the beneficial owner of such Book-Entry
Certificate.
Certificate Principal Balance: As to any Certificate (other
than the Class C 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 Certificates
only,
payments under the Certificate Insurance Policy relating to
principal (except
that any payment under the Certificate Insurance Policy with
respect to an
Applied Realized Loss Amount allocated to the Class A Certificates
shall not
result in a further reduction of the Certificate Principal Balance
of the
Class A Certificates) and (iii) any Applied Realized Loss Amounts
allocated to
such Certificate on previous Distribution Dates pursuant to Section
4.04(g),
and (B) increased by any Subsequent Recoveries allocated to such
Certificate
pursuant to Section 4.04(h) on such Distribution Date.
<PAGE>
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 Certificate Insurer arising under
Section 4.06
hereof, the "Certificate Principal Balance" of the Class A
Certificates shall
not be reduced by the amount of any payments made by the
Certificate Insurer
in respect of principal on such Certificates under the Certificate
Insurance
Policy, except to the extent such payment shall have been
reimbursed to the
Certificate Insurer pursuant to the provisions of this
Agreement.
Certificate Register:
The register maintained pursuant to
Section 5.02 hereof.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register (initially,
Cede & Co.,
as nominee for the Depository, in the case of any Class of
Book-Entry
Certificates), except that solely for the purpose of giving any
consent
pursuant to this Agreement, any Certificate registered in the name
of the
Depositor or any affiliate of the Depositor shall be deemed not to
be
Outstanding and the Voting Interest evidenced thereby shall not be
taken into
account in determining whether the requisite amount of Voting
Interests
necessary to effect such consent has been obtained; provided that
if any such
Person (including the Depositor) owns 100% of the Voting Interests
evidenced
by a Class of Certificates, such Certificates shall be deemed to
be
Outstanding for purposes of any provision hereof (other than the
second
sentence of Section 10.01 hereof) that requires the consent of the
Holders of
Certificates of a particular Class as a condition to the taking of
any action
hereunder. The Trustee is entitled to rely conclusively on a
certification of
the Depositor or any affiliate of the Depositor in determining
which
Certificates are registered in the name of an affiliate of the
Depositor.
Certification Party:
As defined in Section 11.05.
Certifying Person: As
defined in Section 11.05.
CHL: Countrywide Home
Loans, Inc., a New York corporation,
and its successors and assigns.
CHL Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which CHL is the applicable
Seller.
Class: All Certificates bearing the same Class designation
as set forth in Section 5.01 hereof.
Class A Certificates: Collectively, the Class A-1, Class
A-2, Class A-3, Class A-4, Class A-5 and Class A-6
Certificates.
Class A Available Funds: With respect to any Class of Class
A Certificates and any Distribution Date, funds allocated from
amounts
available pursuant to this Agreement to
<PAGE>
make distributions on that Class of Class A Certificates on such
Distribution
Date, other than any Insured Payments.
Class A Insurance Payments Account: The separate Eligible
Account created and maintained by the Trustee pursuant to Section
4.06(c) in
the name of the Trustee for the benefit of the Class A
Certificateholders and
designated "The Bank of New York in trust for registered holders of
CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2006-S4,
Class A
Certificates." Funds in the Class A Insurance Payments Account
shall be held
in trust for the Class A Certificateholders for the uses and
purposes set
forth in this Agreement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (x) the aggregate Certificate
Principal
Balance of the Class A Certificates immediately prior to that
Distribution
Date, over (y) the aggregate Stated Principal Balance of the
Mortgage Loans
for that Distribution Date minus the Overcollateralization Target
Amount for
such Distribution Date.
Class A-1 Certificate: Any Certificate designated as a
"Class A-1 Certificate" on the face thereof, in the form of Exhibit
A-1
hereto, representing the right to distributions as set forth
herein.
Class A-2 Certificate: Any Certificate designated as a
"Class A-2 Certificate" on the face thereof, in the form of Exhibit
A-2
hereto, representing the right to distributions as set forth
herein.
Class A-3 Certificate: Any Certificate designated as a
"Class A-3 Certificate" on the face thereof, in the form of Exhibit
A-3
hereto, representing the right to distributions as set forth
herein.
Class A-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-5 Certificate: Any Certificate designated as a
"Class A-5 Certificate" on the face thereof, in the form of Exhibit
A-5
hereto, representing the right to distributions as set forth
herein.
Class A-6 Certificate: Any Certificate designated as a
"Class A-6 Certificate" on the face thereof, in the form of Exhibit
A-6
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-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
<PAGE>
Certificate, Exhibit E hereto, in either case representing the
right to
distributions as set forth herein.
Class C Certificate: Any Certificate designated as a "Class
C Certificate" on the face thereof, in the form of Exhibit C
hereto,
representing the right to distributions as set forth herein.
Class C Distributable Amount: As defined in the Preliminary
Statement.
Class 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 8, 2006.
Code: The Internal
Revenue Code of 1986, including any
successor or amendatory provisions.
Collateral Schedule:
Schedule II hereto.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the numerator of which is the sum of (x) original
principal
balance of the related Mortgage Loan and (y) the outstanding
principal balance
of any senior mortgage loans at the date of origination of the
related
Mortgage Loan and the denominator of which is the Appraised Value
of the
related Mortgaged Property.
Commission: The U.S.
Securities and Exchange Commission.
Compensating Interest: With respect to the Mortgage Loans
and any Distribution Date, an amount equal to the lesser of (x)
one-half of
the Servicing Fee for the related Due Period and (y) the aggregate
Prepayment
Interest Shortfalls for such Distribution Date.
Confirmation: The confirmation, reference number
2000005079722 / 200005079723, with a trade date of August 28, 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 101
Barclay Street,
New York, New York 10286 (Attention: Corporate Trust MBS
Administration),
telephone: (212) 815-3236, facsimile: (212) 815-3986.
<PAGE>
Corridor Contract: With respect to the Class A-1
Certificates, the transaction evidenced by the Confirmation (as
assigned to
the Corridor Contract Administrator pursuant to the Corridor
Contract
Assignment Agreement), 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: JPMorgan Chase Bank, N.A.
Corridor Contract Termination Date: The Distribution Date
in August 2008.
Covered Certificates:
The Class A-1 Certificates.
Covered Loan:
A Mortgage
Loan listed on the
Mortgage
Loan Schedule as being
covered by the
Credit Insurance Policy.
Credit Bureau Risk Score: A statistical credit score
obtained by CHL in
connection with
the
origination of a Mortgage Loan.
Credit Insurance
Policy: The Credit Insurance Policy
issued by the Credit Insurer with respect to certain Mortgage Loans
identified
in the Mortgage Loan Schedule.
Credit Insurance Premium: For any Distribution Date, the fee
payable to the Credit Insurer equal to the product of (x) the
Credit Insurance
Premium Rate and (y) the aggregate Stated Principal Balance of the
Covered
Loans for the Distribution Date, computed on the basis of a 360-day
year
consisting of twelve 30-day months.
Credit Insurance Premium Rate: With respect to a Covered
Loan and any Distribution Date, 1.0442% per annum.
Credit Insurer: Old
Republic Insurance Company, or
any replacement
Credit Insurer, as applicable.
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 or Notional Amount of such Class
immediately
prior to such Distribution Date.
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.
<PAGE>
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.
Deficiency Amount:
With respect to:
(a) each Distribution Date prior to the Final Scheduled
Distribution Date, an amount equal to the sum of (i) the excess, if
any, of
(a) the aggregate amount of Current Interest on the Class A
Certificates net
of any interest shortfalls resulting from Prepayment Interest
Shortfalls and
any interest shortfalls resulting from the application of the
Relief Act, or
similar state or local laws, over (b) the Class A Available Funds
for such
Distribution Date, and (ii) the excess, if any, of (A) the
aggregate
Certificate Principal Balance of the Class A Certificates over (B)
the sum of
the aggregate Stated Principal Balance of the Mortgage Loans and
any amount on
deposit in the Pre-Funding Account, in each case taking into
account all
distributions to be made on such Distribution Date;
(b) the Final Scheduled Distribution Date for the Class A
Certificates, an amount equal to the sum of (i) the excess, if any,
of (a) the
aggregate amount of Current Interest on the Class A Certificates
net of any
interest shortfalls resulting from Prepayment Interest Shortfalls
and any
interest shortfalls resulting from the application of the Relief
Act, or
similar state or local laws over (b) the Class A Available Funds
for such
Distribution Date and (ii) the aggregate Certificate Principal
Balance of the
Class A Certificates on such Final Scheduled Distribution Date
(after taking
into account all distributions of Class A Available Funds to be
made to the
Class A Certificates on such Distribution Date); and
(c) any date on which the acceleration of the Class A
Certificates has been directed or consented to by the Certificate
Insurer, the
excess of (i) the amount required to pay the aggregate outstanding
Certificate
Principal Balance of the Class A Certificates in full, together
with accrued
and unpaid interest thereon through the date of payment of the
Class A
Certificates over (ii) the Class A Available Funds for that
Distribution Date.
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.
<PAGE>
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.
Denomination: With respect to each Certificate, the amount
set forth on the face thereof as the "Initial Certificate Balance
of this
Certificate" or, if not the foregoing, the Percentage Interest
appearing on
the face thereof, as applicable.
Depositor: CWHEQ,
Inc., a Delaware corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is Cede & Co., or any other
organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially be
the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5)
of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Book-Entry
Certificates, the agreement among the Depositor and the initial
Depository,
dated as of the Closing Date, substantially in the form of Exhibit
O.
Depository Participant: A broker, dealer, bank or other
financial institution or other person for whom from time to time a
Depository
effects book-entry transfers and pledges of securities deposited
with the
Depository.
Determination Date: With respect to any Distribution Date,
the 22nd day of the month of such Distribution Date or, if such
22nd day is
not a Business Day, the immediately preceding Business Day;
provided that the
Determination Date in each month will be at least two Business Days
before the
Distribution Date.
<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
Certificate Insurer
and designated "The Bank of New York, in trust for registered
Holders of
CWHEQ, Inc., Home Equity Loan Asset Backed Certificates, Series
2006-S4".
Funds in the Distribution Account shall be held in trust for
the
Certificateholders 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
September 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 for Payment: With respect to an Insured Amount, the
Distribution Date on which Insured Amounts are due and payable
pursuant to the
terms of this Agreement.
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 Certificate Insurance Policy, in the case of the Class A
Certificates)
as evidenced by a
<PAGE>
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.
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 at least BBB- or its
equivalent
from at least one Rating Agency.
Escrow Account: As
defined in Section 3.06 hereof.
Event of Default: As
defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the
sum of (i) the amount remaining after the distribution of interest
to
Certificateholders for such Distribution Date, pursuant to Section
4.04(a)(v),
(ii) the amount remaining after the distribution of principal
to
Certificateholders for such Distribution Date, pursuant to Section
4.04(b)(iv)
and (iii) the Overcollateralization Reduction Amount for such
Distribution
Date.
Excess Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of the Overcollateralized
Amount for
such Distribution Date over the Overcollateralization Target Amount
for such
Distribution Date.
Excess Proceeds: With respect to any Liquidated Mortgage
Loan, 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 Covered Loan, the Credit Insurance Premium Rate.
<PAGE>
Extra Principal Distribution Amount: With respect to any
Distribution Date, the lesser of (1) the Overcollateralization
Deficiency
Amount for such Distribution Date and (2) the Excess Cashflow
available for
payment thereof for such Distribution Date.
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.
Final Scheduled Distribution Date: With respect to the Class
A Certificates and the Certificate Insurance Policy, the
Distribution Date
occurring in the month following the month of the scheduled
maturity date of
the Mortgage Loan having the latest scheduled maturity date
including any
Subsequent Mortgage Loans, if any.
Fixed Rate
Certificates:
The Class A-2, Class A-3,
Class A-4,
Class A-5 and Class A-6 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 $40,000 and (y) September 30, 2006.
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) August 1, 2006 and (y) the date of
origination of such
Mortgage Loan.
<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 and Indemnity Agreement: The Insurance and
Indemnity Agreement, dated as of the Closing Date, by and among
the
Certificate Insurer, as insurer, the Depositor, as depositor,
Countrywide, as
sponsor and a seller, the Master Servicer, as master servicer, and
the
Trustee, as trustee.
Insurance Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including the Credit
Insurance
Policy, including all riders and endorsements thereto in effect
with respect
to such Mortgage Loan, including any replacement policy or policies
for any
Insurance Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans (other than by the Certificate Insurer under the Certificate
Insurance
Policy) pursuant to any Insurance Policy or any other insurance
policy
covering a Mortgage Loan, to the extent such proceeds are payable
to the
mortgagee under the Mortgage, the Master Servicer or the trustee
under the
deed of trust and are not applied to the restoration of the related
Mortgaged
Property or released to the Mortgagor in accordance with the
procedures that
the Master Servicer would follow in servicing mortgage loans held
for its own
account, in each case other than any amount included in such
Insurance
Proceeds in respect of Insured Expenses and received either prior
to or in
connection with such Mortgage Loan becoming a Liquidated Mortgage
Loan.
