EXHIBIT 99.2
==============================================================================
Countrywide Home Loans, Inc.
a Seller
Park Monaco Inc.
a Seller
CWHEQ, Inc.
Purchaser
----------------------------------
Purchase Agreement
Dated as of December 29, 2005
----------------------------------
Revolving Home Equity Loan Asset Backed Notes
Series 2005-L
==============================================================================
Table of Contents
Page
----
Article I
Definitions
Section 1.01. Definitions......................................................................1
Article II
Sale of Mortgage Loans; Payment of Purchase Price
Section 2.01. Sale of the Mortgage Loans.......................................................2
Section 2.02. Obligations of Sellers Upon Sale.................................................3
Section 2.03. Payment of Purchase Price for the Mortgage Loans.................................6
Article III
Representations and Warranties; Remedies For Breach
Section 3.01. Seller Representations and Warranties............................................7
Section 3.02. Seller Representations and Warranties Relating to the Mortgage Loans.............9
Article IV
Sellers' Covenants
Section 4.01. Covenants of the Sellers........................................................22
Article V
Servicing
Section 5.01. Servicing.......................................................................22
Article VI
Termination
Section 6.01. Termination.....................................................................22
Article VII
Miscellaneous Provisions
Section 7.01. Amendment.......................................................................22
Section 7.02. Governing Law...................................................................23
Section 7.03. Notices.........................................................................23
Section 7.04. Severability of Provisions......................................................23
Section 7.05. Counterparts; Electronic Delivery...............................................24
i
Section 7.06. Further Agreements..............................................................24
Section 7.07. Successors and Assigns: Assignment of Purchase Agreement........................24
Section 7.08. Survival........................................................................24
SCHEDULES AND ANNEXES
Schedule I Mortgage Loan Schedule.....................................................Sch-I-1
Schedule II Standard & Poor's Glossary................................................Sch-II-1
Annex 1 Adoption Annex.............................................................▇▇▇-1-1
ii
This Purchase Agreement, dated as of December 29, 2005 (the
"Agreement"), between Countrywide Home Loans, Inc., a New York corporation, as
a seller ("CHL" or a "Seller"), Park Monaco Inc., a Delaware corporation, as a
seller ("Park Monaco" or a "Seller," and together with CHL, the "Sellers"),
and CWHEQ, Inc., a Delaware corporation (the "Purchaser"),
Witnesseth:
Whereas, each Seller is the owner of the applicable notes or other
evidence of indebtedness indicated on Schedule I as owned by that Seller, and
certain other notes or other evidence of indebtedness made or to be made in
the future, and Related Documentation; and
Whereas, by the date of their transfer, each Seller will own the
mortgages on the properties securing the Mortgage Loans indicated on Schedule
I as owned by that Seller, including rights to (a) any property acquired by
foreclosure or deed in lieu of foreclosure or otherwise and (b) the proceeds
of any hazard insurance policies on the Mortgaged Properties; and
Whereas, each Seller wants to sell its Mortgage Loans to the
Purchaser pursuant to this Agreement; and
Whereas, pursuant to the Sale and Servicing Agreement, of even date
with this Agreement (the "Sale and Servicing Agreement"), among the Purchaser,
as depositor, CHL, as sponsor and master servicer, the Trust, and the
Indenture Trustee, the Purchaser will transfer the Mortgage Loans to the
Trust;
Now, Therefore, the parties agree as follows.
ARTICLE I
Definitions
Section 1.01. Definitions.
Capitalized terms used in this Agreement that are not otherwise
defined have the meanings given to them in the Indenture, and if not defined
there, in the Sale and Servicing Agreement. In addition, Section 1.04 (Rules
of Construction) of the Indenture is incorporated by reference with
appropriate substitution of this Agreement for references in that Section to
the Indenture so that the language of that Section will read appropriately as
applying to this Agreement.
ARTICLE II
Sale of Mortgage Loans; Payment of Purchase Price
Section 2.01. Sale of the Mortgage Loans.
(a) The Initial Mortgage Loans. Concurrently with the execution and
delivery of this Agreement, CHL, with respect to each Initial Mortgage Loan it
owns as indicated on Schedule I, hereby transfers to the Purchaser, without
recourse, all of its right, title, and interest existing now or in the future
in
(1) that Mortgage Loan, including its Asset Balance
(including all Additional Balances), the related Mortgage File, all
property that secures that Mortgage Loan, and all collections
received on it after the Cut-off Date (excluding payments due by the
Cut-off Date);
(2) property that secured that Mortgage Loan that is
acquired by foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related
to the mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection
with that Mortgage Loan;
(5) all other assets included or to be included in the Trust
for the benefit of the Noteholders and the Credit Enhancer; and
(6) all proceeds of the foregoing.
Park Monaco, with respect to each Initial Mortgage Loan it owns as
indicated on Schedule I, hereby transfers to the Purchaser, without recourse,
all of its right, title, and interest existing now or in the future in
(1) that Mortgage Loan, including its Asset Balance
(including all Additional Balances), the related Mortgage File, all
property that secures that Mortgage Loan, and all collections
received on it after the Cut-off Date (excluding payments due by the
Cut-off Date);
(2) property that secured that Mortgage Loan that is
acquired by foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related
to the mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection
with that Mortgage Loan;
2
(5) all other assets included or to be included in the Trust
for the benefit of the Noteholders and the Credit Enhancer; and
(6) all proceeds of the foregoing.
The Additional Home Equity Loans. The Purchaser may use the funds in
each Additional Loan Account to purchase Additional Home Equity Loans on any
Subsequent Closing Date designated by the Purchaser by the Latest Subsequent
Closing Date. On each Subsequent Closing Date, each Seller shall deliver a
Transfer Document (properly completed and executed by the Seller) to the
Purchaser. When each Seller delivers a Transfer Document, that Seller hereby
transfers to the Purchaser without recourse, and the Purchaser purchases and
shall effect payment for, all of its right, title, and interest in each
Additional Home Equity Loan identified in the Transfer Document, including its
Asset Balance (including all Additional Balances) and all collections received
on it after the relevant Subsequent Cut-off Date (excluding payments due by
the Subsequent Cut-off Date) and all proceeds of the foregoing.
(b) By the sale of a Mortgage Loan and its Additional Balances, each
Seller has sold to the Purchaser, and the Purchaser has purchased from each
Seller, each future draw of new borrowing under the related Credit Line
Agreement. The Purchaser shall pay the applicable Seller for each Additional
Balance in cash in an amount equal to the principal amount of the Additional
Balance as it arises. The Trust, the applicable Seller, and the Purchaser may
agree to a netting arrangement in connection with this transaction, when
appropriate, rather than actually moving cash.
