EXHIBIT 4.1
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Co-Trustee
-------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2007
-------------------------------
ASSET-BACKED CERTIFICATES, SERIES 2007-1
Table of Contents
Page
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms..................................................................................10
Section 1.02 Certain Interpretive Provisions................................................................55
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans...................................................................56
Section 2.02 Acceptance by Trustee of the Mortgage Loans....................................................63
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the Sellers...............69
Section 2.04 Representations and Warranties of the Depositor................................................89
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases................91
Section 2.06 Authentication and Delivery of Certificates....................................................91
Section 2.07 Covenants of the Master Servicer...............................................................92
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans......................................................92
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer................................94
Section 3.03 Rights of the Depositor, the Sellers, the Certificateholders,
the NIM Insurer and the Trustee in Respect of the Master Servicer..............................95
Section 3.04 Trustee to Act as Master Servicer..............................................................96
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution
Account; Pre-Funding Account; Capitalized Interest Account.....................................96
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow Accounts...........................100
Section 3.07 Access to Certain Documentation and Information Regarding the Mortgage Loans..................100
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution Account,
Carryover Reserve Fund and the Principal Reserve Fund.........................................101
Section 3.09 [Reserved]....................................................................................104
Section 3.10 Maintenance of Hazard Insurance...............................................................104
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................105
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds
and Realized Losses; Repurchase of Certain Mortgage Loans.....................................106
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files............................................110
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be Held for the Trustee......111
Section 3.15 Servicing Compensation........................................................................111
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Section 3.16 Access to Certain Documentation...............................................................112
Section 3.17 Annual Statement as to Compliance.............................................................112
Section 3.18 [Reserved]....................................................................................113
Section 3.19 [Reserved]....................................................................................113
Section 3.20 Prepayment Charges............................................................................113
Section 3.21 Swap Contract.................................................................................114
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports..................................................................116
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls.........117
Section 4.03 [Reserved]....................................................................................118
Section 4.04 Distributions.................................................................................118
Section 4.05 Monthly Statements to Certificateholders......................................................125
Section 4.06 Termination of a Mortgage Insurance Policy....................................................126
Section 4.07 Carryover Reserve Fund........................................................................127
Section 4.08 Credit Comeback Excess Account................................................................127
Section 4.09 Swap Trust and Swap Account...................................................................128
Section 4.10 Final Maturity Reserve Trust and Final Maturity Reserve Fund..................................129
ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates..............................................................................131
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates...................132
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.............................................137
Section 5.04 Persons Deemed Owners.........................................................................137
Section 5.05 Access to List of Certificateholders' Names and Addresses.....................................137
Section 5.06 Book-Entry Certificates.......................................................................138
Section 5.07 Notices to Depository.........................................................................139
Section 5.08 Definitive Certificates.......................................................................139
Section 5.09 Maintenance of Office or Agency...............................................................139
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Sellers..................140
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the Sellers..................140
Section 6.03 Limitation on Liability of the Depositor, the Sellers, the Master Servicer,
the NIM Insurer and Others....................................................................141
Section 6.04 Limitation on Resignation of Master Servicer..................................................141
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds................................................142
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default.............................................................................142
Section 7.02 Trustee to Act; Appointment of Successor......................................................144
Section 7.03 Notification to Certificateholders............................................................146
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of Trustee.............................................................................146
Section 8.02 Certain Matters Affecting the Trustee.........................................................148
Section 8.03 Trustee Not Liable for Mortgage Loans.........................................................149
Section 8.04 Trustee May Own Certificates..................................................................150
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses............................................150
Section 8.06 Eligibility Requirements for Trustee..........................................................150
Section 8.07 Resignation and Removal of Trustee............................................................151
Section 8.08 Successor Trustee.............................................................................152
Section 8.09 Merger or Consolidation of Trustee............................................................152
Section 8.10 Appointment of Co-Trustee or Separate Trustee.................................................153
Section 8.11 Tax Matters...................................................................................154
Section 8.12 Co-Trustee....................................................................................157
Section 8.13 Access to Records of the Trustee..............................................................160
Section 8.14 Suits for Enforcement.........................................................................160
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans..............................161
Section 9.02 Final Distribution on the Certificates........................................................162
Section 9.03 Additional Termination Requirements...........................................................163
Section 9.04 Auction of the Mortgage Loans and REO Properties..............................................164
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.....................................................................................168
Section 10.02 Recordation of Agreement; Counterparts........................................................170
Section 10.03 Governing Law.................................................................................170
Section 10.04 Intention of Parties..........................................................................170
Section 10.05 Notices.......................................................................................172
Section 10.06 Severability of Provisions....................................................................173
Section 10.07 Assignment....................................................................................173
Section 10.08 Limitation on Rights of Certificateholders....................................................173
Section 10.09 Inspection and Audit Rights...................................................................174
Section 10.10 Certificates Nonassessable and Fully Paid.....................................................174
Section 10.11 Rights of NIM Insurer.........................................................................174
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ARTICLE XI.
EXCHANGE ACT REPORTING
Section 11.01 Filing Obligations............................................................................176
Section 11.02 Form 10-D Filings.............................................................................176
Section 11.03 Form 8-K Filings..............................................................................177
Section 11.04 Form 10-K Filings.............................................................................177
Section 11.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification..................................................................178
Section 11.06 Form 15 Filing................................................................................178
Section 11.07 Report on Assessment of Compliance and Attestation............................................179
Section 11.08 Use of Subservicers and Subcontractors........................................................180
Section 11.09 Amendments....................................................................................181
Section 11.10 Reconciliation of Accounts....................................................................181
Exhibits
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EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class 1-A Certificate
EXHIBIT A-2 Form of Class 2-A-1 Certificate
EXHIBIT A-3 Form of Class 2-A-2 Certificate
EXHIBIT A-4 Form of Class 2-A-3 Certificate
EXHIBIT A-5 Form of Class 2-A-4 Certificate
EXHIBIT A-6 Form of Class M-1 Certificate
EXHIBIT A-7 Form of Class M-2 Certificate
EXHIBIT A-8 Form of Class M-3 Certificate
EXHIBIT A-9 Form of Class M-4 Certificate
EXHIBIT A-10 Form of Class M-5 Certificate
EXHIBIT A-11 Form of Class M-6 Certificate
EXHIBIT A-12 Form of Class M-7 Certificate
EXHIBIT A-13 Form of Class M-8 Certificate
EXHIBIT A-14 Form of Class M-9 Certificate
EXHIBIT A-15 Form of Class B Certificate
EXHIBIT B Form of Class P Certificate
EXHIBIT C Form of Class C Certificate
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedule
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a
Portion of a Related Mortgage File is
not Delivered to the Trustee on or
prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee (Initial
Mortgage Loans)
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 Form of Initial Certification of Trustee (Subsequent
Mortgage Loans)
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EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1 Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Form of Request for Document Release
EXHIBIT N Form of Request for File Release
EXHIBIT O Copy of Depository Agreement
EXHIBIT P Form of Subsequent Transfer Agreement
EXHIBIT Q [Reserved]
EXHIBIT R [Reserved]
EXHIBIT S-1 [Reserved]
EXHIBIT S-2 [Reserved]
EXHIBIT T Officer's Certificate with respect to Prepayments
EXHIBIT U Form of Swap Contract
EXHIBIT V-1 Form of Swap Contract Assignment Agreement
EXHIBIT V-2 Form of Swap Contract Administration Agreement
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 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification (Replacement Master
Servicer)
SCHEDULE I Prepayment Charge Schedule and Prepayment Charge Summary
SCHEDULE II Collateral Schedule
SCHEDULE III 40-Year Target Schedule
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POOLING AND SERVICING AGREEMENT, dated as of January 1, 2007, by and
among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller ("CHL" or a
"Seller"), PARK MONACO INC., a Delaware corporation, as a seller ("Park Monaco"
or a "Seller"), PARK SIENNA LLC, a Delaware limited liability company, as a
seller ("Park Sienna" or a "Seller", and together with CHL and Park Monaco, the
"Sellers"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership, as
master servicer (the "Master Servicer"), THE BANK OF NEW YORK, a New York
banking corporation, as trustee (the "Trustee"), and THE BANK OF NEW YORK TRUST
COMPANY, N.A., a national banking association, as co-trustee (the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund (excluding the Credit
Comeback Excess Account, the Carryover Reserve Fund and the assets held in the
Pre-Funding Account and the Capitalized Interest Account) for federal income tax
purposes will consist of three REMICs (the "Swap-IO REMIC," the "Strip REMIC"
and the "Master REMIC"). Each Certificate, other than the Class A-R Certificate,
will represent ownership of one or more regular interests in the Master REMIC
for purposes of the REMIC Provisions. The Class A-R Certificate represents
ownership of the sole class of residual interest in the Swap-IO REMIC, the Strip
REMIC and the Master REMIC. The Master REMIC will hold as assets the several
classes of uncertificated Strip REMIC Interests (other than the STR-A-R
Interest). Each Strip REMIC Interest (other than the STR-A-R Interest) is hereby
designated as a regular interest in the Strip REMIC. The Strip REMIC will hold
as assets the several classes of uncertificated Swap-IO REMIC Interests (other
than the SWR-A-R Interest). Each Swap-IO REMIC Interest (other than the SWR-A-R
Interest) is hereby designated as a regular interest in the Swap-IO REMIC. The
Swap-IO REMIC will hold as assets all property of the Trust Fund (excluding the
Credit Comeback Excess Account, the Carryover Reserve Fund and the assets held
in the Pre-Funding Account and the Capitalized Interest Account). The latest
possible maturity date of all REMIC regular interests created in this Agreement
shall be the Latest Possible Maturity Date.
None of the REMICs described herein shall hold any interest in the Swap
Trust, Swap Contract, Swap Account or Final Maturity Reserve Trust.
SWAP-IO REMIC:
The Swap-IO REMIC Interests will have the principal balances and
pass-through rates as set forth below.
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-1A $ 5,819,766.50 (2)
SWR-1B 5,819,766.50 (3)
SWR-2A 6,930,175.50 (2)
SWR-2B 6,930,175.50 (3)
SWR-3A 8,074,492.00 (2)
SWR-3B 8,074,492.00 (3)
1
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-4A 8,107,763.50 (2)
SWR-4B 8,107,763.50 (3)
SWR-5A 8,842,307.00 (2)
SWR-5B 8,842,307.00 (3)
SWR-6A 9,983,827.50 (2)
SWR-6B 9,983,827.50 (3)
SWR-7A 10,905,208.00 (2)
SWR-7B 10,905,208.00 (3)
SWR-8A 11,962,837.00 (2)
SWR-8B 11,962,837.00 (3)
SWR-9A 12,993,534.50 (2)
SWR-9B 12,993,534.50 (3)
SWR-10A 13,993,138.50 (2)
SWR-10B 13,993,138.50 (3)
SWR-11A 14,820,175.50 (2)
SWR-11B 14,820,175.50 (3)
SWR-12A 107,623,141.50 (2)
SWR-12B 107,623,141.50 (3)
SWR-13A 15,193,695.50 (2)
SWR-13B 15,193,695.50 (3)
SWR-14A 15,230,024.50 (2)
SWR-14B 15,230,024.50 (3)
SWR-15A 15,036,485.50 (2)
SWR-15B 15,036,485.50 (3)
SWR-16A 15,405,620.50 (2)
SWR-16B 15,405,620.50 (3)
SWR-17A 15,746,522.00 (2)
SWR-17B 15,746,522.00 (3)
SWR-18A 24,694,745.00 (2)
SWR-18B 24,694,745.00 (3)
SWR-19A 15,825,910.00 (2)
SWR-19B 15,825,910.00 (3)
SWR-20A 15,509,748.50 (2)
SWR-20B 15,509,748.50 (3)
SWR-21A 15,199,322.00 (2)
SWR-21B 15,199,322.00 (3)
SWR-22A 14,273,665.50 (2)
SWR-22B 14,273,665.50 (3)
SWR-23A 13,674,998.00 (2)
SWR-23B 13,674,998.00 (3)
SWR-24A 116,812,970.00 (2)
SWR-24B 116,812,970.00 (3)
SWR-25A 11,321,896.50 (2)
SWR-25B 11,321,896.50 (3)
SWR-26A 11,048,619.50 (2)
2
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-26B 11,048,619.50 (3)
SWR-27A 10,783,900.00 (2)
SWR-27B 10,783,900.00 (3)
SWR-28A 9,686,636.00 (2)
SWR-28B 9,686,636.00 (3)
SWR-29A 9,435,285.00 (2)
SWR-29B 9,435,285.00 (3)
SWR-30A 24,806,186.00 (2)
SWR-30B 24,806,186.00 (3)
SWR-31A 9,585,931.00 (2)
SWR-31B 9,585,931.00 (3)
SWR-32A 9,360,067.00 (2)
SWR-32B 9,360,067.00 (3)
SWR-33A 9,144,838.50 (2)
SWR-33B 9,144,838.50 (3)
SWR-34A 8,930,989.00 (2)
SWR-34B 8,930,989.00 (3)
SWR-35A 8,725,933.50 (2)
SWR-35B 8,725,933.50 (3)
SWR-36A 191,142,663.50 (2)
SWR-36B 191,142,663.50 (3)
SWR-37A 2,053,645.50 (2)
SWR-37B 2,053,645.50 (3)
SWR-38A 2,356,130.50 (2)
SWR-38B 2,356,130.50 (3)
SWR-39A 2,187,692.00 (2)
SWR-39B 2,187,692.00 (3)
SWR-40A 2,127,788.00 (2)
SWR-40B 2,127,788.00 (3)
SWR-41A 1,990,533.00 (2)
SWR-41B 1,990,533.00 (3)
SWR-42A 2,006,697.50 (2)
SWR-42B 2,006,697.50 (3)
SWR-43A 1,935,561.50 (2)
SWR-43B 1,935,561.50 (3)
SWR-44A 1,785,926.00 (2)
SWR-44B 1,785,926.00 (3)
SWR-45A 1,890,724.00 (2)
SWR-45B 1,890,724.00 (3)
SWR-46A 1,744,958.00 (2)
SWR-46B 1,744,958.00 (3)
SWR-47A 1,892,141.50 (2)
SWR-47B 1,892,141.50 (3)
SWR-48A 1,535,565.50 (2)
SWR-48B 1,535,565.50 (3)
3
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-49A 1,504,328.00 (2)
SWR-49B 1,504,328.00 (3)
SWR-50A 1,770,192.00 (2)
SWR-50B 1,770,192.00 (3)
SWR-51A 1,689,507.00 (2)
SWR-51B 1,689,507.00 (3)
SWR-52A 1,685,864.50 (2)
SWR-52B 1,685,864.50 (3)
SWR-53A 1,608,694.00 (2)
SWR-53B 1,608,694.00 (3)
SWR-54A 1,604,433.00 (2)
SWR-54B 1,604,433.00 (3)
SWR-55A 1,523,184.00 (2)
SWR-55B 1,523,184.00 (3)
SWR-56A 1,380,721.00 (2)
SWR-56B 1,380,721.00 (3)
SWR-57A 1,435,406.50 (2)
SWR-57B 1,435,406.50 (3)
SWR-58A 1,303,726.50 (2)
SWR-58B 1,303,726.50 (3)
SWR-59A 1,518,569.00 (2)
SWR-59B 1,518,569.00 (3)
SWR-60A 1,820,174.50 (2)
SWR-60B 1,820,174.50 (3)
SWR-61A 1,648,581.00 (2)
SWR-61B 1,648,581.00 (3)
SWR-62A 1,810,594.50 (2)
SWR-62B 1,810,594.50 (3)
SWR-63A 1,607,042.50 (2)
SWR-63B 1,607,042.50 (3)
SWR-64A 1,488,766.00 (2)
SWR-64B 1,488,766.00 (3)
SWR-65A 1,581,014.50 (2)
SWR-65B 1,581,014.50 (3)
SWR-66A 1,503,549.00 (2)
SWR-66B 1,503,549.00 (3)
SWR-67A 1,371,558.00 (2)
SWR-67B 1,371,558.00 (3)
SWR-68A 1,267,553.50 (2)
SWR-68B 1,267,553.50 (3)
SWR-69A 1,340,514.50 (2)
SWR-69B 1,340,514.50 (3)
SWR-70A 1,239,027.00 (2)
SWR-70B 1,239,027.00 (3)
SWR-71A 1,338,921.00 (2)
4
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-71B 1,338,921.00 (3)
SWR-72A 97,317,696.00 (2)
SWR-72B 97,317,696.00 (3)
SWR-Support (4) (5)
SWR-P $ 100.00 (6)
SWR-40 Year
Reserve (7) (7)
SW-A-R (8) (8)
----------
(1) Scheduled principal, prepayments and Realized Losses will be allocated
first, to the SWR-Support Interest and second, to the numbered classes
sequentially (from lowest to highest). Amounts so allocated to a numbered
class shall be further allocated between the "A" and "B" components of
such numbered class pro-rata until the entire class is reduced to zero.
(2) Prior to the 73rd Distribution Date, a rate equal to twice the Pool Tax
Cap less 10.56% per annum. On and after the 73rd Distribution Date a rate
equal to the Pool Tax Cap. The "Pool Tax Cap" means the weighted average
of the Adjusted Net Mortgage Rates of all the Mortgage Loans. For this
purpose, beginning on the Distribution Date in February 2017 and ending on
the Distribution Date in January 2037 (the "Last Scheduled Distribution
Date"), the Adjusted Net Mortgage Rate shall be determined by first
reducing the interest payable on each 40-Year Mortgage Loan by the 40-Year
Reserve Rate.
(3) Prior to the 73rd Distribution Date, a rate equal to the lesser of (i)
10.56% per annum and (ii) twice the Pool Tax Cap. On and after the 73rd
Distribution Date, a rate equal to the Pool Tax Cap.
(4) On the Closing Date and on each Distribution Date, following the
allocation of Principal Amounts and Realized Losses, the principal balance
in respect of the SWR-Support Interest will equal the excess of (a) the
sum of (i) the principal balance of the Mortgage Loans (as of the end of
the related Due Period, reduced by principal prepayments received after
such Due Period that are to be distributed on such Distribution Date) and
(ii) the amount, if any, on deposit in the Pre-Funding Account in respect
of the Mortgage Loans over (b) the principal balance in respect of the
remaining Swap-IO REMIC Interests other than the SWR-P and the SWR-A-R
Interests.
(5) A rate equal to the Pool Tax Cap.
(6) On each Distribution Date the SWR-P Interest is entitled to all Prepayment
Charges collected with respect to the Mortgage Loans. It pays no interest.
(7) Beginning on the Distribution Date in February 2017 and ending on the Last
Scheduled Distribution Date, the SW-40 Year Reserve Interest shall be
entitled to a specific portion of the interest payable on each 40-Year
Mortgage Loan. Specifically, the SW-40 Year Reserve Interest shall be
entitled to a specific portion of the interest payable on the Stated
Principal Balance of each 40-Year Mortgage Loan as of the Due Date in the
month preceding the month of that Distribution Date (after giving effect
to principal prepayments in the Prepayment Period related to that prior
Due Date) at a per annum rate equal to 0.80% (the "40-Year Reserve Rate").
5
(8) The SW-A-R Interest is the sole class of residual interest in the Swap-IO
REMIC. It has no principal and pays no principal or interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the Mortgage Loans shall be payable
with respect to the Swap-IO REMIC Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each
Swap-IO REMIC Interest at the rate, or according to the formulas, described
above.
(2) Principal. Principal Distribution Amounts shall be allocated among
the Swap-IO REMIC Interests as described above.
(3) Prepayment Penalties. All Prepayment Charges are allocated to the
SWR-P Interest.
STRIP REMIC:
The Strip REMIC Regular Interests will have the principal balances, pass-through
rates and Corresponding Classes of Certificates as set forth in the following
table:
------------------------------- ---------------------------- ---------------------------- ----------------------------
Pass-Through Corresponding Class of
Strip REMIC Interest Initial Principal Balance Rate Certificates
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-1-A....................... (1) (2) 1-A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-A-1..................... (1) (2) 2-A-1
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-A-2..................... (1) (2) 2-A-2
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-A-3..................... (1) (2) 2-A-3
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-A-4..................... (1) (2) 2-A-4
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-1....................... (1) (2) M-1
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-2....................... (1) (2) M-2
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-3....................... (1) (2) M-3
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-4....................... (1) (2) M-4
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-5....................... (1) (2) M-5
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-6....................... (1) (2) M-6
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-7....................... (1) (2) M-7
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-8....................... (1) (2) M-8
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-9....................... (1) (2) M-9
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-B......................... (1) (2) B
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-$100...................... $100 (3) A-R
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-C-OC...................... (4) (2) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-C-Swap-IO (5) (5) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-C-40 Year IO (6) (6) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-P......................... $100 (7) P
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-A-R....................... (8) (8) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
(1) This Strip REMIC Interest has a principal balance that is initially equal to
100% of its Corresponding Certificate Class issued by the Master REMIC.
Principal payments, both scheduled and prepaid, Realized Losses and Subsequent
Recoveries attributable to the Swap-IO
6
REMIC Interests held by the Strip REMIC will be allocated to this class to
maintain its size relative to its Corresponding Certificate Class.
(2) On each Distribution Date, the pass-through rate for this Strip REMIC
Interest will be the "Strip REMIC Cap," which will equal the weighted average of
the pass-through rates of the Swap-IO REMIC Interests (other than the SWR-P,
SWR-40 Year Reserve and SWR-A-R Interests) treating each "B" Interest the
cardinal number of which (for example, ▇▇-▇▇, ▇▇-▇▇, ▇▇-▇▇, etc.) is not less
than the ordinal number of the Distribution Date (first Distribution Date,
second Distribution Date, third Distribution Date, etc.) as capped at a rate
equal to the product of (i) 2 and (ii) LIBOR.
(3) This Strip REMIC Interest pays no interest.
(4) This Strip REMIC Interest has a principal balance that is initially equal to
100% of the Overcollateralized Amount. Principal payments, both scheduled and
prepaid, Realized Losses and Subsequent Recoveries attributable to the Swap-IO
REMIC Interests held by the Strip REMIC will be allocated to this class to
maintain its size relative to the Overcollateralized Amount.
(5) For each Distribution Date, the STR-C-Swap-IO Interest is entitled to
receive from each Swap REMIC "B" Interest the cardinal number of which (for
example, ▇▇-▇▇, ▇▇-▇▇, ▇▇-▇▇, etc.) is not less than the ordinal number of the
Distribution Date (first Distribution Date, second Distribution Date, third
Distribution Date, etc. ) the interest accruing on such interest in excess of a
per annum rate equal to the product of (i) 2 and (ii) LIBOR.
(6) The STR-C-40 Year IO is entitled to all amounts payable with respect to the
SWR-40 Year Reserve Interest.
(7) The STR-P Interest is entitled to all amounts payable with respect to the
SWR-P Interest. It pays no interest.
(8) The STR-A-R Interest is the sole class of residual interest in the Strip
REMIC. It has no principal balance and pays no principal or interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the Swap-IO Interests shall be
payable with respect to the Strip REMIC Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each Strip
REMIC Interest at the rate, or according to the formulas, described above.
(2) Principal. Principal Distribution Amounts shall be allocated among
the Strip REMIC Interests as described above.
(3) Prepayment Penalties. All Prepayment Charges are allocated to the
STR-P Interest.
7
MASTER REMIC:
The following table specifies the class designation, interest rate, and
principal amount for each class of Master REMIC Interest:
Original Certificate
Class Principal Balance Pass-Through Rate
------------------------------------------------ -------------------- -----------------
Class 1-A....................................... $540,940,000.00 (1)
Class 2-A-1..................................... $455,775,000.00 (1)
Class 2-A-2..................................... $145,076,000.00 (1)
Class 2-A-3..................................... $320,823,000.00 (1)
Class 2-A-4..................................... $128,386,000.00 (1)
Class M-1....................................... $76,000,000.00 (1)
Class M-2....................................... $69,000,000.00 (1)
Class M-3....................................... $40,000,000.00 (1)
Class M-4....................................... $38,000,000.00 (1)
Class M-5....................................... $35,000,000.00 (1)
Class M-6....................................... $31,000,000.00 (1)
Class M-7....................................... $26,000,000.00 (1)
Class M-8....................................... $15,000,000.00 (1)
Class M-9....................................... $21,000,000.00 (1)
Class B......................................... $23,000,000.00 (1)
Class C......................................... (2) (3)
Class P......................................... $100.00 (4)
Class A-R....................................... $100.00 (5)
(1) The Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement. For federal income tax purposes,
including the computation of the Class C Distributable Amount and
entitlement to Net Rate Carryover the pass-through rate in respect of
each Class 1-A Certificate, Class 2-A Certificate, Class M Certificate
and Class B Certificate will be subject to a cap equal to the Strip
REMIC Cap rather than its applicable Net Rate Cap.
(2) For federal income tax purposes, the Class C Certificates will be
treated as having a Certificate Principal Balance equal to the
Overcollateralized Amount.
(3) For each Interest Accrual Period the Class C Certificates are entitled
to an amount (the "Class C Distributable Amount") equal to the sum of
(a) the interest payable on the STR-C-Swap-IO Interest, (b) the
interest payable on the STR-C-OC Interest, (c) the interest payable on
the STR-C-40 Year IO Interest and (d) a specified portion of the
interest payable on the Strip REMIC Regular Interests (other than the
STR-$100, STR-C-OC, STR-C-Swap-IO, STR-C-40 Year IO and STR-P
Interests) equal to the excess of the Strip REMIC Cap over the weighted
average interest rate of the Strip REMIC Regular Interests (other than
the STR-$100, STR-C-OC, STR-C-Swap-IO, STR-C-40 Year IO and STR-P
Interests) with each such Class subject to a cap equal to the
Pass-Through Rate of the Corresponding Master REMIC Class. The
Pass-Through Rate of the Class C Certificates shall be a rate
sufficient to entitle it to an amount equal to all interest accrued on
the Mortgage Loans less the interest accrued on the other interests
issued by the Master REMIC. The Class C Distributable Amount for any
Distribution Date is payable
8
from current interest on the Mortgage Loans and any related
Overcollateralization Reduction Amount for that Distribution Date.
(4) For each Distribution Date the Class P Certificates are entitled to all
Prepayment Charges distributed with respect to the STR-P Interest.
(5) The Class A-R Certificates represent the sole class of residual
interest in each REMIC created hereunder. The Class A-R Certificates
are not entitled to distributions of interest.
The foregoing REMIC structure is intended to cause all of the cash from
the Mortgage Loans to flow through to the Master REMIC as cash flow on REMIC
regular interests, without creating any shortfall--actual or potential (other
than for credit losses)-- to any REMIC regular interest. It is not intended that
the Class A-R Certificates be entitled to any cash flows pursuant to this
Agreement except as provided in Section 3.08(a) hereunder.
9
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:
40-Year Target Schedule: Schedule III hereto.
40-Year Mortgage Loan: A Mortgage Loan with an original term to
maturity of 40 years.
40-Year Reserve Rate: As defined in the Preliminary Statement.
Acceptable Bid Amount: Either (i) a bid equal to or greater than the
Minimum Auction Amount or (ii) the highest bid submitted by a Qualified Bidder
in an auction if the Directing Certificateholder agrees to pay the related
Auction Supplement Amount.
Account: Any Escrow Account, the Carryover Reserve Fund, the
Certificate Account, the Credit Comeback Excess Account, the Distribution
Account, the Pre-Funding Account, the Capitalized Interest Account, the
Principal Reserve Fund, the Swap Account, the Final Maturity Reserve Fund or any
other account related to the Trust Fund or the Mortgage Loans.
Accrual Period: With respect to any Distribution Date and each Class of
Interest-Bearing Certificates, the period commencing on the immediately
preceding Distribution Date (or, in the case of the first Distribution Date, the
Closing Date) and ending on the day immediately preceding such Distribution
Date. With respect to any Distribution Date and the Class C Certificates, the
calendar month preceding the month in which such Distribution Date occurs. All
calculations of interest on the Interest-Bearing Certificates will be made on
the basis of the actual number of days elapsed in the related Accrual Period and
on a 360-day year. All calculations of interest on the Class C Certificates will
be made on the basis of a 360-day year consisting of twelve 30-day months.
Additional Designated Information: As defined in Section 11.02.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable in
accordance with the terms of the related Mortgage Note.