Insured Amounts: With respect to any Class of Class A
Certificates and any Distribution Date, the Deficiency Amount for
such Class
and Distribution Date.
Insured Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.
Insured Payments: With respect to any Distribution Date, the
aggregate amount actually paid by the Certificate Insurer to the
Trustee in
respect of (i) Insured Amounts for a Distribution Date and (ii)
Preference
Amounts for any given Business Day.
Interest-Bearing Certificates: The Class A Certificates.
Interest Carry Forward Amount: With respect to each Class of
Interest-Bearing Certificates and each Distribution Date, the
excess of (i)
the Current Interest for such Class with respect to prior
Distribution Dates
over (ii) the amount actually distributed to such Class with
respect to
interest on such prior Distribution Dates.
Interest Determination Date: With respect to the Adjustable
Rate Certificates, the second LIBOR Business Day preceding the
commencement of
each Accrual Period.
<PAGE>
Interest Funds: With respect to any Distribution Date, (x)
the Interest Remittance Amount for such Distribution Date, less (y)
the sum of
(i) the Trustee Fee for such Distribution Date and (ii) the Credit
Insurance
Premium for such Distribution Date.
Interest Remittance Amount: With respect to any Distribution
Date, (x) the sum, without duplication, of (i) all scheduled
interest
collected during the related Due Period with respect to the
Mortgage Loans
less the Servicing Fee, (ii) all interest on Principal Prepayments
received
during the related Prepayment Period with respect to the Mortgage
Loans, other
than Prepayment Interest Excess, (iii) all Advances relating to
interest with
respect to the Mortgage Loans, (iv) all Compensating Interest with
respect to
the Mortgage Loans, (v) Liquidation Proceeds with respect to the
Mortgage
Loans collected during the related Due Period (to the extent such
Liquidation
Proceeds relate to interest), (vi) any payments received under the
Credit
Insurance Policy attributable to interest for the related Due
Period, (vii)
any Loss Coverage Payment attributable to interest for the related
Due Period
and (viii) the Seller Shortfall Interest Requirement, if any, less
(y) all
reimbursements to the Master Servicer during the related Due Period
for
Advances of interest previously made.
Investment Letter: As
defined in Section 5.02(b).
Item 1119 Party: The Depositor, any Seller, the Master
Servicer, the Trustee, any Subservicer, any originator identified
in the
Prospectus Supplement, the Credit Insurer and the Corridor
Contract
Counterparty, and any other material transaction party, as
identified in
Exhibit Z hereto, as updated pursuant to Section 11.04.
Late Payment Rate: With respect to any Distribution Date,
the lesser of (i) the greater of (a) the rate of interest, as it is
publicly
announced by Citibank, N.A. at its principal office in New York,
New York as
its prime rate (any change in the prime rate of interest to be
effective on
the date the change is announced by Citibank, N.A.) plus 2% and (b)
the then
applicable highest rate of interest on any of the Class A
Certificates and
(ii) the maximum rate permissible under applicable usury or similar
laws
limiting interest rates. The Late Payment Rate shall be computed on
the basis
of the actual number of days elapsed over a year of 360 days.
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
<PAGE>
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.
Loss Coverage Payment: With respect to any Distribution Date
on or prior to the Distribution Date on which the Sponsor Loss
Coverage Amount
is reduced to zero, the amount of Realized Losses on the Covered
Loans with
respect to which a claim for payment was denied by the Credit
Insurer due to
an exclusion in the Credit Insurance Policy but for which there are
no
breaches of the representations and warranties set forth in Section
2.03 with
respect to such Covered Loans. Notwithstanding the preceding
sentence, with
respect to the Distribution Date on which the amount described in
the
preceding sentence exceeds the Sponsor Loss Coverage Amount, the
Loss Coverage
Payment for such Distribution Date shall be the Sponsor Loss
Coverage Amount.
Majority Holder: The Holders of Certificates evidencing at
least 51% of the Voting Rights allocated to such Class of
Certificates.
Master Servicer: Countrywide Home Loans Servicing LP, a
Texas limited partnership, and its successors and assigns, in its
capacity as
master servicer hereunder.
Master Servicer
Advance Date: As to any Distribution
Date, the Business Day immediately preceding such
Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The
amounts (i) payable by the Master Servicer in respect of any
Prepayment
Charges waived other than in accordance with the standard set forth
in the
first sentence of Section 3.20(a), or (ii) collected from the
Master Servicer
in respect of a remedy for the breach of the representation made by
CHL set
forth in Section 3.20(c).
<PAGE>
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.
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.
Mortgage: The mortgage, deed of trust or other instrument
creating a second lien on or second priority ownership interest in
an estate
in fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional
documents
delivered to the Trustee to be added to the Mortgage File pursuant
to this
Agreement.
Mortgage Loan Schedule: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the deletion
of
Liquidated Mortgage Loans and Deleted Mortgage Loans and the
addition of (x)
Replacement Mortgage Loans pursuant to the provisions of this
Agreement and
(y) Subsequent Mortgage Loans pursuant to the provisions of this
Agreement and
any Subsequent Transfer Agreement) transferred to the Trustee as
part of the
Trust Fund and from time to time subject to this Agreement,
attached hereto as
Exhibit F-1, setting forth in the following information with
respect to each
Mortgage Loan:
(i) the loan
number;
(ii)
[Reserved];
(iii) the
Appraised Value;
(iv)
the Mortgage Rate;
(v) the maturity
date;
(vi)
the original principal balance;
<PAGE>
(vii) the
Cut-off Date Principal Balance;
(viii) the first
payment date of the Mortgage
Loan;
(ix)
the Scheduled Payment in effect as of the
Cut-off Date;
(x) the
Combined Loan-to-Value Ratio at
origination;
(xi)
a code indicating whether the residential
dwelling at the time of origination was
represented to be owner-occupied;
(xii) a
code indicating whether the residential
dwelling is either (a) a detached
single-family dwelling, (b) a two-family
residential property, (c) a three-family
residential property, (d) a four-family
residential property, (e) planned unit
development, (f) a low-rise condominium
unit, (g) a high-rise condominium unit or
(h) manufactured housing;
(xiii) the
purpose of the Mortgage Loan;
(xiv) a code indicating if
such Mortgage Loan is
a Covered Loan, if applicable; and
(xv)
a code indicating whether the Mortgage
Loan is a CHL Mortgage Loan, a Park
Granada Mortgage Loan, a Park Monaco
Mortgage Loan or a Park Sienna Mortgage
Loan.
Such schedule shall also set forth the total of the amounts
described under
(vii) above for all of the Mortgage Loans. The Mortgage Loan
Schedule shall be
deemed to include each Loan Number and Borrower Identification
Mortgage Loan
Schedule delivered pursuant to Section 2.01(f) and all the related
Subsequent
Mortgage Loans and Subsequent Mortgage Loan information included
therein.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof and any
Subsequent
Transfer Agreement as from time to time are held as part of the
Trust Fund
(including any REO Property), the mortgage loans so held being
identified in
the Mortgage Loan Schedule, notwithstanding foreclosure or other
acquisition
of title of the related Mortgaged Property. Any mortgage loan that
was
intended by the parties hereto to be transferred to the Trust Fund
as
indicated by such Mortgage Loan Schedule which is in fact not so
transferred
for any reason, including a breach of the representation contained
in Section
2.02 hereof, shall continue to be a Mortgage Loan hereunder until
the Purchase
Price with respect thereto has been paid to the Trust Fund.
Mortgage Note: The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage
Loan.
Mortgage Pool: The aggregate of the Mortgage Loans
identified in the Mortgage Loan Schedule.
<PAGE>
Mortgage Rate:
The annual rate of interest borne by
a Mortgage
Note as set
forth in the Mortgage
Loan Schedule.
Mortgaged Property:
The underlying property securing a
Mortgage Loan.
Mortgagor: The
obligors on a Mortgage Note.
NAS Factor: For any Distribution Date set forth below, the
percentage set forth in the following table:
Distribution Date
Percentage
------------------------------------
---------------------
September 2006 -- August 2009
0%
September 2009 -- August 2011
45%
September 2011 -- August 2012
80%
September 2012 -- August 2013
100%
September 2013 and thereafter
300%
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)(ii) 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, (1) the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans as of the
first day
of the related Due Period (after giving effect to Principal
Prepayments
received during the Prepayment Period that ends during such Due
Period), less
(2) the Certificate Insurance Policy Premium Rate, multiplied by a
fraction,
the numerator of which is (a) the aggregate Certificate Principal
Balance of
the Class A Certificates and the denominator of which is (b) the
aggregate
Stated Principal Balance of the Mortgage Loans as of the first day
of the
related Due Period (after giving effect to Principal Prepayments
received
during the Prepayment Period that ends during such Due Period) plus
any
amounts on deposit in the Pre-Funding Account as of the first day
of that Due
Period. The Net Rate Cap shall be 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.
Net Rate Carryover: With respect to any Class of Class A
Certificates and any Distribution Date, the sum of (A) the excess
of (i) the
amount of interest that such Class would otherwise have accrued for
such
Distribution Date had the Pass-Through Rate for such Class and the
related
Accrual Period not been determined based on the 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
<PAGE>
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
and/or Class P
Certificates.
Nonrecoverable Advance: Any portion of an Advance previously
made or proposed to be made by the Master Servicer that, in the
good faith
judgment of the Master 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
administration
of the trust and one or more United States persons have authority
to control
all substantial decisions of the trustor.
Notional Amount: Not applicable.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman
of the
Board, the President, a Managing Director, a Vice President
(however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the
Depositor,
(ii) in the case of the Master Servicer, signed by the President,
an Executive
Vice President, a Vice President, an Assistant Vice President, the
Treasurer,
or one of the Assistant Treasurers or Assistant Secretaries of
Countrywide GP,
Inc., its general partner, (iii) if provided for in this Agreement,
signed by
a Servicing Officer, as the case may be, and delivered to the
Depositor and
the Trustee, as the case may be, as required by this Agreement, or
(iv) in the
case of any other Person, signed by an authorized officer of such
Person.
One-Month LIBOR: With respect to any Accrual Period for the
Adjustable Rate Certificates, the rate determined by the Trustee on
the
related Interest Determination Date on the basis of the rate for
U.S. dollar
deposits for one month as quoted on the Bloomberg Terminal on such
Interest
Determination Date. If such rate is not quoted on the Bloomberg
Terminal (or
if such service is no longer offered, such other service for
displaying
One-Month LIBOR or comparable rates as may be reasonably selected
by the
Trustee), One-Month LIBOR for the applicable Accrual Period for the
Adjustable
Rate Certificates will be the Reference Bank Rate. If no such
quotations can
be obtained by the Trustee and no Reference Bank Rate is available,
One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual
Period for
the Adjustable Rate Certificates.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably
acceptable to
each addressee of such opinion;
<PAGE>
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 the purchase of the Mortgage Loans
pursuant to
clause (a) of the first sentence of Section 9.01 hereof.
Optional Termination Date: The first Distribution Date on
which the aggregate Stated Principal Balance of the Mortgage Loans
is less
than or equal to 10% of the sum of the aggregate Cut-off Date
Principal
Balance of the Initial Mortgage Loans and the Pre-Funded
Amount.
Original Value: The value of the property underlying a
Mortgage Loan based, in the case of the purchase of the underlying
Mortgaged
Property, on the lower of an appraisal satisfactory to the Master
Servicer or
the sales price of such property or, in the case of a refinancing,
on an
appraisal satisfactory to the Master Servicer.
OTS: The Office of
Thrift Supervision.
Outstanding:
With respect
to the Certificates as
of any date of determination, all Certificates theretofore executed
and
authenticated under this Agreement except:
(i) Certificates theretofore canceled by the
Trustee or delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu
of which other Certificates have been executed and delivered
by the Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero
that was not
the subject of a Principal Prepayment in full, and that did not
become a
Liquidated Mortgage Loan, prior to the end of the related
Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the
Overcollateralization
Target Amount exceeds the Overcollateralized Amount on such
Distribution Date
(after giving effect to the distribution of the Principal
Distribution Amount
(other than the portion thereof consisting of the Extra Principal
Distribution
Amount) on such Distribution Date).
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (i) the
Excess
Overcollateralization Amount for such Distribution Date and (ii)
the Principal
Remittance Amount for such Distribution Date.
<PAGE>
Overcollateralization Target Amount: With respect to any
Distribution Date (a) through the Distribution Date in February
2007, $0, and
(b) after the Distribution Date in February 2007, 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.
Overcollateralized Amount: With respect to any Distribution
Date, the amount, if any, by which (x) the sum of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and any
amount on deposit in the Pre-Funding Account exceeds (y) the
aggregate
Certificate Principal Balance of the Class A Certificates as of
such
Distribution Date (after giving effect to distribution of the
Principal
Remittance Amount 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).
Ownership
Interest: As to any Certificate, any ownership
interest in such Certificate including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect,
legal or beneficial.
Park Granada: Park
Granada LLC, a Delaware limited
liability company, and its successors and assigns.