Section 2.02. Obligations of Sellers Upon Sale.
In connection with the transfers pursuant to Section 2.01(a), each
Seller further agrees, at its own expense:
(a) to deliver to the Purchaser by the Closing Date a Mortgage Loan
Schedule containing an accurate list of all Initial Mortgage Loans sold by it,
specifying for each Initial Mortgage Loan, among other things, its account
number and its Cut-off Date Asset Balance; and
(b) to indicate in its books and records that the applicable Mortgage
Loans have been sold to the Indenture Trustee, as assignee of the Purchaser,
pursuant to this Agreement by the Closing Date for the Initial Mortgage Loans,
and by each Subsequent Closing Date for the related Additional Home Equity
Loans;
(c) to deliver to the Purchaser, or at the Purchaser's direction to
the Indenture Trustee, the Owner Trustee, and the Credit Enhancer, an
Officer's Certificate confirming the satisfaction of each of the conditions
precedent in Section 2.01(b) of the Sale and Servicing Agreement by each
Subsequent Closing Date; and
3
(d) to deliver to the Purchaser, or at the Purchaser's direction to
the Indenture Trustee, a revised Mortgage Loan Schedule reflecting the
addition of the Additional Home Equity Loans within 15 days following each
Subsequent Closing Date.
The Initial Mortgage Loan Schedule containing the Mortgage Loans sold
by both Sellers is Exhibit A to the Sale and Servicing Agreement and shall
also be attached as Schedule I to this Agreement and is hereby incorporated
into this Agreement.
Each Seller agrees to perfect and protect the Purchaser's interest in
each Mortgage Loan transferred by it pursuant to Section 2.01(a) and its
proceeds by preparing, executing, and filing a UCC1 Financing Statement with
the Secretary of State in the State of New York describing the Mortgage Loans
and naming the applicable Seller as debtor and the Purchaser as secured party
and indicating that the Mortgage Loans have been assigned to the Trust and all
necessary Continuation Statements and any additional UCC1 Financing Statements
due to a change in the name or the state of incorporation of that Seller. The
Financing Statement shall be filed by the Closing Date. This Financing
Statement will state in bold-faced type that a purchase of the Mortgage Loans
included in the collateral covered by the Financing Statement from the debtor
will violate the rights of the secured party and its assignee.
The Purchaser agrees to perfect and protect the Trust's interest in
each Mortgage Loan and its proceeds by preparing, executing, and filing a UCC1
Financing Statement with the Secretary of State in the State of Delaware
describing the Mortgage Loans and naming the Purchaser as debtor and the Trust
as secured party (and indicating that the Mortgage Loans have been pledged to
the Indenture Trustee) and all necessary Continuation Statements and any
additional UCC1 Financing Statements due to a change in the name or the state
of incorporation of the Purchaser. The Financing Statement shall be filed by
the Closing Date. This Financing Statement will state in bold-faced type that
a purchase of the Mortgage Loans included in the collateral covered by the
Financing Statement from the debtor will violate the rights of the secured
party and its assignee.
In connection with any transfer by a Seller, it shall deliver to the
order of the Purchaser the following documents for each Mortgage Loan
transferred by that Seller (the "Related Documentation"):
(1) the original Mortgage Note endorsed in blank or, if the
original Mortgage Note has been lost or destroyed and not replaced,
an original lost note affidavit from the Sponsor stating that the
original Mortgage Note was lost, misplaced, or destroyed, together
with a copy of the related Mortgage Note;
(2) unless the Mortgage Loan is registered on the MERS(R)
System, an original assignment of mortgage in blank in recordable
form;
4
(3) the original recorded mortgage with evidence of
recording on it (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) or, if the original recorded mortgage
with evidence of recording on it cannot be delivered by the Closing
Date because of a delay caused by the public recording office where
the original Mortgage has been delivered for recordation or because
the original Mortgage has been lost, the Sponsor shall deliver to the
Indenture Trustee an accurate copy of the mortgage, together with (i)
when the delay is caused by the public recording office, an Officer's
Certificate of the Sponsor or the Purchaser stating that the original
mortgage has been dispatched to the appropriate public recording
official or (ii) when the original mortgage has been lost, a
certificate by the appropriate county recording office where the
mortgage is recorded;
(4) any original intervening assignments needed for a
complete chain of title to the Trust with evidence of recording on
them, or, if any original intervening assignment has not been
returned from the applicable recording office or has been lost, an
accurate copy of it, together with (i) when the delay is caused by
the public recording office, an Officer's Certificate of the Sponsor
or the Purchaser stating that the original intervening assignment has
been dispatched to the appropriate public recording official for
recordation or (ii) when the original intervening assignment has been
lost, a certificate by the appropriate county recording office where
the mortgage is recorded;
(5) a title policy for each Mortgage Loan with a Credit
Limit in excess of $100,000;
(6) the original of any guaranty executed in connection with
the Mortgage Note;
(7) the original of each assumption, modification,
consolidation, or substitution agreement relating to the Mortgage
Loan; and
(8) any security agreement, chattel mortgage, or equivalent
instrument executed in connection with the Mortgage.
The Related Documentation for the Initial Mortgage Loans will be
delivered:
(1) no later than the Closing Date, with respect to no less
than 50% of the Initial Mortgage Loans,
(2) no later than the twentieth day after the Closing Date,
with respect to no less than 40% of the Initial Mortgage Loans in
addition to those delivered on the Closing Date, and
(3) within thirty days following the Closing Date, with respect
to the remaining Initial Mortgage Loans.
5
The Related Documentation for the Additional Home Equity Loans will
be delivered:
(1) no later than relevant Subsequent Closing Date, with respect to
no less than 10% of the relevant Additional Home Equity Loans; and
(2) within twenty days following the relevant Subsequent Closing
Date, with respect to the remaining relevant Additional Home Equity Loans.
Each Seller confirms to the Purchaser that, as of the Closing Date,
it has caused the portions of the Electronic Ledger relating to the Initial
Mortgage Loans maintained by that Seller to be clearly and unambiguously
marked to indicate that the Initial Mortgage Loans have been sold to the
Purchaser, and sold by the Purchaser to the Trust, and Granted by the Trust to
the Indenture Trustee, and that a purchase of those Mortgage Loans from that
Seller or the Purchaser will violate the rights of the Trust, as secured party
with respect to those Mortgage Loans. By the relevant Subsequent Closing Date
or the applicable date of substitution, as applicable, CHL shall cause the
portions of the Electronic Ledgers relating to the relevant Additional Home
Equity Loans or Eligible Substitute Mortgage Loans, as the case may be, to be
clearly and unambiguously marked, and shall make appropriate entries in its
general accounting records, to indicate that those Mortgage Loans have been
transferred to the Trust at the direction of the Purchaser and that they have
been Granted by the Trust to the Indenture Trustee, and that a purchase of the
Mortgage Loans from CHL or the Purchaser will violate the rights of the Trust,
as secured party with respect to those Mortgage Loans.