Adjusted Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
less the related Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage Rate
less the related Expense Fee Rate.
Adjusted Replacement Upfront Amount: As defined in Section 3.21.
10
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each date on
which the related Mortgage Rate is subject to adjustment, as provided in the
related Mortgage Note.
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.
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 and
any Loan Group or Loan Groups, the amount, if any, by which, the aggregate
Certificate Principal Balance of the Class(es) of Certificates listed opposite
such Loan Group(s) in the following table (after all distributions of principal
on such Distribution Date) exceeds the sum of (x) the aggregate Stated Principal
Balance of the Mortgage Loans in such Loan Group(s) for such Distribution Date
and (y) the amount on deposit in the Pre-Funding Account in respect of such Loan
Group(s); provided, however, that an Applied Realized Loss Amount will not exist
for a Class of Class A Certificates unless the Certificate Principal Balances of
the Subordinate Certificates have been reduced to zero.
Loan Group(s) Class(es) of Certificates
1 and 2 Interest-Bearing
1 1-A
2 2-A
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
11
at the time of the origination of the related Mortgage Loan, or the sales price
of the Mortgaged Property at the time of such origination, whichever is less, or
with respect to any Mortgage Loan originated in connection with a refinancing,
the appraised value of the Mortgaged Property based upon the appraisal made at
the time of such refinancing.
Auction Supplement Amount: As defined in Section 9.04(c).
Bankruptcy Code: Title 11 of the United States Code.
Bid Determination Date: As defined in Section 9.04(b).
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Interest-Bearing Certificates (other than the Class B
Certificates) constitutes a Class of Book-Entry Certificates, and Class B
Certificates having an initial Certificate Principal Balance of $3,000,000
constitute Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which 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.
Capitalized Interest Account: The separate Eligible Account designated
as such and created and maintained by the Trustee pursuant to Section 3.05(e).
The Capitalized Interest Account shall be treated as an "outside reserve fund"
under applicable Treasury regulations and shall not be part of any REMIC. Except
as provided in Section 3.05(e), any investment earnings on the amounts on
deposit in the Capitalized Interest Account shall be treated as owned by the
Depositor and shall be taxable to the Depositor.
Capitalized Interest Deposit: $7,342,186.89.
Capitalized Interest Release Amount: With respect to any Subsequent
Transfer Date, an amount equal to the product of (1) the sum of (a) the Trustee
Fee Rate and (b) the weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans (excluding any Subsequent Mortgage Loans conveyed to the Trust Fund during
the calendar month in which such Subsequent Transfer Date occurs) as of the
first day of the Due Period beginning in the month in which such Subsequent
Transfer Date occurs (after giving effect to Principal Prepayments received
during the Prepayment Period, if any, that ends during such Due Period), (2) the
Subsequent Transfer Date Transfer Amount for such Subsequent Transfer Date and
(3) a fraction, the numerator of which is the number of calendar months in the
period beginning with the calendar month in which such Subsequent Transfer Date
occurs and ending with the calendar month containing the latest date on which
the Funding Period could end, and the denominator of which is 12.
12
Capitalized Interest Requirement: With respect to each Funding Period
Distribution Date, 1/12 of the product of (1) the sum of (a) the Trustee Fee
Rate and (b) the weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans (excluding any Subsequent Mortgage Loans conveyed to the Trust Fund during
the calendar month preceding such Distribution Date) as of the first day of the
related Due Period (after giving effect to Principal Prepayments received during
the Prepayment Period, if any, that ends during such Due Period) and (2) the
amount on deposit in the Pre-Funding Account as of the last day of the calendar
month preceding such Funding Period Distribution Date (or, if the Funding Period
ended during such calendar month, as of the last day of the Funding Period).
Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.07 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 CWABS, Inc., Asset-Backed
Certificates, Series 2007-1". 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 ▇-▇▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇ and Exhibit E.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans Servicing LP in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2007-1". Funds in the Certificate Account shall be held in
trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Certificate Owner: With respect to a Book-Entry Certificate, the person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than the
Class C Certificates) and as of any Distribution Date, the Initial Certificate
Principal Balance of such Certificate (A) less the sum of (i) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04(b) and (ii) 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. 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.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
13
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 1-A Certificate: Any Certificate designated as a "Class 1-A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class 1-A Net Rate Cap: For any Distribution Date, the weighted average
Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 1 as of the first
day of the related Due Period (after giving effect to Principal Prepayments
received during the Prepayment Period that ends during such Due Period),
adjusted to an effective rate reflecting the calculation of interest on the
basis of the actual number of days elapsed during the related Accrual Period and
a 360-day year, minus a fraction, expressed as a percentage, the numerator of
which is (a) the product of (x) the sum of (1) the sum of the Net Swap Payment
payable to the Swap Counterparty with respect to such Distribution Date and the
Final Maturity Reserve Deposit for such Distribution Date times a fraction, the
numerator of which is equal to 360 and the denominator of which is equal to the
actual number of days in the related Accrual Period and (2) any Swap Termination
Payment payable to the Swap Counterparty for such Distribution Date (other than
a Swap Termination Payment due to a Swap Counterparty Trigger Event) and (y) a
fraction, the numerator of which is the Interest Funds for Loan Group 1 for such
Distribution Date, and the denominator of which is the Interest Funds for Loan
Group 1 and Loan Group 2 for such Distribution Date, and the denominator of
which is (b) the sum of the aggregate Stated
14
Principal Balance of the Mortgage Loans in Loan Group 1 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 in respect of Loan Group 1 as of the first
day of that Due Period.
Class 1-A Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class A Principal Distribution Target
Amount and (y) a fraction, the numerator of which is the Principal Remittance
Amount for Loan Group 1 and the denominator of which is the Principal Remittance
Amount for both Loan Groups.
Class 2-A-1 Certificate: Any Certificate designated as a "Class 2-A-1
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class 2-A-2 Certificate: Any Certificate designated as a "Class 2-A-2
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class 2-A-3 Certificate: Any Certificate designated as a "Class 2-A-3
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.
Class 2-A-4 Certificate: Any Certificate designated as a "Class 2-A-4
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
Class 2-A Certificates: The Class 2-A-1, Class 2-A-2, Class 2-A-3 and
Class 2-A-4 Certificates collectively.
Class 2-A Net Rate Cap: For any Distribution Date, the weighted average
Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 2 as of the first
day of the related Due Period (after giving effect to Principal Prepayments
received during the Prepayment Period that ends during such Due Period),
adjusted to an effective rate reflecting the calculation of interest on the
basis of the actual number of days elapsed during the related Accrual Period and
a 360-day year, minus a fraction, expressed as a percentage, the numerator of
which is (a) the product of (x) the sum of (1) the sum of the Net Swap Payment
payable to the Swap Counterparty with respect to such Distribution Date and the
Final Maturity Reserve Deposit for such Distribution Date times a fraction, the
numerator of which is equal to 360 and the denominator of which is equal to the
actual number of days in the related Accrual Period and (2) any Swap Termination
Payment payable to the Swap Counterparty for such Distribution Date (other than
a Swap Termination Payment due to a Swap Counterparty Trigger Event) and (y) a
fraction, the numerator of which is the Interest Funds for Loan Group 2 for such
Distribution Date, and the denominator of which is the Interest Funds for Loan
Group 1 and Loan Group 2 for such Distribution Date, and the denominator of
which is (b) the sum of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2 as of the first day of the related Due Period (after
giving effect to Principal Prepayments received during the Prepayment Period
that
15
ends during such Due Period) plus any amounts on deposit in the Pre-Funding
Account in respect of Loan Group 2 as of the first day of that Due Period.
Class 2-A Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class A Principal Distribution Target
Amount and (y) a fraction, the numerator of which is the Principal Remittance
Amount for Loan Group 2 and the denominator of which is the Principal Remittance
Amount for both Loan Groups.
Class A-R Certificate: Any Certificate designated as a "Class A-R
Certificate" on the face thereof, in the form of Exhibit D hereto or, in the
case of the Tax Matters Person Certificate, Exhibit E hereto, in either case
representing the right to distributions as set forth herein.
Class A Certificate: Any Class 1-A or Class 2-A Certificate.
Class A Principal Distribution Target Amount: With respect to any
Distribution Date, the excess of (1) the aggregate Certificate Principal Balance
of the Class A Certificates immediately prior to such Distribution Date, over
(2) the lesser of (x) 59.10% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date minus the OC Floor.
Class B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-15 hereto,
representing the right to distributions as set forth herein.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
Class C Distributable Amount: As defined in the Preliminary Statement.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class M-3 Certificate: Any Certificate designated as a "Class M-3
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.
16
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-10 hereto,
representing the right to distributions as set forth herein.
Class M-6 Certificate: Any Certificate designated as a "Class M-6
Certificate" on the face thereof, in the form of Exhibit A-11 hereto,
representing the right to distributions as set forth herein.
Class M-7 Certificate: Any Certificate designated as a "Class M-7
Certificate" on the face thereof, in the form of Exhibit A-12 hereto,
representing the right to distributions as set forth herein.
Class M-8 Certificate: Any Certificate designated as a "Class M-8
Certificate" on the face thereof, in the form of Exhibit A-13 hereto,
representing the right to distributions as set forth herein.
Class M-9 Certificate: Any Certificate designated as a "Class M-9
Certificate" on the face thereof, in the form of Exhibit A-14 hereto,
representing the right to distributions as set forth herein.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.
Class P Principal Distribution Date: The first Distribution Date that
occurs after the end of the latest Prepayment Charge Period for all Mortgage
Loans that have a Prepayment Charge Period.
Closing Date: February 9, 2007.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collateral Schedule: Schedule II hereto.
Combined Class M-1, M-2 and M-3 Principal Distribution Amount: With
respect to any Distribution Date, the excess of (1) the sum of (a) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking into
account distribution of the Class 1-A Principal Distribution Amount and Class
2-A Principal Distribution Amount for such Distribution Date) and (b) the
aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class
M-3 Certificates immediately prior to the Distribution Date over (2) the lesser
of (a) 77.60% of the aggregate Stated Principal Balance of the Mortgage Loans
for the Distribution Date and (b) the aggregate Stated Principal Balance of the
Mortgage Loans for the Distribution Date minus the OC Floor; provided, however,
that if the Class M-1, Class M-2 and/or Class M-3 Certificates are the only
Classes of Subordinate Certificates outstanding on such Distribution Date, those
Classes will be entitled to receive the entire remaining Principal Distribution
Amount for Loan Group 1 and Loan Group 2 until the Certificate Principal
Balances thereof are reduced to zero.
17
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: With respect to each Loan Group and any
Distribution Date, an amount equal to the lesser of (x) one-half of the
Servicing Fee for the Mortgage Loans in that Loan Group for the related Due
Period and (y) the aggregate Prepayment Interest Shortfalls for the Mortgage
Loans in that Loan Group for such Distribution Date.
Confirmation: The confirmation, Global No. N563177N, with a trade date
of January 26, 2007 evidencing a transaction between the Swap Counterparty and
CHL relating to the Swap 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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: Corporate Trust MBS Administration), telephone:
(▇▇▇) ▇▇▇-▇▇▇▇, facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
Co-Trustee: The Bank of New York Trust Company, N.A., a national
banking association, not in its individual capacity, but solely in its capacity
as co-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.
Covered Mortgage Loan: A Mortgage Loan listed on the Mortgage Loan
Schedule as being covered by a Mortgage Insurance Policy.
Credit Bureau Risk Score: A statistical credit score obtained by CHL in
connection with the origination of a Mortgage Loan.
Credit Comeback Excess Account: The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 4.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2007-1". Funds in the Credit Comeback Excess Account shall
be held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Credit Comeback Excess Amount: With respect to the Credit Comeback
Loans in any Loan Group and any Master Servicer Advance Date, the portion of the
sum of the following (without duplication) attributable to the excess, if any,
of the actual mortgage rate on each Credit Comeback Loan in such Loan Group and
the Mortgage Rate on such Credit Comeback Loan: (i) all scheduled interest
collected during the related Due Period with respect to the Credit Comeback
Loans in such Loan Group, (ii) all interest on prepayments received during the
related Prepayment Period with respect to the Credit Comeback Loans in such Loan
Group, other than Prepayment Interest Excess, (iii) all Advances relating to
interest with respect to the Credit Comeback Loans in such Loan Group, (iv) all
Compensating Interest with respect to the Credit Comeback Loans in such Loan
Group and (v) Liquidation Proceeds with respect to the Credit Comeback Loans in
such Loan Group collected during the related Due Period (to the extent such
18
Liquidation Proceeds relate to interest), less all Nonrecoverable Advances for
such Loan Group relating to interest reimbursed during the related Due Period.
Credit Comeback Excess Cashflow: With respect to any Distribution Date,
any amounts in the Credit Comeback Excess Account available for such
Distribution Date.
Credit Comeback Loan: Any Fixed Rate Mortgage Loan for which the
related Mortgage Rate is subject to reduction (not exceeding 0.375% per annum)
for good payment history of Scheduled Payments by the related Mortgagor.
Cumulative Loss Trigger Event: With respect to a Distribution Date on
or after the Stepdown Date, a Cumulative Loss Trigger Event will be in effect if
(x) the aggregate amount of Realized Losses on the Mortgage Loans from the
Cut-off Date for each such Mortgage Loan to (and including) the last day of the
related Due Period (reduced by the aggregate amount of any Subsequent Recoveries
received through the last day of that Due Period) exceeds (y) the applicable
percentage, for such Distribution Date, of the sum of the aggregate Cut-off Date
Principal Balance of the Initial Mortgage Loans and the Pre-Funded Amount, as
set forth below:
Distribution Date Percentage
----------------- ----------
February 2009 -- January 2010 1.25% with respect to February 2009, plus
an additional 1/12th of 1.55% for each
month thereafter through January 2010
February 2010 -- January 2011......... 2.80% with respect to February 2010, plus
an additional 1/12th of 1.65% for each
month thereafter through January 2011
February 2011 -- January 2012......... 4.45% with respect to February 2011, plus
an additional 1/12th of 1.30% for each
month thereafter through January 2012
February 2012 -- January 2013......... 5.75% with respect to February 2012, plus
an additional 1/12th of 0.75% for each
month thereafter through January 2013
February 2013 and thereafter.......... 6.50%
Current Interest: With respect to each Class of Interest-Bearing
Certificates and each Distribution Date, the interest accrued at the applicable
Pass-Through Rate for the applicable Accrual Period on the Certificate Principal
Balance of such Class immediately prior to such Distribution Date.
19
Cut-off Date: When used with respect to any Mortgage Loan the "Cut-off
Date" shall mean the Initial Cut-off Date or the related Subsequent Cut-off
Date, as the case may be.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all payments of principal due on or prior to the Cut-off Date,
whether or not received, and all Principal Prepayments received on or prior to
the Cut-off Date, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any Scheduled
Payment that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court that is final and non-appealable
in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans
identified on the schedule of Mortgage Loans hereto set forth on Exhibit F-2
hereof for which all or a portion of a related Mortgage File is not delivered to
the Co-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 Co-Trustee on or prior to the
related Subsequent Transfer Date. The Depositor shall deliver (or cause delivery
of) the Mortgage Files to the Co-Trustee: (A) with respect to at least 50% of
the Initial Mortgage Loans in each Loan Group, not later than the Closing Date
and with respect to at least 10% of the Subsequent Mortgage Loans in each Loan
Group 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 in each Loan Group, 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 Co-Trustee as provided in Section 2.01, Countrywide Home Loans, Inc.
shall hold such files as agent and in trust for the Co-Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
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Delinquency Trigger Event: With respect to any Distribution Date on or
after the Stepdown Date, a Delinquency Trigger Event will be in effect if the
Rolling Sixty-Day Delinquency Rate for Outstanding Mortgage Loans equals or
exceeds the product of (x) the Senior Enhancement Percentage for such
Distribution Date and (y) the applicable percentage listed below for the most
senior Class of Interest-Bearing Certificates:
Class Percentage
A..................... 39.10%
M-1................... 48.02%
M-2................... 60.58%
M-3................... 71.39%
M-4................... 85.98%
M-5................... 105.91%
M-6................... 133.27%
M-7................... 170.13%
M-8................... 202.43%
M-9................... 275.72%
B..................... 456.91%
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or, if
not the foregoing, the Percentage Interest appearing on the face thereof, as
applicable.
Depositor: CWABS, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Book-Entry Certificates, the
agreement among the Depositor and the initial Depository, dated as of the
Closing Date, substantially in the form of Exhibit O.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 15th day
of the month of such Distribution Date or, if such 15th day is not a Business
Day, the immediately preceding Business Day.
Directing Certificateholder: As defined in Section 9.04(a).
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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 designated "The Bank of New York,
in trust for registered Holders of CWABS, Inc., Asset-Backed Certificates,
Series 2007-1". 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 February 2007.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for Scheduled Payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period beginning
on the second day of the calendar month preceding the calendar month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
▇▇▇▇▇: 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 ▇▇▇▇▇'▇ 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 as
evidenced by a letter from each Rating Agency to the Trustee. Eligible Accounts
may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(d) hereof.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
22
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, Class B Certificates and Certificates of any
Class that does not have or no longer has a rating of BBB- or its equivalent, or
better, from at least one Rating Agency.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum of (i)
the amount remaining after the distribution of interest to Certificateholders
for such Distribution Date pursuant to Section 4.04(a)(v)(b), (ii) the amount
remaining after the distribution of principal to Certificateholders for such
Distribution Date, pursuant to Section 4.04(b)(1)(B)(ii) or 4.04(b)(2)(B)(iii)
and (iii) the Overcollateralization Reduction Amount for such Distribution Date.
Excess Deposit: As defined in Section 8.11 hereof.
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, (iii) with respect to a Covered
Mortgage Loan, the applicable Mortgage Insurance Premium Rate and (iv) with
respect to any Mortgage Loan covered by a lender paid mortgage insurance policy
(other than a Mortgage Insurance Policy), the related mortgage insurance premium
rate.
23
Extra Principal Distribution Amount: With respect to any Distribution
Date and each of Loan Group 1 and Loan Group 2, the lesser of (1) the
Overcollateralization Deficiency Amount and (2) the Excess Cashflow and Credit
Comeback Excess Cashflow available for payment thereof, to be allocated between
Loan Group 1 and Loan Group 2, pro rata, based on the Principal Remittance
Amount for each such Loan Group for such Distribution Date.
▇▇▇▇▇▇ 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 Maturity Funding Cap: For any Distribution Date beginning with
the Distribution Date in February 2017, the least of (i) the aggregate
Certificate Principal Balance of the Interest-Bearing Certificates immediately
prior to that Distribution Date, (ii) the aggregate Stated Principal Balance of
all outstanding 40-Year 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) and (iii) $43,410,348.
Final Maturity OC Trigger: With respect to any Distribution Date on or
after the Distribution Date in February 2027, the Final Maturity OC Trigger will
be in effect if and for so long as the sum of (x) the amount on deposit in the
Final Maturity Reserve Fund on that Distribution Date (including any Final
Maturity Reserve Deposit made on the Distribution Date) and (y) the
Overcollateralized Amount for that Distribution Date (calculated after giving
effect to all distributions to be made prior to the time of determination) is
less than the outstanding Stated Principal Balance of all 40-Year Mortgage Loans
as of the Due Date occurring in the month of that Distribution Date (after
giving effect to Principal Prepayments received during the Prepayment Period
ending in the same month as the Distribution Date).
Final Maturity Required Deposit Trigger: With respect to any
Distribution Date on or after the Distribution Date in February 2017 up to and
including the Distribution Date in January 2037, the Final Maturity Required
Deposit Trigger shall be in effect with respect to such Distribution Date if the
aggregate Stated Principal Balance of the 40-Year Mortgage Loans as of the Due
Date occurring in the month preceding the month of that Distribution Date (after
giving effect to Principal Prepayments in the Prepayment Period related to that
prior Due Date) is greater than the "40-Year Target" specified on the 40-Year
Target Schedule for such Distribution Date.
Final Maturity Reserve Deposit: For any Distribution Date on which the
Final Maturity Required Deposit Trigger is not in effect, $0. For any
Distribution Date on which the Final Maturity Required Deposit Trigger is in
effect, an amount equal to the lesser of (a) one-twelfth of the product of (i)
0.80% and (ii) the aggregate Stated Principal Balance of the 40-Year Mortgage
Loans as of the Due Date occurring in the month preceding the month of that
Distribution Date (after giving effect to Principal Prepayments in the
Prepayment Period related to that prior Due Date) and (b) the excess of (i) the
Final Maturity Funding Cap for such Distribution Date over (ii) the amount on
deposit in the Final Maturity Reserve Fund immediately prior to such
Distribution Date.
24
Final Maturity Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.09 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2007-1". Funds in the Final Maturity Reserve Fund shall be
held in trust by the Final Maturity Reserve Trustee for the Certificateholders
for the uses and purposes set forth in this Agreement.
Final Maturity Reserve Trust: The trust fund established by Section
4.10.
Final Maturity Reserve 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 Holders of the Certificates 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.
Five-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 60 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Fixed Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life of
the related Mortgage and any Credit Comeback Loans, including in each case any
Mortgage Loans delivered in replacement thereof.
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.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Funding Period: The period from the Closing Date to and including the
earlier to occur of (x) the date the amount in the Pre-Funding Account is less
than $175,000 and (y) March 31, 2007.
Funding Period Distribution Date: Each Distribution Date on or prior to
the Distribution Date occurring in the calendar month following the month in
which the Funding Period ends.
25
Gross Margin: The percentage set forth in the related Mortgage Note to
be added to the Index for use in determining the Mortgage Rate for each
Adjustable Rate Mortgage Loan on each of its Adjustment Dates.
Group 1 Mortgage Loans: The group of Mortgage Loans identified in the
related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including in each
case any Mortgage Loans delivered in replacement thereof.
Group 1 Overcollateralization Reduction Amount: With respect to any
Distribution Date, the Overcollateralization Reduction Amount for such
Distribution Date multiplied by a fraction, the numerator of which is (x) the
Principal Remittance Amount for Loan Group 1 for such Distribution Date, and the
denominator of which is (y) the aggregate Principal Remittance Amount for Loan
Group 1 and Loan Group 2 for such Distribution Date.
Group 1 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 1 Mortgage Loans on
the Closing Date, which shall equal $135,001,648.12.
Group 2 Mortgage Loans: The group of Mortgage Loans identified in the
related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including in each
case any Mortgage Loans delivered in replacement thereof.
Group 2 Overcollateralization Reduction Amount: With respect to any
Distribution Date, the Overcollateralization Reduction Amount for such
Distribution Date multiplied by a fraction, the numerator of which is the
Principal Remittance Amount for Loan Group 2 for such Distribution Date, and the
denominator of which is the aggregate Principal Remittance Amount for Loan Group
1 and Loan Group 2 for such Distribution Date.
Group 2 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 2 Mortgage Loans on
the Closing Date, which shall equal $273,085,525.47.
Index: As to any Adjustable Rate Mortgage Loan on any Adjustment Date
related thereto, the index for the adjustment of the Mortgage Rate set forth as
such in the related Mortgage Note, or, if the Index in the Mortgage Note ceases
to be published or becomes unavailable for any reason, then the Index shall be a
new index selected by the Master Servicer, based on comparable information and
in accordance with the Mortgage Note and applicable law.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Adjustment Date following the origination of such Mortgage Loan.
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.
26
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) January 1, 2007 and (y) the date of origination of such Mortgage
Loan.
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.
Initial Mortgage Rate: As to each Adjustable Rate Mortgage Loan, the
Mortgage Rate in effect prior to the Initial Adjustment Date.
Initial Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the percentage specified in the related Mortgage Note that limits
the permissible increase or decrease in the Mortgage Rate on its initial
Adjustment Date.
Institutional Accredited Investor or IAI: An "accredited investor" as
defined in any of paragraphs (1), (2), (3)and (7) of Rule 501(a) under the
Securities Act or any entity in which all of the equity owners come within such
paragraphs.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including each Mortgage Insurance Policy and
all riders and endorsements to each such Mortgage Insurance Policy 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
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed of trust and are
not applied to the restoration of the related Mortgaged Property or released to
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account, in each case other
than any amount included in such Insurance Proceeds in respect of Insured
Expenses and received either prior to or in connection with such Mortgage Loan
becoming a Liquidated Mortgage Loan.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest-Bearing Certificates: The Class A Certificates and the
Subordinate 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.
27
Interest Determination Date: With respect to the first Accrual Period
for the Interest-Bearing Certificates, February 7, 2007. With respect to any
Accrual Period for the Interest-Bearing Certificates thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
Interest Funds: With respect to any Distribution Date and Loan Group,
the Interest Remittance Amount for such Loan Group and Distribution Date, less
the portion of the Trustee Fee for such Distribution Date allocable to such Loan
Group, plus the Adjusted Replacement Upfront Amount, if any, allocable to that
Loan Group, less the Mortgage Insurance Premiums for the Covered Mortgage Loans
in that Loan Group for such Distribution Date.
Interest Remittance Amount: With respect to the Mortgage Loans in each
Loan Group and any Distribution Date, (x) the sum, without duplication, of (i)
all scheduled interest collected during the related Due Period (for the
avoidance of doubt, other than Credit Comeback Excess Amounts) with respect to
the related Mortgage Loans less the related Servicing Fee, (ii) all interest on
prepayments received during the related Prepayment Period with respect to such
Mortgage Loans, other than Prepayment Interest Excess, (iii) all related
Advances relating to interest with respect to such Mortgage Loans, (iv) all
related Compensating Interest with respect to such Mortgage Loans, (v)
Liquidation Proceeds with respect to such Mortgage Loans collected during the
related Due Period (to the extent such Liquidation Proceeds relate to interest),
(vi) Seller Interest Shortfall Payments with respect to such Mortgage Loans for
such Distribution Date, and (vii) in the case of each Funding Period
Distribution Date, the portion of the Capitalized Interest Requirement for such
Distribution Date allocable to such Loan Group, if any, less (y) all
reimbursements to the Master Servicer during the related Due Period for Advances
of interest previously made allocable to such Loan Group.
Investment Letter: As defined in Section 5.02(b).
ISDA Master Agreement: The 1992 ISDA Master Agreement (Multicurrency -
Cross Border), including the Schedule and Credit Support Annex thereto, dated
February 9, 2007, between the Swap Counterparty and the Swap Contract
Administrator.
Item 1119 Party: The Depositor, any Seller, the Master Servicer, the
Trustee, any Subservicer, any originator identified in the Prospectus
Supplement, the Swap Counterparty and any other material transaction party, as
identified in Exhibit Z hereto, as updated pursuant to Section 11.04.
Latest Possible Maturity Date: The Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Limited Exchange Act Reporting Obligations: The obligations of the
Master Servicer under Section 3.17(b), Section 6.02 and Section 6.04 with
respect to notice and information to be provided to the Depositor and Article XI
(except Section 11.07(a)(1) and (2)).
28
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified in
the related Prepayment Period that it has received all amounts it expects to
receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property
received in connection with or prior to such Mortgage Loan becoming a Liquidated
Mortgage Loan (other than the amount of such net proceeds representing any
profit realized by the Master Servicer in connection with the disposition of any
such properties), less the sum of related unreimbursed Advances, Servicing Fees
and Servicing Advances.
Loan Group: Either of Loan Group 1 or Loan Group 2.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 2: The Group 2 Mortgage Loans.
Loan-to-Value Ratio: As to any Mortgage Loan, the fraction, expressed
as a percentage, the numerator of which is the original principal balance of
such Mortgage Loan and the denominator of which is the Appraised Value of the
related Mortgaged Property.
Majority Holder: The Holders of Certificates evidencing at least 51% of
the Voting Rights allocated to such Class of Certificates.
Master REMIC: As defined in the Preliminary Statement.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as master servicer
hereunder.
Master Servicer Advance Date: As to any Distribution Date, the Business
Day immediately preceding such Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived other
than in accordance with the standard set forth in the first sentence of Section
3.20(a), or (ii) collected from the Master Servicer in respect of a remedy for
the breach of the representation made by CHL set forth in Section 3.20(c).