Park Granada
Mortgage Loans: The Mortgage Loans
identified as such on the Mortgage Loan Schedule for which Park
Granada is the
applicable Seller.
Park Monaco: Park
Monaco Inc., a Delaware corporation,
and its successors and assigns.
Park Monaco
Mortgage Loans: The Mortgage Loans
identified as such on the Mortgage Loan Schedule for which Park
Monaco is the
applicable Seller.
Park Sienna: Park Sienna LLC, a Delaware limited liability
company, and its
successors
and assigns.
Park Sienna
Mortgage Loans: The Mortgage Loans
identified as such on the Mortgage Loan Schedule for which Park
Sienna is the
applicable Seller.
Pass-Through Margin: With respect to any Distribution Date
and the Class A-1 Certificates, 0.110% per annum.
Pass-Through Rate: With respect to any Accrual Period and
each Class of Interest-Bearing Certificates, the per annum rate set
forth or
calculated in the manner described in the Preliminary
Statement.
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
<PAGE>
the face of such Certificate or equal to the percentage obtained by
dividing the
Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Performance Certification: As defined in Section 11.05.
Permitted Investments:
At any time, any one or more
of the following obligations and
securities:
(i) obligations of the United States or any agency
thereof, provided such obligations are backed by the full
faith and credit of the United States;
(ii) general obligations of or obligations
guaranteed by any state of the United States or the District
of Columbia receiving the highest long-term debt rating of
each Rating Agency, or such lower rating as each Rating
Agency has confirmed in writing is sufficient for the
ratings originally assigned to the Certificates by such
Rating Agency (without regard to the Certificate Insurance
Policy, in the case of the Class A Certificates);
(iii) commercial or finance company paper which is
then receiving the highest commercial or finance company
paper rating of each Rating Agency, or such lower rating as
each Rating Agency has confirmed in writing is sufficient
for the ratings originally assigned to the Certificates by
such Rating Agency (without regard to the Certificate
Insurance Policy, in the case of the Class A Certificates);
(iv) certificates of deposit, demand or time
deposits, or bankers' acceptances issued by any depository
institution or trust company incorporated under the laws of
the United States or of any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long
term unsecured debt obligations of such depository
institution or trust company (or in the case of the
principal depository institution in a holding company
system, the commercial paper or long-term unsecured debt
obligations of such holding company, but only if 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 Certificate
Insurance Policy, in the case of the Class A Certificates);
(v) repurchase obligations with respect to any
security described in clauses (i) and (ii) above, in either
case entered into with a depository institution or trust
company (acting as principal) described in clause (iv)
above;
(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
<PAGE>
commercial paper rating of S&P for any such securities) and
(y), or such lower rating as each Rating Agency has
confirmed in writing is sufficient for the ratings
originally assigned to the Certificates by such Rating
Agency (without regard to the Certificate Insurance Policy,
in the case of the Class A Certificates);
(vii) interests in any money market fund which at
the date of acquisition of the interests in such fund and
throughout the time such interests are held in such fund has
the highest applicable long term rating by each Rating
Agency or such lower rating as each Rating Agency has
confirmed in writing is sufficient for the ratings
originally assigned to the Certificates by such Rating
Agency (without regard to the Certificate Insurance Policy,
in the case of the Class A Certificates);
(viii) short term investment funds sponsored by any
trust company or national banking association incorporated
under the laws of the United States or any state thereof
which on the date of acquisition has been rated by each
Rating Agency in their respective highest applicable rating
category or such lower rating as each Rating Agency has
confirmed in writing is sufficient for the ratings
originally assigned to the Certificates by such Rating
Agency (without regard to the Certificate Insurance Policy,
in the case of the Class A Certificates); and
(ix) such other relatively risk free investments
having a specified stated maturity and bearing interest or
sold at a discount acceptable to each Rating Agency as will
not result in the downgrading or withdrawal of the rating
then assigned to the Certificates by any Rating Agency
(without regard to the Certificate Insurance Policy, in the
case of the Class A Certificates), as evidenced by a signed
writing delivered by each Rating Agency, and reasonably
acceptable to the NIM Insurer, as evidenced by a signed
writing delivered by the NIM Insurer and the Certificate
Insurer;
provided, that no such instrument shall be a Permitted Investment
if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or (iii) is purchased at a deep discount; provided further
that no
such instrument shall be a Permitted Investment (A) if such
instrument
evidences principal and interest payments derived from obligations
underlying
such instrument and the interest payments with respect to such
instrument
provide a yield to maturity of greater than 120% of the yield to
maturity at
par of such underlying obligations, or (B) if it may be redeemed at
a price
below the purchase price (the foregoing clause (B) not to apply to
investments
in units of money market funds pursuant to clause (vii) above);
provided
further that no amount beneficially owned by any REMIC (including,
without
limitation, any amounts collected by the Master Servicer but not
yet deposited
in the Certificate Account) may be invested in investments (other
than money
market funds) treated as equity interests for Federal income tax
purposes,
unless the Master Servicer shall receive an Opinion of Counsel, at
the expense
of Master Servicer, to the effect that such investment will not
adversely
affect the status of any such REMIC as a REMIC under the Code or
result in
imposition of a tax on any such REMIC. Permitted Investments that
are subject
to prepayment or call may not be purchased at a price in excess of
par.
<PAGE>
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.
Pre-Funded Amount:
$0.
Pre-Funding Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.05 in the name
of the
Trustee for the benefit of the Certificateholders and the
Certificate Insurer
and designated "The Bank of New York, in trust for registered
holders of
CWHEQ, Inc., Home Equity Loan Asset Backed Certificates, Series
2006-S4."
Funds in the Pre-Funding Account shall be held in trust for the
Certificateholders for the
<PAGE>
uses and purposes set forth in this Agreement and shall not be a
part of any
REMIC created hereunder, provided, however that any investment
income earned
from Permitted Investments made with funds in the Pre-Funding
Account will be
for the account of CHL.
Preference Amount: Any payment of principal or interest on a
Class A Certificate which has become Due for Payment and which was
made to a
Holder by or on behalf of the Trust, which has been deemed a
preferential
transfer and was previously recovered from the Holder pursuant to
the United
States Bankruptcy Code in accordance with a final, non-appealable
order of a
court of competent jurisdiction.
Preference Claim: As
defined in Section 4.06(h).
Premium Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of
the Trustee
for the benefit of the Certificateholders and the Certificate
Insurer and
designated "The Bank of New York, in trust for registered holders
of CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2006-S4."
Funds in
the Premium Account shall be held in trust for the
Certificateholders and the
Certificate Insurer for the uses and purposes set forth in this
Agreement.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the
Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the
charges or premiums, if any, due in connection with a full or
partial
prepayment of such Mortgage Loan within the related Prepayment
Charge Period
in accordance with the terms thereof (other than any Master
Servicer
Prepayment Charge Payment Amount).
Prepayment Charge Period: With respect to any Mortgage Loan,
the period of time during which a Prepayment Charge may be
imposed.
Prepayment
Charge Schedule: As of the Initial Cut-off Date
with respect to each Initial Mortgage Loan and as of the Subsequent
Cut-off
Date with respect to each Subsequent Mortgage Loan, a list attached
hereto as
Schedule I (including the Prepayment Charge Summary attached
thereto), setting
forth the following information with respect to each Prepayment
Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment
Charge;
(iii) the state of origination of the related
Mortgage Loan;
(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
<PAGE>
(vi) the principal balance of the related Mortgage
Loan as of the Cut-off Date.
As of the Closing Date, the Prepayment Charge Schedule shall
contain the necessary information for each Initial Mortgage Loan.
The
Prepayment Charge Schedule shall be amended by the Master Servicer
upon the
sale of any Subsequent Mortgage Loans to the Trust Fund. In
addition, the
Prepayment Charge Schedule shall be amended from time to time by
the Master
Servicer in accordance with the provisions of this Agreement and a
copy of
each related amendment shall be furnished by the Master Servicer to
the Class
P and Class C Certificateholders and the NIM Insurer.
Prepayment Interest Excess: With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal
Prepayment
during the period from the related Due Date to the end of the
related
Prepayment Period, any payment of interest received in connection
therewith
(net of any applicable Servicing Fee) representing interest accrued
for any
portion of such month of receipt.
Prepayment Interest Shortfall: With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a
partial
Principal Prepayment or a Principal Prepayment in full during the
period from
the beginning of the related Prepayment Period to the Due Date in
such
Prepayment Period (other than a Principal Prepayment in full
resulting from
the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
2.04, 3.12 or
9.01 hereof) and for each Mortgage Loan that became a Liquidated
Mortgage Loan
during the related Due Period, the amount, if any, by which (i) one
month's
interest at the applicable Net Mortgage Rate on the Stated
Principal Balance
of such Mortgage Loan immediately prior to such prepayment (or
liquidation) or
in the case of a partial Principal Prepayment on the amount of such
prepayment
(or Liquidation Proceeds) exceeds (ii) the amount of interest paid
or
collected in connection with such Principal Prepayment or such
Liquidation
Proceeds.
Prepayment Period: As to any Distribution Date and related
Due Date, the period beginning with the opening of business on the
sixteenth
day of the calendar month preceding the month in which such
Distribution Date
occurs (or, with respect to the first Distribution Date, the period
beginning
with the opening of business on the day immediately following the
Initial
Cut-off Date) 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) the Overcollateralization Reduction
Amount for
such Distribution Date.
<PAGE>
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.
Principal Remittance Amount: With respect to any
Distribution Date, (a) the sum, without duplication, of: (i) the
scheduled
principal collected with respect to the Mortgage Loans during the
related Due
Period or advanced with respect to such Distribution Date, (ii)
Principal
Prepayments collected in the related Prepayment Period with respect
to the
Mortgage Loans, (iii) the Stated Principal Balance of each Mortgage
Loan that
was repurchased by a Seller or purchased by the Master Servicer
with respect
to such Distribution Date, (iv) the amount, if any, by which the
aggregate
unpaid principal balance of any Replacement Mortgage Loans
delivered by the
Sellers in connection with a substitution of a Mortgage Loan is
less than the
aggregate unpaid principal balance of any Deleted Mortgage Loans,
(v) any
payments received under the Credit Insurance Policy attributable to
principal
for the related Due Period, (vi) any Loss Coverage Payment
attributable to
principal for the related Due Period, and (vii) all Liquidation
Proceeds (to
the extent such Liquidation Proceeds related to principal) and
Subsequent
Recoveries collected during the related Due Period; less (b) all
Advances
relating to principal and certain expenses reimbursable pursuant to
Section
6.03 and reimbursed during the related Due Period.
Principal Reserve Fund: The separate Eligible Account
created and initially maintained by the Trustee pursuant to Section
3.08 in
the name of the Trustee for the benefit of the Certificateholders
and
designated "The Bank of New York in trust for registered Holders of
CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2006-S4".
Funds in
the Principal Reserve Fund shall be held in trust for the
Certificateholders
for the uses and purposes set forth in this Agreement.
Private Certificates:
The Class C and Class P Certificates.
Prospectus: The
prospectus dated
August 9, 2006,
relating
to asset backed
securities to be sold
by the Depositor.
Prospectus Supplement:
The prospectus supplement dated
September 7, 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,
<PAGE>
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 from any
violation of any predatory or abusive lending law in connection
with such
Mortgage Loan.
Rating Agency: Each of Moody's and S&P. If any such
organization or its successor is no longer in existence, "Rating
Agency" shall
be a nationally recognized statistical rating organization, or
other
comparable Person identified as a "Rating Agency" in the
Underwriter's
Exemption, designated by the Depositor, 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 the Fixed-Rate Certificates and
the Class
A-R, Class C and Class P Certificates, the last Business Day of the
month
preceding the month of a Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest
whole multiple
of 0.03125%) of the offered rates for United States dollar deposits
for one
month that are quoted by the Reference Banks as of 11:00 a.m., New
York City
time, on the related Interest Determination Date to prime banks in
the London
interbank market for a period of one month in amounts approximately
equal to
the outstanding aggregate Certificate Principal Balance of the
Adjustable-Rate
Certificates on such Interest Determination Date, provided that at
least two
such Reference Banks provide such rate. If fewer than two offered
rates
appear, the Reference Bank Rate will be the arithmetic mean
<PAGE>
(rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of
the rates quoted by one or more major banks in New York City,
selected by the
Trustee, as of 11:00 a.m., New York City time, on such date for
loans in U.S.
dollars to leading European banks for a period of one month in
amounts
approximately equal to the aggregate Certificate Principal Balance
of the
Adjustable-Rate Certificates on such Interest Determination
Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and
NatWest, N.A., provided that if any of the foregoing banks are not
suitable to
serve as a Reference Bank, then any leading banks selected by the
Trustee
which are engaged in transactions in Eurodollar deposits in the
international
Eurocurrency market (i) with an established place of business in
London,
England, (ii) not controlling, under the control of or under common
control
with the Depositor, CHL or the Master Servicer and (iii) which have
been
designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate:
Any Certificate other than the Class
A-R Certificates.