The Purchaser accepts all right, title, and interest of each of the
Sellers existing now or in the future in the Mortgage Loans and other property
transferred to it pursuant to this Section.
The transfer of the Mortgage Loans is a sale by each Seller to the
Purchaser of all its interest in the applicable Mortgage Loans and other
property described above. However, to provide for the possibility that either
transfer might be characterized as a transfer for security and not as a sale,
each Seller hereby Grants to the Purchaser a Security Interest in all of its
right, title, and interest in the applicable Mortgage Loans and other property
described above, whether existing now or in the future, to secure all of that
its obligations under this Agreement; and this Agreement shall constitute a
Security Agreement under applicable law.
Section 2.03. Payment of Purchase Price for the Mortgage Loans.
(a) In consideration of the sale of the Initial Mortgage Loans from
each of the Sellers to the Purchaser on the Closing Date, the Purchaser agrees
to transfer to the applicable Seller on the Closing Date the purchase price
for the applicable Initial Mortgage Loans provided in the Adoption Annex
attached as Annex 1 to this Agreement (the "Adoption Annex").
6
(b) In consideration of the sale of the Additional Home Equity Loans
from the Seller to the Purchaser on each Subsequent Closing Date, the
Purchaser agrees to cause the Trust to pay to the Seller, when the conditions
to the release of the purchase price for the Additional Home Equity Loans
under the Sale and Servicing Agreement have been met, an amount equal to their
Cut-off Date Asset Balance.
ARTICLE III
Representations and Warranties; Remedies For Breach
Section 3.01. Sellers Representations and Warranties.
(a) CHL represents and warrants to the Purchaser as of the Closing
Date:
(1) CHL is a New York corporation, validly existing and in good
standing under the laws of the State of New York, and has the
corporate power to own its assets and to transact the business in
which it is currently engaged. CHL is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction
in which the character of the business transacted by it or any
properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse effect
on the business, properties, assets, or condition (financial or
other) of CHL;
(2) CHL has the power and authority to make, execute, deliver,
and perform this Agreement and all of the transactions contemplated
by this Agreement, and has taken all necessary corporate action to
authorize the execution, delivery, and performance of this Agreement.
When executed and delivered, this Agreement will constitute the valid
and legally binding obligation of CHL enforceable in accordance with
its terms;
(3) CHL is not required to obtain the consent of any other party
or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau,
or agency in connection with the execution, delivery, performance,
validity, or enforceability of this Agreement, except for any
consents, licenses, approvals or authorizations, or registrations or
declarations, that have been obtained or filed, as the case may be,
before the Closing Date;
(4) The execution, delivery, and performance of this Agreement by
the Seller will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the
Seller or any provision of the certificate of incorporation or bylaws
of CHL, or constitute a material breach of any mortgage,
7
indenture, contract, or other agreement to which CHL is a party or by
which CHL may be bound; and
(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of CHL threatened, against CHL or any of its properties or
with respect to this Agreement or the Notes that in the opinion of
CHL has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Agreement.
(6) The representations in Section 3.01(b) are true.
(b) Park Monaco represents and warrants to the Purchaser as of the
Closing Date:
(1) Park Monaco is a Delaware corporation, validly existing and
in good standing under the laws of the State of Delaware, and has the
corporate power to own its assets and to transact the business in
which it is currently engaged. Park Monaco is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it
or any properties owned or leased by it requires such qualification
and in which the failure so to qualify would have a material adverse
effect on the business, properties, assets, or condition (financial
or other) of Park Monaco.
(2) Park Monaco has the power and authority to make, execute,
deliver, and perform this Agreement and all of the transactions
contemplated by this Agreement, and has taken all necessary corporate
action to authorize the execution, delivery, and performance of this
Agreement. When executed and delivered, this Agreement will
constitute the valid and legally binding obligation of Park Monaco
enforceable in accordance with its terms;
(3) Park Monaco is not required to obtain the consent of any
other party or any consent, license, approval or authorization from,
or registration or declaration with, any governmental authority,
bureau, or agency in connection with the execution, delivery,
performance, validity, or enforceability of this Agreement, except
for any consents, licenses, approvals or authorizations, or
registrations or declarations, that have been obtained or filed, as
the case may be, before the Closing Date;
(4) The execution, delivery, and performance of this Agreement by
Park Monaco will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to Park
Monaco or any provision of the certificate of incorporation or bylaws
of Park Monaco, or constitute a material breach of any mortgage,
indenture, contract, or other agreement to which Park Monaco is a
party or by which Park Monaco may be bound; and
8
(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of Park Monaco threatened, against Park Monaco or any of
its properties or with respect to this Agreement or the Notes that in
the opinion of Park Monaco has a reasonable likelihood of resulting
in a material adverse effect on the transactions contemplated by this
Agreement.
(c) The representations and warranties in this Section 3.01 shall
survive the transfer of the Mortgage Loans to the Purchaser. CHL shall cure a
breach of any of the representations and warranties of CHL and Park Monaco in
accordance with the Sale and Servicing Agreement. The remedy specified in the
Sale and Servicing Agreement shall constitute the sole remedy against a Seller
with respect to any breach.
Section 3.02. Seller Representations and Warranties Relating to the
Mortgage Loans.
(a) CHL represents and warrants to the Purchaser as of the Cut-off
Date, unless specifically stated otherwise:
(1) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, this Agreement
constitutes a valid and legally binding obligation of CHL,
enforceable against CHL in accordance with its terms.