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
29
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Auction Amount: With respect to any auction of the Mortgage
Loans and any REO Properties pursuant to Section 9.04, the sum of (i) the
Termination Price that would be payable by the NIM Insurer if the Optional
Termination were exercised in the following calendar month pursuant to Section
9.01 and (ii) all reasonable fees and expenses incurred by the Trustee in
connection with any auction conducted pursuant to Section 9.04.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
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: ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on or first priority ownership interest in an estate in fee simple in
real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Insurance Policy: Either of the Mortgage Insurance Policy
issued by United Guaranty Mortgage Indemnity Company or the Mortgage Insurance
Policy issued by Mortgage Guaranty Insurance Corporation with respect to certain
Mortgage Loans identified in the Mortgage Loan Schedule.
Mortgage Insurance Premium: Either of the premium payable on the
Mortgage Insurance Policy issued by United Guaranty Mortgage Indemnity Company
or the premium payable on the Mortgage Insurance Policy issued by Mortgage
Guaranty Insurance Corporation, each on each Distribution Date and amounts due
for premium taxes with respect to West Virginia, Kentucky or other applicable
state taxes relating to such premium.
Mortgage Insurance Premium Rate: With respect to a Covered Mortgage
Loan, the per annum rate set forth for such Covered Mortgage Loan on the
Mortgage Loan Schedule.
30
Mortgage Insurer: Either of United Guaranty Mortgage Indemnity Company
or Mortgage Guaranty Insurance Corporation or any replacement Mortgage Insurer,
as applicable.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the deletion of Liquidated
Mortgage Loans and Deleted Mortgage Loans and the addition of (x) Replacement
Mortgage Loans pursuant to the provisions of this Agreement and (y) Subsequent
Mortgage Loans pursuant to the provisions of this Agreement and any Subsequent
Transfer Agreement) transferred to the Trustee as part of the Trust Fund and
from time to time subject to this Agreement, attached hereto as Exhibit F-1,
setting forth in the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Loan Group;
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the 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) a code indicating whether such Mortgage Loan is a Credit
Comeback Loan;
(xiv) the purpose of the Mortgage Loan;
(xv) with respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of each Adjustment Date;
31
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Initial Periodic Rate Cap and Subsequent
Periodic Rate Cap; and
(g) the Gross Margin;
(xvi) a code indicating whether the Mortgage Loan is a CHL Mortgage
Loan, a Park Monaco Mortgage Loan or a Park Sienna Mortgage
Loan;
(xvii) the premium rate for any lender-paid mortgage insurance, if
applicable;
(xviii) a code indicating whether the Mortgage Loan is a Fixed Rate
Mortgage Loan or an Adjustable Rate Mortgage Loan;
(xix) a code indicating if such Mortgage Loan is a Covered Mortgage
Loan and the applicable Mortgage Insurance Premium Rate as
set forth in the applicable Mortgage Insurance Policy; and
(xx) the Servicing Fee Rate for the Mortgage Loan as of the
applicable Cut-off Date and, if the Servicing Fee Rate is
subject to increase following the initial Adjustment Date for
the Mortgage Loan, the Servicing Fee Rate for the Mortgage
Loan following the initial Adjustment Date.
Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans and for each Loan Group. The Mortgage
Loan Schedule shall be deemed to include each supplement thereto 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.
32
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time; provided, however, the Mortgage Rate for each Credit Comeback
Loan shall be treated for all purposes of payments on the Certificates,
including the calculation of the Pass-Through Rates and the applicable Net Rate
Cap, as reduced by 0.375% on the Due Date following the end of each of the first
four annual periods after the origination date, irrespective of whether the
Mortgagor qualifies for the reduction by having a good payment history.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
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: With respect to any Distribution Date and (i) the Class
1-A Certificates, the Class 1-A Net Rate Cap, (ii) each Class of Class 2-A
Certificates, the Class 2-A Net Rate Cap and (iii) each Class of Subordinate
Certificates, the Subordinate Net Rate Cap.
Net Rate Carryover: With respect to any Class of Interest-Bearing
Certificates and any Distribution Date, the sum of (A) the excess of (i) the
amount of interest that such Class would otherwise have accrued for such
Distribution Date had the Pass-Through Rate for such Class and the related
Accrual Period not been determined based on the applicable Net Rate Cap, over
(ii) the amount of interest accrued on such Class at the applicable Net Rate Cap
for such Distribution Date and (B) the Net Rate Carryover for such Class for all
previous Distribution Dates not previously paid pursuant to Section 4.04,
together with interest thereon at the then-applicable Pass-Through Rate for such
Class, without giving effect to the applicable Net Rate Cap.
Net Swap Payment: With respect to any Distribution Date and payment by
the Swap Contract Administrator to the Swap Counterparty, the excess, if any, of
the "Fixed Amount" (as defined in the Swap Contract) with respect to such
Distribution Date over the "Floating Amount" (as defined in the Swap Contract)
with respect to such Distribution Date. With respect to any Distribution Date
and payment by the Swap Counterparty to the Swap Contract Administrator, the
excess, if any, of the "Floating Amount" (as defined in the Swap Contract) with
respect to such Distribution Date over the "Fixed Amount" (as defined in the
Swap Contract) with respect to such Distribution Date
NIM Insurer: Any insurer guarantying at the request of CHL certain
payments under notes backed or secured by the Class C 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
33
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.
OC Floor: With respect to any Distribution Date, an amount equal to
0.50% of the sum of the aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans and the Pre-Funded Amount.
Officer's Certificate: A certificate (i) in the case of the Depositor,
signed by the Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant
Treasurers or Assistant Secretaries of the Depositor, (ii) in the case of the
Master Servicer, signed by the President, an Executive Vice President, a Vice
President, an Assistant Vice President, the Treasurer, or one of the Assistant
Treasurers or Assistant Secretaries of Countrywide GP, Inc., its general
partner, (iii) if provided for in this Agreement, signed by a Servicing Officer,
as the case may be, and delivered to the Depositor and the Trustee, as the case
may be, as required by this Agreement, or (iv) in the case of any other Person,
signed by an authorized officer of such Person.
One-Month LIBOR: With respect to any Accrual Period for the
Interest-Bearing Certificates, the rate determined by the Trustee on the related
Interest Determination Date on the basis of the rate for U.S. dollar deposits
for one month as quoted on the Bloomberg Terminal on such Interest Determination
Date; provided that the parties hereto acknowledge that One-Month LIBOR
calculated for the first Accrual Period for the Interest-Bearing Certificates
shall equal 5.32000% per annum. If such rate is not quoted on the Bloomberg
Terminal (or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably selected by
the Trustee), One-Month LIBOR for the applicable Accrual Period for the
Interest-Bearing 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 Interest-Bearing Certificates.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either and (iii) not be connected with the Depositor or the
Master Servicer as an
34
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Optional Termination: The termination of the Trust Fund pursuant to
clause (a) of the first sentence of Section 9.01.
Optional Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the sum of the aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans and the Pre-Funded Amount.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal satisfactory to the Master Servicer or the sales price of
such property or, in the case of a refinancing, on an appraisal satisfactory to
the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan
with a Stated Principal Balance greater than zero that was not the subject of a
Principal Prepayment in full, and that did not become a Liquidated Mortgage
Loan, prior to the end of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distribution of the Principal Distribution Amount (other than
the portion thereof consisting of the Extra Principal Distribution Amount) on
such Distribution Date).
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (i) the Excess
Overcollateralization Amount for such Distribution Date and (ii) the aggregate
Principal Remittance Amount for Loan Group 1 and Loan Group 2 for such
Distribution Date.
Overcollateralization Target Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date, an amount equal to 1.75% of the sum of the
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans and the
Pre-Funded Amount and (b) on or after the Stepdown Date, the greater of (i) an
amount equal to 3.50% of the aggregate Stated Principal
35
Balance of the Mortgage Loans for the current Distribution Date and (ii) the OC
Floor; provided, however, that if a Trigger Event is in effect on any
Distribution Date, the Overcollateralization Target Amount will be the
Overcollateralization Target Amount as in effect for the prior Distribution
Date.
Overcollateralized Amount: With respect to any Distribution Date, the
amount, if any, by which (x) the sum of the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date and any amount on deposit in
the Pre-Funding Account exceeds (y) the aggregate Certificate Principal Balance
of the Interest-Bearing Certificates as of such Distribution Date (after giving
effect to distribution of the Principal Remittance Amounts to be made on such
Distribution Date and, in the case of the Distribution Date immediately
following the end of the Funding Period, any amounts to be released from the
Pre-Funding Account).
Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Park Monaco: Park Monaco Inc., a Delaware corporation, and its
successors and assigns.
Park Monaco Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Monaco is the applicable Seller.
Park Sienna: Park Sienna LLC, a Delaware limited liability company, and
its successors and assigns.
Park Sienna Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Sienna is the applicable Seller.
Pass-Through Margin: With respect to any Accrual Period and Class of
Interest-Bearing Certificates, the per annum rate indicated in the following
table:
36
-------------------------------- --------------- -----------------
Pass-Through Pass-Through
Class Margin (1) Margin (2)
-------------------------------- --------------- -----------------
Class 1-A....................... 0.140% 0.280%
-------------------------------- --------------- -----------------
Class 2-A-1..................... 0.050% 0.100%
-------------------------------- --------------- -----------------
Class 2-A-2..................... 0.100% 0.200%
-------------------------------- --------------- -----------------
Class 2-A-3..................... 0.140% 0.280%
-------------------------------- --------------- -----------------
Class 2-A-4..................... 0.230% 0.460%
-------------------------------- --------------- -----------------
Class M-1....................... 0.230% 0.345%
-------------------------------- --------------- -----------------
Class M-2....................... 0.270% 0.405%
-------------------------------- --------------- -----------------
Class M-3....................... 0.300% 0.450%
-------------------------------- --------------- -----------------
Class M-4....................... 0.370% 0.555%
-------------------------------- --------------- -----------------
Class M-5....................... 0.380% 0.570%
-------------------------------- --------------- -----------------
Class M-6....................... 0.450% 0.675%
-------------------------------- --------------- -----------------
Class M-7....................... 0.900% 1.350%
-------------------------------- --------------- -----------------
Class M-8....................... 1.700% 2.550%
-------------------------------- --------------- -----------------
Class M-9....................... 1.750% 2.625%
-------------------------------- --------------- -----------------
Class B......................... 1.750% 2.625%
-------------------------------- --------------- -----------------
(1) For any Accrual Period relating to any Distribution Date occurring on
or prior to the Optional Termination Date.
(2) For any Accrual Period relating to any Distribution Date occurring
after the Optional Termination Date.
Pass-Through Rate: With respect to any Accrual Period and each Class of
Interest-Bearing Certificates the lesser of (x) One-Month LIBOR for such Accrual
Period plus the Pass-Through Margin for such Class and Accrual Period and (y)
the applicable Net Rate Cap for such Class and the related Distribution Date.
Percentage Interest: With respect to any Interest-Bearing Certificate,
a fraction, expressed as a percentage, the numerator of which is the Certificate
Principal Balance represented by such Certificate and the denominator of which
is the aggregate Certificate Principal Balance of the related Class. With
respect to the Class C, Class P and Class A-R Certificates, the portion of the
Class evidenced thereby, expressed as a percentage, as stated on the face of
such Certificate.
Performance Certification: As defined in Section 11.05.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as each Rating Agency has
37
confirmed in writing is sufficient for the ratings originally assigned
to the Certificates by such Rating Agency;
(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;
(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 ▇▇▇▇▇'▇ 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;
(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 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;
(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;
(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; and
38
(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, as evidenced by a signed writing delivered by each
Rating Agency, and reasonably acceptable to the NIM Insurer, as
evidenced by a signed writing delivered by the NIM Insurer;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes, unless the
Master Servicer shall receive an Opinion of Counsel, at the expense of Master
Servicer, to the effect that such investment will not adversely affect the
status of any such REMIC as a REMIC under the Code or result in imposition of a
tax on any such REMIC. Permitted Investments that are subject to prepayment or
call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States Persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC formed hereunder to fail to
qualify as a REMIC at any time that any Certificates are Outstanding. The terms
"United States," "State" and "International Organization" shall have the
39
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 Tax Cap: As defined in the Preliminary Statement.
Pool Stated Principal Balance: The aggregate of the Stated Principal
Balances of the Mortgage Loans which were Outstanding Mortgage Loans.
Pre-Funded Amount: The amount deposited in the Pre-Funding Account on
the Closing Date, which shall equal $408,087,173.59.
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 designated "The Bank of New York,
in trust for registered holders of CWABS, Inc., Asset-Backed Certificates,
Series 2007-1." Funds in the Pre-Funding Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement and
shall not be a part of any REMIC created hereunder, provided, however, that any
investment income earned from Permitted Investments made with funds in the
Pre-Funding Account will be for the account of CHL.
Prepayment Assumption: The applicable rate of prepayment, as described
in the Prospectus Supplement relating to the Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan within the related Prepayment Charge Period in accordance with the
terms thereof (other than any Master Servicer Prepayment Charge Payment Amount).
Prepayment Charge Period: With respect to any Mortgage Loan, the period
of time during which a Prepayment Charge may be imposed.
40
Prepayment Charge Schedule: As of the Initial Cut-off Date with respect
to each Initial Mortgage Loan and as of the Subsequent Cut-off Date with respect
to each Subsequent Mortgage Loan, a list attached hereto as Schedule I
(including the Prepayment Charge Summary attached thereto), setting forth the
following information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on
the related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of
the Cut-off Date.
As of the Closing Date, the Prepayment Charge Schedule shall contain
the necessary information for each Initial Mortgage Loan. The Prepayment Charge
Schedule shall be amended by the Master Servicer upon the sale of any Subsequent
Mortgage Loans to the Trust Fund. In addition, the Prepayment Charge Schedule
shall be amended from time to time by the Master Servicer in accordance with the
provisions of this Agreement and a copy of each related 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
41
month in which such Distribution Date occurs (or, with respect to the first
Distribution Date, the period beginning with the opening of business on January
2, 2007) and ending on the close of business on the fifteenth day of the month
in which such Distribution Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of New York,
as publicly announced to be in effect from time to time. The Prime Rate shall be
adjusted automatically, without notice, on the effective date of any change in
such prime commercial lending rate. The Prime Rate is not necessarily The Bank
of New York's lowest rate of interest.
Principal Distribution Amount: With respect to each Distribution Date
and a Loan Group, the sum of (i) the Principal Remittance Amount for such Loan
Group for such Distribution Date less any portion of such amount used to cover
any payment due to the Swap Counterparty with respect to such Distribution Date
pursuant to Section 4.09, (ii) the Extra Principal Distribution Amount for such
Loan Group 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) allocable to such Loan Group,
minus (iv) (a) the amount of any Group 1 Overcollateralization Reduction Amount,
in the case of Loan Group 1 and (b) the amount of any Group 2
Overcollateralization Reduction Amount, in the case of Loan Group 2.
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 the Mortgage Loans in each
Loan Group and any Distribution Date, (a) the sum, without duplication, of: (i)
the scheduled principal collected with respect to the Mortgage Loans during the
related Due Period or advanced with respect to such Distribution Date, (ii)
Principal Prepayments collected in the related Prepayment Period, with respect
to the Mortgage Loans, (iii) the Stated Principal Balance of each Mortgage Loan
that was repurchased by a Seller or purchased by the Master Servicer with
respect to such Distribution Date, (iv) the amount, if any, by which the
aggregate unpaid principal balance of any Replacement Mortgage Loans delivered
by the Sellers in connection with a substitution of a Mortgage Loan is less than
the aggregate unpaid principal balance of any Deleted Mortgage Loans and (v) all
Liquidation Proceeds (to the extent such Liquidation Proceeds related to
principal) and Subsequent Recoveries collected during the related Due Period;
less (b) all Advances relating to principal and certain expenses reimbursable
pursuant to Section 6.03 and reimbursed during the related Due Period, in each
case with respect to such Loan Group.
Principal Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2007-1". Funds in the Principal Reserve Fund
42
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Private Certificates: The Class B, Class C and Class P Certificates.
Prospectus: The prospectus dated November 27, 2006, relating to
asset-backed securities to be sold by the Depositor.
Prospectus Supplement: The prospectus supplement dated February 8,
2007, relating to the public offering of the certain Classes of Certificates
offered thereby.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
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 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 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 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.
Qualified Bidder: With respect to any auction pursuant to Section 9.04,
any institution that is a regular purchaser and/or seller in the secondary
market of residential mortgage loans as determined by the Trustee (or any
advisor on its behalf), in its sole discretion, and any holder of an interest in
the Class C Certificates; provided, however, that neither CHL nor any of its
affiliates shall constitute a Qualified Bidder.
Qualified Institutional Buyer or QIB: A "qualified institutional buyer"
within the meaning of Rule 144A.
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 and designated by
the Depositor, notice of which designation shall be given to the Trustee.
References herein to a given rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of
43
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
Interest-Bearing Certificates, the Business Day immediately preceding such
Distribution Date, or if any such Certificates are no longer Book-Entry
Certificates, the Record Date with respect to such Certificates shall be the
last Business Day of the month preceding the month of such Distribution Date.
With respect to any Distribution Date and the Class A-R, Class C and Class P
Certificates and the first Distribution Date, the Closing Date, and with respect
to any other Distribution Date, the last Business Day of the month preceding the
month of such Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the arithmetic
mean (rounded upwards, if necessary, to the nearest whole multiple of 0.03125%)
of the offered rates for United States dollar deposits for one month that are
quoted by the Reference Banks as of 11:00 a.m., New York City time, on the
related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the
outstanding aggregate Certificate Principal Balance of the Interest-Bearing
Certificates on such Interest Determination Date, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple of 0.03125%) of the rates quoted by one
or more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York City time, on such date for loans in U.S. dollars to leading European
banks for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Interest-Bearing 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.
44
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) with respect to any Fixed
Rate Mortgage Loan, have a Mortgage Rate not less than or no more than 1% per
annum higher than the Mortgage Rate of the Deleted Mortgage Loan and, with
respect to any Adjustable Rate Mortgage Loan: (a) have a Maximum Mortgage Rate
no more than 1% per annum higher or lower than the Maximum Mortgage Rate of the
Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no more than 1% per
annum higher or lower than the Minimum Mortgage Rate of the Deleted Mortgage
Loan; (c) have the same Index and intervals between Adjustment Dates as that of
the Deleted Mortgage Loan; (d) have a Gross Margin not more than 1% per annum
higher or lower than that of the Deleted Mortgage Loan; and (e) have an Initial
Periodic Rate Cap and a Subsequent Periodic Rate Cap each not more than 1% lower
than that of the Deleted Mortgage Loan; (iii) have the same or higher credit
quality characteristics than that of the Deleted Mortgage Loan; (iv) be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio no higher than that of the
Deleted Mortgage Loan; (vi) have a remaining term to maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan; (vii)
not permit conversion of the Mortgage Rate from a fixed rate to a variable rate
or vice versa; (viii) provide for a Prepayment Charge on terms substantially
similar to those of the Prepayment Charge, if any, of the Deleted Mortgage Loan;
(ix) have the same occupancy type and lien priority as the Deleted Mortgage
Loan; (x) be covered by the applicable Mortgage Insurance Policy if the Deleted
Mortgage Loan was covered by such Mortgage Insurance Policy and (xi) 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 (xi) of this definition would cause a
proposed Replacement Mortgage Loan to fail to comply with one
45
or more of clauses (i), (ii), (iv), (viii) and/or (ix) of this definition, then
such proposed Replacement Mortgage Loan must comply with clause (xi) and need
not comply with one or more of clauses (i), (ii), (iv), (viii) and/or (ix), to
the extent, and only to the extent, necessary to assure that the Replacement
Mortgage Loan otherwise complies with clause (xi).
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 Swap
Counterparty, any enhancement or support provider contemplated by Items 1114(b)
or 1115 of Regulation AB, or any other material party contemplated by Item
1101(d)(1) of Regulation AB;
(d) with respect to the Trustee, the Master Servicer and the Depositor
only, the occurrence of an early amortization, performance trigger or other
event, including an Event of Default under this Agreement;
(e) any amendment to this Agreement;
(f) the resignation, removal, replacement, substitution of the Master
Servicer, any Subservicer, the Trustee or any co-trustee;
(g) with respect to the Master Servicer only, if the Master Servicer
becomes aware that (i) any material enhancement or support specified in Item
1114(a)(1) through (3)of Regulation AB or Item 1115 of Regulation AB that was
previously applicable regarding one or more classes of the Certificates has
terminated other than by expiration of the contract on its stated termination
date or as a result of all parties completing their obligations under such
agreement; (ii) any material enhancement specified in Item 1114(a)(1) through
(3)of Regulation AB or Item 1115 of Regulation AB has been added with respect to
one or more classes of the Certificates; or (iii) any existing material
enhancement or support specified in Item 1114(a)(1) through (3)of Regulation AB
or Item 1115 of Regulation AB with respect to one or more classes of the
Certificates has been materially amended or modified; and
(h) with respect to the Trustee, the Master Servicer and the Depositor
only, a required distribution to Holders of the Certificates is not made as of
the required Distribution Date under this Agreement.
46
Reporting Subcontractor: With respect to the Master Servicer or the
Trustee, any Subcontractor determined by such Person pursuant to Section
11.08(b) to be "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB. References to a Reporting Subcontractor shall refer
only to the Subcontractor of such Person and shall not refer to Subcontractors
generally.
Representing Party: As defined in Section 2.03(e).
Request for Document Release: A Request for Document Release submitted
by the Master Servicer to the Co-Trustee, substantially in the form of Exhibit
M.
Request for File Release: A Request for File Release submitted by the
Master Servicer to the Co-Trustee, substantially in the form of Exhibit N.
Required Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the excess of (i) $1,000 over (ii) the
amount of funds on deposit in the Carryover Reserve Fund after all other
deposits and withdrawals from such account on such Distribution Date.
Required 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 the applicable Mortgage Insurance Policy with respect to a
Covered Mortgage Loan.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
Rolling Sixty-Day Delinquency Rate: With respect to any Distribution
Date on or after the Stepdown Date and any Loan Group or Loan Groups, the
average of the Sixty-Day Delinquency Rates for such Loan Group or Loan Groups
and such Distribution Date and the two immediately preceding Distribution Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. and its successors.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification: As defined in Section 11.05.
Scheduled Payment: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and/or interest due on any Due Date on such
Mortgage Loan which is payable by the related Mortgagor from time to time under
the related Mortgage Note, determined: (a) after giving effect to (i) any
Deficient Valuation and/or Debt Service Reduction
47
with respect to such Mortgage Loan and (ii) any reduction in the amount of
interest collectible from the related Mortgagor pursuant to the Relief Act or
any similar state or local law; (b) without giving effect to any extension
granted or agreed to by the Master Servicer pursuant to Section 3.05(a); and (c)
on the assumption that all other amounts, if any, due under such Mortgage Loan
are paid when due.
Securities Act: The Securities Act of 1933, as amended.
Seller Interest Shortfall Payment: With respect to any Initial Mortgage
Loan that does not have a first payment date on or before the Due Date in the
month of the first Distribution Date or any Subsequent Mortgage Loan that does
not have a first payment date on or before the Due Date in the month immediately
following the related Subsequent Transfer Date, an amount equal to one month's
interest at the related Adjusted Mortgage Rate on the Cut-off Date Principal
Balance of that Mortgage Loan.
Sellers: CHL, in its capacity as seller of the CHL Mortgage Loans to
the Depositor, Park 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.
Senior Certificates: The Class A and Class A-R Certificates.
Senior Enhancement Percentage: With respect to a Distribution Date on
or after the Stepdown Date, the fraction (expressed as a percentage) (1) the
numerator of which is the excess of (a) the aggregate Stated Principal Balance
of the Mortgage Loans for the preceding Distribution Date over (b) (i) before
the Certificate Principal Balances of the Senior Certificates have been reduced
to zero, the sum of the Certificate Principal Balances of the Senior
Certificates, or (ii) after the Certificate Principal Balances of the Senior
Certificates have been reduced to zero, the Certificate Principal Balance of the
most senior Class of Subordinate Certificates outstanding, as of the related
Master Servicer Advance Date, and (2) the denominator of which is the aggregate
Stated Principal Balance of the Mortgage Loans for the preceding Distribution
Date.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations hereunder, including, but not limited to, the cost of
(i) the preservation, restoration and protection of a Mortgaged Property, (ii)
any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan for the preceding Distribution Date or,
in the event of any payment of interest that accompanies a Principal Prepayment
in full made by the Mortgagor, interest at the Servicing
48
Fee Rate on the Stated Principal Balance of such Mortgage Loan for the period
covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date on or
after the Stepdown Date, a fraction, expressed as a percentage, the numerator of
which is the aggregate Stated Principal Balance for such Distribution Date of
all Mortgage Loans 60 or more days delinquent as of the close of business on the
last day of the calendar month preceding such Distribution Date (including
Mortgage Loans in foreclosure, bankruptcy and REO Properties) and the
denominator of which is the aggregate Stated Principal Balance for such
Distribution Date of all Mortgage Loans.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the unpaid principal balance of the
Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due on or prior to such date and
irrespective any delinquency in payment by the related Mortgagor, and (ii) as of
any other Distribution Date, the Stated Principal Balance of the Mortgage Loan
as of its Cut-off Date, minus the sum of (a) the principal portion of the
Scheduled Payments (x) due with respect to such Mortgage Loan during each Due
Period ending prior to such Distribution Date and (y) that were received by the
Master Servicer as of the close of business on the Determination Date related to
such Distribution Date or with respect to which Advances were made as of the
Master Servicer Advance Date related to such Distribution Date, (b) all
Principal Prepayments with respect to 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, and references herein to the Stated Principal Balance of a Loan Group
at any time shall mean the aggregate Stated Principal Balance of all Mortgage
Loans in such Loan Group at such time.
Stepdown Date: The earlier to occur of (a) the Distribution Date
following the Distribution Date on which the aggregate Certificate Principal
Balance of the Senior Certificates is reduced to zero, and (b) the later to
occur of (x) the Distribution Date in February 2010 and (y) the first
Distribution Date on which the aggregate Certificate Principal Balance of the
Senior
49
Certificates (after calculating anticipated distributions on such Distribution
Date) is less than or equal to 59.10% of the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date.
Stepdown Target Subordination Percentage: For each Class of Subordinate
Certificates (other than the Class M-1, Class M-2 and Class M-3 Certificates),
the respective percentage indicated in the following table:
Stepdown Target Subordination
Percentage
-----------------------------
Class M-4....................... 18.60%
Class M-5....................... 15.10%
Class M-6....................... 12.00%
Class M-7....................... 9.40%
Class M-8....................... 7.90%
Class M-9....................... 5.80%
Class B......................... 3.50%
Strip REMIC: As defined in the Preliminary Statement.
Strip REMIC Cap: As defined in the Preliminary Statement.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to the Mortgage Loans under the direction or authority of the
Master Servicer or a Subservicer or the Trustee, as the case may be.
Subordinate Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class B
Certificates.
Subordinate Class Principal Distribution Amount: With respect to any
Distribution Date and any Class of Subordinate Certificates (other than the
Class M-1, Class M-2 and Class M-3 Certificates), the excess of (1) the sum of
(a) the aggregate Certificate Principal Balance of the Class A Certificates
(after taking into account distribution of the Class 1-A Principal Distribution
Amount and the Class 2-A Principal Distribution Amount for such Distribution
Date), (b) the aggregate Certificate Principal Balance of the Class M-1, Class
M-2 and Class M-3 Certificates (after taking into account distribution of the
Combined Class M-1, M-2 and M-3 Principal Distribution Amount for such
Distribution Date), (c) the aggregate Certificate Principal Balance of any
Classes of Subordinate Certificates (other than the Class M-1, Class M-2 and
Class M-3 Certificates) that are senior to the subject Class (in each case,
after taking into account distribution of the Subordinate Class Principal
Distribution Amount(s) for such senior Class(es) of Certificates for such
Distribution Date) and (d) the Certificate Principal Balance of the subject
Class of Subordinate Certificates immediately prior to such Distribution Date
over (2) the lesser of (a) the product of (x) 100% minus the Stepdown Target
Subordination
50
Percentage for the subject Class of Certificates and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (b) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date minus the OC Floor; provided, however, that if such Class of Subordinate
Certificates is the only Class of Subordinate Certificates outstanding on such
Distribution Date, that Class will be entitled to receive the entire remaining
Principal Distribution Amount for Loan Group 1 and Loan Group 2 until the
Certificate Principal Balance thereof is reduced to zero.