Regulation AB:
Subpart 229.1100 - Asset Backed
Securities (Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as
such may be
amended from time to time, and subject to such clarification
and
interpretation as have been provided by the Commission in the
adopting release
(Asset Backed Securities, Securities Act Release No. 33-8518, 70
Fed. Reg.
1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or
as may be
provided by the Commission or its staff from time to time and
publicly
available.
Relief Act: The
Servicemembers Civil Relief Act.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear
at section
860A through 860G of Subchapter M of Chapter 1 of the Code, and
related
provisions, and regulations and rulings promulgated thereunder, as
the
foregoing may be in effect from time to time.
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 rate not more than
1% per annum
higher or lower than that of the Deleted Mortgage Loan; (iv) have a
Combined
Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (v) have
a remaining term to maturity not greater than (and not more than
one year less
than) that of the
<PAGE>
Deleted Mortgage Loan; (vi) not permit conversion of the Mortgage
Rate from a
fixed rate to a variable rate; (vii) provide for a Prepayment
Charge on terms
substantially similar to those of the Prepayment Charge, if any, of
the
Deleted Mortgage Loan; (viii) have the same occupancy type and lien
priority
as the Deleted Mortgage Loan; and (ix) comply with each
representation and
warranty set forth in Section 2.03 as of the date of substitution;
provided,
however, that notwithstanding the foregoing, to the extent that
compliance
with clause (ix) of this definition would cause a proposed
Replacement
Mortgage Loan to fail to comply with one or more of clauses (i),
(iii), (vii)
and/or (viii) of this definition, then such proposed Replacement
Mortgage Loan
must comply with clause (ix) and need not comply with one or more
of clauses
(i), (iii), (vii) and/or (viii), to the extent, and only to the
extent,
necessary to assure that the Replacement Mortgage Loan otherwise
complies with
clause (ix).
Reportable Event: Any event required to be reported on Form
8-K, and in any event, the following:
(a) entry into a definitive agreement related to the Trust
Fund, the Certificates or the Mortgage Loans, or an amendment to a
Transaction
Document, even if the Depositor is not a party to such agreement
(e.g., a
servicing agreement with a servicer contemplated by Item 1108(a)(3)
of
Regulation AB);
(b) termination of a Transaction Document (other than by
expiration of the agreement on its stated termination date or as a
result of
all parties completing their obligations under such agreement),
even if the
Depositor is not a party to such agreement (e.g., a servicing
agreement with a
servicer contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to the Master Servicer only, if the Master
Servicer becomes aware of any bankruptcy or receivership with
respect to CHL,
the Depositor, the Master Servicer, any Subservicer, the Trustee,
the Corridor
Contract Counterparty, 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)
<PAGE>
through (3) of Regulation AB or Item 1115 of Regulation AB has been
added with
respect to one or more classes of the Certificates; or (iii) any
existing
material enhancement or support specified in Item 1114(a)(1)
through (3) of
Regulation AB or Item 1115 of Regulation AB with respect to one or
more
classes of the Certificates has been materially amended or
modified; and
(h) with respect to the Trustee, the Master Servicer and the
Depositor only, a required distribution to Holders of the
Certificates is not
made as of the required Distribution Date under this Agreement.
Reporting Subcontractor: With respect to the Master Servicer
or the Trustee, any Subcontractor determined by such Person
pursuant to
Section 11.08(b) to be "participating in the servicing function"
within the
meaning of Item 1122 of Regulation AB. References to a Reporting
Subcontractor
shall refer only to the Subcontractor of such Person and shall not
refer to
Subcontractors generally.
Representing Party: As
defined in Section 2.03(f).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Trustee, substantially in
the form of
Exhibit M.
Request for File
Release: A Request for
File Release
submitted by the Master Servicer to the Trustee, substantially in
the form of
Exhibit N.
Required Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the excess of (i) $1,000 over
(ii) the
amount of funds on deposit in the Carryover Reserve Fund.
Required Insurance Policy: With respect to any Mortgage
Loan, any insurance policy that is required to be maintained from
time to time
under this Agreement, including with respect to the Covered Loans,
the Credit
Insurance Policy.
Responsible Officer: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, the Secretary,
any Assistant
Secretary, any Trust Officer or any 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.
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.
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,
<PAGE>
determined: (a) after giving effect to (i) any Deficient Valuation
and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in
the amount of interest collectible from the related Mortgagor
pursuant to the
Relief Act or any similar state or local law; (b) without giving
effect to any
extension granted or agreed to by the Master Servicer pursuant to
Section
3.05(a); and (c) on the assumption that all other amounts, if any,
due under
such Mortgage Loan are paid when due.
Securities Act: The
Securities Act of 1933, as amended.
Seller Shortfall Interest Requirement: $0.
Sellers: CHL, in its capacity as seller of the CHL Mortgage
Loans to the Depositor, Park Granada, in its capacity as seller of
the Park
Granada Mortgage Loans to the Depositor, Park Monaco, in its
capacity as
seller of the Park Monaco Mortgage Loans to the Depositor and Park
Sienna, in
its capacity as seller of the Park Sienna Mortgage Loans to the
Depositor.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by
the Master
Servicer of its servicing obligations hereunder, including, but not
limited
to, the cost of (i) the preservation, restoration and protection of
a
Mortgaged Property, (ii) any enforcement or judicial proceedings,
including
foreclosures, (iii) the management and liquidation of any REO
Property 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, 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.
<PAGE>
Sponsor Loss Coverage Amount: With respect to any
Distribution Date, the amount by which 1.00% of the sum of the
aggregate
Cut-off Date Principal Balance of the Initial Mortgage Loans and
the
Pre-Funded Amount exceeds the aggregate amount of Loss Coverage
Payments, if
any, made prior to such Distribution Date.
Sponsor Loss Coverage Obligation: The obligation of CHL
described in Section 2.08 with respect to Loss Coverage
Payments.
Stated Principal Balance: With respect to any Mortgage Loan
or related REO Property (i) as of the Cut-off Date, the unpaid
principal
balance of the Mortgage Loan as of such date (before any adjustment
to the
amortization schedule for any moratorium or similar waiver or grace
period),
after giving effect to any partial prepayments or Liquidation
Proceeds
received prior to such date and to the payment of principal due on
or prior to
such date and irrespective 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 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.
Subcontractor: Any vendor, subcontractor or other Person
that is not responsible for the overall servicing (as "servicing"
is commonly
understood by participants in the mortgage-backed securities
market) of
Mortgage Loans but performs one or more discrete functions
identified in Item
1122(d) of Regulation AB with respect to the Mortgage Loans under
the
direction or authority of the Master Servicer or a Subservicer or
the Trustee,
as the case may be.
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal to the aggregate of all
amounts in
respect of (i) principal of the related Subsequent Mortgage Loans
due after
the related Subsequent Cut-off Date and received by the Master
Servicer on or
before such Subsequent Transfer Date and not applied in computing
the Cut-off
Date Principal Balance thereof and (ii) interest on the such
Subsequent
Mortgage Loans due after such Subsequent Cut-off Date and received
by the
Master Servicer on or before the Subsequent Transfer Date.
<PAGE>
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 Business Day and may not be
a date
earlier than the date on which the Subsequent Transfer Agreement is
executed
and delivered by the parties thereto pursuant to Section
2.01(d).
Subsequent Transfer Date Purchase Amount: With respect to
any Subsequent Transfer Date, the "Subsequent Transfer Date
Purchase Amount"
identified in the related Subsequent Transfer Agreement which shall
be an
estimate of the aggregate Stated Principal Balances of the
Subsequent Mortgage
Loans identified in such Subsequent Transfer Agreement.
Subsequent Transfer Date Transfer Amount: With respect to
any Subsequent Transfer Date, an amount equal to the lesser of (i)
the
aggregate Stated Principal Balances as of the related Subsequent
Cut-off Dates
of the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date, as
listed on the related Loan Number and Borrower Identification
Mortgage Loan
Schedule delivered pursuant to Section 2.01(f) and (ii) the amount
on deposit
in the Pre-Funding Account.
Subservicer: As
defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to
such term pursuant to Section 2.03(f).
Substitution Amount: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(f), the excess of (x) the
principal
balance of the Mortgage Loan that is substituted
<PAGE>
for, over (y) the principal balance of the related substitute
Mortgage Loan,
each balance being determined as of the date of substitution.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss.
1.860F-4(d) and
Treasury regulation ss. 301.6231(a)(7)-1. Initially, this person
shall be the
Trustee.
Tax Matters Person Certificate: The Class A-R Certificate
with a Denomination of $0.05 and in the form of Exhibit E
hereto.
Terminator: As defined
in Section 9.01.
Transaction Documents: This Agreement, the Corridor
Contract, the Corridor Contract Administration Agreement, the
Credit Insurance
Policy, the Certificate Insurance Policy, the Insurance and
Indemnity
Agreement and any other document or agreement entered into in
connection with
the Trust Fund, the Certificates or the Mortgage Loans.
Transfer: Any direct
or indirect transfer or sale of any
Ownership Interest in a Certificate.
Transfer Affidavit: As
defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal
received
on or with respect thereto after the Cut-off Date to the extent not
applied in
computing the Cut-off Date Principal Balance thereof, exclusive of
interest
not required to be deposited in the Certificate Account pursuant to
Section
3.05(b)(2); (ii) the Certificate Account, the Distribution Account,
the
Principal Reserve Fund, the Carryover Reserve Fund, the Pre-Funding
Account,
the Premium Account and all amounts deposited therein pursuant to
the
applicable provisions of this Agreement; (iii) the rights to
receive certain
proceeds of the Corridor Contract as provided in the Corridor
Contract
Administration Agreement; (iv) property that secured a Mortgage
Loan and has
been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (v)
the mortgagee's rights under the Insurance Policies with respect to
the
Mortgage Loan; (vi) rights under the Credit Insurance Policy; (vii)
the rights
of the Trustee for the benefit of the Class A Certificateholders
under the
Certificate Insurance Policy; and (vi) 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).
<PAGE>
Trustee Advance Rate: With respect to any Advance made by
the Trustee pursuant to Section 4.01(d), a per annum rate of
interest
determined as of the date of such Advance equal to the Prime Rate
in effect on
such date plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i)
the Pool
Stated Principal Balance and (ii) any amounts remaining in the
Pre-Funding
Account (excluding any investment earnings thereon) with respect to
such
Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the
per annum rate agreed upon in writing on or prior to the Closing
Date by the
Trustee and the Depositor, which is 0.009% per annum.
Underwriter's
Exemption: Prohibited
Transaction
Exemption
2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor
thereto), or
any substantially similar administrative exemption granted by the
U.S.
Department of Labor.
Underwriters:
Countrywide Securities
Corporation,
Bear,
Stearns & Co Inc. and Credit Suisse Securities (USA) LLC.
Unpaid Realized Loss Amount: For any Class of Certificates
and any Distribution Date, (x) the portion of the aggregate Applied
Realized
Loss Amount allocated to that Class and remaining unpaid (in the
case of any
Class of Class A Certificates, without regard to any payment made
by the
Certificate Insurer in respect of that Class under the Certificate
Insurance
Policy) minus (y) (1) 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) or (2)
in the case
of any Class of Class A Certificates, the amount of any Subsequent
Recovery
paid to the Certificate Insurer in respect of that Class.
Voting Rights: The voting rights of all the Certificates
that are allocated to any Certificates for purposes of the voting
provisions
hereunder. Voting Rights allocated to each Class of Certificates
shall be
allocated 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 Certificates are outstanding or any amounts are owed the
Certificate
Insurer under this Agreement, unless a Certificate Insurer Default
shall have
occurred and be continuing, the Certificate Insurer will be
entitled to
exercise the Voting Rights of the Class A Certificateholders,
without the
consent of the Class A Certificateholders, and the Class A
Certificateholders
may exercise such rights only with the prior written consent of
the
Certificate Insurer.
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
<PAGE>
defined therein. For purposes of this Agreement and all such
certificates and
other documents, unless the context otherwise requires: (a)
accounting terms
not otherwise defined in this Agreement, and accounting terms
partly defined
in this Agreement to the extent not defined, shall have the
respective
meanings given to them under generally accepted accounting
principles; (b) the
words "hereof," "herein" and "hereunder" and words of similar
import refer to
this Agreement (or the certificate, agreement or other document in
which they
are used) as a whole and not to any particular provision of this
Agreement (or
such certificate, agreement or document); (c) references to any
Section,
Schedule or Exhibit are references to Sections, Schedules and
Exhibits in or
to this Agreement, and references to any paragraph, subsection,
clause or
other subdivision within any Section or definition refer to such
paragraph,
subsection, clause or other subdivision of such Section or
definition; (d) the
term "including" means "including without limitation"; (e)
references to any
law or regulation refer to that law or regulation as amended from
time to time
and include any successor law or regulation; (f) references to any
agreement
refer to that agreement as amended from time to time; (g)
references to any
Person include that Person's permitted successors and assigns; and
(h) a
Mortgage Loan is "30 days delinquent" if a Scheduled Payment has
not been
received by the close of business on the Due Date on which the next
Scheduled
Payment is due. Similarly for "60 days delinquent," "90 days
delinquent" and
so on.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance
of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over
and otherwise conveys to the Depositor, without recourse, all the
right, title
and interest of such Seller in and to the applicable Initial
Mortgage Loans,
including all interest and principal received and receivable by
such Seller on
or with respect to applicable Initial Mortgage Loans after the
Initial Cut-off
Date (to the extent not applied in computing the Cut-off Date
Principal
Balance thereof) or 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. On the Closing Date, CHL, as a Seller,
shall
deposit $301.24 into the Distribution Account for distribution as
part of the
Principal Remittance Amount on the first Distribution Date.