(2) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, either
(A) this Agreement constitutes a valid transfer to
the Purchaser of all right, title, and interest of each of
the Sellers in the applicable Mortgage Loans, and all
collections received in respect of the applicable Mortgage
Loans after the Cut-off Date or Subsequent Cut-off Date, as
applicable (excluding payments due by the Cut-off Date or
Subsequent Cut-off Date, as applicable), all proceeds of the
applicable Mortgage Loans, and all other property specified
in Section 2.01(a) or (b), and the Sale and Servicing
Agreement constitutes a valid transfer to the Trust of the
foregoing property and all other property specified in
Section 2.01(a) or (b) of the Sale and Servicing Agreement
such that, on execution of the Sale and Servicing Agreement,
it is owned by the Trust free of all liens and other
encumbrances, and is part of the corpus of the Trust
transferred to the Trust by the Purchaser, and upon payment
for the
9
Additional Balances, this Agreement and the Sale and
Servicing Agreement will constitute a valid transfer to the
Trust of all interest of each of the Sellers in the
Additional Balances, all proceeds of the Additional
Balances, and all other property specified in Section
2.01(a) of the Sale and Servicing Agreement relating to the
Additional Balances free of all liens and other
encumbrances, and the Indenture constitutes a valid Grant of
a Security Interest to the Indenture Trustee in that
property, and the Indenture Trustee has a first priority
perfected Security Interest in the property, subject to the
effect of Section 9-315 of the UCC with respect to
collections on the Mortgage Loans that are deposited in the
Collection Account in accordance with the next to last
paragraph of Section 3.02(b) of the Sale and Servicing
Agreement, or
(B) this Agreement or the Sale and Servicing
Agreement, as appropriate, constitutes a Grant of a Security
Interest to the Owner Trustee on behalf of the Trust and the
Indenture constitutes a Grant of a Security Interest to the
Indenture Trustee in the property described in clause (A)
above. If this Agreement and the Sale and Servicing
Agreement constitute the Grant of a Security Interest to the
Trust and the Indenture constitutes a Grant of a Security
Interest to the Indenture Trustee in such property, the
Indenture Trustee will have a first priority perfected
Security Interest in the property, subject to the effect of
Section 9-315 of the UCC with respect to collections on the
Mortgage Loans that are deposited in the Collection Account
in accordance with the next to last paragraph of Section
3.02(b) of the Sale and Servicing Agreement. This Security
Interest is enforceable as such against creditors of and
purchasers from the Trust, the Purchaser, and each of the
Sellers.
(3) CHL has not authorized the filing of and is not aware of any
financing statements against either Seller that include a description
of collateral covering the Collateral other than any financing
statement (A) relating to the Security Interests granted to the
Depositor, the Trust, or the Indenture Trustee under this Agreement,
pursuant to the Sale and Servicing Agreement, or pursuant to the
Indenture, (B) that has been terminated, or (C) that names the
Depositor, the Trust, or the Indenture Trustee as secured party.
(4) As of the Closing Date, the information in the Mortgage Loan
Schedule for the Initial Mortgage Loans is correct in all material
respects. As of the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, the information in the Mortgage
Loan Schedule for the relevant Additional Home Equity is correct in
all material respects. As of the applicable date of substitution for
an Eligible Substitute Mortgage Loan, the information with respect to
the Eligible Substitute
10
Mortgage Loan in the Mortgage Loan Schedule is correct in all
material respects. As of the date any Additional Balance is created,
the information as to the Mortgage Loan identification number and the
Additional Balance of that Mortgage Loan reported for inclusion in
the Mortgage Loan Schedule is correct in all material respects.
(5) The applicable Mortgage Loans have not been assigned or
pledged, and the related Seller is their sole owner and holder free
of any liens, claims, encumbrances, participation interests,
equities, pledges, charges, or Security Interests of any nature, and
has full authority, under all governmental and regulatory bodies
having jurisdiction over the ownership of the applicable Mortgage
Loans, to transfer them pursuant to this Agreement.
(6) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the related
Mortgage Note and the mortgage for each Mortgage Loan have not been
assigned or pledged, and immediately before the sale of the Mortgage
Loans to the Purchaser, the related Seller was the sole owner and
holder of the Mortgage Loan free of any liens, claims, encumbrances,
participation interests, equities, pledges, charges, or Security
Interests of any nature, and has full authority, under all
governmental and regulatory bodies having jurisdiction over the
ownership of the applicable Mortgage Loans, to transfer it pursuant
to this Agreement.
(7) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the related
mortgage is a valid and subsisting first lien on the property
described in it, as shown on the Mortgage Loan Schedule with respect
to each related Mortgage Loan, and as of the Cut-off Date, relevant
Subsequent Closing Date, or date of substitution, as applicable, the
related Mortgaged Property is free of all encumbrances and liens
having priority over the first lien of the mortgage except for liens
for
(A) real estate taxes and special assessments not
yet delinquent;
(B) covenants, conditions and restrictions, rights
of way, easements, and other matters of public record as of
the date of recording that are acceptable to mortgage
lending institutions generally; and
(C) 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 the
mortgage.
(8) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans,
11
or the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, no obligor has a valid offset, defense, or
counterclaim under any Credit Line Agreement or mortgage.
(9) To the best knowledge of CHL, as of the Closing Date with
respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the
applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, no related Mortgaged Property has any
delinquent recording or other tax or fee or assessment lien or
governmental charge against it, other than those that have been or
will be paid by the Seller.
(10) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, no proceeding
is pending or, to the best knowledge of CHL, threatened for the total
or partial condemnation of the related Mortgaged Property, and the
property is free of material damage and is in good repair.
(11) To the best knowledge of CHL, as of the Closing Date with
respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the
applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, no mechanics' or similar liens or claims
have been filed for work, labor, or material affecting the related
Mortgaged Property that are, or may be, liens prior or equal to the
lien of the related mortgage, except liens that are fully insured
against by the title insurance policy referred to in clause (16).
(12) No Minimum Monthly Payment on an Initial Mortgage Loan being
transferred on the Closing Date is more than 59 days delinquent
(measured on a contractual basis) and no Minimum Monthly Payment on
any other Mortgage Loan subsequently being transferred is more than
30 days delinquent (measured on a contractual basis) on the relevant
transfer date and no more than the applicable percentage specified in
the Adoption Annex of the Initial Mortgage Loans being transferred on
the Closing Date (by Cut-off Date Loan Balance) were 30-59 days
delinquent (measured on a contractual basis).
(13) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the Mortgage
File for each Mortgage Loan contains each of the documents specified
to be included in it.
(14) At origination, each Mortgage Loan and the related Mortgage
Note complied in all material respects with applicable local, state,
and federal laws, including
12
all applicable predatory and abusive lending laws, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, or disclosure laws applicable
to the Mortgage Loan, and the servicing practices used by the Master
Servicer with respect to each Mortgage Loan have been consistent with
the practices and the degree of skill and care the Master Servicer
exercises in servicing for itself loans that it owns that are
comparable to the Mortgage Loans.