Subordinate Net Rate Cap: With respect to any Distribution Date and
each Class of Subordinate Certificates, the weighted average of the Class 1-A
Net Rate Cap and the Class 2-A Net Rate Cap, weighted on the basis of the excess
(if any) of the sum of the aggregate Stated Principal Balance of the Mortgage
Loans in the related Loan Group 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) and the amount on deposit in the
Pre-Funding Account in respect of that Loan Group as of the first day of such
Due Period over the Certificate Principal Balance of the related Senior
Certificates immediately prior to such Distribution Date.
Subsequent Certificate Account Deposit: With respect to any Subsequent
Transfer Date, an amount equal to the aggregate of all amounts in respect of (i)
principal of the related Subsequent Mortgage Loans due after the related
Subsequent Cut-off Date and received by the Master Servicer on or before such
Subsequent Transfer Date and not applied in computing the Cut-off Date Principal
Balance thereof and (ii) interest on such Subsequent Mortgage Loans due after
such Subsequent Cut-off Date and received by the Master Servicer on or before
the Subsequent Transfer Date.
Subsequent Cut-off Date: In the case of any Subsequent Mortgage Loan,
the later of (x) the first day of the month of the related Subsequent Transfer
Date and (y) the date of origination of such Subsequent Mortgage Loan.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the Trustee on
a Subsequent Transfer Date, and listed on the related supplement to the 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 Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the percentage specified in the related Mortgage Note that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
(other than the initial Adjustment 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.
51
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 supplement to the 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(e).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(e), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
Successful Auction: An auction held pursuant to Section 9.04 at which
at least three Qualified Bidders submitted bids and at least one of those bids
was an Acceptable Bid Amount.
Swap Account: The separate Eligible Account created and initially
maintained by the Swap Trustee pursuant to Section 4.09.
Swap Contract: The transaction evidenced by the Confirmation (as
assigned to the Swap Contract Administrator pursuant to the Swap Contract
Assignment Agreement), a form of which is attached hereto as Exhibit U.
Swap Contract Administration Agreement: The swap contract
administration agreement dated as of the Closing Date among CHL, the Trustee and
the Swap Contract Administrator, a form of which is attached hereto as Exhibit
V-2.
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Swap Contract Administrator: The Bank of New York, in its capacity as
swap contract administrator under the Swap Contract Administration Agreement and
its successors and assigns.
Swap Contract Assignment Agreement: The Assignment Agreement dated as
of the Closing Date among CHL, the Swap Contract Administrator and the Swap
Counterparty, a form of which is attached hereto as Exhibit V-1.
Swap Contract Termination Date: The Distribution Date in January 2013.
Swap Counterparty: Deutsche Bank AG, New York Branch and its
successors.
Swap Counterparty Trigger Event: Either (i) an "Event of Default" under
the ISDA Master Agreement with respect to which the Swap Counterparty is the
sole "Defaulting Party" (as defined in the ISDA Master Agreement) or (ii) a
"Termination Event" (other than an Illegality or a Tax Event (as such terms are
defined in the ISDA Master Agreement)) or "Additional Termination Event" under
the ISDA Master Agreement with respect to which the Swap Counterparty is the
sole "Affected Party" (as defined in the ISDA Master Agreement).
Swap-IO REMIC: As defined in the Preliminary Statement.
Swap Termination Payment: The payment payable to either party under the
ISDA Master Agreement due to an early termination of the ISDA Master Agreement.
Swap Trust: The trust fund established by Section 4.09.
Swap Trustee: The Bank of New York, a New York banking corporation, not
in its individual capacity, but solely in its capacity as trustee for the
benefit of the Holders of the Interest-Bearing Certificates 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.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and Treasury
regulation ss. 301.6231(a)(7)-1. Initially, this person shall be the Trustee.
Tax Matters Person Certificate: With respect to the Master REMIC, the
Strip REMIC and the Swap-IO REMIC, the Class A-R Certificate with a Denomination
of $0.05 and in the form of Exhibit E hereto.
Termination Price: As defined in Section 9.01.
Terminator: As defined in Section 9.01.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 36 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
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Transaction Documents: This Agreement, the Swap Contract, the Swap
Contract Administration Agreement, each Mortgage Insurance Policy and any other
document or agreement entered into in connection with the Trust Fund, the
Certificates or the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date on or after the
Stepdown Date, either a Delinquency Trigger Event with respect to that
Distribution Date or a Cumulative Loss Trigger Event with respect to that
Distribution Date.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(2); (ii) the
Certificate Account, the Distribution Account, the Principal Reserve Fund, the
Carryover Reserve Fund, the Credit Comeback Excess Account, the Pre-Funding
Account, the Capitalized Interest Account and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii) property that
secured a Mortgage Loan and has been acquired by foreclosure, deed in lieu of
foreclosure or otherwise; (iv) the mortgagee's rights under the Insurance
Policies with respect to the Mortgage Loan; and (v) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property.
Trustee: The Bank of New York, a New York banking corporation, not in
its individual capacity, but solely in its capacity as trustee for the benefit
of the Certificateholders under this Agreement, and any successor thereto, and
any corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
Trustee Advance Notice: As defined in Section 4.01(d).
Trustee Advance Rate: With respect to any Advance made by the Trustee
pursuant to Section 4.01(d), a per annum rate of interest determined as of the
date of such Advance equal to the Prime Rate in effect on such date plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i) the Pool Stated
Principal Balance and (ii) any amounts remaining in the Pre-Funding Account
(excluding any investment earnings thereon) with respect to such Distribution
Date.
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Trustee Fee Rate: With respect to each Mortgage Loan, the per annum
rate agreed upon in writing on or prior to the Closing Date by the Trustee and
the Depositor, which is 0.009% per annum.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 24 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41, 67
Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department of
Labor.
Underwriters: Countrywide Securities Corporation and Greenwich Capital
Markets, Inc.
Unpaid Realized Loss Amount: For any Class of Certificates and any
Distribution Date, (x) the portion of the aggregate Applied Realized Loss Amount
previously allocated to that Class remaining unpaid from prior Distribution
Dates minus (y) any increase in the Certificate Principal Balance of that Class
due to the allocation of Subsequent Recoveries to the Certificate Principal
Balance of that Class pursuant to Section 4.04(h).
Voting Rights: The voting rights of all the Certificates that are
allocated to any Certificates for purposes of the voting provisions hereunder.
Voting Rights allocated to each Class of Certificates shall be allocated 97% to
the Certificates other than the Class A-R, Class C and Class P Certificates
(with the allocation among the Certificates to be in proportion to the
Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes), and 1% to each of the Class A-R,
Class C and Class P Certificates. Voting Rights will be allocated among the
Certificates of each such Class in accordance with their respective Percentage
Interests.
Winning Bidder: With respect to a Successful Auction, the Qualified
Bidder that bids the highest price.
Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined meanings
when used in any certificate, agreement or other document delivered pursuant
hereto unless otherwise defined therein. For purposes of this Agreement and all
such certificates and other documents, unless the context otherwise requires:
(a) accounting terms not otherwise defined in this Agreement, and accounting
terms partly defined in this Agreement to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles; (b) the words "hereof," "herein" and "hereunder" and words of
similar import refer to this Agreement (or the certificate, agreement or other
document in which they are used) as a whole and not to any particular provision
of this Agreement (or such certificate, agreement or document); (c) references
to any Section, Schedule or Exhibit are references to Sections, Schedules and
Exhibits in or to this Agreement, and references to any paragraph, subsection,
clause or other subdivision within any Section or definition refer to such
paragraph, subsection, clause or other subdivision of such Section or
definition; (d) the term "including" means
55
"including without limitation"; (e) references to any law or regulation refer to
that law or regulation as amended from time to time and include any successor
law or regulation; (f) references to any agreement refer to that agreement as
amended from time to time; (g) references to any Person include that Person's
permitted successors and assigns; and (h) a Mortgage Loan is "30 days
delinquent" if a Scheduled Payment has not been received by the close of
business on the Due Date on which the next Scheduled Payment is due. Similarly
for "60 days delinquent," "90 days delinquent" and so on.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of such Seller in and to the applicable Initial Mortgage Loans,
including all interest and principal received and receivable by such Seller on
or with respect to applicable Initial Mortgage Loans after the Initial Cut-off
Date (to the extent not applied in computing the Cut-off Date Principal Balance
thereof) or deposited into the Certificate Account by the Master Servicer on
behalf of such Seller as part of the Initial Certificate Account Deposit as
provided in this Agreement, other than principal due on the applicable Initial
Mortgage Loans on or prior to the Initial Cut-off Date and interest accruing
prior to the Initial Cut-off Date. The Master Servicer confirms that, on behalf
of the Sellers, concurrently with the transfer and assignment, it has deposited
into the Certificate Account the Initial Certificate Account Deposit.
Immediately upon the conveyance of the Initial Mortgage Loans referred
to in the preceding paragraph, the Depositor sells, transfers, assigns, sets
over and otherwise conveys to the Trustee for benefit of the Certificateholders,
without recourse, all right, title and interest in and to the Initial Mortgage
Loans.
CHL further agrees (x) to cause The Bank of New York to enter into the
Swap Contract Administration Agreement as Swap Contract Administrator and (y) to
assign all of its right, title and interest in and to the interest rate swap
transaction evidenced by the Confirmation, and to cause all of its obligations
in respect of such transaction to be assumed by, the Swap Contract
Administrator, on the terms and conditions set forth in the Swap Contract
Assignment Agreement.
(b) Subject to the execution and delivery of the related Subsequent
Transfer Agreement as provided by Section 2.01(d) and the terms and conditions
of this Agreement, each Seller sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, on each Subsequent
Transfer Date, all the right, title and interest of such Seller in and to the
related Subsequent Mortgage Loans, including all interest and principal received
and receivable by such Seller on or with respect to such Subsequent Mortgage
Loans after the related Subsequent Cut-off Date (to the extent not applied in
computing the Cut-off Date Principal Balance thereof) or deposited into the
Certificate Account by the Master Servicer on behalf of such Seller as part of
any related Subsequent Certificate Account Deposit as provided in this
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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, without recourse, all right, title and interest in the
Subsequent Mortgage Loans.
(c) Each Seller has entered into this Agreement in consideration for
the purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right, title and interest in the portion of the Trust Fund
not otherwise conveyed to the Trustee pursuant to Section 2.01(a) or (b).
(d) On any Business Day during the Funding Period designated by CHL to
the Trustee, the Sellers, the Depositor and the Trustee shall complete, execute
and deliver a Subsequent Transfer Agreement. After the execution and delivery of
such Subsequent Transfer Agreement, on the Subsequent Transfer Date, the Trustee
shall set aside in the Pre-Funding Account an amount equal to the related
Subsequent Transfer Date Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the satisfaction of each of the following
conditions:
(1) the Trustee and the Underwriters will be provided Opinions
of Counsel addressed to the Rating Agencies as with respect to the sale
of the Subsequent Mortgage Loans conveyed on such Subsequent Transfer
Date (such opinions being substantially similar to the opinions
delivered on the Closing Date to the Rating Agencies with respect to
the sale of the Initial Mortgage Loans on the Closing Date), to be
delivered as provided in Section 2.01(f);
(2) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans does
not result in a reduction or withdrawal of any ratings assigned to the
Certificates by the Rating Agencies;
(3) the Depositor shall deliver to the Trustee an Officer's
Certificate confirming the satisfaction of each of the conditions set
forth in this Section 2.01(e) required to be satisfied by such
Subsequent Transfer Date;
(4) each Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date satisfies the representations and warranties applicable
to it under this Agreement, provided, however, that with respect to a
breach of a representation and warranty with respect to a Subsequent
Mortgage Loan set forth in this clause (4), the obligation under
Section 2.03(e) of this Agreement of the applicable Seller, to cure,
repurchase or replace such Subsequent Mortgage Loan shall constitute
the sole remedy against such Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee;
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(5) the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date were selected in a manner reasonably believed not to be
adverse to the interests of the Certificateholders;
(6) no Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date was 30 or more days delinquent as of the related Cut-off
Date;
(7) following the conveyance of the Subsequent Mortgage Loans
on such Subsequent Transfer Date, the characteristics of each Loan
Group will not vary by more than the amount specified below (other than
(i) the percentage of Mortgage Loans secured by Mortgaged Properties
located in the State of California, which will not exceed 50% of the
Mortgage Loans in each Loan Group and (ii) the percentage of Mortgage
Loans in the Credit Grade Categories of "C" or below, which will not
exceed 15% of the Mortgage Loans in each Loan Group) 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:
Loan Group 1
Characteristic Value Permitted Variance
-------------- ----- ------------------
Weighted Average Mortgage Rate......................... 8.097% +/-0.10%
Weighted Average Original Loan-to-Value Ratio.......... 79.47% +/-3.00%
Weighted Average Credit Bureau Risk Score.............. 596 points +/-5 points
Percentage Originated under CHL's Full Documentation
Program................................................ 62.23% +/-3.00%
Weighted Average Gross Margin of Adjustable Rate
Mortgage Loans......................................... 6.527% +/-0.10%
Loan Group 2
Characteristic Value Permitted Variance
-------------- ----- ------------------
Weighted Average Mortgage Rate......................... 8.032% +/-0.10%
Weighted Average Original Loan-to-Value Ratio.......... 81.54% +/-3.00%
Weighted Average Credit Bureau Risk Score.............. 618 points +/-5 points
Percentage Originated under CHL's Full Documentation
Program................................................ 55.40% +/-3.00%
Weighted Average Gross Margin of Adjustable Rate
Mortgage Loans......................................... 6.645% +/-0.10%
(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
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(9) the Trustee and the Underwriters 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 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 supplement to the Mortgage Loan Schedule reflecting
the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date and the
Loan Group into which each Subsequent Mortgage Loan was conveyed, (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) (which
such Officer's Certificate shall set forth the Subsequent Transfer Date Transfer
Amount and Capitalized Interest Release Amount, if any, for such Subsequent
Transfer Date), the Trustee shall remit to CHL (on behalf of CHL and the other
Sellers) the Subsequent Transfer Date Transfer Amount from such funds that were
set aside in the Pre-Funding Account pursuant to Section 2.01(d) and shall
distribute any Capitalized Interest Release Amount for such Subsequent Transfer
Date to the order of CHL. The positive difference, if any, between the
Subsequent Transfer Date Transfer Amount and the Subsequent Transfer Date
Purchase Amount shall be re-invested by the Trustee in the Pre-Funding Account.
The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except for
its own receipt of documents specified above, and shall be entitled to rely on
the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the Depositor
shall deliver to the Trustee a letter of a nationally recognized firm of
independent public accountants stating whether or not the Subsequent Mortgage
Loans conveyed on such Subsequent Transfer Date conform to the characteristics
described in Section 2.01(e)(6) and (7).
(g) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered to, and deposited with, the Co-Trustee (or, in
the case of the Delay Delivery Mortgage Loans, will deliver to, and deposit
with, the Co-Trustee within the time periods specified in the definition of
Delay Delivery Mortgage Loans) (except as provided in clause (vi) below) for the
benefit of the Certificateholders, the following documents or instruments with
respect to each such Mortgage Loan so assigned (with respect to each Mortgage
Loan, clause (i) through (vi) below, together, the "Mortgage File" for each such
Mortgage Loan):
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(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
"Asset-Backed Certificates, Series 2007-1, CWABS, Inc., by The Bank of
New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of January 1, 2007, without recourse"
or a copy of such assignment, with recording information, (each such
assignment, when duly and validly completed, to be in recordable form
and sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or a
copy of such assignments, with recording information (in each case
noting the presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the electronic
equivalent and all riders thereto or, in the event such original title
policy has not been received from the insurer, such original or
duplicate original lender's title policy and all riders thereto shall
be delivered within one year of the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, each Seller agrees that it will cause, at such Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have
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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 Co-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 Co-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
Co-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 Co-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 Co-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 Co-Trustee within the time periods specified in this
Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan as
to which the related Mortgaged Property and Mortgage File are located in any
jurisdiction under the
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laws of which the recordation of the assignment specified in clause (iii) above
is not necessary to protect the Trustee's and the Certificateholders' interest
in the related Mortgage Loan, as evidenced by an Opinion of Counsel delivered by
CHL to the Trustee within 90 days of the Closing Date (which opinion may be in
the form of a "survey" opinion and is not required to be delivered by counsel
admitted to practice law in the jurisdiction as to which such opinion applies),
in lieu of recording the assignment specified in clause (iii) above, the
applicable Seller may deliver an unrecorded assignment in blank, in form
otherwise suitable for recording to the Co-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
Co-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 Co-Trustee
shall complete the assignment in the manner specified in clause (iii) above and
CHL shall submit or cause to be submitted for recording as specified above or,
should CHL fail to perform such obligations, the Trustee shall cause the Master
Servicer, at the Master Servicer's expense, to cause each such previously
unrecorded assignment to be submitted for recording as specified above. In the
event a Mortgage File is released to the Master Servicer as a result of the
Master Servicer's having completed a Request for Document Release, the Trustee
shall complete the assignment of the related Mortgage in the manner specified in
clause (iii) above.
So long as the Co-Trustee or its agent maintains an office in the State
of California, the Co-Trustee or its agent shall maintain possession of and not
remove or attempt to remove from the State of California any of the Mortgage
Files as to which the related Mortgaged Property is located in such State. In
the event that a Seller fails to record an assignment of a Mortgage Loan as
herein provided within 90 days of notice of an event set forth in clause (I),
(II) or (III) of the preceding paragraph, the Master Servicer shall prepare and,
if required hereunder, file such assignments for recordation in the appropriate
real property or other records office. Each Seller hereby appoints the Master
Servicer (and any successor servicer hereunder) as its attorney-in-fact with
full power and authority acting in its stead for the purpose of such
preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date (in the case of Initial Mortgage Loans) or
related Subsequent Transfer Date (in the case of Subsequent Mortgage Loans) and
the Cut-off Date, CHL shall deposit or cause to be deposited in the Certificate
Account the amount required to be deposited therein with respect to such payment
pursuant to Section 3.05 hereof.
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Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date (in the case of Initial Mortgage Loans) or
within twenty days after the related Subsequent Transfer Date (in the case of
Subsequent Mortgage Loans), CHL (on behalf of each Seller) shall either (i)
deliver to the Co-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, without recourse, all right, title and interest in the
portion of the Trust Fund not otherwise conveyed to the Trustee pursuant to
Sections 2.01(a) or (b).
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a) The Co-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 and CHL (on behalf of each Seller) an Initial
Certification substantially in the form annexed hereto as Exhibit G-1 to the
effect that, as to each Initial Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Initial Mortgage Loan paid in full or any Initial
Mortgage Loan specifically identified in such certification as not covered by
such certification), the documents described in Section 2.01(g)(i) and, in the
case of each Initial Mortgage Loan that is not a MERS Mortgage Loan, the
documents described in Section 2.01(g)(iii) with respect to
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such Initial Mortgage Loans as are in the Co-Trustee's possession and based on
its review and examination and only as to the foregoing documents, such
documents appear regular on their face and relate to such Initial Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after the Closing Date
to the Depositor, the Master Servicer and CHL (on behalf of each Seller) an
Interim Certification substantially in the form annexed hereto as Exhibit G-2 to
the effect that, as to each Initial Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Initial Mortgage Loan paid in full or any Initial
Mortgage Loan specifically identified in such certification as not covered by
such certification) all documents required to be delivered to the Co-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), (ix)
and (xv) of the definition of the "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. On or before the thirtieth (30th)
day after the Closing Date (or if such thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer and CHL (on behalf of each Seller) a Delay Delivery Certification with
respect to the Initial Mortgage Loans substantially in the form annexed hereto
as Exhibit G-3, with any applicable exceptions noted thereon. The Trustee or the
Co-Trustee, as applicable, 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)
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 Co-Trustee, at the direction of 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
64
MERS Mortgage Loan, the original Mortgage or a copy of such Mortgage,
with recording information, noting the presence of the MIN of the
Initial Mortgage Loan and language indicating that the Mortgage Loan is
a MOM Loan if the Initial Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the
public recording office in which Mortgage has been recorded;
(iii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, a duly executed assignment of the Mortgage or a
copy thereof with recording information, in either case in the form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or a
copy of such assignments, with recording information (in each case
noting the presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(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 Co-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 Co-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
Co-Trustee shall release the related Mortgage
65
File to CHL and shall execute and deliver at CHL's request such instruments of
transfer or assignment as CHL has prepared, in each case without recourse, as
shall be necessary to vest in CHL, or a designee, the Trustee's interest in any
Initial Mortgage Loan released pursuant hereto. If pursuant to the foregoing
provisions CHL repurchases an Initial Mortgage Loan that is a MERS Mortgage
Loan, the Master Servicer shall cause MERS to execute and deliver an assignment
of the Mortgage in recordable form to transfer the Mortgage from MERS to CHL and
shall cause such Mortgage to be removed from registration on the MERS(R) System
in accordance with MERS' rules and regulations.
The Co-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 Co-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 Co-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 Co-Trustee, the Depositor and any Certificateholder against any
Seller.
(b) The Trustee agrees to execute and deliver on the Subsequent
Transfer Date to the Depositor, the Master Servicer and CHL (on behalf of each
Seller) an Initial Certification substantially in the form annexed hereto as
Exhibit G-4 to the effect that, as to each Subsequent Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Subsequent Mortgage Loan paid in full
or any Subsequent Mortgage Loan specifically identified in such certification as
not covered by such certification), the documents described in Section
2.01(g)(i) and, in the case of each Subsequent Mortgage Loan that is not a MERS
Mortgage Loan, the documents described in Section 2.01(g)(iii), with respect to
such Subsequent Mortgage Loan are in its possession, and based on its review and
examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Subsequent Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after the
Subsequent Transfer Date to the Depositor, the Master Servicer and CHL (on
behalf of each Seller) an Interim Certification substantially in the form
annexed hereto as Exhibit G-2 to the effect that, as to each Subsequent Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Subsequent Mortgage
Loan paid in full or any Subsequent Mortgage Loan specifically identified in
such certification as not covered by such certification), all documents required
to be delivered to it pursuant to this Agreement with respect to such Subsequent
Mortgage Loan are in its possession (except those described in Section
2.01(g)(vi)) and based on its review and
66
examination and only as to the foregoing documents, (i) such documents appear
regular on their face and relate to such Subsequent Mortgage Loan, and (ii) the
information set forth in items (i), (iv), (v), (vi), (viii), (ix) and (xv) of
the definition of the "Mortgage Loan Schedule" accurately reflects information
set forth in the Mortgage File. On or before the thirtieth (30th) day after the
Subsequent Transfer Date (or if such thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer and CHL (on behalf of each Seller) a Delay Delivery Certification with
respect to the Subsequent Mortgage Loans substantially in the form annexed
hereto as Exhibit G-3, with any applicable exceptions noted thereon, together
with a Subsequent Certification substantially in the form annexed hereto as
Exhibit G-4. The Trustee shall be under no duty or obligation to inspect, review
or examine such documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded in the real estate
records or that they are other than what they purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date, the Trustee
shall deliver to the Depositor, the Master Servicer, CHL (on behalf of each
Seller) 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 Co-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;
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(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 Co-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
68
promptly deliver to the Co-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 Co-Trustee, the Depositor and any
Certificateholder against the Sellers.
Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Sellers.
(a) The Master Servicer hereby represents and warrants to the Depositor
and the Trustee as follows, as of the date hereof with respect to the Initial
Mortgage Loans, and the related Subsequent Transfer Date with respect to the
Subsequent Mortgage Loans:
(1) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under the laws
of the State of Texas and is duly authorized and qualified to transact
any and all business contemplated by this Agreement to be conducted by
the Master Servicer in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(2) The Master Servicer has the full partnership power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
partnership action on the part of the Master Servicer the execution,
delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes a legal, valid and binding obligation
of the Master Servicer, enforceable against the Master Servicer in
accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer
under this Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance
with the terms hereof are in the ordinary
69
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 ▇▇▇▇▇▇ ▇▇▇ 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.
(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.
(8) The Master Servicer has fully furnished and will fully
furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis for the Mortgage Loans in Loan
Group 1.
(b) CHL hereby represents and warrants to the Depositor and the Trustee
as follows, as of the Initial Cut-off Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Cut-off Date in the case of the
Subsequent Mortgage Loans (unless otherwise indicated or the context otherwise
requires, percentages with respect to the Initial Mortgage
70
Loans in the Trust Fund or in a Loan Group or Loan Groups are measured by the
Cut-off Date Principal Balance of the Initial Mortgage Loans in the Trust Fund
or of the Initial Mortgage Loans in the related Loan Group or Loan Groups, as
applicable):
(1) CHL is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the State of
New York and is duly authorized and qualified to transact any and all
business contemplated by this Agreement and each Subsequent Transfer
Agreement to be conducted by CHL in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with
the doing business laws of any such state, to the extent necessary to
ensure its ability to enforce each Mortgage Loan, to sell the CHL
Mortgage Loans in accordance with the terms of this Agreement and each
Subsequent Transfer Agreement and to perform any of its other
obligations under this Agreement and each Subsequent Transfer Agreement
in accordance with the terms hereof and thereof.
(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.
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(4) CHL is an approved seller of conventional mortgage loans
for ▇▇▇▇▇▇ Mae 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.
(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 Loan-to-Value Ratio at origination
in excess of 100.00%.
(11) Each Mortgage Loan is secured by a valid and enforceable
first lien on the related Mortgaged Property subject only to (1) the
lien of non-delinquent current real property taxes and assessments, (2)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally or specifically reflected in
the appraisal made in connection with the origination of the related
Mortgage Loan and (3)other matters to which like properties are
commonly subject that do not materially interfere with the benefits of
the security intended to be provided by such Mortgage.
(12) Immediately prior to the assignment of each CHL Mortgage
Loan to the Depositor, CHL had good title to, and was the sole owner
of, such CHL Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against any
Mortgaged Property.
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(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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and is in a form
acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, which policy insures the
Sellers and successor owners of indebtedness secured by the insured
Mortgage, as to the first priority lien, of the Mortgage subject to the
exceptions set forth in paragraph (11) above; to the best of CHL's
knowledge, no claims have been made under such mortgage title insurance
policy and no prior holder of the related Mortgage, including any
Seller, has done, by act or omission, anything that would impair the
coverage of such mortgage title insurance policy.
(19) No Initial Mortgage Loan was the subject of a Principal
Prepayment in full between the Initial Cut-off Date and the Closing
Date. No Subsequent Mortgage Loan was the subject of a Principal
Prepayment in full between the Subsequent Cut-off Date and the
Subsequent Transfer Date.
(20) To the best of CHL's knowledge, all of the improvements
that were included for the purpose of determining the Appraised Value
of the Mortgaged
73
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) Each Mortgage Note and each Mortgage is acceptable in
form to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac.
(27) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof
74
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 in Loan Group 1
and Loan Group 2 are secured by single family detached dwellings. No
more than approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans in Loan Group 1 and Loan Group 2
are secured by two- to four-family dwellings. No more than
approximately the percentage specified in the Collateral Schedule of
the Initial Mortgage Loans in Loan Group 1 and Loan Group 2 are secured
by low-rise condominium units. No more than approximately the
percentage specified in the Collateral Schedule of the Initial Mortgage
Loans in Loan Group 1 and Loan Group 2 are secured by high-rise
condominium units. No more than approximately the percentage specified
in the Collateral Schedule of the Initial Mortgage Loans in Loan Group
1 and Loan Group 2 are secured by manufactured housing. No more than
approximately the percentage specified in the Collateral Schedule of
the Initial Mortgage Loans in Loan Group 1 and Loan Group 2 are secured
by PUDs.
(33) Each Initial Mortgage Loan in Loan Group 1 and Loan Group
2 was originated on or after the date specified in the Collateral
Schedule.
(34) Each Initial Mortgage Loan that is an Adjustable Rate
Mortgage Loan, other than a Two-Year Hybrid Mortgage Loan, a Three-Year
Hybrid Mortgage Loan or a Five-Year Hybrid Mortgage Loan, had an
initial Adjustment Date no later than the applicable date specified on
the Collateral Schedule; each Initial Mortgage Loan that is a Two-Year
Hybrid Mortgage Loan had an initial Adjustment Date no later than the
applicable date specified on the Collateral Schedule; each Initial
Mortgage Loan that is a Three-Year Hybrid Mortgage Loan had an initial
Adjustment Date no later than the applicable date specified on the
Collateral Schedule; and each Initial Mortgage Loan that is a Five-Year
Hybrid Mortgage Loan had an initial Adjustment Date no later than the
applicable date specified on the Collateral Schedule.