Immediately upon the conveyance of the Initial Mortgage
Loans referred to in the preceding paragraph, the Depositor (i)
sells,
transfers, assigns, sets over and otherwise conveys to the Trustee
for benefit
of the Certificateholders and the Certificate Insurer, without
recourse, all
right title and interest in the Initial Mortgage Loans and (ii)
causes the
Certificate Insurer to deliver the Certificate Insurance Policy to
the
Trustee.
CHL further agrees (x) to cause The Bank of New York to
enter into the Corridor Contract Administration Agreement as
Corridor Contract
Administrator and (y) to assign all of
<PAGE>
its right, title and interest in and to the interest rate corridor
transaction
evidenced by each Confirmation, and to cause all of its obligations
in respect
of such transaction to be assumed by, the Corridor Contract
Administrator, on
the terms and conditions set forth in the Corridor Contract
Assignment
Agreement.
(b) Subject to the execution and delivery of the related
Subsequent Transfer Agreement as provided by Section 2.01(d) and
the terms and
conditions of this Agreement, each Seller sells, transfers,
assigns, sets over
and otherwise conveys to the Depositor, without recourse, on each
Subsequent
Transfer Date, all the right, title and interest of such Seller in
and to the
related Subsequent Mortgage Loans, including all interest and
principal
received and receivable by such Seller on or with respect to such
Subsequent
Mortgage Loans after the related Subsequent Cut-off Date (to the
extent not
applied in computing the Cut-off Date Principal Balance thereof) or
deposited
into the Certificate Account by the Master Servicer on behalf of
such Seller
as part of any related Subsequent Certificate Account Deposit as
provided in
this Agreement, other than principal due on such Subsequent
Mortgage Loans on
or prior to the related Subsequent Cut-off Date and interest
accruing prior to
the related Subsequent Cut-off Date.
Immediately upon the conveyance of the Subsequent Mortgage
Loans referred to in the preceding paragraph, the Depositor sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit
of the
Certificateholders and the Certificate Insurer, without recourse,
all right
title and interest in the Subsequent Mortgage Loans.
(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, the Underwriters and the
Certificate Insurer 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 and the Certificate Insurer
with
respect to the sale of the Initial Mortgage Loans on the
Closing
Date), to be delivered as provided in Section 2.01(f);
<PAGE>
(2) the execution and delivery of such Subsequent
Transfer Agreement or conveyance of the related Subsequent
Mortgage
Loans does not result in a reduction or withdrawal of any
ratings
assigned to the Certificates by the Rating Agencies (without
regard
to the Certificate Insurance Policy, in the case of the Class A
Certificates);
(3) the Depositor shall deliver to the Trustee an
Officer's Certificate confirming the satisfaction of each of
the
conditions set forth in this Section 2.01(e) required to be
satisfied
by such Subsequent Transfer Date;
(4) each Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date satisfies the representations and
warranties
applicable to it under this Agreement, provided, however, that
with
respect to a breach of a representation and warranty with respect
to
a Subsequent Mortgage Loan set forth in this clause (4), the
obligation under Section 2.03(f) of this Agreement of the
applicable
Seller, to cure, repurchase or replace such Subsequent Mortgage
Loan
shall constitute the sole remedy against such Seller respecting
such
breach available to Certificateholders, the Depositor, the
Certificate Insurer or the Trustee;
(5) the Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date were selected in a manner reasonably
believed not to be adverse to the interests of the
Certificateholders
or the Certificate Insurer;
(6) no Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date was 30 or more days delinquent as of
the
related Cut-off Date;
(7) following the conveyance of the Subsequent
Mortgage Loans on such Subsequent Transfer Date, the
characteristics
of the Mortgage Loans will not vary by more than the amount
specified
below from the characteristics listed below; provided that for
the
purpose of making such calculations, the characteristics for
any
Initial Mortgage Loan made will be taken as of the Initial
Cut-off
Date and the characteristics for any Subsequent Mortgage Loans
will
be taken as of the Subsequent Cut-off Date;
Permitted
Variance
Characteristic
Value or Range
-------------------------
-----
-----------
Average Stated Principal Balance..........................
N/A
5%
Weighted Average Mortgage Rate............................
N/A
0.10%
Weighted Average Original Combined Loan-to-Value Ratio....
N/A
1.00%
Weighted Average Remaining Term to Maturity...............
N/A 3 months
Weighted Average FICO Score...............................
N/A 5 points
Occupancy Type - Investment Properties....................
N/A
1.00%
Purpose - Cash Out........................................
N/A 1.00% higher
2.00% lower
<PAGE>
(8) none of the Sellers or the Depositor is
insolvent and neither of the Sellers nor the Depositor will be
rendered insolvent by the conveyance of Subsequent Mortgage Loans
on
such Subsequent Transfer Date; and
(9) the Trustee, the Underwriters and the
Certificate Insurer will be provided with an Opinion of
Counsel,
which Opinion of Counsel shall not be at the expense of either
the
Trustee or the Trust Fund, addressed to the Trustee, to the
effect
that such purchase of Subsequent Mortgage Loans will not (i)
result
in the imposition of the tax on "prohibited transactions" on
the
Trust Fund or contributions after the Startup Date, as defined
in
Sections 860F(a)(2) and 860G(d) of the Code, respectively or
(ii)
cause any REMIC formed hereunder to fail to qualify as a REMIC,
such
opinion to be delivered as provided in Section 2.01(f).
The Trustee shall not be required to investigate or
otherwise verify compliance with these conditions, except for its
own receipt
of documents specified above, and shall be entitled to rely on the
required
Officer's Certificate.
(f) Within six Business Days after each Subsequent Transfer
Date, upon (1) delivery to the Trustee and the Certificate Insurer
by the
Depositor of the Opinions of Counsel referred to in Section
2.01(e)(1) and
(e)(9), (2) delivery to the Trustee by CHL (on behalf of each
Seller) of a
Loan Number and Borrower Identification Mortgage Loan Schedule
reflecting the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer
Date, (3)
deposit in the Certificate Account by the Master Servicer on behalf
of the
Sellers of the applicable Subsequent Certificate Account Deposit,
and (4)
delivery to the Trustee by the Depositor of an Officer's
Certificate
confirming the satisfaction of each of the conditions precedent set
forth in
this Section 2.01(f), the Trustee shall pay the applicable Seller
the
Subsequent Transfer Date Transfer Amount from such funds that were
set aside
in the Pre-Funding Account pursuant to Section 2.01(d). The
positive
difference, if any, between the Subsequent Transfer Date Transfer
Amount and
the Subsequent Transfer Date Purchase Amount shall be re-invested
by the
Trustee in the Pre-Funding Account.
The Trustee shall not be required to investigate or
otherwise verify compliance with the conditions set forth in the
preceding
paragraph, except for its own receipt of documents specified above,
and shall
be entitled to rely on the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the
Depositor shall deliver to the Trustee and the Certificate Insurer
a letter of
a nationally recognized firm of independent public accountants
stating whether
or not the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date
conform to the characteristics described in Section 2.01(e)(6) and
(7).
(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
<PAGE>
respect to each such Mortgage Loan so assigned (with respect to
each Mortgage
Loan, clause (i) through (vi) below, together, the "Mortgage File"
for each
such Mortgage Loan):
(i) the original Mortgage Note, endorsed by manual
or facsimile signature in blank in the following form: "Pay
to the order of ________________ without recourse", with all
intervening endorsements that show a complete chain of
endorsement from the originator to the Person endorsing the
Mortgage Note (each such endorsement being sufficient to
transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that
Mortgage Note), or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note
affidavit, stating that the original Mortgage Note was lost
or destroyed, together with a copy of the related Mortgage
Note and all such intervening endorsements;
(ii) in the case of each Mortgage Loan that is not
a MERS Mortgage Loan, the original recorded Mortgage or a
copy of such Mortgage, with recording information, and in
the case of each MERS Mortgage Loan, the original Mortgage
or a copy of such Mortgage, with recording information,
noting the presence of the MIN of the Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if
the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by
the public recording office in which such Mortgage has been
recorded;
(iii) in the case of each Mortgage Loan that is not
a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Home Equity Loan Asset Backed Certificates,
Series 2006-S4, CWHEQ, Inc., by The Bank of New York, a New
York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of August 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.
<PAGE>
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 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.
<PAGE>
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 (a) the State of California or (b) any other
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 and a copy to the Rating Agencies,
in lieu of
recording the assignment specified in clause (iii) above, the
applicable
Seller may deliver an unrecorded assignment in blank, in form
otherwise
suitable for recording to the Trustee; provided that if the related
Mortgage
has not been returned from the applicable public recording office,
such
assignment, or any copy thereof, of the Mortgage may exclude the
information
to be provided by the recording office. As to any Mortgage Loan
other than a
MERS Mortgage Loan, the procedures of the preceding sentence shall
be
applicable only so long as the related Mortgage File is maintained
in the
possession of the Trustee in the State or jurisdiction described in
such
sentence. In the event that with respect to Mortgage Loans other
than MERS
Mortgage Loans (I) any Seller, the Depositor, the Master Servicer
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.
The Trustee or its agent shall maintain possession of the
Mortgage Files in the State of California and shall not remove the
Mortgage
Files from the State of California. In the event that a Seller
fails to record
an assignment of a Mortgage Loan as herein provided within 90 days
of notice
of an event set forth in clause (I), (II) or (III) of the preceding
paragraph,
the Master Servicer shall prepare and, if required hereunder, file
such
assignments for recordation in the appropriate real property or
other records
office. Each Seller hereby appoints the Master Servicer (and any
successor
servicer hereunder) as its attorney-in-fact with full power and
authority
acting in its stead for the purpose of such preparation, execution
and filing.
In the case of Mortgage Loans that become the subject of a
Principal Prepayment between the Closing Date (in the case of
Initial Mortgage
Loans) or related Subsequent Transfer Date (in the case of
Subsequent Mortgage
Loans) and the Cut-off Date, CHL shall deposit or cause to be
deposited in the
Certificate Account the amount required to be deposited therein
with respect
to such payment pursuant to Section 3.05 hereof.
Notwithstanding anything to the contrary in this Agreement,
within thirty days after the Closing Date (in the case of Initial
Mortgage
Loans) or within twenty days after the related Subsequent Transfer
Date (in
the case of Subsequent Mortgage Loans), CHL (on behalf
<PAGE>
of each Seller) shall either (i) deliver to the Trustee the
Mortgage File as
required pursuant to this Section 2.01 for each Delay Delivery
Mortgage Loan
or (ii) (A) repurchase the Delay Delivery Mortgage Loan or (B)
substitute the
Delay Delivery Mortgage Loan for a Replacement Mortgage Loan, which
repurchase
or substitution shall be accomplished in the manner and subject to
the
conditions set forth in Section 2.03, provided that if CHL fails to
deliver a
Mortgage File for any Delay Delivery Mortgage Loan within the
period provided
in the prior sentence, the cure period provided for in Section 2.02
or in
Section 2.03 shall not apply to the initial delivery of the
Mortgage File for
such Delay Delivery Mortgage Loan, but rather CHL shall have five
(5) Business
Days to cure such failure to deliver. CHL shall promptly provide
each Rating
Agency 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 and the Certificate Insurer,
without
recourse, all right title and interest in the portion of the Trust
Fund not
otherwise conveyed to the Trust Fund pursuant to Sections 2.01(a)
or (b).
Section 2.02 Acceptance by
Trustee of the Mortgage Loans.
-------------------------------------------
(a) The Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial
Certification
in the form annexed hereto as Exhibit G-1 and in the list of
exceptions
attached thereto, of the documents referred to in clauses (i) and
(iii) of
Section 2.01(g) above with respect to the Initial Mortgage Loans
and all other
assets included in the Trust Fund and declares that it holds and
will hold
such documents and the other documents delivered to it constituting
the
Mortgage Files, and that it holds or will hold such other assets
included in
the Trust Fund, in trust for the exclusive use and benefit of all
present and
future Certificateholders.