(15) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, no Mortgage
Loan is a High Cost Loan or Covered Loan, as applicable, and no
Mortgage Loan originated on or after October 1, 2002 through March 6,
2003 is governed by the Georgia Fair Lending Act; and "High Cost
Loan" and "Covered Loan" have the meaning assigned to them in the
Standard & Poor's LEVELS(R) Glossary attached as Schedule II (the
"Glossary") where
(x) a "High Cost Loan" is each loan identified in
the column "Category under applicable anti-predatory lending
law" of the table entitled "Standard & Poor's High Cost Loan
Categorization" in the Glossary as each such loan is defined
in the applicable anti-predatory lending law of the state or
jurisdiction specified in such table and
(y) "Covered Loan" is each loan identified in the
column "Category under applicable anti-predatory lending
law" of the table entitled "Standard & Poor's Covered Loan
Categorization" in the Glossary as each such loan is defined
in the applicable anti-predatory lending law of the state or
jurisdiction specified in such table.
(16) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, either a
lender's title insurance policy or binder was issued or a guaranty of
title customary in the relevant jurisdiction was obtained, on the
date of origination of the Mortgage Loan being transferred on the
relevant date and each policy is valid and remains in full force.
(17) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, none of the
Mortgaged Properties is a mobile home or a manufactured housing unit
that is not considered or classified as part of the real estate under
the laws of the jurisdiction in which it is located.
13
(18) No more than the percentage specified in the Adoption Annex
of the Initial Mortgage Loans, by aggregate principal balance of the
related Mortgage Loans, are secured by Mortgaged Properties located
in one United States postal zip code.
(19) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the
Loan-to-Value Ratio for each Mortgage Loan was not in excess of the
percentage specified in the Adoption Annex.
(20) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, no selection
procedure reasonably believed by CHL to be adverse to the interests
of the Transferor, the Noteholders, or the Credit Enhancer was used
in selecting the Mortgage Loans.
(21) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, neither Seller
has transferred the Mortgage Loans to the Trust with any intent to
hinder, delay, or defraud any of its creditors.
(22) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the Minimum
Monthly Payment with respect to any Mortgage Loan is not less than
the interest accrued at the applicable Loan Rate on the average daily
Asset Balance during the interest period relating to the date on
which the Minimum Monthly Payment is due.
(23) The Mortgage Notes constitute either "instruments" or
"general intangibles" as defined in the UCC.
(24) By the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or within 30 days of the applicable
date of substitution with respect to any Eligible Substitute Mortgage
Loan, the Sponsor will file UCC1 financing statements in the proper
filing office in the appropriate jurisdiction to perfect the Security
Interest in the Collateral Granted under the Indenture.
(25) The Mortgage Notes that constitute or evidence the
Collateral do not have any marks or notations indicating that they
have been pledged, assigned, or otherwise transferred to any person
other than the Purchaser, the Trust, or the Indenture
14
Trustee. All financing statements filed or to be filed against each
Seller in favor of the Purchaser, the Trust, or the Indenture Trustee
in connection with this Agreement, the Sale and Servicing Agreement,
or the Indenture describing the Collateral contain a statement to the
following effect: "A purchase of the Mortgage Loans included in the
collateral covered by this financing statement will violate the
rights of the Purchaser, the Trust, or the Indenture Trustee."
(26) As of the Closing Date, CHL and Park Monaco will have
received a written acknowledgement from the Custodian that is acting
solely as agent of the Indenture Trustee.
(27) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, each Credit
Line Agreement and each Mortgage Loan is an enforceable obligation of
the related mortgagor.
(28) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, neither Seller
has received a notice of default of any senior mortgage loan related
to a Mortgaged Property that has not been cured by a party other than
the Master Servicer.
(29) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the definition
of "prime rate" in each Credit Line Agreement relating to a Mortgage
Loan does not differ materially from "the highest `prime rate' as
published in the `Money Rates' table of The Wall Street Journal as of
the first business day of the calendar month for the applicable
interest rate adjustment date."
(30) The weighted average remaining term to maturity of the
Initial Mortgage Loans on a contractual basis as of the Cut-off Date
is approximately the number of months specified in the Adoption
Annex. On each date that the Loan Rates have been adjusted, interest
rate adjustments on the Initial Mortgage Loans were made in
compliance with the related mortgage and Mortgage Note and applicable
law. Over the term of each Mortgage Loan, the Loan Rate may not
exceed the related Loan Rate Cap. The Loan Rate Cap for the Initial
Mortgage Loans ranges between the percentages specified in the
Adoption Annex and the weighted average Loan Rate Cap is
approximately the percentage specified in the Adoption Annex. The
Gross Margins for the Initial Mortgage Loans range between the
percentages specified in the Adoption
15
Annex and the weighted average Gross Margin is approximately the
percentage specified in the Adoption Annex as of the Cut-off Date for
the Initial Mortgage Loans. The Loan Rates on the Initial Mortgage
Loans range between the percentages specified in the Adoption Annex
and the weighted average Loan Rate on the Initial Mortgage Loans is
approximately the percentage specified in the Adoption Annex.
(31) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, each Mortgaged
Property consists of a single parcel of real property with a
one-to-four unit single family residence erected on it, or an
individual condominium unit, planned unit development unit, or
townhouse.
(32) No more than the percentage specified in the Adoption Annex
(by Cut-off Date Loan Balance) of the Initial Mortgage Loans are
secured by real property improved by individual condominium units,
units in planned unit developments, townhouses, or two-to-four family
residences erected on them, and at least the percentage specified in
the Adoption Annex (by Cut-off Date Loan Balance) of the Mortgage
Loans are secured by real property with a detached one-family
residence erected on them.
(33) The Credit Limits on the Initial Mortgage Loans range
between approximately the dollar amounts specified in the Adoption
Annex with an average of approximately the dollar amount specified in
the Adoption Annex. As of the Cut-off Date for the Initial Mortgage
Loans, no Mortgage Loan had a principal balance in excess of
approximately the dollar amount specified in the Adoption Annex and
the average principal balance of the Initial Mortgage Loans is equal
to approximately the dollar amounts specified in the Adoption Annex.
(34) Approximately the percentages specified in the Adoption
Annex of the Initial Mortgage Loans, by aggregate principal balance
as of the Cut-off Date, are secured by first and second liens.
(35) As of the Closing Date, no more than the percentage
specified in the Adoption Annex of the Initial Mortgage Loans, by
aggregate principal balance, were appraised electronically.
(36) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, no default
exists under any applicable Mortgage
16
Note or applicable Mortgage Loan and no event that, with the passage
of time or with notice and the expiration of any grace or cure
period, would constitute a default under any applicable Mortgage Note
or applicable Mortgage Loan has occurred and been waived. As of the
Closing Date with respect to the Initial Mortgage Loans, the relevant
Subsequent Closing Date with respect to any Additional Home Equity
Loans, or the applicable date of substitution with respect to any
Eligible Substitute Mortgage Loan, no modifications to the applicable
Mortgage Notes and applicable Mortgage Loans have been made and not
disclosed.