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(35) Approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans in Loan Group 1 and Loan Group 2
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 in
Loan Group 1 and Loan Group 2, respectively, are secured by investor
properties, and no less than approximately the percentage specified in
the Collateral Schedule of the Initial Mortgage Loans in Loan Group 1
and Loan Group 2 respectively, are secured by owner-occupied Mortgaged
Properties that are primary residences.
(37) At the Cut-off Date, the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy
with a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the
area where the Mortgaged Property is located in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent
the Mortgagor and/or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium unit. All
such individual insurance policies and all flood policies referred to
in item (38) below contain a standard mortgagee clause naming the
applicable Seller or the original mortgagee, and its successors in
interest, as mortgagee, and the applicable Seller has received no
notice that 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
76
period, would constitute a default, breach, violation or event of
acceleration under the Mortgage or the related Mortgage Note; and no
Seller has waived any default, breach, violation or event of
acceleration.
(41) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of CHL's knowledge, no improvement
to a Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
Mortgage Loan Schedule. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan. The Mortgage
Note does not permit or obligate the Master Servicer to make future
advances to the Mortgagor at the option of the Mortgagor.
(44) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
that previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every
such item that remains unpaid and that has been assessed, but is not
yet due and payable. Except for (A) payments in the nature of escrow
payments, and (B) interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage proceeds, whichever is later,
to the day that precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Master Servicer has not advanced
funds, or induced, solicited or knowingly received any advance of funds
by a party other than the Mortgagor, directly or indirectly, for the
payment of any amount required by the Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten in
all material respects in accordance with CHL's underwriting guidelines
for credit blemished quality mortgage loans or, with respect to
Mortgage Loans purchased by CHL were underwritten in all material
respects in accordance with customary and prudent underwriting
guidelines generally used by originators of credit blemished quality
mortgage loans.
(46) Prior to the approval of the Mortgage Loan application,
an appraisal of the related Mortgaged Property was obtained from a
qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan; such appraisal is in
a form acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac.
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(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 in
Loan Group 1 and Loan Group 2 as of the Cut-off Date ranged between the
approximate per annum percentages specified on the Collateral Schedule
and the weighted average Mortgage Rate as of the Cut-off Date was
approximately the per annum rate specified on the Collateral Schedule.
(49) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the applicable
Seller's portfolio at the Closing Date as to which the representations
and warranties made as to the Mortgage Loans set forth in this Section
2.03(b) and Sections 2.03(c) and 2.03(d) can be made. No selection was
made in a manner that would adversely affect the interests of
Certificateholders.
(50) The Gross Margins on the Initial Mortgage Loans in Loan
Group 1 and Loan Group 2 range between the approximate percentages
specified on the Collateral Schedule, and the weighted average Gross
Margin was approximately the percentage specified in the Collateral
Schedule.
(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) To the extent required under applicable law, each
originator and subsequent mortgagee or servicer of the Mortgage Loan
complied with all licensing requirements and was authorized to transact
and do business in the jurisdiction in which the related Mortgaged
Property is located at all times when it held or serviced the
78
Mortgage Loan. Any and all requirements of any federal, state or local
laws or regulations, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, anti-predatory lending, fair credit reporting, unfair
collection practice, equal credit opportunity, fair housing and
disclosure laws and regulations, applicable to the solicitation,
origination, collection and servicing of such Mortgage Loan have been
complied with in all material respects; and any obligations of the
holder of the Mortgage Note, Mortgage and other loan documents have
been complied with in all material respects; servicing of each Mortgage
Loan has been in accordance with prudent mortgage servicing standards,
any applicable laws, rules and regulations and in accordance with the
terms of the Mortgage Notes, Mortgage and other loan documents, whether
such origination and servicing was done by the applicable Seller, its
affiliates, or any third party which originated the Mortgage Loan on
behalf of, or sold the Mortgage Loan to, any of them, or any servicing
agent of any of the foregoing.
(58) The methodology used in underwriting the extension of
credit for the Mortgage Loan employs objective mathematical principles
which relate the borrower's income, assets and liabilities to the
proposed payment and such underwriting methodology does not rely on the
extent of the borrower's equity in the collateral as the principal
determining factor in approving such credit extension. Such
underwriting methodology confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability to make
timely payments on the Mortgage Loan.
(59) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of
obtaining the extension of credit. No borrower obtained a prepaid
single-premium credit life, disability, accident or health insurance
policy in connection with the origination of the Mortgage Loan.
(60) If the Mortgage Loan provides that the interest rate on
the principal balance of the related Mortgage Loan may be adjusted, all
of the terms of the related Mortgage pertaining to interest rate
adjustments, payment adjustments and adjustments of the outstanding
principal balance have been made in accordance with the terms of the
related Mortgage Note and applicable law and are enforceable and such
adjustments will not affect the priority of the Mortgage lien.
(61) The Mortgaged Property complies with all applicable laws,
rules and regulations relating to environmental matters, including but
not limited to those relating to radon, asbestos and lead paint and no
Seller nor, to the best of CHL's knowledge, the Mortgagor, has received
any notice of any violation or potential violation of such law.
(62) There is no action, suit or proceeding pending, or to the
best of CHL's knowledge, threatened or likely to be asserted with
respect to the Mortgage Loan against or affecting any Seller before or
by any court, administrative agency, arbitrator or governmental body.
79
(63) No action, inaction, or event has occurred and no state
of fact exists or has existed that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
hazard insurance policy, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by
CHL or any designee of CHL or any corporation in which CHL or any
officer, director, or employee had a financial interest at the time of
placement of such insurance.
(64) Each Mortgage Loan has a fully assignable life of loan
tax service contract which may be assigned without the payment of any
fee.
(65) No Mortgagor has notified CHL or the Master Servicer on
CHL's behalf, and CHL has no knowledge, of any relief requested or
allowed to a Mortgagor under the Relief Act or any similar state or
local law.
(66) Each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union, insurance
company, or mortgage banking company which is supervised and examined
by a federal or state authority, or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 2.03
and 2.11 of the National Housing Act.
(67) Each Mortgage Loan was (A) originated no earlier than six
months prior to the time the applicable Seller purchased such Mortgage
Loan pursuant to a mortgage loan purchase agreement or other similar
agreement and (B) underwritten or reunderwritten by the applicable
Seller in accordance with the applicable Seller's underwriting
guidelines in effect at the time the loan was underwritten or
reunderwritten, as applicable.
(68) Each Mortgage Loan, at the time it was originated and as
of the Closing Date or the related Subsequent Transfer Date, as
applicable, complied in all material respects with applicable local,
state and federal laws, including, but not limited to, all predatory
and abusive lending laws.
(69) None of the Mortgage Loans is a "high cost" mortgage loan
as defined by applicable federal, state and local predatory and abusive
lending laws.
(70) Each Prepayment Charge is enforceable and was originated
in compliance with all applicable federal, state and local laws.
(71) None of the Mortgage Loans that are secured by property
located in the State of Illinois are in violation of the provisions of
the Illinois Interest Act; 815 Ill. Comp. Stat. 205/0.01 (2004).
(72) There is no Mortgage Loan in the Trust Fund that was
originated on or after March 7, 2003, which is a "high cost home loan"
as defined under the Georgia Fair Lending Act.
80
(73) No Mortgage Loan in the Trust Fund is a High Cost Loan or
Covered Loan, as applicable (as such terms are defined in the
then-current Standard & Poor's LEVELS(R) Glossary) and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is
governed by the Georgia Fair Lending Act.
(74) Each Mortgage Loan is secured by a "single family
residence" within the meaning of Section 25(e)(10) of the Code. The
fair market value of the manufactured home securing each Mortgage Loan
was at least equal to 80% of the adjusted issue price of the contract
at either (i) the time the contract was originated (determined pursuant
to the REMIC Provisions) or (ii) the time the contract is transferred
to the purchaser.
(75) No Mortgage Loan in the Trust Fund is a "high cost home,"
"covered" (excluding home loans defined as "covered home loans" in the
New Jersey Home Ownership Security Act of 2002 that were originated
between November 26, 2003 and July 7, 2004), "high risk home" or
"predatory" loan under any applicable state, federal or local law (or a
similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability
for residential mortgage loans having high interest rates, points
and/or fees).
(76) There is no Mortgage Loan in the Trust Fund that was
originated on or after October 1, 2002 and before March 7, 2003, which
is secured by property located in the State of Georgia.
(77) Representations and Warranties relating to the Mortgage
Loans in Loan Group 1:
(i) Each Mortgage Loan in Loan Group 1 is in
compliance with the anti-predatory lending eligibility for
purchase requirements of ▇▇▇▇▇▇ Mae's Selling Guide;
(ii) No Mortgage Loan in Loan Group 1 is subject to
the requirements of the Home Ownership and Equity Protection
Act of 1994 ("HOEPA");
(iii) Each Mortgage Loan in Loan Group 1 at the time
it was made complied in all material respects with applicable
local, state, and federal laws, including, but not limited to,
all applicable predatory and abusive lending laws;
(iv) No Mortgage Loan in Loan Group 1 is a "High-Cost
Home Loan" as defined in the Georgia Fair Lending Act, as
amended (the "Georgia Act"). No Mortgage Loan in Loan Group 1
subject to the Georgia Act and secured by owner occupied real
property or an owner occupied manufactured home located in the
State of Georgia was originated (or modified) on or after
October 1, 2002 through and including March 6, 2003;
(v) No Mortgage Loan in Loan Group 1 is a "High-Cost
Home Loan" as defined in New York Banking Law 6-1;
81
(vi) No Mortgage Loan in Loan Group 1 is a "High-Cost
Home Loan" as defined in the Arkansas Home Loan Protection Act
effective July 16, 2003 (Act 1340 of 2003);
(vii) No Mortgage Loan in Loan Group 1 is a
"High-Cost Home Loan" as defined in the Kentucky high-cost
home loan statute effective June 24, 2003 (Ky. Rev. Stat.
Section 360.100);
(viii) No Mortgage Loan in Loan Group 1 is a
"High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003 (N.J.S.A. 46:10B-22
et seq.);
(ix) No Mortgage Loan in Loan Group 1 is a "High-Cost
Home Loan" as defined in the New Mexico Home Loan Protection
Act effective January 1, 2004 (N.M. Stat. ▇▇▇. ▇▇.▇▇. 58-21A-1
et seq.);
(x) No Mortgage Loan in Loan Group 1 is a "High-Risk
Home Loan" as defined in the Illinois High-Risk Home Loan Act
effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et
seq.);
(xi) No Mortgage Loan in Loan Group 1 is a "High-Cost
Home Mortgage Loan" as defined in the Massachusetts Predatory
Home Loan Practices Act, effective November 7, 2004 (Mass.
▇▇▇. Laws Ch. 183C);
(xii) No Mortgage Loan in Loan Group 1 is a "High
Cost Home Loan" as defined in the Indiana Home Loan Practices
Act, effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1
through 24-9-9);
(xiii) No Mortgage Loan in Loan Group 1 is a balloon
mortgage loan that has an original stated maturity of less
than seven (7) years;
(xiv) No borrower related to a Mortgage Loan in Loan
Group 1 was encouraged or required to select a Mortgage Loan
product offered by the Mortgage Loan's originator which is a
higher cost product designed for less creditworthy borrowers,
unless at the time of such Mortgage Loan's origination, such
borrower did not qualify taking into account credit history
and debt-to-income ratios for a lower-cost credit product then
offered by such Mortgage Loan's originator or any affiliate of
the Mortgage Loan's originator. If, at the time of loan
application, the borrower may have qualified for a lower-cost
credit product then offered by any mortgage lending affiliate
of the Mortgage Loan's originator, the Mortgage Loan's
originator referred the borrower's application to such
affiliate for underwriting consideration;
(xv) The methodology used in underwriting the
extension of credit for each Mortgage Loan in Loan Group 1
employs objective mathematical principles which relate the
borrower's income, assets and liabilities to the proposed
payment and such underwriting methodology does not rely on the
extent of the borrower's equity in the collateral as the
principal determining factor in approving such credit
82
extension. Such underwriting methodology confirmed that at the
time of origination (application/approval) the borrower had a
reasonable ability to make timely payments on such Mortgage
Loan;
(xvi) With respect to any Mortgage Loan in Loan Group
1 that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the loan's
origination, the borrower agreed to such premium in exchange
for a monetary benefit, including but not limited to a rate or
fee reduction, (ii) prior to the loan's origination, the
borrower was offered the option of obtaining a mortgage loan
that did not require payment of such a premium, (iii) the
prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law, (iv)
for loans originated on or after September 1, 2004, the
duration of the prepayment period shall not exceed three
(3)years from the date of the note, unless the loan was
modified to reduce the prepayment period to no more than three
years from the date of the note and the borrower was notified
in writing of such reduction in prepayment period, and (v)
notwithstanding any state or federal law to the contrary, the
Master Servicer shall not impose such prepayment premium in
any instance when the mortgage debt is accelerated as the
result of the borrower's default in making the loan payments;
(xvii) No borrower related to a Mortgage Loan in Loan
Group 1 was required to purchase any credit, life, disability,
accident or health insurance product as a condition of
obtaining the extension of credit. No borrower related to a
Mortgage Loan in Loan Group 1 obtained a prepaid
single-premium credit, life, disability, accident or health
insurance policy in connection with the origination of the
Mortgage Loan in Loan Group 1; No proceeds from any Mortgage
Loan in Loan Group 1 were used to purchase single premium
credit insurance policies as part of the origination of, or as
a condition to closing, such Mortgage Loan;
(xviii) All points and fees related to each Mortgage
Loan in Loan Group 1 were disclosed in writing to the borrower
in accordance with applicable state and federal law and
regulation. Except in the case of a Mortgage Loan in Loan
Group 1 in an original principal amount of less than $60,000
which would have resulted in an unprofitable origination, no
borrower was charged "points and fees" (whether or not
financed) in an amount greater than 5% of the principal amount
of such loan, such 5% limitation is calculated in accordance
with ▇▇▇▇▇▇ Mae's anti-predatory lending requirements as set
forth in the ▇▇▇▇▇▇ ▇▇▇ Selling Guide;
(xix) All fees and charges (including finance
charges) and whether or not financed, assessed, collected or
to be collected in connection with the origination and
servicing of each Mortgage Loan in Loan Group 1 has been
disclosed in writing to the borrower in accordance with
applicable state and federal law and regulation; and
(xx) The Master Servicer will transmit full-file
credit reporting data for each Mortgage Loan pursuant to
▇▇▇▇▇▇ Mae Guide Announcement 95-19 and
83
that for each Mortgage Loan, Master Servicer agrees it shall
report one of the following statuses each month as follows:
new origination, current, delinquent (30-, 60-, 90-days,
etc.), foreclosed, or charged-off.
(78) The representations in Section 2.03(c)(1)-(6) and
2.03(d)(1)-(6) are true and correct.
(c) Park Monaco hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Cut-off Date:
(1) Park Monaco is duly organized as a Delaware corporation
and is validly existing and in good standing under the laws of the
State of Delaware and is duly authorized and qualified to transact any
and all business contemplated by this Agreement and each Subsequent
Transfer Agreement to be conducted by Park Monaco in any state in 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,
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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.
(d) Park Sienna hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Cut-off Date:
(1) Park Sienna is duly organized as a Delaware limited
liability company and is validly existing and in good standing under
the laws of the State of Delaware and is duly authorized and qualified
to transact any and all business contemplated by this Agreement and
each Subsequent Transfer Agreement to be conducted by Park Sienna in
any state in which a Mortgaged Property securing a Park Sienna Mortgage
Loan is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the
doing business laws of any such state, to the extent necessary to
ensure its ability to enforce each Park Sienna Mortgage Loan, to sell
the Park Sienna Mortgage Loans in accordance with the terms of
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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
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Transfer Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, Park Sienna has obtained the same.
(6) Park Sienna will treat the transfer of the Park Sienna
Mortgage Loans to the Depositor as a sale of the Park Sienna Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Sienna
Mortgage Loan to the Depositor, Park Sienna had good title to, and was
the sole owner of, such the Park Sienna Mortgage Loan free and clear of
any pledge, lien, encumbrance or security interest and had full right
and authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to this
Agreement.
(e) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) through (d) that
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties and the NIM Insurer. Each of the Master Servicer
and the Sellers (each, a "Representing Party") hereby covenants with respect to
the representations and warranties set forth in Sections 2.03(a) through (d)
that within 90 days of the earlier of the discovery by such Representing Party
or receipt of written notice by such Representing Party from any party of a
breach of any representation or warranty set forth herein made that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, it shall cure such breach in all material respects and, if such breach is
not so cured, shall, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage
Loan") from the Trust Fund and substitute in its place a Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at
the Purchase Price in the manner set forth below; provided that (a) any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof, (b) any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for File Release and (c) any such substitution pursuant to (i) above
shall include a payment by the applicable Representing Party of any amount as
calculated under item (iii) of the definition of "Purchase Price". Any
Representing Party liable for a breach under this Section 2.03 shall promptly
reimburse the Master Servicer or the Trustee for any expenses reasonably
incurred by the Master Servicer or the Trustee in respect of enforcing the
remedies for such breach. To enable the Master Servicer to amend the Mortgage
Loan Schedule, any Representing Party liable for a breach under this Section
2.03 shall, unless it cures such breach in a timely fashion pursuant to this
Section 2.03, promptly notify the Master Servicer whether such Representing
Party intends either to repurchase, or to substitute for, the Mortgage Loan
affected by such breach. With respect to the representations and warranties
described in this Section that are made to the best of the Representing Party's
knowledge, if it is discovered by any of the Depositor, the Master Servicer, the
Sellers or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, notwithstanding the Representing Party's lack of
knowledge with respect to the substance of such representation or warranty, such
inaccuracy
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shall be deemed a breach of the applicable representation or warranty. Any
breach of a representation set forth in Section 2.03(a)(8), (b)(72), (b)(75),
(b)(76) or (b)(77) shall be deemed to materially and adversely affect the
Certificateholders.
With respect to any Replacement Mortgage Loan or Loans, the applicable
Seller delivering such Replacement Mortgage Loan shall deliver to the Trustee
for the benefit of the Certificateholders the related Mortgage Note, Mortgage
and assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the applicable Seller delivering such
Replacement Mortgage Loan on such Distribution Date. For the month of
substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for the related Due Period and
thereafter the applicable Seller shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan. The Master Servicer shall
amend the Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans and the Master Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Replacement Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the applicable Seller delivering such Replacement
Mortgage Loan shall be deemed to have made with respect to such Replacement
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties set forth in Section 2.03(b), (c) or (d) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Co-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
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Determination Date for the Distribution Date in the month following the month
during which such Seller became obligated to repurchase or replace such Mortgage
Loan and upon such deposit of the Purchase Price, the delivery of the Opinion of
Counsel required by Section 2.05, if any, and the receipt of a Request for File
Release, the Co-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.
(f) The representations and warranties set forth in this Section 2.03
shall survive delivery of the respective Mortgage Files to the Co-Trustee for
the benefit of the Certificateholders with respect to each Mortgage Loan.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer and
the Trustee as follows, as of the date hereof and as of each Subsequent Transfer
Date:
(1) The Depositor is duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware
and has full power and authority (corporate and other) necessary to own
or hold its properties and to conduct its business as now conducted by
it and to enter into and perform its obligations under this Agreement
and each Subsequent Transfer Agreement.
(2) The Depositor has the full corporate power and authority
to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and each Subsequent
Transfer Agreement and has duly authorized, by all necessary corporate
action on its part, the execution, delivery and performance of this
Agreement and each Subsequent Transfer Agreement; and this Agreement
and each Subsequent Transfer Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes
a legal, valid and binding obligation of the Depositor, enforceable
against the Depositor in accordance with its terms, subject, as to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and (ii) general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at law.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by the Depositor, the consummation of the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of the Depositor and will not (A) result in a material breach of any
term or provision of the charter or by-laws of the Depositor or (B)
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materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which the Depositor is a
party or by which it may be bound or (C) constitute a material
violation of any statute, order or regulation applicable to the
Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or
meet any of its obligations under this Agreement.
(4) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or any Subsequent Transfer 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 Co-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(e).
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Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee an Opinion of Counsel (which such
Representing Party shall use reasonable efforts to obtain), addressed to the
Trustee to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause any REMIC formed hereunder to
fail to qualify as a REMIC at any time that any Certificates are outstanding.
Any Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, any Seller, the Master Servicer or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of section 860G(a)(3)of the Code, the party discovering such
fact shall promptly (and in any event within five Business Days of discovery)
give written notice thereof to the other parties and the NIM Insurer. In
connection therewith, the Trustee shall require CHL, at CHL's option, to either
(i) substitute, if the conditions in Section 2.03(e) with respect to
substitutions are satisfied, a Replacement Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty contained in Section 2.03. The Trustee shall reconvey
to CHL the Mortgage Loan to be released pursuant hereto in the same manner, and
on the same terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty contained in Section 2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement.
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Section 2.07 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor and the Trustee
as follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any affiliate
of the Depositor or the Trustee and prepared by the Master Servicer pursuant to
this Agreement will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the information, certificate, statement
or report not misleading.
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with customary and usual
standards of practice of prudent mortgage loan lenders in the respective states
in which the Mortgaged Properties are located, including taking all required and
appropriate actions under each Required Insurance Policy and taking all required
and appropriate actions under each Mortgage Insurance Policy on behalf of the
Co-Trustee, other than the payment of each Mortgage Insurance Premium and
obtaining the approval of each Mortgage Insurer with respect to the appointment
of a successor servicer. In connection with such servicing and administration,
the Master Servicer shall have full power and authority, acting alone and/or
through subservicers as provided in Section 3.02 hereof, subject to the terms
hereof (i) to execute and deliver, on behalf of the Certificateholders and the
Trustee, customary consents or waivers and other instruments and documents, (ii)
to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages (but only in the manner provided in this
Agreement), (iii) to collect any Insurance Proceeds, other Liquidation Proceeds
and Subsequent Recoveries, and (iv) subject to Section 3.12(b), to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan; provided that the Master Servicer shall take no
action that is inconsistent with or prejudices the interests of the Trustee or
the Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor and the Trustee under this Agreement. The Master Servicer shall
represent and protect the interest of the Trustee in the same manner as it
currently protects its own interest in mortgage loans in its own portfolio in
any claim, proceeding or litigation regarding a Mortgage Loan and shall not make
or permit any modification, waiver or amendment of any term of any Mortgage Loan
which would (i) cause any REMIC formed hereunder to fail to qualify as a REMIC,
(ii) result in the imposition of any tax under section 860(a) or 860(d) of the
Code or (iii) cause any Covered Mortgage Loan to not be covered by the
applicable Mortgage Insurance Policy, but in any case the Master Servicer shall
not act in any manner that is a lesser standard than that provided in the first
sentence of this Section 3.01. Without limiting the generality of the foregoing,
the Master Servicer, in its own
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name or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Master Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Master Servicer
to service and administer the Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer. The Master Servicer further is authorized and empowered
by the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS, solely as nominee
for the Trustee and its successors and assigns.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers to the
Trustee by the Closing Date.
In addition, the Master Servicer shall administer each Mortgage
Insurance Policy on behalf of itself, the Sellers, the Depositor and the Trustee
for the benefit of the Certificateholders, when it is necessary to make claims
and receive payments under each Mortgage Insurance Policy. In connection with
its activities as Master Servicer of the Mortgage Loans, the Master Servicer
agrees to present, on behalf of itself, the Trustee and the Certificateholders,
claims to the insurer under any primary insurance policies and, in this regard,
to take any reasonable action necessary to permit recovery under any primary
insurance policies respecting defaulted Mortgage Loans. Any amounts collected by
the Master Servicer under any primary insurance policies shall be deposited in
the Certificate Account.
The Master Servicer shall take whatever action is appropriate to
maximize the amounts payable under each Mortgage Insurance Policy and to service
the Covered Mortgage Loans in the manner required by the applicable Mortgage
Insurance Policy. The Master Servicer shall prepare and submit all claims
eligible for submission under each Mortgage Insurance Policy and shall, except
as otherwise specified in this Agreement, perform all of the obligations
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of the insured under each Mortgage Insurance Policy. If either Mortgage
Insurance Policy is terminated for any reason other than the exhaustion of its
coverage, or if the financial strength rating of either Mortgage Insurer is
reduced to below investment grade, the Master Servicer will use its best efforts
to obtain a comparable policy from an insurer that is acceptable to the Rating
Agencies. The replacement policy, if available, shall provide coverage equal to
the then remaining coverage of the applicable Mortgage Insurance Policy.
However, if the premium cost of a replacement policy exceeds the premium cost of
that Mortgage Insurance Policy, the coverage amount of the replacement policy
will be reduced so that its premium cost will not exceed the premium cost of
that Mortgage Insurance Policy.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Scheduled Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor master servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement. Notwithstanding
the foregoing, this Section 3.01 shall not limit the ability of the Master
Servicer to seek recovery of any such amounts from the related Mortgagor under
the terms of the related Mortgage Note, as permitted by law and shall not be an
expense of the Trust.
Section 3.02 Subservicing; Enforcement of the Obligations of Master
Servicer.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that (i)
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder, (ii) that
such subservicing agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the ratings on any Class of Certificates, as evidenced
by a letter to that effect delivered by each Rating Agency to the Depositor and
the NIM Insurer and (iii) the NIM Insurer shall have consented to such
subservicing agreements (which consent shall not be unreasonably withheld) with
Subservicers, for the servicing and administration of the Mortgage Loans. The
Master Servicer shall deliver to the Trustee copies of all Sub-Servicing
Agreements, and any amendments or modifications thereof, promptly upon the
Master Servicer's execution and delivery of such instruments. The Master
Servicer, with the written consent of the NIM Insurer (which consent shall not
be unreasonably withheld), shall be entitled to terminate any Subservicing
Agreement and the rights and obligations of any Subservicer pursuant to any
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement. Notwithstanding the provisions of any subservicing
agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Master Servicer or a subservicer or reference to
actions taken through a Master Servicer or otherwise, the Master Servicer shall
remain obligated and liable to the Depositor, the Trustee and the
Certificateholders for the servicing and administration of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of
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such subservicing agreements or arrangements or by virtue of indemnification
from the subservicer and to the same extent and under the same terms and
conditions as if the Master Servicer alone were servicing and administering the
Mortgage Loans. Every subservicing agreement entered into by the Master Servicer
shall contain a provision giving the successor Master Servicer the option to
terminate such agreement without cost in the event a successor Master Servicer
is appointed. All actions of each subservicer performed pursuant to the related
subservicing agreement shall be performed as an agent of the Master Servicer
with the same force and effect as if performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.
Section 3.03 Rights of the Depositor, the Sellers, the
Certificateholders, the NIM Insurer and the Trustee in
Respect of the Master Servicer.
None of the Trustee, the Sellers, the Certificateholders, the NIM
Insurer or the Depositor shall have any responsibility or liability for any
action or failure to act by the Master Servicer, and none of them is obligated
to supervise the performance of the Master Servicer hereunder or otherwise. The
Master Servicer shall afford (and any Subservicing Agreement shall provide that
each Subservicer shall afford) the Depositor, the NIM Insurer and the Trustee,
upon reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer (and any such Subservicer) in respect of the
Master Servicer's rights and obligations hereunder and access to officers of the
Master Servicer (and those of any such Subservicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor,
the NIM Insurer and the Trustee its (and any such Subservicer's) most recent
financial statements and such other information relating to the Master
Servicer's capacity to perform its obligations under this Agreement that it
possesses. To the extent such information is not otherwise available to the
public, the Depositor, the NIM Insurer and the Trustee shall not disseminate any
information obtained pursuant to the preceding two sentences without the Masters
Servicer's (or any such Subservicer's) written consent, except as required
pursuant to this Agreement or to the extent that it is necessary to do so (i) in
working with legal counsel, auditors, taxing authorities or other governmental
agencies, rating agencies or reinsurers or (ii) pursuant to any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Depositor, the Trustee, the
NIM Insurer or the Trust Fund, and in either case, the Depositor, the NIM
Insurer or the Trustee, as the case may be, shall use its reasonable best
efforts to assure the confidentiality of any such disseminated non-public
information. The Depositor may, but is not obligated to, enforce the obligations
of the Master Servicer under this Agreement and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer under this Agreement or exercise the rights of the Master Servicer
under this Agreement; provided by virtue of such performance by the Depositor of
its designee. The Depositor shall not have any responsibility or liability for
any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
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Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default or
termination by the Depositor), the Trustee or its designee shall thereupon
assume all of the rights and obligations of the Master Servicer hereunder
arising thereafter (except that the Trustee shall not be (i) liable for losses
of the Master Servicer pursuant to Section 3.10 hereof or any acts or omissions
of the predecessor Master Servicer hereunder, (ii) obligated to make Advances if
it is prohibited from doing so by applicable law, (iii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, including pursuant to
Section 2.02 or 2.03 hereof, (iv) responsible for expenses of the Master
Servicer pursuant to Section 2.03 or (v) deemed to have made any representations
and warranties hereunder, including pursuant to Section 2.03 or the first
paragraph of Section 6.02 hereof). If the Master Servicer shall for any reason
no longer be the Master Servicer (including by reason of any Event of Default or
termination by the Depositor), the Trustee (or any other successor servicer)
may, at its option, succeed to any rights and obligations of the Master Servicer
under any subservicing agreement in accordance with the terms thereof; provided
that the Trustee (or any other successor servicer) shall not incur any liability
or have any obligations in its capacity as servicer under a subservicing
agreement arising prior to the date of such succession unless it expressly
elects to succeed to the rights and obligations of the Master Servicer
thereunder; and the Master Servicer shall not thereby be relieved of any
liability or obligations under the subservicing agreement arising prior to the
date of such succession.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; Pre-Funding Account; Capitalized
Interest Account.