The Trustee agrees to execute and deliver on the Closing
Date to the Depositor, the Master Servicer, CHL (on behalf of each
Seller) and
the Certificate Insurer, an Initial Certification substantially in
the form
annexed hereto as Exhibit G-1 to the effect that, as to each
Initial Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Initial
Mortgage
Loan paid in full or any Initial Mortgage Loan specifically
identified in such
certification as not covered by such certification), the documents
described
in Section 2.01(g)(i) and, in the case of each Initial Mortgage
Loan that is
not a MERS Mortgage Loan, the documents described in Section
2.01(g)(iii) with
respect to such Initial Mortgage Loans as are in the Trustee's
possession and
based on its review and examination and only as to the foregoing
documents,
such
<PAGE>
documents appear regular on their face and relate to such Initial
Mortgage
Loan. The Trustee agrees to execute and deliver within 30 days
after the
Closing Date to the Depositor, the Master Servicer, CHL (on behalf
of each
Seller) and the Certificate Insurer, an Interim Certification
substantially in
the form annexed hereto as Exhibit G-2 to the effect that, as to
each Initial
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Initial
Mortgage Loan paid in full or any Initial Mortgage Loan
specifically
identified in such certification as not covered by such
certification) all
documents required to be delivered to the Trustee pursuant to the
Agreement
with respect to such Initial Mortgage Loans are in its possession
(except
those documents described in Section 2.01(g)(vi)) and based on its
review and
examination and only as to the foregoing documents, (i) such
documents appear
regular on their face and relate to such Initial Mortgage Loan, and
(ii) the
information set forth in items (i), (iv), (v), (vi), (viii) and
(ix) of the
definition of the "Mortgage Loan Schedule" accurately reflects
information set
forth in the Mortgage File. On or before the thirtieth (30th) day
after the
Closing Date (or if such thirtieth day is not a Business Day, the
succeeding
Business Day), the Trustee shall deliver to the Depositor, the
Master
Servicer, CHL (on behalf of each Seller) and the Certificate
Insurer a Delay
Delivery Certification with respect to the Initial Mortgage
Loans
substantially in the form annexed hereto as Exhibit G-3, with any
applicable
exceptions noted thereon. The Trustee shall be under no duty or
obligation to
inspect, review or examine such documents, instruments,
certificates or other
papers to determine that the same are genuine, enforceable or
appropriate for
the represented purpose or that they have actually been recorded in
the real
estate records or that they are other than what they purport to be
on their
face.
Not later than 180 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer, CHL (on behalf
of each
Seller), the Certificate Insurer and any Certificateholder that so
requests, a
Final Certification with respect to the Initial Mortgage Loans
substantially
in the form annexed hereto as Exhibit H, with any applicable
exceptions noted
thereon.
In connection with the Trustee's completion and delivery of
such Final Certification, the Trustee shall review each Mortgage
File with
respect to the Initial Mortgage Loans to determine that such
Mortgage File
contains the following documents:
(i) the original Mortgage Note, endorsed by manual
or facsimile signature in blank in the following form: "Pay
to the order of ________________ without recourse", with all
intervening endorsements that show a complete chain of
endorsement from the originator to the Person endorsing the
Mortgage Note (each such endorsement being sufficient to
transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that
Mortgage Note), or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note
affidavit, stating that the original Mortgage Note was lost
or destroyed, together with a copy of the related Mortgage
Note and all such intervening endorsements;
(ii) in the case of each Initial Mortgage Loan that
is not a MERS Mortgage Loan, the original recorded Mortgage
or a copy of such Mortgage, with recording information, and
in the case of each Initial Mortgage Loan that is a MERS
Mortgage Loan, the original Mortgage or a copy of such
Mortgage, with
<PAGE>
recording information, noting the presence of the MIN of the
Initial Mortgage Loan and language indicating that the
Mortgage Loan is a MOM
Loan if the Initial Mortgage Loan is
a MOM Loan, with evidence of recording indicated thereon, or
a copy of the Mortgage certified by the public recording
office in which Mortgage has been recorded;
(iii) in the case of each Initial Mortgage Loan
that is not a MERS Mortgage Loan, a duly executed assignment
of the Mortgage or a copy thereof with recording
information, in either case in the form permitted by Section
2.01;
(iv) the original recorded assignment or
assignments of the Mortgage or a copy of such assignments,
with recording information, together with all interim
recorded assignments of such Mortgage or a copy of such
assignments, with recording information (in each case noting
the presence of a MIN in the case of each MERS Mortgage
Loan);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement,
if any; and
(vi) the
original or duplicate original lender's
title policy or a copy of lender's title policy or a
printout of the electronic equivalent and all riders
thereto.
If, in the course of such review, the Trustee finds any
document or documents constituting a part of such Mortgage File
that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the
Trustee shall
include such exceptions in such Final Certification (and the
Trustee shall
state in such Final Certification whether any Mortgage File does
not then
include the original or duplicate original lender's title policy or
a printout
of the electronic equivalent and all riders thereto). If the public
recording
office in which a Mortgage or assignment thereof is recorded
retains the
original of such Mortgage or assignment, a copy of the original
Mortgage or
assignment so retained, with evidence of recording thereon,
certified to be
true and complete by such recording office, shall be deemed to
satisfy the
requirements of clause (ii), (iii) or (iv) above, as applicable.
CHL shall
promptly correct or cure such defect referred to above within 90
days from the
date it was so notified of such defect and, if CHL does not correct
or cure
such defect within such period, CHL shall either (A) if the time to
cure such
defect expires prior to the end of the second anniversary of the
Closing Date,
substitute for the related Initial Mortgage Loan a Replacement
Mortgage Loan,
which substitution shall be accomplished in the manner and subject
to the
conditions set forth in Section 2.03, or (B) purchase such Initial
Mortgage
Loan from the Trust Fund within 90 days from the date CHL was
notified of such
defect in writing at the Purchase Price of such Initial Mortgage
Loan;
provided that any such substitution pursuant to (A) above or
repurchase
pursuant to (B) above shall not be effected prior to the delivery
to the
Trustee of the Opinion of Counsel required by Section 2.05 hereof
and any
substitution pursuant to (A) above shall not be effected prior to
the
additional delivery to the Trustee of a Request for File Release.
No
substitution will be made in any calendar month after the
Determination Date
for such month. The Purchase Price for any such Initial Mortgage
Loan shall be
deposited by CHL in the Certificate Account and, upon receipt of
such deposit
and Request for File Release with respect thereto, the Trustee
shall release
the related Mortgage File to CHL and shall execute and deliver at
CHL's
request such instruments of transfer or
<PAGE>
assignment as CHL has prepared, in each case without recourse, as
shall be
necessary to vest in CHL, or a designee, the Trustee's interest in
any Initial
Mortgage Loan released pursuant hereto. If pursuant to the
foregoing
provisions CHL repurchases an Initial Mortgage Loan that is a MERS
Mortgage
Loan, the Master Servicer shall cause MERS to execute and deliver
an
assignment of the Mortgage in recordable form to transfer the
Mortgage from
MERS to CHL and shall cause such Mortgage to be removed from
registration on
the MERS(R) System in accordance with MERS' rules and
regulations.
The Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and
conditions set
forth herein. Each Seller shall promptly deliver to the Trustee,
upon the
execution or receipt thereof, the originals of such other documents
or
instruments constituting the Mortgage File that come into the
possession of
such Seller from time to time.
It is understood and agreed that the obligation of CHL to
substitute for or to purchase any Mortgage Loan that does not meet
the
requirements of Section 2.02(a) above shall constitute the sole
remedy
respecting such defect available to the Trustee, the Depositor and
any
Certificateholder against any Seller.
It is understood and agreed that the obligation of CHL to
substitute for or to purchase, pursuant to Section 2.02(a), any
Initial
Mortgage Loan whose Mortgage File contains any document or
documents that does
not meet the requirements of clauses (i)-(iv) and (vi) above and
which defect
is not corrected or cured by CHL within 90 days from the date it
was notified
of such defect, shall constitute the sole remedy respecting such
defect
available to the Trustee, the Depositor and any Certificateholder
against any
Seller.
(b) The Trustee agrees to execute and deliver on the
Subsequent Transfer Date to the Depositor, the Master Servicer, CHL
(on behalf
of each Seller) and the Certificate Insurer an Initial
Certification
substantially in the form annexed hereto as Exhibit G-4 to the
effect that, as
to each Subsequent Mortgage Loan listed in the Mortgage Loan
Schedule (other
than any Subsequent Mortgage Loan paid in full or any Subsequent
Mortgage Loan
specifically identified in such certification as not covered by
such
certification), the documents described in Section 2.01(g)(i) and,
in the case
of each Subsequent Mortgage Loan that is not a MERS Mortgage Loan,
the
documents described in Section 2.01(g)(iii), with respect to such
Subsequent
Mortgage Loan are in its possession, and based on its review and
examination
and only as to the foregoing documents, such documents appear
regular on their
face and relate to such Subsequent Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days
after the Subsequent Transfer Date to the Depositor, the Master
Servicer, CHL
(on behalf of each Seller) and the Certificate Insurer an
Interim
Certification substantially in the form annexed hereto as Exhibit
G-2 to the
effect that, as to each Subsequent Mortgage Loan listed in the
Mortgage Loan
Schedule (other than any Subsequent Mortgage Loan paid in full or
any
Subsequent Mortgage Loan specifically identified in such
certification as not
covered by such certification), all documents required to be
delivered to it
pursuant to this Agreement with respect to such Subsequent Mortgage
Loan are
in its possession (except those described in Section 2.01(g)(vi))
and based on
its review and examination and only as to the foregoing documents,
(i) such
documents appear
<PAGE>
regular on their face and relate to such Subsequent Mortgage Loan,
and (ii)
the information set forth in items (i), (iv), (v), (vi), (viii) and
(ix) of
the definition of the "Mortgage Loan Schedule" accurately reflects
information
set forth in the Mortgage File. On or before the thirtieth (30th)
day after
the Subsequent Transfer Date (or if such thirtieth day is not a
Business Day,
the succeeding Business Day), the Trustee shall deliver to the
Depositor, the
Master Servicer, CHL (on behalf of each Seller) and the Certificate
Insurer a
Delay Delivery Certification with respect to the Subsequent
Mortgage Loans
substantially in the form annexed hereto as Exhibit G-3, with any
applicable
exceptions noted thereon, together with a Subsequent
Certification
substantially in the form annexed hereto as Exhibit G-4. The
Trustee shall be
under no duty or obligation to inspect, review or examine such
documents,
instruments, certificates or other papers to determine that the
same are
genuine, enforceable or appropriate for the represented purpose or
that they
have actually been recorded in the real estate records or that they
are other
than what they purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date,
the Trustee shall deliver to the Depositor, the Master Servicer,
CHL (on
behalf of each Seller), the Certificate Insurer and to any
Certificateholder
that so requests a Final Certification with respect to the
Subsequent Mortgage
Loans substantially in the form annexed hereto as Exhibit H, with
any
applicable exceptions noted thereon.
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;
<PAGE>
(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 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
<PAGE>
promptly deliver to the Trustee, upon the execution or receipt
thereof, the
originals of such other documents or instruments constituting the
Mortgage
File that come into the possession of such Seller from time to
time.
It is understood and agreed that the obligation of the
Sellers to substitute for or to purchase, pursuant to Section
2.02(b), any
Subsequent Mortgage Loan whose Mortgage File contains any document
or
documents that does not meet the requirements of clauses (i)-(iv)
and (vi)
above and which defect is not corrected or cured by such Seller
within 90 days
from the date it was notified of such defect, shall constitute the
sole remedy
respecting such defect available to the Trustee, the Depositor and
any
Certificateholder against the Sellers.
Section
2.03
Representations,
Warranties and
Covenants of the
Master Servicer and the
Sellers.
--------------------------------------------
(a) The Master Servicer hereby represents and warrants to
the Depositor, the Certificate Insurer and the Trustee as follows,
as of the
date hereof with respect to the Initial Mortgage Loans, and the
related
Subsequent Transfer Date with respect to the Subsequent Mortgage
Loans:
(1) The Master Servicer is duly organized as a
Texas limited partnership and is validly existing and in good
standing under the laws of the State of Texas and is duly
authorized
and qualified to transact any and all business contemplated by
this
Agreement to be conducted by the Master Servicer in any state
in
which a Mortgaged Property is located or is otherwise not
required
under applicable law to effect such qualification and, in any
event,
is in compliance with the doing business laws of any such state,
to
the extent necessary to ensure its ability to enforce each
Mortgage
Loan, to service the Mortgage Loans in accordance with the terms
of
this Agreement and to perform any of its other obligations under
this
Agreement in accordance with the terms hereof.