(37) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, each Mortgage
Loan was originated in accordance with the Sponsor's underwriting
guidelines and the Sponsor had no knowledge of any fact that would
have caused a reasonable originator of mortgage loans to conclude on
the date of origination of each Mortgage Loan that each such Mortgage
Loan would not be paid in full when due.
(38) To the best knowledge of CHL at the time of origination of
each Mortgage Loan, no improvement located on or being part of the
Mortgaged Property was in violation of any applicable zoning and
subdivision laws or ordinances.
(39) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, 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.
(40) Based on the drawn balances of the Initial Mortgage Loans,
the Initial Mortgage Loans had the characteristics set out in the
Adoption Annex in respect of the following: weighted average Combined
Loan-to-Value Ratio; range of Combined Loan-to-Value Ratios;
percentage of primary residences; weighted average FICO score; range
of FICO scores; Weighted Average Net Loan Rate; range of net Loan
Rates; weighted average original stated term to maturity; range of
original term to maturity; range of remaining term to maturity;
average drawn balance; weighted average utilization ratio; and
percentage of the Initial Mortgage Loans that have their respective
Mortgaged Properties located in the top five states, measured by
aggregate drawn balances.
(41) Any Initial Mortgage Loan that has been modified in any
manner has been so modified in accordance with the policies and
procedures of the Master Servicer and in a manner that was permitted
by the Sale and Servicing Agreement, the Indenture, and any other
Transaction Document.
(42) Each Initial Mortgage Loan was originated (within the
meaning of Section 3(a)(41) of the Securities Exchange Act of 1934)
by an entity that satisfied at
17
the time of origination the requirements of Section 3(a)(41) of the
Securities Exchange Act of 1934.
(43) At the time each Initial Mortgage Loan was originated, each
Seller was, and each Seller is an approved seller of conventional
mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ 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.
(44) 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 principal balance of
the related Mortgage Loan as of the Cut-off Date or the relevant
Subsequent Cut-off Date, as applicable, 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 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 ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and is in a form
acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, which policy insures the
Sponsor and successor owners of indebtedness secured by the insured
Mortgage, as to the first priority lien, of the Mortgage subject to
the exceptions in paragraph (7) above.
(45) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the
improvements on each Mortgaged Property are covered by a valid and
existing hazard insurance policy with a generally acceptable carrier
that provides for fire and extended coverage and coverage for such
other hazards as are customary in the area where the Mortgaged
Property is located in an amount that is at least equal to the lesser
of (i) the maximum insurable value of the improvements securing the
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 the policy will be sufficient to prevent the Mortgagor 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 (46)
below contain a standard mortgagee clause naming the Sponsor or the
original mortgagee, and its successors in interest, as mortgagee, and
the Sponsor has received no notice that any premiums due and payable
thereon have not been paid, and the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance, including flood insurance,
at the Mortgagor's expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
18
insurance at the Mortgagor's expense and to seek reimbursement
therefor from the Mortgagor.
(46) 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 the Mortgaged Property
with a generally acceptable carrier in an amount representing
coverage not less than the least of (A) the outstanding principal
balance of the Mortgage Loan and any mortgage loan senior to that
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 National Flood Insurance Act
of 1968.
(47) Each Mortgage Note and the related Mortgage are genuine, and
each is the valid and legally binding obligation of its maker,
enforceable in accordance with its terms and under applicable law,
except that (a) its enforceability 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.
(48) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(49) To the best of CHL's knowledge, all of the improvements that
were included for the purpose of determining the appraised value of
the Mortgaged Property lie wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach on the Mortgaged Property.
(50) 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 certificates of occupancy
and fire underwriting certificates, have been made or obtained from
the appropriate authorities, unless their lack would not have a
material adverse effect on the value of the Mortgaged Property, and
the Mortgaged Property is lawfully occupied under applicable law.
19
(51) Each Mortgage contains customary and enforceable provisions
that render the rights and remedies of its holder adequate for the
realization against the Mortgaged Property of the benefits of the
security intended to be provided by it, including, (i) in the case of
a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure.
(52) Before the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the Sponsor, who had no
interest, direct or indirect, in the Mortgaged Property or in any
loan secured by the Mortgaged Property, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan.
(53) 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 Period of the first
installment of principal and interest and taxes and insurance
payments, the Sponsor 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.
(54) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, no foreclosure
proceedings are pending against any Mortgaged Property and no
Mortgage Loan is subject to any pending bankruptcy or insolvency
proceeding.
(55) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, there is no
homestead exemption available and enforceable that materially
interferes with the right to sell any Mortgaged Property at a
trustee's sale or the right to foreclose the related Mortgage.
(56) No borrower was required to purchase any single premium
credit insurance policy (e.g., life, disability, accident,
unemployment, or health insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. No
borrower obtained a prepaid single-premium credit insurance policy
(e.g., life, disability, accident, unemployment, mortgage, or health
insurance) in connection with the origination of the Mortgage Loan.
No proceeds from any Mortgage Loan were used to purchase debt
cancellation agreements as part of the origination of, or as a
condition to closing, the Mortgage Loan.
20
(57) The Initial Mortgage Loans, individually and in the
aggregate, conform in all material respects to their descriptions in
the Prospectus Supplement.
(58) 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).
(b) If the substance of any representation or warranty under the Sale
and Servicing Agreement or in this Section made to the best of CHL's knowledge
or as to which a Seller has no knowledge is inaccurate and the inaccuracy
materially and adversely affects the interest of the Purchaser or its assignee
in the related Mortgage Loan, then, notwithstanding that the Seller did not
know the substance of the representation and warranty was inaccurate at the
time the representation or warranty was made, the inaccuracy shall be a breach
of the applicable representation or warranty and CHL shall cure the breach,
repurchase the Mortgage Loan, or substitute for the Mortgage Loan in
accordance with the Sale and Servicing Agreement.
(c) The representations and warranties in this Section shall survive
the transfer and assignment of the Mortgage Loans to the Purchaser. The sole
remedy of the Purchaser, the Noteholders, the Indenture Trustee on behalf of
Noteholders, and the Credit Enhancer against a Seller for the breach of a
representation or warranty is CHL's obligation to accept a transfer of a
Mortgage Loan as to which a breach has occurred and is continuing and to make
any required deposit in the Collection Account or to substitute an Eligible
Substitute Mortgage Loan.
(d) The Purchaser acknowledges that CHL, as Master Servicer, in its
sole discretion, may purchase for its own account from the Trust any Mortgage
Loan that is 151 days or more delinquent. The price for any Mortgage Loan
purchased shall be calculated in the same manner as in Section 3.06 of the
Sale and Servicing Agreement and shall be deposited in the Collection Account.