(a) The Master Servicer shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties are located to collect
all payments called for under the terms and provisions of the Mortgage Loans to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late payment
charge or, subject to Section 3.20, any Prepayment Charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due dates
for payments due on a Mortgage Note for a period not greater than 270 days. In
the event of any such arrangement, the Master Servicer shall make Advances on
the related Mortgage Loan during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. In addition, the NIM Insurer's prior written
consent shall be required for any waiver of Prepayment Charges or for the
extension of the due dates for payments due on a Mortgage Note, if the aggregate
number of outstanding Mortgage Loans that have been granted such waivers or
extensions exceeds 5% of the aggregate number of Initial
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Mortgage Loans and Subsequent Mortgage Loans. The Master Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited on
a daily basis within two Business Days of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted by
Subservicers or received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans on or before the Cut-off Date) and the following amounts required
to be deposited hereunder:
(1) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(2) all payments on account of interest on the Mortgage Loans
(net of the related Servicing Fee and Prepayment Interest Excess
permitted under Section 3.15 hereof to the extent not previously paid
to or withheld by the Master Servicer);
(3) all Insurance Proceeds;
(4) all Liquidation Proceeds and Subsequent Recoveries, other
than proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures;
(5) all Compensating Interest;
(6) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
(7) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.10 hereof;
(8) the Purchase Price and any Substitution Adjustment Amount;
(9) all Advances made by the Master Servicer or the Trustee
pursuant to Section 4.01 hereof;
(10) all Prepayment Charges and Master Servicer Prepayment
Charge Payment Amounts; and
(11) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer into
the Certificate Account shall be exclusive, it being understood and agreed that,
without limiting the
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generality of the foregoing, payments in the nature of late payment charges or
assumption fees, if collected, need not be remitted by the Master Servicer. In
the event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time withdraw or direct the institution maintaining the
Certificate Account, to withdraw such amount from the Certificate Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the institution
maintaining the Certificate Account, that describes the amounts deposited in
error in the Certificate Account. The Master Servicer shall maintain adequate
records with respect to all withdrawals made pursuant to this Section. All funds
deposited in the Certificate Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08.
No later than 1:00 p.m. Pacific time on the Master Servicer Advance
Date in the month of the first Distribution Date and in the month immediately
following any Subsequent Transfer Date, CHL shall remit to the Master Servicer,
and the Master Servicer shall deposit in the Certificate Account, the Seller
Interest Shortfall Payments (if any) for the related Distribution Date.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(1) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a); and
(2) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments.
The foregoing requirements for remittance by the Master Servicer and
deposit by the Trustee into the Distribution Account shall be exclusive. In the
event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering a written notice to the Trustee that
describes the amounts deposited in error in the Distribution Account. All funds
deposited in the Distribution Account shall be held by the Trustee in trust for
the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Distribution Account at the direction of the
Master Servicer.
(d) If the Pre-Funded Amount is greater than zero, the Trustee shall
establish and maintain, on behalf of the Certificateholders, the Pre-Funding
Account, and on the Closing Date, CHL shall remit the Pre-Funded Amount to the
Trustee for deposit in the Pre-Funding Account.
On the Business Day before the Distribution Date following the end of
the Funding Period, the Trustee shall (i) withdraw the amount on deposit in the
Pre-Funding
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Account (net of investment income), (ii) promptly deposit such amount in the
Distribution Account, and (iii) distribute each amount to the Certificates on
the Distribution Date pursuant to Section 4.04.
(e) If the Capitalized Interest Deposit is greater than zero, the
Trustee shall establish and maintain, on behalf of the Certificateholders, the
Capitalized Interest Account. On the Closing Date, CHL shall remit the
Capitalized Interest Deposit to the Trustee for deposit in the Capitalized
Interest Account. On each Distribution Account Deposit Date related to a Funding
Period Distribution Date, the Trustee shall transfer from the Capitalized
Interest Account to the Distribution Account an amount equal to the Capitalized
Interest Requirement (which, to the extent required, may include investment
earnings on amounts on deposit therein) for the related Distribution Date.
On each Subsequent Transfer Date, upon satisfaction of the conditions
for such Subsequent Transfer Date set forth in Section 2.01(e), the Trustee
shall withdraw from the Capitalized Interest Account the Capitalized Interest
Release Amount for such Subsequent Transfer Date and distribute such amount to
the order of CHL.
If any funds remain in the Capitalized Interest Account at the end of
the Distribution Account Deposit Date for the last Funding Period Distribution
Date, the Trustee shall distribute any such remaining funds to the order of CHL
on the last Funding Period Distribution Date.
(f) Each institution that maintains the Certificate Account, the
Distribution Account, the Pre-Funding Account or the Capitalized Interest
Account shall invest the funds in each such account, as directed by the Master
Servicer, in Permitted Investments, which shall mature not later than (x) in the
case of the Certificate Account, the second Business Day next preceding the
related Distribution Account Deposit Date (except that if such Permitted
Investment is an obligation of the institution that maintains such Certificate
Account, then such Permitted Investment shall mature not later than the Business
Day next preceding such Distribution Account Deposit Date) and (y) in the case
of the Distribution Account, the Pre-Funding Account and the Capitalized
Interest Account, the Business Day immediately preceding the first Distribution
Date that follows the date of such investment (except that if such Permitted
Investment is an obligation of the institution that maintains such Distribution
Account or Pre-Funding Account, then such Permitted Investment shall mature not
later than such Distribution Date), in each case, shall not be sold or disposed
of prior to its maturity. All such Permitted Investments shall be made in the
name of the Trustee, for the benefit of the Certificateholders. In the case of
(i) the Certificate Account and the Distribution Account, all income and gain
net of any losses realized from any such investment shall be for the benefit of
the Master Servicer as servicing compensation and shall be remitted to it
monthly as provided herein, (ii) the Pre-Funding Account, all income and gain
net of any losses realized from any such investment shall be for the benefit of
the Depositor and shall be remitted to the Depositor as provided herein and
(iii) the Capitalized Interest Account, all income and gain net of any losses
realized from any such investment on deposit therein shall be credited thereto.
The amount of any losses incurred in the Certificate Account or the Distribution
Account in respect of any such investments shall be deposited by the Master
Servicer in the Certificate Account or paid to the Trustee for deposit into the
Distribution Account out of the Master Servicer's own funds immediately as
realized. The
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amount of any losses incurred in the Pre-Funding Account or the Capitalized
Interest Account in respect of any such investments shall be paid by the Master
Servicer to the Trustee for deposit into the Pre-Funding Account or the
Capitalized Interest Account, as applicable, out of the Master Servicer's own
funds immediately as realized. The Trustee shall not be liable for the amount of
any loss incurred in respect of any investment or lack of investment of funds
held in the Certificate Account, the Distribution Account, the Pre-Funding
Account or the Capitalized Interest Account and made in accordance with this
Section 3.05.
(g) The Master Servicer shall give at least 30 days' advance notice to
the Trustee, each Seller, each Rating Agency and the Depositor of any proposed
change of location of the Certificate Account prior to any change thereof. The
Trustee shall give at least 30 days' advance notice to the Master Servicer, each
Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Distribution Account, the Pre-Funding Account, the Capitalized
Interest Account or the Carryover Reserve Fund prior to any change thereof.
(h) Except as otherwise expressly provided in this Agreement, if any
default occurs under any Permitted Investment, the Trustee may and, subject to
Sections 8.01 and 8.02(a)(4), at the request of the Holders of Certificates
representing more than 50% of the Voting Rights or the NIM Insurer, shall take
any action appropriate to enforce payment or performance, including the
institution and prosecution of appropriate proceedings.
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
To the extent required by the related Mortgage Note, the Master
Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors (or
advances by the Master Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Master Servicer to compel a Mortgagor to
establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
Section 3.07 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Master Servicer shall afford the Depositor, the NIM Insurer and the
Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all
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accounts, insurance policies and other matters relating to this Agreement, such
access being afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the Master Servicer designated by
it. Upon request, the Master Servicer shall furnish to the Trustee and the NIM
Insurer its most recent publicly available financial statements and any other
information relating to its capacity to perform its obligations under this
Agreement reasonably requested by the NIM Insurer.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to each Certificateholder or
Certificate Owner that is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder or
Certificate Owner to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to be reimbursed by each such
Certificateholder or Certificate Owner for actual expenses incurred by the
Master Servicer in providing such reports and access.
Section 3.08 Permitted Withdrawals from the Certificate Account,
Distribution Account, Carryover Reserve Fund and the
Principal Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not
previously paid to or withheld by the Master Servicer), as servicing
compensation in accordance with Section 3.15, that portion of any
payment of interest that equals the Servicing Fee for the period with
respect to which such interest payment was made, and, as additional
servicing compensation to the Master Servicer, those other amounts set
forth in Section 3.15;
(ii) to reimburse each of the Master Servicer and the Trustee
for Advances made by it with respect to the Mortgage Loans, such right
of reimbursement pursuant to this subclause (ii) being limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, Liquidation Proceeds, Insurance Proceeds and Subsequent
Recoveries) that represent late recoveries of payments of principal
and/or interest on such particular Mortgage Loan(s) in respect of which
any such Advance was made;
(iii) [Reserved];
(iv) to reimburse each of the Master Servicer and the Trustee
for any Nonrecoverable Advance previously made;
(v) to reimburse the Master Servicer from Insurance Proceeds
for Insured Expenses covered by the related Insurance Policy;
(vi) to pay the Master Servicer any unpaid Servicing Fees and
to reimburse it for any unreimbursed Servicing Advances, the Master
Servicer's right to reimbursement of Servicing Advances pursuant to
this subclause (vi) with
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respect to any Mortgage Loan being limited to amounts received on
particular Mortgage Loan(s) (including, for this purpose, Liquidation
Proceeds, Insurance Proceeds and Subsequent Recoveries and purchase and
repurchase proceeds) that represent late recoveries of the payments for
which such advances were made pursuant to Section 3.01 or Section 3.06;
(vii) to pay to the applicable Seller, the Depositor or the
Master Servicer, as applicable, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant
to Section 2.02, 2.03, 2.04 or 3.12, all amounts received thereon and
not taken into account in determining the related Purchase Price of
such repurchased Mortgage Loan;
(viii) to reimburse the applicable Seller, the Master
Servicer, the NIM Insurer or the Depositor for expenses incurred by any
of them in connection with the Mortgage Loans or Certificates and
reimbursable pursuant to Section 6.03 hereof; provided that such amount
shall only be withdrawn following the withdrawal from the Certificate
Account for deposit into the Distribution Account pursuant to the
following paragraph;
(ix) to pay any lender-paid primary mortgage insurance
premiums;
(x) to withdraw any amount deposited in the Certificate
Account and not required to be deposited therein; and
(xi) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 1:00 p.m. Pacific time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Certificate
Account and remit to the Trustee the Interest Remittance Amount, Principal
Remittance Amount, Prepayment Charges collected and the Master Servicer
Prepayment Charge Payment Amount for each Loan Group, and the Trustee shall
deposit such amount in the Distribution Account.
The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On the
Closing Date, CHL shall deposit into the Principal Reserve Fund $200.00. Funds
on deposit in the Principal Reserve Fund shall not be invested. The Principal
Reserve Fund shall be treated as an "outside reserve fund" under applicable
Treasury regulations and shall not be part of any REMIC created under this
Agreement.
On the Business Day before the first Distribution Date, the Trustee
shall transfer $100.00 from the Principal Reserve Fund to the Distribution
Account, and on the first Distribution Date, the Trustee shall withdraw $100 and
distribute such amount to the Class A-R Certificates in reduction of the
Certificate Principal Balance thereof.
On the Business Day before the Class P Principal Distribution Date, the
Trustee shall transfer $100.00 from the Principal Reserve Fund to the
Distribution Account and shall distribute such amount to the Class P
Certificates on the Class P Principal Distribution Date.
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Following the distributions to be made in accordance with the preceding
sentence, the Trustee shall then terminate the Principal Reserve Fund.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii), (iv),
(v), (vi), (vii), (viii) and (ix) above. Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iv), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master Servicer
to be a Nonrecoverable Advance and identifying the related Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distribution to the Certificateholders and remittance to the Final Maturity
Reserve Fund and the Swap Account in the manner specified in this Agreement (and
to withhold from the amounts so withdrawn, the amount of any taxes that it is
authorized to retain pursuant to the third paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay the Trustee the Trustee Fee on each Distribution
Date;
(ii) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in
or credited to the Distribution Account;
(iii) to withdraw pursuant to Section 3.05 any amount
deposited in the Distribution Account and not required to be deposited
therein;
(iv) to reimburse the Trustee for any unreimbursed Advances
made by it pursuant to Section 4.01(d) hereof, such right of
reimbursement pursuant to this subclause (iv) being limited to (x)
amounts received on the related Mortgage Loan(s) in respect of which
any such Advance was made and (y) amounts not otherwise reimbursed to
the Trustee pursuant to Section 3.08(a)(ii) hereof;
(v) to reimburse the Trustee for any Nonrecoverable Advance
previously made by the Trustee pursuant to Section 4.01(d) hereof, such
right of reimbursement pursuant to this subclause (v) being limited to
amounts not otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(iv) hereof;
(vi) to pay to the Co-Trustee, for payment to each Mortgage
Insurer as provided below, the related Mortgage Insurance Premium; and
(vii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
The Co-Trustee shall pay the applicable Mortgage Insurance Premium to
the related Mortgage Insurer in accordance with the following wiring
instructions:
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United Guaranty Mortgage Indemnity Company, Account #2035650940583,
Wachovia Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA
#▇▇▇▇▇▇▇▇▇, Txt: Attention: ▇▇▇▇ ▇▇▇▇▇, CWABS 2007-1 Pool, Bulk Deal 81.
Mortgage Guaranty Insurance Corporation, Account #112663706, US Bank,
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA #▇▇▇▇▇▇▇▇▇, Txt:
Attention: Premium Pay - ID 3147644644 deal # 2110.
(c) The Trustee shall withdraw funds from the Carryover Reserve Fund
for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the third paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Carryover Reserve Fund for the following purposes:
(1) to withdraw any amount deposited in the Carryover Reserve
Fund and not required to be deposited therein; and
(2) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09 [Reserved].
Section 3.10 Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures) shall be deposited in the Certificate Account. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds or Subsequent Recoveries to the extent
permitted by Section 3.08 hereof. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor or maintained
on property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special flood
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hazard area and such area is participating in the national flood insurance
program, the Master Servicer shall cause flood insurance to be maintained with
respect to such Mortgage Loan. Such flood insurance shall be in an amount equal
to the lesser of (i) the original principal balance of the related Mortgage
Loan, (ii) the replacement value of the improvements that are part of such
Mortgaged Property, or (iii) the maximum amount of such insurance available for
the related Mortgaged Property under the Flood Disaster Protection Act of 1973,
as amended. If the hazard policy contains a deductible clause, the Master
Servicer will be required to deposit from its own funds into the Certificate
Account the amounts that would have been deposited therein but for the
deductible clause.
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
The Master Servicer shall notify the Trustee that any such substitution,
modification or assumption agreement has been completed by forwarding to the
Co-Trustee the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall
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prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment, the Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross Margin,
the Initial Periodic Rate Cap, the Subsequent Periodic Rate Cap, the Adjustment
Date and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance with
its underwriting standards as then in effect. The Master Servicer shall notify
the Trustee that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original of such substitution or
assumption agreement, which in the case of the original shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Master Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination
of Excess Proceeds and Realized Losses; Repurchase of
Certain Mortgage Loans.
(a) Notwithstanding the first sentence of Section 3.01, the Master
Servicer may agree to any modification of any Mortgage Loan (the "Modified
Mortgage Loan") if (i) CHL purchases the Modified Mortgage Loan from the Trust
Fund immediately following the modification as described below and (ii) the
Stated Principal Balance of such Mortgage Loan, when taken together with the
aggregate of the Stated Principal Balances of all other Mortgage Loans in the
same Loan Group that have been so modified since the Closing Date at the time of
those modifications, does not exceed an amount equal to 5% of the aggregate
initial Certificate Principal Balance of the Certificates. Effective immediately
after the modification, and, in any event, on the same Business Day on which the
modification occurs, all interest of the Trustee in the Modified Mortgage Loan
shall automatically be deemed transferred and assigned to CHL and all benefits
and burdens of ownership thereof, including the right to accrued interest
thereon from the date of modification and the risk of default thereon, shall
pass to CHL. The Master Servicer shall promptly deliver to the Trustee a
certification of a Servicing Officer to the effect that all requirements of this
paragraph have been satisfied with respect to the Modified Mortgage Loan. For
federal income tax purposes, the Trustee shall account for such purchase as a
prepayment in full of the Modified Mortgage Loan. CHL shall remit the Purchase
Price to the Master Servicer for deposit into the Certificate Account pursuant
to Section 3.05 within one Business Day after the purchase of the Modified
Mortgage Loan. Upon receipt by the Trustee of written notification of any such
deposit signed by a Servicing Officer, the Trustee shall release to CHL or its
designee the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in CHL any Modified Mortgage Loan previously transferred
and assigned pursuant hereto. CHL covenants
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and agrees to indemnify the Trust Fund against any liability for any "prohibited
transaction" taxes and any related interest, additions, and penalties imposed on
the Trust Fund established hereunder as a result of any modification of a
Mortgage Loan effected pursuant to this subsection (a), any holding of a
Modified Mortgage Loan by the Trust Fund or any purchase of a Modified Mortgage
Loan by CHL (but such obligation shall not prevent CHL or any other appropriate
Person from in good faith contesting any such tax in appropriate proceedings and
shall not prevent CHL from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings). CHL shall have no right of
reimbursement for any amount paid pursuant to the foregoing indemnification,
except to the extent that the amount of any tax, interest, and penalties,
together with interest thereon, is refunded to the Trust Fund or CHL. If the
Master Servicer agrees to a modification of any Mortgage Loan pursuant to this
Section 3.12(a), and if such Mortgage Loan carries a Prepayment Charge
provision, CHL shall deliver to the Trustee the amount of the Prepayment Charge,
if any, that would have been due had such Mortgage Loan been prepaid at the time
of such modification, for deposit into the Certificate Account (not later than
1:00 p.m. Pacific time on the Master Servicer Advance Date immediately
succeeding the date of such modification) for distribution in accordance with
the terms of this Agreement.
(b) The Master Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Certificate Account pursuant to Section 3.08
hereof). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property and any related Subsequent Recoveries, as
contemplated in Section 3.08 hereof. If the Master Servicer has knowledge that a
Mortgaged Property that the Master Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders
(or the Trustee's nominee on behalf of the Certificateholders). The Trustee's
name shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Master Servicer shall ensure
that the title to such REO Property references this Agreement and the Trustee's
capacity thereunder. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall either itself or through an agent selected by the Master
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO
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Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds, but in
no event later than three years after its acquisition by the Trust Fund or, at
the expense of the Trust Fund, the Master Servicer shall request, more than 60
days prior to the day on which such three-year period would otherwise expire, an
extension of the three-year grace period. In the event the Trustee shall have
been supplied with an Opinion of Counsel (such opinion not to be an expense of
the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of the Trust Fund as defined in section
860F of the Code or cause any REMIC formed hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, and the Trust Fund may
continue to hold such Mortgaged Property (subject to any conditions contained in
such Opinion of Counsel) after the expiration of such three-year period.
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust Fund
in such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition
of any federal, state or local income taxes on the income earned from such
Mortgaged Property under section 860G(c) of the Code or otherwise, unless the
Master Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any Mortgaged
Properties acquired through foreclosure or other judicial proceeding, net of
reimbursement to the Master Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee
paid or to be paid with respect to the management of such Mortgaged Property,
shall be applied to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this
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Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Certificate Account. To the
extent the income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan, such excess shall be considered to
be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan and
any Subsequent Recoveries, net of any payment to the Master Servicer as provided
above, shall be deposited in the Certificate Account as provided in Section 3.05
for distribution on the related Distribution Date, except that any Excess
Proceeds shall be retained by the Master Servicer as additional servicing
compensation.
The proceeds of any Liquidated Mortgage Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order: first, to reimburse the
Master Servicer for any related unreimbursed Servicing Advances and Servicing
Fees, pursuant to Section 3.08(a)(vi) or this Section 3.12; second, to reimburse
the Master Servicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest (to the
extent no Advance has been made for such amount) on the Mortgage Loan or related
REO Property, at the Net Mortgage Rate to the Due Date occurring in the month in
which such amounts are required to be distributed; and fourth, as a recovery of
principal of the Mortgage Loan.
(c) [Reserved].
(d) The Master Servicer, in its sole discretion, shall have the right
to elect (by written notice sent to the Trustee) to purchase for its own account
from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a
price equal to the Purchase Price; provided, however, that the Master Servicer
may only exercise this right on or before the last day of the calendar month in
which such Mortgage Loan became 150 days delinquent (such month, the "Eligible
Repurchase Month"); provided further, that any such Mortgage Loan which becomes
current but thereafter becomes delinquent may be purchased by the Master
Servicer pursuant to this Section in any ensuing Eligible Repurchase Month. The
Purchase Price for any Mortgage Loan purchased hereunder shall be deposited in
the Certificate Account. Any purchase of a Mortgage Loan pursuant to this
Section 3.12(d) shall be accomplished by remittance to the Master Servicer for
deposit in the Certificate Account of the Purchase Price. The Trustee, upon
receipt of certification from the Master Servicer of such deposit and a Request
for File Release from the Master Servicer, shall release or cause to be released
to the purchaser of such Mortgage Loan the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment prepared by the
purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Trustee's right, title and interest in and to such Mortgage Loan and
all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto.
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Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will promptly notify the
Co-Trustee by delivering a Request for File Release. Upon receipt of such
request, the Co-Trustee shall promptly release the related Mortgage File to the
Master Servicer, and the Co-Trustee shall at the Master Servicer's direction
execute and deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage in each case provided by the Master Servicer, together
with the Mortgage Note with written evidence of cancellation thereon. The Master
Servicer is authorized to cause the removal from the registration on the MERS(R)
System of such Mortgage and to execute and deliver, on behalf of the Trust Fund
and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Certificate Account, the Distribution Account, the
Carryover Reserve Fund or the related subservicing account. From time to time
and as shall be appropriate for the servicing or foreclosure of any Mortgage
Loan, including for such purpose, collection under any policy of flood insurance
any fidelity bond or errors or omissions policy, or for the purposes of
effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Co-Trustee
shall, upon delivery to the Co-Trustee of a Request for Document Release or a
Request for File Release, as applicable, release the documents specified in such
request or the Mortgage File, as the case may be, to the Master Servicer.
Subject to the further limitations set forth below, the Master Servicer shall
cause the Mortgage File or documents so released to be returned to the
Co-Trustee when the need therefor by the Master Servicer no longer exists,
unless the Mortgage Loan is liquidated and the proceeds thereof are deposited in
the Certificate Account, in which case the Master Servicer shall deliver to the
Co-Trustee a Request for File Release for any remaining documents in the
Mortgage File not in the possession of the Master Servicer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity. Notwithstanding the foregoing, the Master Servicer shall cause
possession of any Mortgage File or of the documents therein that shall have been
released by the Co-Trustee to be returned to the Co-Trustee within 21 calendar
days after possession thereof shall have been released by the Co-Trustee unless
(i) the Mortgage Loan has been liquidated and the Liquidation Proceeds relating
to the Mortgage Loan have been deposited in the Certificate Account, and the
Master Servicer shall have delivered to the Co-Trustee a Request for File
Release or (ii) the Mortgage File or document shall have been delivered to an
attorney or to a public trustee or other public official as required by law for
purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property and the Master Servicer shall have
delivered to the Trustee an Officer's Certificate of a Servicing Officer
certifying as to the name and address of
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the Person to which the Mortgage File or the documents therein were delivered
and the purpose or purposes of such delivery.
Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Co-Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds, Insurance Proceeds or
Subsequent Recoveries in respect of any Mortgage Loan. All Mortgage Files and
funds collected or held by, or under the control of, the Master Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds or Subsequent Recoveries
including but not limited to, any funds on deposit in the Certificate Account,
shall be held by the Master Servicer for and on behalf of the Trust Fund and
shall be and remain the sole and exclusive property of the Trust Fund, subject
to the applicable provisions of this Agreement. The Master Servicer also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Certificate Account, the Distribution Account, the
Carryover Reserve Fund or in any Escrow Account (as defined in Section 3.06), or
any funds that otherwise are or may become due or payable to the Trustee for the
benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of set off against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that the Master Servicer shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Certificate Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of any Excess Proceeds,
assumption fees, late payment charges, Prepayment Interest Excess, and all
income and gain net of any losses realized from Permitted Investments shall be
retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(b) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.
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Section 3.16 Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and
Certificate Owners and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the Master Servicer
designated by it. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
Section 3.17 Annual Statement as to Compliance.
(a) The Master Servicer shall deliver to the Depositor and the Trustee
on or before March 15 of each year, commencing with its 2008 fiscal year, an
Officer's Certificate stating, as to the signer thereof, that (i) a review of
the activities of the Master Servicer during the preceding calendar year (or
applicable portion thereof) and of the performance of the Master Servicer under
this Agreement, has been made under such officer's supervision and (ii) to the
best of such officer's knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement, in all material respects
throughout such year (or applicable portion thereof), or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status thereof and (iii)
to the best of such officer's knowledge, each Subservicer has fulfilled all its
obligations under its Subservicing Agreement in all material respects throughout
such year, or, if there has been a failure to fulfill any such obligation in any
material respect specifying each such failure known to such officer and the
nature and status thereof.
(b) The Master Servicer shall cause each Subservicer to deliver to the
Depositor and the Trustee on or before March 15 of each year, commencing with
its 2008 fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of such Subservicer during the
preceding calendar year (or applicable portion thereof) and of the performance
of the Subservicer under the applicable Subservicing Agreement or primary
servicing agreement, has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, such Subservicer has
fulfilled all its obligations under the applicable Subservicing Agreement or
primary servicing agreement, in all material respects throughout such year (or
applicable portion thereof), or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status thereof.
(c) The Trustee shall forward a copy of each such statement to each
Rating Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder or Certificate Owner upon request at the Master Servicer's
expense, provided such statement is delivered by the Master Servicer to the
Trustee.
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Section 3.18 [Reserved].
Section 3.19 [Reserved].
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the contrary, in the
event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Master Servicer may not waive any Prepayment Charge or portion thereof required
by the terms of the related Mortgage Note unless (i) such Mortgage Loan is in
default or the Master Servicer believes that such a default is imminent, and the
Master Servicer determines that such waiver would maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the value of
such Prepayment Charge, or (ii) (A) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law relating
to creditors' rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment, or (B) the enforceability is otherwise
limited or prohibited by applicable law. In the event of a Principal Prepayment
in full or in part with respect to any Mortgage Loan, the Master Servicer shall
deliver to the Trustee an Officer's Certificate substantially in the form of
Exhibit T no later than the third Business Day following the immediately
succeeding Determination Date with a copy to the Class P Certificateholders. If
the Master Servicer has waived or does not collect all or a portion of a
Prepayment Charge relating to a Principal Prepayment in full or in part due to
any action or omission of the Master Servicer, other than as provided above, the
Master Servicer shall deliver to the Trustee, together with the Principal
Prepayment in full or in part, the amount of such Prepayment Charge (or such
portion thereof as had been waived) for deposit into the Certificate Account
(not later than 1:00 p.m. Pacific time on the immediately succeeding Master
Servicer Advance Date, in the case of such Prepayment Charge) for distribution
in accordance with the terms of this Agreement.