(2) The Master Servicer has the full partnership
power and
authority to sell and service each Mortgage Loan, and to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by this Agreement and has duly
authorized
by all necessary partnership action on the part of the Master
Servicer the execution, delivery and performance of this
Agreement;
and this Agreement, assuming the due authorization, execution
and
delivery hereof by the other parties hereto, constitutes a
legal,
valid and binding obligation of the Master Servicer,
enforceable
against the Master Servicer in accordance with its terms, except
that
(a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating
to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may
be
subject to equitable defenses and to the discretion of the
court
before which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement by
the Master Servicer, the servicing of the Mortgage Loans by the
Master Servicer under this Agreement, the consummation of any
other
of the transactions contemplated by this
<PAGE>
Agreement, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of the Master
Servicer
and will not (A) result in a material breach of any term or
provision of the certificate of limited partnership,
partnership
agreement or other organizational document of the Master Servicer
or
(B) materially conflict with, result in a material breach,
violation
or acceleration of, or result in a material default under, the
terms
of any other material agreement or instrument to which the
Master
Servicer is a party or by which it may be bound, or (C) constitute
a
material violation of any statute, order or 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, the
Certificate Insurer and the Trustee as follows, as of the Initial
Cut-off Date
in the case of the Initial Mortgage Loans and as of the related
Subsequent
Cut-off Date in the case of the Subsequent Mortgage Loans (unless
otherwise
indicated or the context otherwise requires, percentages with
respect to the
Initial Mortgage Loans in the Trust Fund are measured by the
Cut-off Date
Principal Balance of the Initial Mortgage Loans in the Trust
Fund):
(1) CHL is duly organized as a New York corporation
and is validly existing and in good standing under the laws of
the
State of New York and is duly
<PAGE>
authorized and qualified to transact any and all business
contemplated by this Agreement and each Subsequent Transfer
Agreement to be conducted by CHL in any state in which a
Mortgaged
Property is located or is otherwise not required under
applicable
law to effect such qualification and, in any event, is in
compliance
with the doing business laws of any such state, to the extent
necessary to ensure its ability to enforce each Mortgage Loan,
to
sell the CHL Mortgage Loans in accordance with the terms of
this
Agreement and each Subsequent Transfer Agreement and to perform
any
of its other obligations under this Agreement and each
Subsequent
Transfer Agreement in accordance with the terms hereof and
thereof.
(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.
<PAGE>
(5) No litigation is pending or, to the best of
CHL's knowledge, threatened, against CHL that would materially
and
adversely affect the execution, delivery or enforceability of
this
Agreement or any Subsequent Transfer Agreement or the ability of
CHL
to sell the CHL Mortgage Loans or to perform any of its other
obligations under this Agreement or any Subsequent Transfer
Agreement
in accordance with the terms hereof or thereof.
(6) No consent, approval, authorization or order of
any court
or governmental agency or body is required for the
execution, delivery and performance by CHL of, or compliance by
CHL
with, this Agreement or any Subsequent Transfer 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 Combined Loan-to-Value
Ratio at origination
in excess of 100.00%.
(11) Each Mortgage Loan is secured by a valid and
enforceable second lien on the related Mortgaged Property
subject
only to (1) the lien of non-delinquent current real property
taxes
and
assessments, (2) covenants, conditions and restrictions, rights
of way, easements and other matters of public record as of the
date
of recording of such Mortgage, such exceptions appearing of
record
being acceptable to mortgage lending institutions generally or
specifically reflected in the appraisal made in connection with
the
origination of the related Mortgage Loan, (3) other matters to
which
like properties are commonly subject that do not materially
interfere
with the benefits of the security intended to be provided by
such
Mortgage (4) any senior mortgage loan secured by such Mortgaged
Property and identified in the Mortgage File related to such
Mortgage
Loan.
(12) Immediately prior to the assignment of each
CHL Mortgage Loan to the Depositor, CHL had good title to, and
was
the sole owner of, such CHL Mortgage Loan free and clear of any
pledge, lien, encumbrance or security interest and had full right
and
authority, subject to no interest or participation of, or
agreement
with, any other party, to sell and assign the same pursuant to
this
Agreement.
(13) There is no delinquent tax or assessment lien
against any Mortgaged Property.
<PAGE>
(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.
(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 second priority lien, of the
Mortgage
subject to the exceptions set forth in paragraph (11) above; to
the
best of CHL's knowledge, no claims have been made under such
mortgage
title insurance policy and no prior holder of the related
Mortgage,
including any Seller, has done, by act or omission, anything
that
would impair the coverage of such mortgage title insurance
policy.
(19) No Initial Mortgage Loan was the subject of a
Principal Prepayment in full between the Initial Cut-off Date and
the
Closing Date. No Subsequent Mortgage Loan was the subject of a
Principal Prepayment in full between the Subsequent Cut-off Date
and
the Subsequent Transfer Date.
(20) To the best of CHL's knowledge, all of the
improvements that were included for the purpose of determining
the
Appraised Value of the Mortgaged
<PAGE>
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 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) [Reserved].
(27) There exist no deficiencies with respect to
escrow deposits and payments, if such are required, for which
customary arrangements for repayment thereof
<PAGE>
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.
(29) There is no pledged account or other security
other than real estate securing the Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation
feature, or other contingent interest feature.
(31) Each Mortgage Loan contains a customary "due
on sale" clause.
(32) No less than approximately the percentage
specified in the Collateral Schedule of the Initial Mortgage
Loans
are secured by single family detached dwellings. No more than
approximately the percentage specified in the Collateral Schedule
of
the Initial Mortgage Loans are secured by two- to four-family
dwellings. No more than approximately the percentage specified in
the
Collateral Schedule of the Initial Mortgage Loans are secured
by
low-rise condominium units. No more than approximately the
percentage
specified in the Collateral Schedule of the Initial Mortgage
Loans
are secured by high-rise condominium units. No more than
approximately the percentage specified in the Collateral Schedule
of
the Initial Mortgage Loans are secured by manufactured housing.
No
more than approximately the percentage specified in the
Collateral
Schedule of the Initial Mortgage Loans are secured by PUDs.
(33) Each Initial Mortgage Loan was originated on
or after the date specified in the Collateral Schedule.
(34) [Reserved];
(35) Approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans provide for a
Prepayment Charge.
(36) On the basis of representations made by the
Mortgagors in their loan applications, no more than approximately
the
percentage specified in the Collateral Schedule of the Initial
Mortgage Loans, respectively, are secured by investor properties,
and
no less than approximately the percentage specified in the
Collateral
Schedule of the Initial Mortgage Loans respectively, are secured
by
owner-occupied Mortgaged Properties that are primary
residences.
(37) At the Cut-off Date, the improvements upon
each Mortgaged Property are covered by a valid and existing
hazard
insurance policy with a generally acceptable carrier that
provides
for fire and extended coverage and coverage for such other hazards
as
are customary in the area where the Mortgaged Property is located
in
an
<PAGE>
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
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
<PAGE>
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 the
Mortgage
proceeds, whichever is later, to the day that precedes by one
month
the Due Date of the first installment of principal and
interest,
including without limitation, taxes and insurance payments, the
Master Servicer has not advanced funds, or induced, solicited
or
knowingly received any advance of funds by a party other than
the
Mortgagor, directly or indirectly, for the payment of any
amount
required by the Mortgage.
(45) The Mortgage Loans originated by CHL were
underwritten in all material respects in accordance with CHL's
underwriting guidelines for closed-end second lien mortgage loans
or,
with respect to Mortgage Loans purchased by CHL were underwritten
in
all
material respects in accordance with customary and prudent
underwriting guidelines generally used by originators of
closed-end
second lien mortgage loans.
(46) Prior to the approval of the Mortgage Loan
application, an appraisal of the related Mortgaged Property was
obtained from a qualified appraiser, duly appointed by the
originator, who had no interest, direct or indirect, in the
Mortgaged
Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of
the
Mortgage Loan; such appraisal is in a form acceptable to 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 of the Initial Mortgage Loans as
of
the Cut-off Date was approximately the per annum rate specified
on
the Collateral Schedule.
(49) The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the
applicable
Seller's portfolio at the Closing Date as to which the
representations and warranties made as to the Mortgage Loans
set
forth in this Section 2.03(b) and Sections 2.03(c), 2.03(d) and
2.03(e) can be made. No selection was made in a manner that
would
adversely affect the interests of Certificateholders or the
Certificate Insurer.
<PAGE>
(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.
(54) Any leasehold estate securing a Mortgage Loan
has a term of not less than five years in excess of the term of
the
related Mortgage Loan.
(55) Each Mortgage Loan represents a "qualified
mortgage" within the meaning of Section 860(a)(3) of the Code
(but
without regard to the rule in Treasury Regulation ss.
1.860G-2(f)(2)
that treats a defective obligation as a qualified mortgage, or
any
substantially similar successor provision) and applicable
Treasury
regulations promulgated thereunder.
(56) No Mortgage Loan was either a "consumer credit
contract" or a "purchase money loan" as such terms are defined in
16
C.F.R. ss. 433 nor is any Mortgage Loan a "mortgage" as defined in
15
U.S.C. ss. 1602(aa).
(57) Each Mortgage Loan, at the time it was
originated and as of the Closing Date or the related Subsequent
Transfer Date, as applicable, complied in all material respects
with
applicable local, state and federal laws, including, but not
limited
to, all predatory and abusive lending laws.
(58) None of the Mortgage Loans is a "high cost"
mortgage loan as defined by applicable federal, state and local
predatory and abusive lending laws.
(59) Each Prepayment Charge is enforceable and was
originated in compliance with all applicable federal, state and
local
laws.
(60) None of the Mortgage Loans that are secured by
property located in the State of Illinois are in violation of
the
provisions of the Illinois Interest Act; 815 Ill. Comp. Stat.
205/0.01 (2004).
(61) There is no Mortgage Loan in the Trust Fund
that was originated on or after March 7, 2003, which is a "high
cost
home loan" as defined under the Georgia Fair Lending Act.
(62) No Mortgage Loan in the Trust Fund is a High
Cost Loan or Covered Loan, as applicable (as such terms are
defined
in the then-current Standard & Poor's LEVELS(R) Glossary which
is now
Version 5.7(d), Appendix E) and no Mortgage
<PAGE>
Loan originated on or after October 1, 2002 through March 6, 2003
is
governed by the Georgia Fair Lending Act.
(63) Each Mortgage Loan is secured by a "single
family residence" within the meaning of Section 25(e)(10) of
the
Internal Revenue Code of 1986 (as amended) (the "Code"). The
fair
market value of the manufactured home securing each Mortgage Loan
was
at least equal to 80% of the adjusted issue price of the contract
at
either (i) the time the contract was originated (determined
pursuant
to the REMIC Provisions) or (ii) the time the contract is
transferred
to the purchaser. Each Mortgage Loan is a "qualified mortgage"
under
Section 860G(a)(3) of the Code.
(64) No Mortgage Loan in the Trust Fund is a "high
cost home," "covered" (excluding home loans defined as "covered
home
loans" in the New Jersey Home Ownership Security Act of 2002
that
were originated between November 26, 2003 and July 7, 2004),
"high
risk home" or "predatory" loan under any applicable state, federal
or
local law (or a similarly classified loan using different
terminology
under a law imposing heightened regulatory scrutiny or
additional
legal liability for residential mortgage loans having high
interest
rates, points and/or fees).
(65) There is no Mortgage Loan in the Trust Fund
that was originated on or after October 1, 2002 and before March
7,
2003, which is secured by property located in the State of
Georgia.
(66) The representations in Section 2.03(c)(1)-(6),
2.03(d)(1)-(6) and 2.03(e)(1)-(6) are true and correct.
(c) Park Granada hereby represents and warrants to the
Depositor, the Certificate Insurer and the Trustee as follows, as
of the
Cut-off Date:
(1) Park Granada is duly organized as a Delaware
corporation and is validly existing and in good standing under
the
laws of the State of Delaware and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement and
each
Subsequent Transfer Agreement to be conducted by Park Granada in
any
state in which a Mortgaged Property securing a Park Granada
Mortgage
Loan is located or is otherwise not required under applicable law
to
effect such qualification and, in any event, is in compliance
with
the doing business laws of any such state, to the extent necessary
to
ensure its ability to enforce each Park Granada Mortgage Loan,
to
sell the Park Granada Mortgage Loans in accordance with the terms
of
this Agreement and each Subsequent Transfer Agreement and to
perform
any of its other obligations under this Agreement in accordance
with
the terms hereof.
(2) Park Granada has the full company power and
authority to sell each Park Granada Mortgage Loan, and to
execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and each Subsequent
Transfer Agreement and has duly authorized by all necessary
corporate
action on the part of Park Granada the execution, delivery and
performance of this Agreement and each Subsequent Transfer
Agreement;
and this Agreement and each Subsequent Transfer
<PAGE>
Agreement, assuming the due authorization, execution and
delivery
hereof by the other parties hereto, constitutes a legal, valid
and
binding obligation of Park Granada, enforceable against Park
Granada
in accordance with its terms, except that (a) the
enforceability
hereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors'
rights
generally and (b) the remedy of specific performance and
injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of this Agreement
and each Subsequent Transfer Agreement by Park Granada, the sale
of
the Park Granada Mortgage Loans by Park Granada under this
Agreement
and each Subsequent Transfer Agreement, the consummation of any
other
of the transactions contemplated by this Agreement and each
Subsequent Transfer Agreement, and the fulfillment of or
compliance
with the terms hereof are in the ordinary course of business of
Park
Granada and will not (A) result in a material breach of any term
or
provision of the certificate of incorporation or by-laws of
Park
Granada or (B) materially conflict with, result in a material
breach,
violation or acceleration of, or result in a material default
under,
the terms of any other material agreement or instrument to which
Park
Granada is a party or by which it may be bound, or (C) constitute
a
material violation of any statute, order or regulation applicable
to
Park Granada of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over Park Granada; and
Park
Granada is not in breach or violation of any material indenture
or
other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction
over
it which breach or violation may materially impair Park
Granada's
ability to perform or meet any of its obligations under this
Agreement.