When it receives a certificate from the Master Servicer in the form of Exhibit
D to the Sale and Servicing Agreement, the Trust shall release to the
purchaser of the Mortgage Loan the related Mortgage File and shall execute and
deliver any instruments of transfer prepared by the purchaser of the Mortgage
Loan, without recourse, necessary to vest in the purchaser of the Mortgage
Loan any Mortgage Loan released pursuant to this Agreement, and the purchaser
of the Mortgage Loan shall succeed to all the Trust's interest in the Mortgage
Loan and all security and documents. This assignment shall be an assignment
outright and not for security. The purchaser of the Mortgage Loan shall then
own the Mortgage Loan, and all security and documents, free of any further
obligation to the Trust, the Owner Trustee, the Indenture Trustee, the
Transferor, the Credit Enhancer, or the Noteholders with respect to it.
21
ARTICLE IV
Sellers' Covenants
Section 4.01. Covenants of the Sellers.
Except for the transfer under this Agreement, none of the Sellers
will transfer to any other person, or create or suffer to exist any Lien on
any Mortgage Loan, or any interest in one; each Seller will notify the
Indenture Trustee of the existence of any Lien on any Mortgage Loan
immediately on its discovery; and CHL will defend the right, title, and
interest of the Trust and the Indenture Trustee in the Mortgage Loans against
all claims of third parties claiming through a Seller. Nothing in this Section
shall prohibit a Seller from suffering to exist on any of the Mortgage Loans
any Liens for municipal or other local taxes and other governmental charges if
they are not due at the time or if the applicable Seller is contesting their
validity in good faith by appropriate proceedings and set aside on its books
adequate reserves with respect to them.
ARTICLE V
Servicing
Section 5.01. Servicing.
CHL will be the Master Servicer of the Mortgage Loans pursuant to the
Sale and Servicing Agreement.
ARTICLE VI
Termination
Section 6.01. Termination.
The respective obligations of each of the Sellers and the Purchaser
created by this Agreement shall terminate when the Indenture terminates in
accordance with its terms.
ARTICLE VII
Miscellaneous Provisions
Section 7.01. Amendment.
This Agreement may be amended from time to time by CHL, Park Monaco,
and the Purchaser, with the written consent of the Credit Enhancer, by written
agreement signed by CHL, Park Monaco, and the Purchaser.
22
Section 7.02. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without reference to its provisions that
would result in the application of the laws of another State.
Section 7.03. Notices.
All notices, demands, instructions, consents, and other
communications required or permitted under this Agreement shall be in writing
and signed by the party giving the same and shall be personally delivered or
sent by first class or express mail (postage prepaid), national overnight
courier service, or by facsimile transmission or other electronic
communication device capable of transmitting or creating a written record
(confirmed by first class mail) and shall be considered to be given for
purposes of this Agreement on the day that the writing is delivered when
personally delivered or sent by facsimile or overnight courier or three
Business Days after it was sent to its intended recipient if sent by first
class mail. A facsimile has been delivered when the sending machine issues an
electronic confirmation of transmission. Unless otherwise specified in a
notice sent or delivered in accordance with the provisions of this Section,
notices, demands, instructions, consents, and other communications in writing
shall be given to or made on the respective parties at their respective
addresses indicated below:
(i) if to CHL at:
Countrywide Home Loans, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ref: CWHEQ 2005-L
(ii) if to Park Monaco
Park Monaco Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ref: CWHEQ 2005-L
and
(iii) if to the Purchaser at:
CWHEQ, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ref: CWHEQ 2005-L
Section 7.04. Severability of Provisions.
Any provisions of this Agreement that are held invalid for any reason
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of the invalidity or
23
unenforceability without invalidating the remaining provisions of this
Agreement, and the prohibition or unenforceability in a jurisdiction shall not
invalidate or render unenforceable that provision in any other jurisdiction.
Section 7.05. Counterparts; Electronic Delivery.
This Agreement may be executed in any number of copies, and by the
different parties on the same or separate counterparts, each of which shall be
considered to be an original instrument. Any signature page to this Agreement
containing a manual signature may be delivered by facsimile transmission or
other electronic communication device capable of transmitting or creating a
printable written record, and when so delivered shall have the effect of
delivery of an original manually signed signature page.
Section 7.06. Further Agreements.
The Purchaser and each Seller agree to execute and deliver to the
other any additional documents appropriate to effectuate the purposes of this
Agreement or in connection with the issuance of the Notes.
Section 7.07. Successors and Assigns: Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by each Seller, the Purchaser, the Trust, the Indenture Trustee,
and the Credit Enhancer. The obligations of each Seller under this Agreement
cannot be assigned or delegated to a third party without the consent of the
Purchaser and the Credit Enhancer, except that either Seller may assign its
obligations under this Agreement to any person into which that Seller is
merged or any corporation resulting from any merger, conversion, or
consolidation to which that Seller is a party or any person succeeding to the
business of that Seller. The Purchaser is acquiring the Mortgage Loans to
further transfer them to the Trust, and the Trust will Grant a Security
Interest in them to the Indenture Trustee under the Indenture pursuant to
which the Trust will issue a series of Notes secured by the Mortgage Loans. As
an inducement to the Purchaser to purchase the Mortgage Loans, each Seller
consents to the assignment by the Purchaser to the Trust, and by the Trust to
the Indenture Trustee of all of the Purchaser's rights against it under this
Agreement insofar as they relate to the Mortgage Loans transferred to the
Trust applicable to that Seller and to the enforcement or exercise of any
right against that Seller pursuant to this Agreement by the Indenture Trustee
under the Sale and Servicing Agreement and the Indenture. Enforcement of a
right by the Indenture Trustee shall have the same effect as if the right had
been exercised by the Purchaser directly.
Section 7.08. Survival.
The representations and warranties in Article III shall survive the
purchase of the Mortgage Loans.
24
In Witness Whereof, the Sellers and the Purchaser have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
CWHEQ, Inc.
as Purchaser
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
Countrywide Home Loans, Inc.
as a Seller
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
Park Monaco Inc.
as a Seller
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
25
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 29th day of December, 2005 before me, a Notary Public in and
for said State, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., known to me to be a
Vice President of CWHEQ, Inc., the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Notary Public
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Commission # 1609859
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
26
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 29th day of December, 2005 before me, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. of
Countrywide Home Loans, Inc., personally appeared, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity on behalf of which the person acted,
executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Notary Public
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Commission # 1609859
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
27
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 29th day of December, 2005 before me, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. of
PARK MONACO INC., personally appeared, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed
the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity on behalf of which the person acted,
executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Notary Public
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Commission # 1609859
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
28
Schedule I
Schedule of
Mortgage Loans
[Delivered to the Indenture Trustee only]
Sch-I-1
Schedule II
Standard & Poor's Glossary
Standard & Poor's Predatory Lending Categorization
Standard & Poor's has categorized loans governed by anti-predatory lending
laws in the jurisdictions listed below into three categories based on a
combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan category because they included
thresholds and tests that are typical of what is generally considered High
Cost by the industry.