(b) Upon discovery by the Master Servicer or a Responsible Officer of
the Trustee of a breach of the foregoing subsection (a), the party discovering
the breach shall give prompt written notice to the other parties.
(c) CHL represents and warrants to the Depositor and the Trustee, as of
the Closing Date and each Subsequent Transfer Date, that the information in the
Prepayment Charge Schedule (including the attached prepayment charge summary) is
complete and accurate in all material respects at the dates as of which the
information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms under applicable state law, except as
the enforceability thereof is limited due to acceleration in connection with a
foreclosure or other involuntary payment.
(d) Upon discovery by the Master Servicer or a Responsible Officer of
the Trustee of a breach of the foregoing clause (c) that materially and
adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties. Within 60 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of breach, the
Master Servicer shall cure the breach in all material respects or shall pay into
the Certificate Account the amount of the Prepayment Charge that would otherwise
be due from the Mortgagor, less any amount
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representing such Prepayment Charge previously collected and paid by the Master
Servicer into the Certificate Account.
Section 3.21 Swap Contract.
CHL shall cause The Bank of New York to enter into the Swap Contract
Administration Agreement and shall assign all of its right, title and interest
in and to the interest rate swap transaction evidenced by the Swap Contract to,
and shall cause all of its obligations in respect of such transaction to be
assumed by, the Swap Contract Administrator, on the terms and conditions set
forth in the Swap Contract Assignment Agreement. The Trustee's rights to receive
certain proceeds of the Swap Contract as provided in the Swap Contract
Administration Agreement shall be rights of the Trustee as Swap Trustee
hereunder, shall be an asset of the Swap Trust and shall not be an asset of the
Trust Fund nor of any REMIC. The Swap Trustee shall deposit any amounts received
from time to time from the Swap Contract Administrator with respect to the Swap
Contract into the Swap Account. The Master Servicer shall deposit any amounts
received on behalf of the Swap Trustee from time to time with respect to the
Swap Contract into the Swap Account.
On the Business Day preceding each Distribution Date, the Swap Trustee
shall notify the Swap Contract Administrator of any amounts distributable to the
Interest-Bearing Certificates pursuant to Section 4.04(d)(3) through (8) that
will remain unpaid following all distributions to be made on such Distribution
Date pursuant to Section 4.04(a) through (c).
No later than two Business Days following each Distribution Date, the
Trustee shall provide the Swap Contract Administrator with information regarding
the aggregate Certificate Principal Balance of the Interest-Bearing Certificates
after all distributions on such Distribution Date.
Upon the Swap Contract Administrator obtaining actual knowledge of the
rating of the Swap Counterparty falling below the Approved Ratings Threshold (as
defined in the ISDA Master Agreement) or upon the Swap Contract Administrator
obtaining actual knowledge of the rating of the Swap Counterparty falling below
the Required Ratings Threshold (as defined in the ISDA Master Agreement), the
Swap Trustee shall direct the Swap Contract Administrator to (i) demand payment
of the Delivery Amount (as defined in the ISDA Master Agreement) from the Swap
Counterparty on each Valuation Date (as defined in the ISDA Master Agreement)
and perform its other obligations in accordance with the ISDA Master Agreement
and (ii) take such other action required under the ISDA Master Agreement. If a
Delivery Amount is demanded, the Swap Contract Administrator, in accordance with
the Swap Contract Administration Agreement, shall establish an account to hold
cash and other eligible investments pledged under the ISDA Master Agreement. Any
cash or other Eligible Collateral (as defined in the ISDA Master Agreement)
pledged under the ISDA Master Agreement shall not be part of the Distribution
Account or the Swap Account unless remitted to such accounts by the Swap
Contract Administrator in accordance with the Swap Contract Administration
Agreement. If Eligible Collateral with a value equal to the Delivery Amount is
not delivered to the Swap Contract Administrator by the Swap Counterparty, the
Swap Trustee shall direct the Swap Contract Administrator to notify the Swap
Counterparty of such failure.
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Upon the Swap Trustee obtaining actual knowledge of an Event of Default
(as defined in the ISDA Master Agreement) or Termination Event (as defined in
the ISDA Master Agreement) for which the Swap Contract Administrator has the
right to designate an Early Termination Date (as defined in the ISDA Master
Agreement), the Swap Trustee shall act at the written direction of the Depositor
as to whether to direct the Swap Contract Administrator to designate an Early
Termination Date; provided, however, that the Swap Trustee shall provide written
notice to each Rating Agency following the Event of Default or Termination
Event. Upon the termination of the Swap Contract under the circumstances
contemplated by this Section 3.21, the Swap Trustee shall use its reasonable
best efforts to enforce the rights of the Swap Contract Administrator as may be
permitted by the terms of the ISDA Master Agreement and consistent with the
terms hereof and CHL shall assist the Swap Contract Administrator in procuring a
replacement swap contract with terms approximating those of the original Swap
Contract.
Any Swap Termination Payment received from the Swap Counterparty shall
be used to pay any upfront amount required under any replacement swap contract
and any excess shall be distributed to CHL and will not be available to make
distributions in respect of any Class of Certificates. In the event that a
replacement swap contract cannot be procured, any Swap Termination Payment
received from the Swap Counterparty in respect of the termination of the
original Swap Contract shall, in accordance with the Swap Contract
Administration Agreement, be retained by the Swap Contract Administrator and
remitted to the Swap Trustee on subsequent Distribution Dates up to and
including the Swap Contract Termination Date to pay any amounts distributable to
the Interest-Bearing Certificates pursuant to Section 4.04(d)(3) through (8)
that will remain unpaid following all distributions to be made on such
Distribution Date pursuant to Section 4.04(a) through (c). Any portion of such
upfront amount remaining after the Swap Contract Termination Date shall be
distributed to CHL and will not be available to make distributions in respect of
any Class of Certificates.
In the event that the swap counterparty in respect of a replacement
swap contract pays any upfront amount to the Swap Contract Administrator in
connection with entering into the replacement swap contract and such upfront
amount is received by the Swap Contract Administrator prior to the Distribution
Date on which any Swap Termination Payment will be payable to the Swap
Counterparty in respect of the original Swap Contract, a portion of that upfront
amount equal to the lesser of (x) that upfront amount and (y) the amount of the
Swap Termination Payment due to the Swap Counterparty in respect of the original
Swap Contract (the "Adjusted Replacement Upfront Amount") shall be included in
Interest Funds for Loan Group 1 and Loan Group 2 for that Distribution Date, pro
rata, based upon their respective Interest Funds for that Distribution Date, and
any upfront amount in excess of the Adjusted Replacement Upfront Amount shall be
distributed to CHL and will not be available to make distributions in respect of
any Class of Certificates. If any upfront amount is paid to the Swap Contract
Administrator by the swap counterparty in respect of a replacement swap contract
after the Distribution Date on which any Swap Termination Payment will be
payable to the Swap Counterparty in respect of the original Swap Contract, such
upfront amount shall, in accordance with the Swap Contract Administration
Agreement, be retained by the Swap Contract Administrator and remitted to the
Swap Trustee on subsequent Distribution Dates up to and including the Swap
Contract Termination Date to pay any amounts distributable to the
Interest-
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Bearing Certificates pursuant to Section 4.04(d)(3) through (8) that will remain
unpaid following all distributions to be made on such Distribution Date pursuant
to Section 4.04(a) through (c).
The Swap Counterparty shall be an express third party beneficiary of
this Agreement for the purpose of enforcing the provisions hereof to the extent
of the Swap Counterparty's rights explicitly specified herein as if a party
hereto.
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports.
(a) Within two Business Days after each Determination Date, the Master
Servicer shall deliver to the Trustee by facsimile or electronic mail (or by
such other means as the Master Servicer and the Trustee, as the case may be, may
agree from time to time) a Remittance Report with respect to the related
Distribution Date. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
(b) Subject to the conditions of this Article IV, the Master Servicer,
as required below, shall make an Advance and deposit such Advance in the
Certificate Account. Each such Advance shall be remitted to the Certificate
Account no later than 1:00 p.m. Pacific time on the Master Servicer Advance Date
in immediately available funds. The Trustee will provide notice to the Master
Servicer by facsimile by the close of business on any Master Servicer Advance
Date in the event that the amount remitted by the Master Servicer to the Trustee
on the Distribution Account Deposit Date is less than the Advances required to
be made by the Master Servicer for such Distribution Date. The Master Servicer
shall be obligated to make any such Advance only to the extent that such advance
would not be a Nonrecoverable Advance. If the Master Servicer shall have
determined that it has made a Nonrecoverable Advance or that a proposed Advance
or a lesser portion of such Advance would constitute a Nonrecoverable Advance,
the Master Servicer shall deliver (i) to the Trustee for the benefit of the
Certificateholders funds constituting the remaining portion of such Advance, if
applicable, and (ii) to the Depositor, each Rating Agency and the Trustee an
Officer's Certificate setting forth the basis for such determination.
(c) In lieu of making all or a portion of such Advance from its own
funds, the Master Servicer may (i) cause to be made an appropriate entry in its
records relating to the Certificate Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required to
be distributed pursuant to this Agreement. The Master Servicer shall be entitled
to be reimbursed from the Certificate Account for all Advances of its own funds
made pursuant to this Section as provided in Section 3.08. The obligation to
make Advances with respect to any Mortgage Loan shall continue until such
Mortgage Loan is paid in full or becomes a Liquidated Mortgage Loan or until the
purchase or repurchase thereof (or substitution therefor)
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from the Trustee pursuant to any applicable provision of this Agreement, except
as otherwise provided in this Section 4.01.
(d) If the Master Servicer determines that it will be unable to comply
with its obligation to make the Advances as and when described in paragraphs (b)
and (c) immediately above, it shall use its best efforts to give written notice
thereof to the Trustee (each such notice a "Trustee Advance Notice"; and such
notice may be given by facsimile), not later than 3:00 p.m., New York time, on
the Business Day immediately preceding the related Master Servicer Advance Date,
specifying the amount that it will be unable to deposit (each such amount an
"Advance Deficiency") and certifying that such Advance Deficiency constitutes an
Advance hereunder and is not a Nonrecoverable Advance. If the Trustee receives a
Trustee Advance Notice on or before 3:30 p.m., (New York time) on a Master
Servicer Advance Date, the Trustee shall, not later than 3:00 p.m., (New York
time), on the related Distribution Date, deposit in the Distribution Account an
amount equal to the Advance Deficiency identified in such Trustee Advance Notice
unless it is prohibited from so doing by applicable law. Notwithstanding the
foregoing, the Trustee shall not be required to make such deposit if the Trustee
shall have received written notification from the Master Servicer that the
Master Servicer has deposited or caused to be deposited in the Certificate
Account an amount equal to such Advance Deficiency. All Advances made by the
Trustee pursuant to this Section 4.01(d) shall accrue interest on behalf of the
Trustee at the Trustee Advance Rate from and including the date such Advances
are made to but excluding the date of repayment, with such interest being an
obligation of the Master Servicer and not the Trust Fund. The Master Servicer
shall reimburse the Trustee for the amount of any Advance made by the Trustee
pursuant to this Section 4.01(d) together with accrued interest, not later than
6:00 p.m. (New York time) on the Business Day following the related Distribution
Date. In the event that the Master Servicer does not reimburse the Trustee in
accordance with the requirements of the preceding sentence, the Trustee shall
immediately (i) terminate all of the rights and obligations of the Master
Servicer under this Agreement in accordance with Section 7.01 and (ii) subject
to the limitations set forth in Section 3.04, assume all of the rights and
obligations of the Master Servicer hereunder.
(e) The Master Servicer shall, not later than the close of business on
the second Business Day immediately preceding each Distribution Date, deliver to
the Trustee a report (in form and substance reasonably satisfactory to the
Trustee) that indicates (i) the Mortgage Loans with respect to which the Master
Servicer has determined that the related Scheduled Payments should be advanced
and (ii) the amount of the related Scheduled Payments. The Master Servicer shall
deliver to the Trustee on the related Master Servicer Advance Date an Officer's
Certificate of a Servicing Officer indicating the amount of any proposed Advance
determined by the Master Servicer to be a Nonrecoverable Advance.
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Master Servicer shall remit any related Compensating
Interest as part of the related Interest Remittance Amount as provided in this
Agreement. The Master Servicer shall not be entitled to any recovery or
reimbursement for Compensating Interest from the Depositor, the Trustee, any
Seller, the Trust Fund or the Certificateholders.
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Section 4.03 [Reserved].
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such Distribution
Date shall be distributed by the Trustee from the Distribution Account in the
following order:
(i) from the Interest Funds for Loan Group 1 and Loan Group 2,
pro rata based on the Interest Funds for each such Loan Group, to the
Final Maturity Reserve Fund, the Final Maturity Reserve Deposit with
respect to such Distribution Date;
(ii) from the Interest Funds for Loan Group 1 and Loan Group
2, pro rata based on the Interest Funds for each such Loan Group, to
the Swap Account, the amount of any Net Swap Payment and any Swap
Termination Payment (other than a Swap Termination Payment due to a
Swap Counterparty Trigger Event) payable to the Swap Counterparty with
respect to such Distribution Date;
(iii) concurrently:
(a) from Interest Funds for Loan Group 1, to the
Class 1-A Certificates, the Current Interest and Interest
Carry Forward Amount for such Class and such Distribution
Date,
(b) from Interest Funds for Loan Group 2,
concurrently to each Class of Class 2-A Certificates, the
Current Interest and Interest Carry Forward Amount for each
such Class and such Distribution Date, pro rata, based on
their respective entitlements;
(iv) from the remaining Interest Funds for Loan Group 1 and
Loan Group 2, concurrently, to each Class of Class A Certificates, any
remaining Current Interest and Interest Carry Forward Amount not paid
pursuant to clause (iii)(a) and (iii)(b), pro rata, based on the
Certificate Principal Balances thereof, to the extent needed to pay any
Current Interest and Interest Carry Forward Amount for each such Class;
provided that Interest Funds remaining after such allocation to pay any
Current Interest and Interest Carry Forward Amount based on the
Certificate Principal Balances of the Certificates will be distributed
to each Class of Class A Certificates with respect to which there
remains any unpaid Current Interest and Interest Carry Forward Amount
(after the distribution based on Certificate Principal Balances), pro
rata, based on the amount of such remaining unpaid Current Interest and
Interest Carry Forward Amount; and
(v) from the remaining Interest Funds for Loan Group 1 and
Loan Group 2, sequentially:
(a) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8,
Class M-9 and Class B Certificates, in that order, the Current
Interest for each such Class, and
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(b) any remainder as part of the Excess Cashflow.
(b) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date with respect to Loan Group 1 and Loan Group 2 shall be
distributed by the Trustee from the Distribution Account in the following order:
(1) with respect to any Distribution Date prior to the
Stepdown Date or on which a Trigger Event is in effect, sequentially:
(A) concurrently:
(i) from the Principal Distribution Amount for Loan Group 1,
sequentially:
(a) to the Class 1-A Certificates, until the
Certificate Principal Balance thereof is reduced to zero; and
(b) to the Classes of Class 2-A Certificates (after
the distribution of the Principal Distribution Amount from
Loan Group 2 as provided in clause (ii)(a) below), in the
order set forth in clause (3) below, until the Certificate
Principal Balances thereof are reduced to zero;
(ii) from the Principal Distribution Amount for Loan Group 2,
sequentially:
(a) to the Classes of Class 2-A Certificates, in the
order set forth in clause (3) below, until the Certificate
Principal Balances thereof are reduced to zero; and
(b) to the Class 1-A Certificates (after the
distribution of the Principal Distribution Amount from Loan
Group 1 as provided in clause (i)(a) above), until the
Certificate Principal Balance thereof is reduced to zero;
(B) from the remaining Principal Distribution Amounts for Loan
Group 1 and Loan Group 2, sequentially:
(i) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and
Class B Certificates, in that order, in each case until the Certificate
Principal Balance thereof is reduced to zero; and
(ii) any remainder as part of the Excess Cashflow.
(2) with respect to any Distribution Date on or after the
Stepdown Date and so long as a Trigger Event is not in effect,
sequentially:
(A) concurrently:
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(i) from the Principal Distribution Amount for Loan Group 1,
in an amount up to the Class 1-A Principal Distribution Amount,
sequentially:
(a) to the Class 1-A Certificates, until the
Certificate Principal Balance thereof is reduced to zero; and
(b) to the Classes of Class 2-A Certificates (after
the distribution of the Principal Distribution Amount from
Loan Group 2 as provided in clause (ii)(a) below), in the
amounts and order set forth in clause (3) below, until the
Certificate Principal Balances thereof are reduced to zero;
and
(ii) from the Principal Distribution Amount for Loan Group 2,
in an amount up to the Class 2-A Principal Distribution Amount,
sequentially:
(a) to the Classes of Class 2-A Certificates, in the
amounts and order set forth in clause (3) below, until the
Certificate Principal Balances thereof are reduced to zero;
and
(b) to the Class 1-A Certificates (after the
distribution of the Principal Distribution Amount from Loan
Group 1 as provided in clause (i)(a) above), until the
Certificate Principal Balance thereof is reduced to zero; and
(B) from the remaining Principal Distribution Amounts for Loan
Group 1 and Loan Group 2, sequentially:
(i) sequentially, to the Class M-1, Class M-2 and Class M-3
Certificates, in that order, the Combined Class M-1, M-2 and M-3
Principal Distribution Amount, until the Certificate Principal Balances
thereof are reduced to zero;
(ii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-6,
Class M-7, Class M-8, Class M-9 and Class B Certificates, in that
order, the Subordinate Class Principal Distribution Amount for each
such Class, in each case until the Certificate Principal Balance
thereof is reduced to zero; and
(iii) any remainder as part of the Excess Cashflow.
(3) On each Distribution Date on which any principal amounts
are to be distributed to the Class 2-A Certificates, such amounts shall
be distributed sequentially, to the Class 2-A-1, Class 2-A-2, Class
2-A-3 and Class 2-A-4 Certificates, in that order, in each case until
the Certificate Principal Balances thereof are reduced to zero.
(c) With respect to any Distribution Date, any Excess Cashflow and, in
the case of clauses (1) and (2) below and in the case of the payment of Unpaid
Realized Loss Amounts pursuant to clause (3) below, any Credit Comeback Excess
Cashflow, shall be
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distributed in the following order, in each case first to the extent of the
remaining Credit Comeback Excess Cashflow, if applicable, and second to the
extent of the remaining Excess Cashflow:
(1) to the Class or Classes of Interest-Bearing Certificates
then entitled to receive distributions in respect of principal, in an
aggregate amount equal to the Extra Principal Distribution Amount for
each Loan Group, payable to each such Class as part of the Principal
Distribution Amount for Loan Group 1 and Loan Group 2 pursuant to
Section 4.04(b) above;
(2) concurrently, to each Class of Class A Certificates, pro
rata based on the Unpaid Realized Loss Amount for each such Class, in
an amount equal to the Unpaid Realized Loss Amount for each such Class;
(3) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and
Class B Certificates, in that order, in each case first in an amount
equal to any Interest Carry Forward Amount for such Class and then in
an amount equal to the Unpaid Realized Loss Amount for such Class;
(4) to the Carryover Reserve Fund and from the Carryover
Reserve Fund to each Class of Interest-Bearing Certificates, pro rata
based on the Certificate Principal Balances thereof, to the extent
needed to pay any Net Rate Carryover for each such Class; provided that
any Excess Cashflow remaining after such allocation to pay Net Rate
Carryover based on the Certificate Principal Balances of those Classes
shall be distributed to each Class of Interest-Bearing Certificates
with respect to which there remains any unpaid Net Rate Carryover
(after the distribution based on the Certificate Principal Balances),
pro rata, based on the amount of such unpaid Net Rate Carryover;
(5) to the Carryover Reserve Fund, in an amount equal to the
Required Carryover Reserve Fund Deposit (after giving effect to other
deposits and withdrawals therefrom on such Distribution Date);
(6) if the Final Maturity OC Trigger is in effect,
sequentially, in the following order:
(i) to the Classes of Class A Certificates, pro rata,
based on the Class 1-A Principal Distribution Amount (in the
case of clause (x)) and the Class 2-A Principal Distribution
Amount (in the case of clause (y)), concurrently: (x) to the
Class 1-A Certificates, until the Certificate Principal
Balance thereof is reduced to zero, and (y) sequentially, to
the Class 2-A-1, Class 2-A-2, Class 2-A-3 and Class 2-A-4
Certificates, in that order, in each case, until the
Certificate Principal Balance thereof is reduced to zero;
provided, however, that any amounts remaining after such
allocation based on the Class 1-A Principal Distribution
Amount and the Class 2-A Principal Distribution Amount will be
distributed to the outstanding Class 1-A Certificates or the
outstanding Classes of Class 2-A
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Certificates, as the case may be, pursuant to clause (x) or
clause (y), as the case may be; and
(ii) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and
Class B Certificates, in that order, in each case until the Certificate
Principal Balance thereof is reduced to zero;
(7) to the Swap Account, in an amount equal to any Swap
Termination Payment due to the Swap Counterparty as a result of a Swap
Counterparty Trigger Event;
(8) to the Class C Certificates, the Class C Distributable
Amount for such Distribution Date; and
(9) to the Class A-R Certificates, any remaining amount.
(d) On each Distribution Date on or prior to the Swap Contract
Termination Date, following the deposits to the Swap Account pursuant to Section
4.04(a)(ii) and Section 4.09 and the distributions described under Section
4.04(c), the Swap Trustee shall distribute amounts on deposit in the Swap
Account in the following amounts and order:
(1) to the Swap Contract Administrator for payment to the Swap
Counterparty, any Net Swap Payment payable to the Swap Counterparty
with respect to such Distribution Date;
(2) to the Swap Contract Administrator for payment to the Swap
Counterparty, any Swap Termination Payment (other than a Swap
Termination Payment due to a Swap Counterparty Trigger Event) payable
to the Swap Counterparty with respect to such Distribution Date;
(3) concurrently, to each Class of Class A Certificates, any
remaining Current Interest and Interest Carry Forward Amount, pro rata
based on their respective entitlements;
(4) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and
Class B Certificates, in that order, in each case in an amount equal to
any remaining Current Interest and Interest Carry Forward Amount for
such Class;
(5) to the Class or Classes of Interest-Bearing Certificates
then entitled to receive distributions in respect of principal, in an
aggregate amount equal to the Overcollateralization Deficiency Amount
remaining unpaid following the distributions described under Section
4.04(c), payable to such Classes in the same manner in which the Extra
Principal Distribution Amount in respect of Loan Group 1 and Loan Group
2 would be distributed to such Classes as described under Section
4.04(c);
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(6) concurrently, to each Class of Interest-Bearing
Certificates, to the extent needed to pay any remaining Net Rate
Carryover for each such Class, pro rata, based on the amount of such
remaining Net Rate Carryover;
(7) concurrently, to each Class of Class A Certificates, pro
rata, based on the remaining Unpaid Realized Loss Amount for each such
Class, in an amount equal to the remaining Unpaid Realized Loss Amount
for each such Class;
(8) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and
Class B Certificates, in that order, in each case in an amount equal to
the remaining Unpaid Realized Loss Amount for each such Class; and
(9) to the Swap Contract Administrator for payment to the Swap
Counterparty, any Swap Termination Payment due to a Swap Counterparty
Trigger Event payable to the Swap Counterparty with respect to such
Distribution Date.
(e) To the extent that a Class of Interest-Bearing Certificates
receives interest in excess of the applicable Net Rate Cap, if such interest is
paid pursuant to Section 4.04(c), then it shall be deemed to have been paid to
the Carryover Reserve Fund and then paid by the Carryover Reserve Fund to those
Certificateholders, and if such interest is paid pursuant to Section 4.04(d),
then such interest shall be deemed to have been paid to the Swap Account and
then paid by the Swap Account to those Certificateholders. For purposes of the
Code, amounts deemed deposited in the Carryover Reserve Fund shall be deemed to
have first been distributed to the Class C Certificates.
(f) On each Distribution Date, all Prepayment Charges and Master
Servicer Prepayment Charge Payment Amounts shall be distributed to the Class P
Certificates. On the Class P Principal Distribution Date, the Trustee shall make
the $100.00 distribution to the Class P Certificates as specified in Section
3.08.
(g) On each Distribution Date, the Trustee shall allocate any Applied
Realized Loss Amount to reduce the Certificate Principal Balances of the Class
B, Class M-9, Class M-8, Class M-7, Class M-6, Class M-5, Class M-4, Class M-3,
Class M-2 and Class M-1 Certificates, sequentially, in that order, in each case
until the Certificate Principal Balance thereof is reduced to zero. After the
Certificate Principal Balances of the Subordinate Certificates have been reduced
to zero, (i) the Trustee shall allocate any Applied Realized Loss Amount with
respect to Loan Group 1 to reduce the Certificate Principal Balance of the Class
1-A Certificates, until the Certificate Principal Balance of such Class has been
reduced to zero, and (ii) the Trustee shall allocate any Applied Realized Loss
Amount with respect to Loan Group 2 to reduce the Certificate Principal Balances
of each Class of Class 2-A Certificates, on a pro rata basis according to their
respective Certificate Principal Balances, until the Certificate Principal
Balances of such Classes have been reduced to zero.
(h) On each Distribution Date, the Trustee shall allocate the amount of
the Subsequent Recoveries with respect to either Loan Group, if any, first to
increase the Certificate Principal Balance of the Class 1-A Certificates (in the
case of any Subsequent Recoveries with
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respect to Loan Group 1) or the Certificate Principal Balances of the Classes of
Class 2-A Certificates (in the case of any Subsequent Recoveries with respect to
Loan Group 2) to which Applied Realized Loss Amounts have been previously
allocated (such increases, in the case of Subsequent Recoveries with respect to
Loan Group 2, to be made among the Classes of Class 2-A Certificates on a pro
rata basis according to their respective Certificate Principal Balances), in
each case by not more than the amount of the Unpaid Realized Loss Amount of such
Class, and then to increase the Certificate Principal Balance of the Subordinate
Certificates to which Applied Realized Loss Amounts have been previously
allocated, sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class B Certificates,
in that order, in each case by not more than the amount of the Unpaid Realized
Loss Amount of such Class.
Holders of Certificates to which any Subsequent Recoveries have been
allocated shall not be entitled to any payment in respect of Current Interest on
the amount of such increases for any Accrual Period preceding the Distribution
Date on which such increase occurs.
Subject to Section 9.02 hereof respecting the final distribution, on
each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such Holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date and (ii) such Holder shall hold Regular Certificates with an aggregate
initial Certificate Principal Balance of not less than $1,000,000 or evidencing
a Percentage Interest aggregating 10% or more with respect to such Class or, if
not, by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.
On or before 5:00 p.m. Pacific time on the fifth Business Day following
each Determination Date (but in no event later than 5:00 p.m. Pacific time on
the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee (in the form of a computer
readable magnetic tape or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to by the Master Servicer and the Trustee (including, without limitation,
the actual mortgage rate for each Credit Comeback Loan) such as to permit the
Trustee to prepare the Monthly Statement and make the required distributions for
the related Distribution Date (the "Remittance Report"). The Trustee shall not
be responsible to recompute, recalculate or verify information provided to it by
the Master Servicer and shall be permitted to conclusively rely on any
information provided to it by the Master Servicer.