(4) No litigation is pending or, to the best of
Park Granada's knowledge, threatened, against Park Granada that
would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or any Subsequent Transfer
Agreement
or the ability of Park Granada to sell the Park Granada
Mortgage
Loans or to perform any of its other obligations under this
Agreement
or any Subsequent Transfer Agreement in accordance with the
terms
hereof or thereof.
(5) No consent,
approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by Park Granada of, or
compliance
by Park Granada with, this Agreement or any Subsequent Transfer
Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order
is
required, Park Granada has obtained the same.
(6) Park Granada will treat the transfer of the
Park Granada Mortgage Loans to the Depositor as a sale of the
Park
Granada Mortgage Loans for all tax, accounting and regulatory
purposes.
<PAGE>
(7) Immediately prior to the assignment of each
Park Granada Mortgage Loan to the Depositor, Park Granada had
good
title to, and was the sole owner of, such Park Granada Mortgage
Loan
free and clear of any pledge, lien, encumbrance or security
interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell
and
assign the same pursuant to this Agreement.
(d) Park Monaco hereby represents and warrants to the
Depositor, the Certificate Insurer and the Trustee as follows, as
of the
Cut-off Date:
(1) Park Monaco is duly organized as a Delaware
corporation and is validly existing and in good standing under
the
laws of the State of Delaware and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement and
each
Subsequent Transfer Agreement to be conducted by Park Monaco in
any
state in which a Mortgaged Property securing a Park Monaco
Mortgage
Loan is located or is otherwise not required under applicable law
to
effect such qualification and, in any event, is in compliance
with
the doing business laws of any such state, to the extent necessary
to
ensure its ability to enforce each Park Monaco Mortgage Loan, to
sell
the Park Monaco Mortgage Loans in accordance with the terms of
this
Agreement and each Subsequent Transfer Agreement and to perform
any
of its other obligations under this Agreement in accordance with
the
terms hereof.
(2) Park Monaco has the full company power and
authority to sell each Park Monaco Mortgage Loan, and to
execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and each Subsequent
Transfer Agreement and has duly authorized by all necessary
corporate
action on the part of Park Monaco the execution, delivery and
performance of this Agreement and each Subsequent Transfer
Agreement;
and this Agreement and each Subsequent Transfer Agreement,
assuming
the due authorization, execution and delivery hereof by the
other
parties hereto, constitutes a legal, valid and binding obligation
of
Park Monaco, enforceable against Park Monaco in accordance with
its
terms, except that (a) the enforceability hereof may be limited
by
bankruptcy, insolvency, moratorium, receivership and other
similar
laws relating to creditors' rights generally and (b) the remedy
of
specific performance and injunctive and other forms of
equitable
relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement
and each Subsequent Transfer Agreement by Park Monaco, the sale
of
the Park Monaco Mortgage Loans by Park Monaco under this
Agreement
and each Subsequent Transfer Agreement, the consummation of any
other
of the transactions contemplated by this Agreement and each
Subsequent Transfer Agreement, and the fulfillment of or
compliance
with the terms hereof are in the ordinary course of business of
Park
Monaco and will not (A) result in a material breach of any term
or
provision of the certificate of incorporation or by-laws of
Park
Monaco or (B) materially conflict with, result in a material
breach,
violation or acceleration of, or result in a material default
under,
the terms of any other material agreement or instrument to which
Park
Monaco is a party or by which it may be bound,
<PAGE>
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 perform any of its other obligations under this Agreement
or
any Subsequent Transfer Agreement in accordance with the terms
hereof
or thereof.
(5) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
execution, delivery and performance by Park Monaco of, or
compliance
by Park Monaco with, this Agreement or any Subsequent Transfer
Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order
is
required, Park Monaco has obtained the same.
(6) Park Monaco will treat the transfer of the Park
Monaco Mortgage Loans to the Depositor as a sale of the Park
Monaco
Mortgage Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each
Park Monaco Mortgage Loan to the Depositor, Park Monaco had
good
title to, and was the sole owner of, such Park Monaco Mortgage
Loan
free and
clear of any pledge, lien, encumbrance or security interest
and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell
and
assign the same pursuant to this Agreement.
(e) Park Sienna hereby represents and warrants to the
Depositor, the Certificate Insurer and the Trustee as follows, as
of the
Cut-off Date:
(1) Park Sienna is duly organized as a Delaware
limited liability company and is validly existing and in good
standing under the laws of the State of Delaware and is duly
authorized and qualified to transact any and all business
contemplated by this Agreement and each Subsequent Transfer
Agreement
to be conducted by Park Sienna in any state in which a
Mortgaged
Property securing a Park Sienna Mortgage Loan is located or is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the
doing
business laws of any such state, to the extent necessary to
ensure
its ability to enforce each Park Sienna Mortgage Loan, to sell
the
Park Sienna Mortgage Loans in accordance with the terms of
<PAGE>
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 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
<PAGE>
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.
(f) Upon discovery by any of the parties hereto of a breach
of a representation or warranty set forth in Section 2.03(a)
through (e) that
materially and adversely affects the interests of the
Certificateholders or
the Certificate Insurer in any Mortgage Loan, the party discovering
such
breach shall give prompt notice thereof to the other parties, the
NIM Insurer
and the Certificate Insurer. Each of the Master Servicer and the
Sellers
(each, a "Representing Party") hereby covenants with respect to
the
representations and warranties set forth in Sections 2.03(a)
through (e) that
within 90 days of the earlier of the discovery by such Representing
Party or
receipt of written notice by such Representing Party from any party
of a
breach of any representation or warranty set forth herein made that
materially
and adversely affects the interests of the Certificateholders in
any Mortgage
Loan or the Certificate Insurer, it shall cure such breach in all
material
respects and, if such breach is not so cured, shall, (i) if such
90-day period
expires prior to the second anniversary of the Closing Date, remove
such
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute
in its place a Replacement Mortgage Loan, in the manner and subject
to the
conditions set forth in this Section; or (ii) repurchase the
affected Mortgage
Loan or Mortgage Loans from the Trustee at the Purchase Price in
the manner
set forth below; provided that (a) any such substitution pursuant
to (i) above
or repurchase pursuant to (ii) above shall not be effected prior to
the
delivery to the Trustee of the Opinion of Counsel required by
Section 2.05
hereof, (b) any such substitution pursuant to (i) above shall not
be effected
prior to the additional delivery to the Trustee of a Request for
File Release
and (c) any such substitution pursuant to (i) above shall include a
payment by
the applicable Representing Party of any amount as calculated under
item (iii)
of the definition of "Purchase Price". Any Representing Party
liable for a
breach under this Section 2.03 shall promptly reimburse the Master
Servicer or
the Trustee for any expenses reasonably incurred by the Master
Servicer or the
Trustee in respect of enforcing the remedies for such breach. To
enable the
Master Servicer to amend the Mortgage Loan Schedule, any
Representing Party
liable for a breach under this Section 2.03 shall, unless it cures
such breach
in a timely fashion pursuant to this Section 2.03, promptly notify
the Master
Servicer whether such Representing Party intends either to
repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With
respect to the
representations and warranties described in this Section that are
made to the
best of the Representing Party's knowledge, if it is discovered by
any of the
Depositor, the Master Servicer, the Sellers, the Certificate
Insurer or the
Trustee that the substance of such representation and warranty is
inaccurate
and such inaccuracy materially and adversely affects the value of
the related
Mortgage Loan, notwithstanding the Representing Party's lack of
knowledge with
respect to the substance of such representation or warranty, such
inaccuracy
shall be deemed a breach of the applicable representation or
warranty.
<PAGE>
With respect to any Replacement Mortgage Loan or Loans, the
applicable Seller delivering such Replacement Mortgage Loan shall
deliver to
the Trustee for the benefit of the Certificateholders and the
Certificate
Insurer the related Mortgage Note, Mortgage and assignment of the
Mortgage,
and such other documents and agreements as are required by Section
2.01, with
the Mortgage Note endorsed and the Mortgage assigned as required by
Section
2.01. No substitution will be made in any calendar month after
the
Determination Date for such month. Scheduled Payments due with
respect to
Replacement Mortgage Loans in the Due Period related to the
Distribution Date
on which such proceeds are to be distributed shall not be part of
the Trust
Fund and will be retained by the applicable Seller delivering such
Replacement
Mortgage Loan on such Distribution Date. For the month of
substitution,
distributions to Certificateholders will include the Scheduled
Payment due on
any Deleted Mortgage Loan for the related Due Period and thereafter
the
applicable Seller shall be entitled to retain all amounts received
in respect
of such Deleted Mortgage Loan. The Master Servicer shall amend the
Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect
the removal
of such Deleted Mortgage Loan and the substitution of the
Replacement Mortgage
Loan or Loans and the Master Servicer shall deliver the amended
Mortgage Loan
Schedule to the Trustee. Upon such substitution, the Replacement
Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all
respects, and
the applicable Seller delivering such Replacement Mortgage Loan
shall be
deemed to have made with respect to such Replacement Mortgage Loan
or Loans,
as of the date of substitution, the representations and warranties
set forth
in Section 2.03(b), (c), (d) or (e) with respect to such Mortgage
Loan. Upon
any such substitution and the deposit to the Certificate Account of
the amount
required to be deposited therein in connection with such
substitution as
described in the following paragraph, the Trustee shall release to
the
Representing Party the Mortgage File relating to such Deleted
Mortgage Loan
and held for the benefit of the Certificateholders and shall
execute and
deliver at the Master Servicer's direction such instruments of
transfer or
assignment as have been prepared by the Master Servicer, in each
case without
recourse, as shall be necessary to vest in the applicable Seller,
or its
respective designee, title to the Trustee's interest in any Deleted
Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which any Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans,
the Master
Servicer will determine the amount (if any) by which the aggregate
principal
balance of all such Replacement Mortgage Loans as of the date of
substitution
is less than the Stated Principal Balance (after application of the
principal
portion of the Scheduled Payment due in the month of substitution)
of all such
Deleted Mortgage Loans. An amount equal to the aggregate of the
deficiencies
described in the preceding sentence (such amount, the "Substitution
Adjustment
Amount") shall be forwarded by the applicable Seller to the Master
Servicer
and deposited by the Master Servicer into the Certificate Account
not later
than the Determination Date for the Distribution Date relating to
the
Prepayment Period during which the related Mortgage Loan became
required to be
purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the
Certificate
Account pursuant to Section 3.05 on the Determination Date for
the
Distribution Date in the month following the month during which
such Seller
became obligated to repurchase or replace such Mortgage Loan and
upon such
deposit of the Purchase Price, the delivery of the Opinion of
Counsel required
by Section 2.05, if
<PAGE>
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.
(g) The representations and warranties set forth in this
Section 2.03 shall survive delivery of the respective Mortgage
Files to the
Trustee for the benefit of the Certificateholders and the
Certificate Insurer
with respect to each Mortgage Loan.
Section 2.04 Representations and Warranties of the
Depositor.
The Depositor hereby represents and warrants to the Master
Servicer 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,
<PAGE>
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
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
and the NIM
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 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(f).
Section 2.05 Delivery of Opinion of Counsel in
Connection
with Substitutions and Repurchases.
---------------------------------------------
(a) Notwithstanding any contrary provision of this
Agreement, with respect to any Mortgage Loan that is not in default
or as to
which default is not imminent, no repurchase or substitution
pursuant to
Sections 2.02, 2.03 or 2.04 shall be made unless the Representing
Party making
such repurchase or substitution delivers to the Trustee an Opinion
of Counsel
(which
<PAGE>
such Representing Party shall use reasonable efforts to
obtain),
addressed to the Trustee to the effect that such repurchase or
substitution
would not (i) result in the imposition of the tax on "prohibited
transactions"
of the Trust Fund or contributions after the Closing Date, as
defined in
sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the
any REMIC formed hereunder to fail to qualify as a REMIC at any
time that any
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 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(f) with respect to substitutions are satisfied, a Replacement
Mortgage
Loan for the affected Mortgage Loan, or (ii) repurchase the
affected Mortgage
Loan within 90 days of such discovery in the same manner as it
would a
Mortgage Loan for a breach of representation or warranty contained
in Section
2.03. The Trustee shall reconvey to CHL the Mortgage Loan to be
released
pursuant hereto in the same manner, and on the same terms and
conditions, as
it would a Mortgage Loan repurchased for breach of a representation
or
warranty contained in Section 2.03.
Section 2.06 Authentication and
Delivery of Certificates.
--------------------------------------------
The Trustee acknowledges the transfer and assignment to it
of the Trust Fund and, concurrently with such transfer and
assignment, has
executed, authenticated and delivered, to or upon t