------------------------------------------------------------------------------------------------------------------------
Standard & Poor's High-Cost Loan Categorization
------------------------------------------------------------------------------------------------------------------------
State/jurisdiction Category under applicable anti-predatory lending law
------------------------------------------------------------------------------------------------------------------------
Arkansas High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
Cleveland Heights, Ohio Covered Loan
------------------------------------------------------------------------------------------------------------------------
Colorado Covered Loan
------------------------------------------------------------------------------------------------------------------------
Connecticut High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
District of Columbia Covered Loan
------------------------------------------------------------------------------------------------------------------------
Florida High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 6, 2003) High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
Georgia as amended (March 7, 2003 - current) High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
HOEPA Section 32 High Cost Loan
------------------------------------------------------------------------------------------------------------------------
Illinois High Risk Home Loan
------------------------------------------------------------------------------------------------------------------------
Kansas High Loan-to-Value Consumer Loans and High APR Consumer Loans
------------------------------------------------------------------------------------------------------------------------
Kentucky High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
Los Angeles, Calif. High Cost Refinance Home Loan
------------------------------------------------------------------------------------------------------------------------
Maine High Rate High Fee mortgage
------------------------------------------------------------------------------------------------------------------------
Massachusetts High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
Nevada Home Loan
------------------------------------------------------------------------------------------------------------------------
New Jersey High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
New York High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
New Mexico High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
North Carolina High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
Oakland, Calif. High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
Ohio Covered Loan
------------------------------------------------------------------------------------------------------------------------
Oklahoma Subsection 10 Mortgage
------------------------------------------------------------------------------------------------------------------------
South Carolina High Cost Home Loan
------------------------------------------------------------------------------------------------------------------------
West Virginia West Virginia Mortgage Loan Act Loan
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Standard & Poor's Covered Loan Categorization
------------------------------------------------------------------------------------------------------------------------
State/jurisdiction Category under applicable anti-predatory lending law
------------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 6, 2003) Covered Loan
------------------------------------------------------------------------------------------------------------------------
New Jersey Covered Home Loan
------------------------------------------------------------------------------------------------------------------------
Sch-II-1
------------------------------------------------------------------------------------------------------------------------
Standard & Poor's Home Loan Categorization
------------------------------------------------------------------------------------------------------------------------
State/jurisdiction Category under applicable anti-predatory lending law
------------------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002- March 6, 2003) Home Loan
------------------------------------------------------------------------------------------------------------------------
New Jersey Home Loan
------------------------------------------------------------------------------------------------------------------------
New Mexico Home Loan
------------------------------------------------------------------------------------------------------------------------
North Carolina Consumer Home Loan
------------------------------------------------------------------------------------------------------------------------
Oakland, Calif. Home Loan
------------------------------------------------------------------------------------------------------------------------
South Carolina Consumer Home Loan
------------------------------------------------------------------------------------------------------------------------
Sch-II-2
Annex 1
Adoption Annex
The purchase price for the Mortgage Loans pursuant to Section 2.03 is
the transfer to each of the Sellers on the Closing Date of the Transferor
Certificates and the proceeds from the sale of the Notes, each by its
respective portion.
The items referred to in the representations and warranties in
Section 3.02 are:
(12) 0.00% of the Mortgage Loans being transferred on the relevant
date (by Cut-off Date Loan Balance) were 30-59 days delinquent (measured on a
contractual basis).
(18) As of the Cut-off Date no more than 3.00% of the Mortgage Loans,
by aggregate principal balance, are secured by Mortgaged Properties located in
one United States postal zip code.
(19) The Combined Loan-to-Value Ratio for each Mortgage Loan was not
in excess of 100.00%.
(30) The weighted average remaining term to maturity of the Mortgage
Loans on a contractual basis as of the Cut-off Date is approximately 296. The
Loan Rate Caps for the Mortgage Loans range between 11.000% and 18.000%, and
the weighted average Loan Rate Cap is approximately 12.032%. The Gross Margins
for the Mortgage Loans range between -0.999% and 6.000%, and the weighted
average Gross Margin is approximately 0.702% as of the Cut-off Date. The Loan
Rates on the Mortgage Loans range between 3.990% and 11.950%, and the weighted
average Loan Rate on the Mortgage Loans is approximately 7.689%.
(32) No more than 30.41% (by Cut-off Date Loan Balance) of the
Mortgage Loans are secured by real property improved by individual condominium
units, units in planned unit developments, townhouses, or two-to-four family
residences erected on them, and at least 69.59% (by Cut-off Date Loan Balance)
of the Mortgage Loans are secured by real property with a detached one-family
residence erected on them.
(33) The Credit Limits on the Mortgage Loans range between
approximately $14,400 and $2,000,000 with an average of approximately
$166,305. As of the Cut-off Date, no Mortgage Loan had a principal balance in
excess of approximately $2,000,000 and the average principal balance of the
Mortgage Loans is equal to approximately $133,732.
(34) Approximately 100.00% of the Mortgage Loans, by aggregate
principal balance as of the Cut-off Date for the Mortgage Loans, are secured
by first liens.
(35) As of the Closing Date, no more than 0.56% of the Mortgage
Loans, by aggregate principal balance, were appraised electronically.
▇▇▇-1-1
(40) As of the Cut-off Date (based on the drawn balances), the
Mortgage Loans had a weighted average Loan-to-Value Ratio of 74.61%; a range
of Loan-to-Value Ratios between 3.92% and 100.00%; a percentage of primary
residences of 59.46%; a weighted average FICO score of 717; a range of FICO
scores between 598 and 817; a Weighted Average Net Loan Rate of 7.189%; a
range of net Loan Rates between 3.490% and 11.450%; a weighted average
original stated term to maturity of 300 months; a range of original term to
maturity between 180 and 300 months; a range of remaining term to maturity
between 115 and 300 months; an average drawn balance of $133,732; an average
utilization ratio of 85.21%; and 45.70% of the Mortgage Loans have their
respective Mortgaged Properties located in the top five states, measured by
aggregate drawn balances.
▇▇▇-1-2