(i) On the earlier of (i) the Distribution Date in January 2037 and
(ii) the termination of this Agreement pursuant to Section 9.01, after giving
effect to the distribution of all available funds, all amounts on deposit in the
Final Maturity Reserve Fund will be distributed in the following order:
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(1) to the Classes of Class A Certificates, pro rata, based on
the Class 1-A Principal Distribution Amount (in the case of clause (x))
and the Class 2-A Principal Distribution Amount (in the case of clause
(y)), concurrently: (x) to the Class 1-A Certificates, until the
Certificate Principal Balance thereof is reduced to zero, and (y)
sequentially, to the Class 2-A-1, Class 2-A-2, Class 2-A-3 and Class
2-A-4 Certificates, in that order, in each case, until the Certificate
Principal Balance thereof is reduced to zero; provided, however, that
any amounts remaining after such allocation based on the Class 1-A
Principal Distribution Amount and the Class 2-A Principal Distribution
Amount will be distributed to the outstanding Class 1-A Certificates or
the outstanding Classes of Class 2-A Certificates, as the case may be,
pursuant to clause (x) or clause (y), as the case may be; and
(2) sequentially, to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and
Class B Certificates, in that order, until the Certificate Principal
Balances thereof are reduced to zero; and
(3) to the Class C Certificates, all remaining amounts.
Section 4.05 Monthly Statements to Certificateholders.
(a) Concurrently with each distribution on a Distribution Date, the
Trustee will forward by mail to each Rating Agency and make available to
Certificateholders on the Trustee's website
(▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇) a statement generally setting forth the
information contained in Exhibit W.
(b) The Trustee's responsibility for disbursing the above information
to the Certificateholders is limited to the availability, timeliness and
accuracy of the information derived from the Master Servicer. The Trustee shall
send a copy of each statement provided pursuant to this Section 4.05 to each
Rating Agency and the NIM Insurer. The Trustee may make the above information
available to Certificateholders via the Trustee's website at
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information regarding (i) the amount of distributions to that Certificateholder
allocable to principal, separately identifying (A) the aggregate amount of any
Principal Prepayments included therein and (B) the aggregate of all scheduled
payments of principal included therein, (ii) the amount of distributions to that
Certificateholder allocable to interest and (iii) the related amount of the
Servicing Fees paid to or retained by the Master Servicer, in each case
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class A-R Certificates the Form 1066 and each Form
1066Q and shall respond
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promptly to written requests made not more frequently than quarterly by any
Holder of Class A-R Certificates with respect to the following matters:
(1) The original projected principal and interest cash flows
on the Closing Date on each related Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(2) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each related
Class of regular and residual interests created hereunder and the
Mortgage Loans, based on the Prepayment Assumption;
(3) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest
cash flows described above;
(4) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each related
Class of regular or residual interests created hereunder and to the
Mortgage Loans, together with each constant yield to maturity used in
computing the same;
(5) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of the
related REMIC with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(6) The amount and timing of any non-interest expenses of the
related REMIC; and
(7) Any taxes (including penalties and interest) imposed on
the related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (1), (2), (3)and (4) above shall be
provided by the Depositor pursuant to Section 8.11.
Section 4.06 Termination of a Mortgage Insurance Policy.
If on any given date the rating of Mortgage Guaranty Insurance
Corporation's claims-paying ability is downgraded below and remains below "AA-"
from S&P or "Aa3" from ▇▇▇▇▇'▇, the Master Servicer may direct the Co-Trustee to
terminate the Mortgage Insurance Policy issued by Mortgage Guaranty Insurance
Corporation and the Co-Trustee shall act in accordance with such direction. The
Master Servicer hereby covenants and agrees that it will not direct the
Co-Trustee to exercise its right to terminate such Mortgage Insurance Policy
unless the Co-Trustee obtains a mortgage insurance policy that meets the
following conditions: (i) such mortgage insurance policy must be issued by a
mortgage insurer that has a rating with respect to its claims-paying ability at
or above "AA " from S&P or "Aa3" from ▇▇▇▇▇'▇ and (ii) such
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mortgage insurance policy must cover the related Covered Mortgage Loans
outstanding as of such date.
In addition, if during the period which the Depositor is required to
file Exchange Act Reports with respect to the Trust Fund, either (a) Mortgage
Guaranty Insurance Corporation shall fail to provide to CHL any information
required to be provided pursuant to Section 2(b) of the Item 1114 Agreement,
dated as of November 7, 2006, between CHL, the Depositor, CWMBS, Inc., CWALT,
Inc., CWHEQ, Inc. and Mortgage Guaranty Insurance Corporation, within the time
period required by such agreement, or (b) United Guaranty Mortgage Indemnity
Company shall fail to provide to CHL any information reasonably requested by CHL
for the purposes of compliance with Item 1114 of Regulation AB, then the
Co-Trustee shall act at the written direction of the Depositor as to whether to
terminate the applicable Mortgage Insurance Policy; provided, however, that the
Co-Trustee shall provide written notice to each Rating Agency of any such
termination. Upon the termination of such Mortgage Insurance Policy under the
circumstances contemplated by this paragraph, CHL shall assist the Co-Trustee in
procuring a replacement mortgage insurance policy that meets the criteria for a
replacement mortgage insurance policy specified in the preceding paragraph.
Section 4.07 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund and shall deposit $1,000 therein. The Carryover Reserve
Fund shall be an Eligible Account, and funds on deposit therein shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including without limitation, other moneys held by the Trustee pursuant to this
Agreement.
(b) The Trustee shall make withdrawals from the Carryover Reserve Fund
to make distributions in respect of Net Rate Carryover as to the extent required
by Section 4.04.
(c) The Carryover Reserve Fund shall not constitute an asset of any
REMIC created hereunder. The Class C Certificates shall evidence ownership of
the Carryover Reserve Fund for federal tax purposes.
(d) Funds in the Carryover Reserve Fund shall be invested by the
Trustee in The Bank of New York cash reserves. All investments shall be made in
the name of the Trustee, for the benefit of the Holders of the Interest-Bearing
Certificates. Any net investment earnings on such amounts shall be retained
therein until withdrawn as provided in Section 3.08.
Section 4.08 Credit Comeback Excess Account.
On the Closing Date, the Trustee shall establish and maintain in its
name, in trust for the benefit of the Certificateholders, the Credit Comeback
Excess Account. The Credit Comeback Excess Account shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement.
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On each Distribution Date, the Trustee shall deposit all Credit
Comeback Excess Amounts in the Credit Comeback Excess Account. The Trustee shall
make withdrawals from the Credit Comeback Excess Account to make distributions
as and to the extent required by Section 4.04.
Funds in the Credit Comeback Excess Account with respect to Loan Group
1 and Loan Group 2 may be invested in Permitted Investments at the written
direction of the Majority Holder of the Class C Certificates, which Permitted
Investments shall mature not later than the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains the Credit Comeback Excess Account, then such Permitted Investment
shall mature not later than such Distribution Date) and shall not be sold or
disposed of prior to maturity. All such Permitted Investments shall be made in
the name of the Trustee, for the benefit of the Certificateholders. In the
absence of such written direction, all funds in the Credit Comeback Excess
Account shall be invested by the Trustee in The Bank of New York cash reserves.
Any net investment earnings on amounts in the Credit Comeback Excess Account
with respect to Loan Group 1 and Loan Group 2 shall be payable pro rata to the
Holders of the Class C Certificates in accordance with their Percentage
Interests. Any losses incurred in the Credit Comeback Excess Account in respect
of any such investments shall be charged against amounts on deposit in the
Credit Comeback Excess Account (or such investments) immediately as realized.
The Trustee shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Credit
Comeback Excess Account and made in accordance with this Section 4.08. The
Credit Comeback Excess Account shall not constitute an asset of any REMIC
created hereunder. The Class C Certificates shall evidence ownership of the
Credit Comeback Excess Account for federal tax purposes.
Section 4.09 Swap Trust and Swap Account.
On the Closing Date, there is hereby established a separate trust (the
"Swap Trust"), the assets of which shall consist of the Trustee's rights and
obligations under the Swap Contract Administration Agreement. The Swap Trust
shall be maintained by the Swap Trustee, who initially, shall be the Trustee.
The Swap Trustee shall hold the assets of the Swap Trust in trust for the
benefit of the Holders of the Interest-Bearing Certificates and the Swap
Counterparty. No later than the Closing Date, the Swap Trustee shall establish
and maintain a separate, segregated trust account to be held in the Swap Trust,
titled, "Swap Account, The Bank of New York, as Swap Trustee, in trust for the
Swap Counterparty and the registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2007-1." Such account shall be an Eligible Account and
funds on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trustee held pursuant to this Agreement. Amounts therein shall be held
uninvested. Funds on deposit in the Swap Account shall be distributed in the
amounts and in the order described under Section 4.04(d). For federal income tax
purposes, the Swap Trust, including the Swap Account, shall be owned by the
Class C Certificates.
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On each Distribution Date, the Trustee shall make a deposit to the Swap
Account pursuant to Section 4.04(a)(ii), and to the extent that the amount of
such deposit is insufficient to pay any Net Swap Payment and/or Swap Termination
Payment (other than a Swap Termination Payment due to a Swap Counterparty
Trigger Event) due to the Swap Counterparty with respect to such Distribution
Date, the Trustee shall withdraw, out of amounts on deposit in the Distribution
Account in respect of the Principal Remittance Amount for Loan Group 1 and Loan
Group 2, pro rata on the basis of those respective Principal Remittance Amounts,
such additional amount as is necessary to cover the remaining portion of any
such Net Swap Payment and/or Swap Termination Payment (other than a Swap
Termination Payment due to a Swap Counterparty Trigger Event) due to the Swap
Counterparty with respect to such Distribution Date.
Section 4.10 Final Maturity Reserve Trust and Final Maturity Reserve
Fund.
(a) On the Closing Date, there is hereby established a separate trust
(the "Final Maturity Reserve Trust"), the assets of which shall consist of the
Final Maturity Reserve Fund.
(b) On the Closing Date, the Final Maturity Reserve Trustee shall
establish and maintain in its name, in trust for the benefit of the Holders of
the Interest-Bearing Certificates, the Final Maturity Reserve Fund and shall
deposit $1,000 therein upon receipt from or on behalf of the Depositor of such
amount. The Final Maturity Reserve Fund shall be an Eligible Account, and funds
on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Trustee pursuant to this Agreement. The Final Maturity Reserve Fund
shall not constitute an asset of the Trust Fund or any REMIC created hereunder.
The Final Maturity Reserve Trustee shall make deposits to and
withdrawals from the Final Maturity Reserve Fund as specified in Section 4.04.
Funds in the Final Maturity Reserve Fund may be invested in Permitted
Investments at the direction of the Holders of the Class C Certificates, which
Permitted Investments shall mature not later than the Business Day immediately
preceding the first Distribution Date that follows the date of such investment
(except that if such Permitted Investment is an obligation of the institution
that maintains the Final Maturity Reserve Fund, then such Permitted Investment
shall mature not later than such Distribution Date) and shall not be sold or
disposed of prior to maturity. All such Permitted Investments shall be made in
the name of the Final Maturity Reserve Trustee, for the benefit of the Holders
of the Certificates. In the absence of such written direction, all funds in the
Final Maturity Reserve Fund shall be invested by the Final Maturity Reserve
Trustee in The Bank of New York cash reserves. Any net investment earnings on
such amounts shall be retained therein until withdrawn as provided in Section
3.08. Any losses incurred in the Final Maturity Reserve Fund in respect of any
such investments shall be charged against amounts on deposit in the Final
Maturity Reserve Fund (or such investments) immediately as realized. The Final
Maturity Reserve Trustee shall not be liable for the amount of any loss incurred
in respect of any investment or lack of investment of funds held in the Final
Maturity Reserve Fund and made in accordance with this Section 4.10.
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The Final Maturity Reserve Trustee may withhold from the amounts
withdrawn from the Final Maturity Reserve Fund pursuant to Section 4.04 the
amount of any taxes that it is authorized to retain pursuant to the third
paragraph of Section 8.11. In addition, the Final Maturity Reserve Trustee may
from time to time make withdrawals from the Final Maturity Reserve Fund for the
following purposes:
(i) to withdraw any amount deposited in the Final Maturity Reserve Fund
and not required to be deposited therein; and
(ii) to clear and terminate the Final Maturity Reserve Fund upon the
termination of this Agreement pursuant to Section 9.01.
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ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through ▇-▇▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇ and Exhibit E. The
Certificates shall be issuable in registered form, in the minimum dollar
denominations, integral dollar multiples in excess thereof and aggregate dollar
denominations as set forth in the following table:
Integral Multiples in Original Certificate
Class Minimum Denomination Excess of Minimum Principal Balance
--------------------------------------------------------------------------------
1-A $20,000 $1 $ 540,940,000
2-A-1 $20,000 $1 $ 455,775,000
2-A-2 $20,000 $1 $ 145,076,000
2-A-3 $20,000 $1 $ 320,823,000
2-A-4 $20,000 $1 $ 128,386,000
M-1 $20,000 $1 $ 76,000,000
M-2 $20,000 $1 $ 69,000,000
M-3 $20,000 $1 $ 40,000,000
M-4 $20,000 $1 $ 38,000,000
M-5 $20,000 $1 $ 35,000,000
M-6 $20,000 $1 $ 31,000,000
M-7 $20,000 $1 $ 26,000,000
M-8 $20,000 $1 $ 15,000,000
M-9 $20,000 $1 $ 21,000,000
B $100,000 $1 $ 23,000,000
A-R $99.95(1) N/A $100
C N/A N/A N/A
P N/A N/A $100
(1) The Tax Matters Person Certificate may be issued in a denomination of $0.05.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.
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The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of Transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of Transfer of any
Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall (except in connection with any transfer of a
Private Certificate to an affiliate of the Depositor (either directly or through
a nominee) in connection with the initial issuance of the Certificates) each
certify to the Trustee in writing the facts surrounding the Transfer in
substantially the form set forth in Exhibit J-2 (a "Transferor Certificate") and
(i) deliver a letter in substantially the form of either Exhibit K (in the case
of the Class P and Class C Certificates and in the case of a Class B Certificate
that after the proposed transfer will be a Definitive Certificate) (the
"Investment Letter") or Exhibit L (in the case of any Private Certificate) (the
"Rule 144A Letter") or (ii) there shall be delivered to the Trustee at the
expense of the Certificateholder desiring to effect such transfer an Opinion of
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Counsel that such Transfer may be made pursuant to an exemption from the
Securities Act; provided, however, that in the case of the delivery of an
Investment Letter in connection with the transfer of any Class C or Class P
Certificate to a transferee that is formed with the purpose of issuing notes
backed by such Class C or Class P Certificate, as the case may be, clause (b)
and (c) of the form of Investment Letter shall not be applicable and shall be
deleted by such transferee. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Co-Trustee, the Trustee and
the Master Servicer shall cooperate with the Depositor in providing the Rule
144A information referenced in the preceding sentence, including providing to
the Depositor such information regarding the Certificates, the Mortgage Loans
and other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such Transfer shall, and does hereby
agree to, indemnify the Co-Trustee, the Trustee, the Depositor, the Trust Fund,
each Seller, the Master Servicer and the NIM Insurer against any liability that
may result if the Transfer is not so exempt or is not made in accordance with
such federal and state laws.
No beneficial interest in any Class B Certificate that is a Book-Entry
Certificate may be held by any Person that is not a Qualified Institutional
Buyer. Notwithstanding the foregoing, a beneficial interest in a Class B
Certificate that is a Book-Entry Certificate may be transferred by any
Certificate Owner holding such interest to any Institutional Accredited Investor
(other than a Qualified Institutional Buyer) that takes delivery in the form of
a Definitive Certificate upon delivery to the Trustee of (i) such certifications
and/or opinions as are contemplated by the first paragraph of this Section
5.02(b) and (ii) such written orders and instructions as are required under the
applicable procedures of the Depository to direct the Trustee to debit the
account of a Depository Participant by the denomination of the transferred
interests in such Book-Entry Certificate. Upon delivery to the Trustee of the
certifications and/or opinions contemplated by the first paragraph of this
Section 5.02(b), the Trustee, subject to and in accordance with the applicable
procedures of the Depository, shall reduce the denomination of the subject
Book-Entry Certificate by the denomination of the transferred interests in such
Book-Entry Certificate, and shall cause a Definitive Certificate of the same
Class as such Book-Entry Certificate, and in a denomination equal to the
reduction in the denomination of such Book-Entry Certificate, to be executed,
authenticated and delivered in accordance with this Agreement to the applicable
transferee. Also notwithstanding the foregoing, any Class B Certificate that is
a Definitive Certificate may be transferred by any Certificateholder holding
such Certificate to any Qualified Institutional Buyer that takes delivery in the
form of a beneficial interest in a Book-Entry Certificate upon delivery to the
Trustee of (i) such certifications and/or opinions as are contemplated by the
first paragraph of this Section 5.02(b) and (ii) such written orders and
instructions as are required under the applicable procedures of the Depository
to direct the Trustee to credit the account of a Depository Participant by the
denomination of the transferred interests in such Class B Certificate. Upon
delivery to the Trustee of the Definitive Certificate to be transferred and the
certifications and/or opinions contemplated by the first paragraph of this
Section 5.02(b), the Trustee, subject to and in accordance with the applicable
procedures of the Depository, shall increase the denomination of the existing
Book-Entry Certificate for the Class
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B Certificates by the denomination of the transferred interests in such
Definitive Certificate, shall instruct the Depository to credit the account of
the applicable Depository Participant, and shall cause the subject Definitive
Certificate to be cancelled.
No Transfer of an ERISA-Restricted Certificate (other than a transfer
of an ERISA-Restricted Certificate to an affiliate of the Depositor (either
directly or through a nominee) in connection with the initial issuance of the
Certificates) shall be made unless the Trustee shall have received either (i) a
written representation from the transferee of such Certificate acceptable to and
in form and substance satisfactory to the Trustee (in the event such Certificate
is a Private Certificate, such requirement is satisfied only by the Trustee's
receipt of a representation letter from the transferee substantially in the form
of Exhibit K or Exhibit L, or in the event such Certificate is a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that (x) such transferee is not a Plan, or (y) in the case of
an ERISA-Restricted Certificate that has been the subject of an ERISA-Qualifying
Underwriting, a representation that the transferee is an insurance company which
is purchasing such Certificate with funds contained in an "insurance company
general account" (as such term is defined in section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificate satisfy the requirements for exemptive relief under
Sections I and III of PTCE 95-60 or (ii) in the case of any ERISA-Restricted
Certificate presented for registration in the name of an employee benefit plan
or arrangement subject to ERISA, or a plan or arrangement subject to Section
4975 of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or arrangement or any other person acting on behalf of
any such plan or arrangement, an Opinion of Counsel satisfactory to the Trustee,
addressed to the Trustee and the Master Servicer, to the effect that the
purchase and holding of such ERISA-Restricted Certificate will not result in a
non-exempt prohibited transaction under ERISA or the Code and will not subject
the Trustee or the Master Servicer to any obligation in addition to those
expressly undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Master Servicer, or the Trust Fund. For purposes of
the preceding sentence, one of such representations, as appropriate, shall be
deemed to have been made to the Trustee by the transferee's acceptance of an
ERISA-Restricted Certificate (or the acceptance by a Certificate Owner of the
beneficial interest in any such Class of ERISA-Restricted Certificates) unless
the Trustee shall have received from the transferee an Opinion of Counsel as
described in clause (ii) or a written representation acceptable in form and
substance to the Trustee. Notwithstanding anything else to the contrary herein,
any purported transfer of an ERISA-Restricted Certificate to or on behalf of an
employee benefit plan subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code without the delivery to the Trustee of an Opinion of
Counsel satisfactory to the Trustee meeting the requirements of clause (i) of
the first sentence of this paragraph as described above shall be void and of no
effect. The Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact not
permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the Trustee, with
respect to the transfer of such Classes of Certificates, required delivery of
such certificates and other documentation or evidence as are expressly required
by the terms of this Agreement and examined such certificates and other
documentation or evidence to determine compliance as to form with the express
requirements hereof. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any
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ERISA-Restricted Certificate that was in fact an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan or arrangement subject to
Section 4975 of the Code or a Person acting on behalf of any such plan or
arrangement at the time it became a Holder or, at such subsequent time as it
became such a plan or arrangement or Person acting on behalf of such a plan or
arrangement, all payments made on such ERISA-Restricted Certificate at and after
either such time. Any such payments so recovered by the Trustee shall be paid
and delivered by the Trustee to the last preceding Holder of such Certificate
that is not such a plan or arrangement or Person acting on behalf of a plan or
arrangement.
Until the Swap Trust and the Final Maturity Reserve Fund terminate, no
transfer of an Interest-Bearing Certificate that is not an ERISA-Restricted
Certificate (other than a transfer of an Interest-Bearing Certificate to an
affiliate of the Depositor (either directly or through a nominee) in connection
with the initial issuance of the Certificates) shall be made unless the Trustee
shall have received either (i) a written representation from the transferee of
such Interest-Bearing Certificate acceptable to and in form and substance
satisfactory to the Trustee to the effect that such transferee is not a Plan, or
(ii) a written representation that the purchase and holding of the
Interest-Bearing Certificate satisfy the requirements for exemptive relief under
▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ 96-23, the service provider
exemption provided under Section 408(b)(17) of ERISA and Section 4975(d)(20) of
the Code or a similar exemption. In the event that such representation is not
delivered, one of the foregoing representations, as appropriate, shall be deemed
to have been made by the transferee's (including an initial acquiror's)
acceptance of the Interest-Bearing Certificate. In the event that such
representation is violated, such transfer or acquisition shall be void and of no
effect.
Each Plan that acquires a Private Certificate (or any beneficial
interest therein) that is not an ERISA-Restricted Certificate will be required
to deliver to the Trustee or its transferor a representation that it is an
"accredited investor" as defined in Rule 501(a)(1) under the Securities Act, and
each investor that acquires a Private Certificate (or any beneficial interest
therein) that is not an ERISA-Restricted Certificate will be required to deliver
to the Trustee or its transferor an agreement to obtain from its transferee such
a representation and agreement. For purposes of the preceding sentence, any
investor acquiring a Private Certificate (or any beneficial interest therein)
that is not an ERISA-Restricted Certificate shall be deemed to have made to the
Trustee or its transferor the representation and agreement set forth in the
preceding sentence by the transferee's acceptance of such Certificate (or
beneficial interest therein).
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(1) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(2) Except in connection with (i) the registration of the Tax
Matters Person Certificate in the name of the Trustee or (ii) any
registration in the name of, or transfer of a Class A-R Certificate to,
an affiliate of the Depositor (either directly or
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through a nominee) in connection with the initial issuance of the
Certificates, no Ownership Interest in a Class A-R Certificate may be
registered or transferred, and the Trustee shall not register the
Transfer of any Class A-R Certificate, unless the Trustee shall have
been furnished with a certificate (a "Transferor Certificate") of the
transferor in the form attached hereto as Exhibit J-1 and an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit I.
(3) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class A-R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class A-R
Certificate and (C) not to Transfer its Ownership Interest in a Class
A-R Certificate, or to cause the Transfer of an Ownership Interest in a
Class A-R Certificate to any other Person, if it has actual knowledge
that such Person is not a Permitted Transferee or that such Transfer
Affidavit is false.
(4) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit and Transferor Certificate. The Trustee
shall be entitled but not obligated to recover from any Holder of a
Class A-R Certificate that was in fact not a Permitted Transferee at
the time it became a Holder or, at such subsequent time as it became
other than a Permitted Transferee, all payments made on such Class A-R
Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, any Seller or the Master
Servicer, to the effect that the elimination of such restrictions will not cause
any REMIC
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formed hereunder to fail to qualify as a REMIC at any time that the Certificates
are outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Class A-R Certificate, by acceptance of its Ownership
Interest, shall be deemed to consent to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Trustee, is reasonably necessary
(a) to ensure that the record ownership of, or any beneficial interest in, a
Class A-R Certificate is not transferred, directly or indirectly, to a Person
that is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Class A-R Certificate that is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all affidavits, certifications and
opinions referred to above in this Section 5.02 shall not be an expense of the
Trust Fund, the Trustee, the Depositor, any Seller or the Master Servicer.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Master Servicer and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee, the NIM Insurer and any agent of the
Master Servicer, the Trustee or the NIM Insurer may treat the person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and none of the Master Servicer, the Trustee, the NIM
Insurer or any agent of the Master Servicer, the Trustee or the NIM Insurer
shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders or Certificate Owners (a) request
such information in writing from the Trustee, (b) state that such
Certificateholders or Certificate Owners desire to communicate with other
Certificateholders or Certificate Owners with respect
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to their rights under this Agreement or under the Certificates and (c) provide a
copy of the communication that such Certificateholders or Certificate Owners
propose to transmit or if the Depositor or Master Servicer shall request such
information in writing from the Trustee, then the Trustee shall, within ten
Business Days after the receipt of such request, provide the Depositor, the
Master Servicer or such Certificateholders or Certificate Owners at such
recipients' expense the most recent list of the Certificateholders of the Trust
Fund held by the Trustee, if any. The Depositor and every Certificateholder or
Certificate Owner, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Book-Entry Certificates.
The Book-Entry Certificates, upon original issuance, shall be issued in
the form of one typewritten Certificate (or more than one, if required by the
Depository) for each Class of such Certificates, to be delivered to the
Depository by or on behalf of the Depositor. Such Certificates shall initially
be registered on the Certificate Register in the name of the Depository or its
nominee, and no Certificate Owner of such Certificates will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of such Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Depositor, the Sellers, the Master Servicer and the Trustee may
deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of the
respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred
by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
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For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates (or, in the case of the Class B Certificates, by
Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates and by Certificateholders (other
than the Depository) owning Definitive Certificates).
Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of any Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.
Section 5.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor advises the Trustee that the Depository is no
longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor or (b) after the occurrence
and continuation of an Event of Default, Certificate Owners of such Book-Entry
Certificates having not less than 51% of the Voting Rights evidenced by any
Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Certificates, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners of such Class requesting the same. The Depositor shall provide the
Trustee with an adequate inventory of Certificates to facilitate the issuance
and transfer of Definitive Certificates. Upon surrender to the Trustee of any
such Certificates by the Depository, accompanied by registration instructions
from the Depository for registration, the Trustee shall authenticate and deliver
such Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates its offices at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust MBS Administration,
as offices for such purposes. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Sellers.
The Depositor, the Master Servicer and each Seller shall each be liable
in accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Sellers.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of the
United States or under the laws of one of the states thereof and will obtain and
preserve its qualification or registration to do business as a foreign
partnership in each jurisdiction in which such qualification or registration is
or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any Person into which the Depositor, the Master Servicer or any Seller
may be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Master Servicer or any Seller shall be
a party, or any person succeeding to the business of the Depositor, the Master
Servicer or any Seller, shall be the successor of the Depositor, the Master
Servicer or such Seller, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided that the successor or
surviving Person to the Master Servicer shall be qualified to service mortgage
loans on behalf of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac.
As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Master Servicer, the Master Servicer shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
a replacement Master Servicer.
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Section 6.03 Limitation on Liability of the Depositor, the Sellers, the
Master Servicer, the NIM Insurer and Others.
None of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer or any of the directors, officers, employees or agents of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer shall be under
any liability to the Trustee (except as provided in Section 8.05), the Trust
Fund or the Certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided that this provision shall not protect the Depositor, the
Sellers, the Master Servicer or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Sellers, the Master Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Sellers, the NIM Insurer,
the Master Servicer and any director, officer, employee or agent of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor, the Sellers,
the NIM Insurer, the Master Servicer and any director, officer, employee or
agent of the Depositor, the Sellers, the NIM Insurer or the Master Servicer
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and that
in its opinion may involve it in any expense or liability; provided that any of
the Depositor, the Sellers, the NIM Insurer or the Master Servicer may, in its
discretion undertake any such action that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be, expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Sellers, the NIM Insurer and the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account as provided by
Section 3.08 hereof.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that its duties hereunder are
no longer permissible under applicable law or (ii) upon appointment of a
successor servicer that is reasonably acceptable to the Trustee and the NIM
Insurer and the written confirmation from each Rating Agency (which confirmation
shall be furnished to the Depositor, the Trustee and the NIM Insurer) that such
resignation will not cause such Rating Agency to reduce the then-current rating
of the Certificates. Any such determination pursuant to clause (i) of the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to
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such effect delivered to the Trustee. No resignation of the Master Servicer
shall become effective until the Trustee shall have assumed the Master
Servicer's responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement and the Depositor shall have received the information described in the
following sentence. As a condition to the effectiveness of any such resignation,
at least 15 calendar days prior to the effective date of such resignation, the
Master Servicer shall provide (x) written notice to the Depositor of any
successor pursuant to this Section and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to the resignation of the Master Servicer.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac for
persons performing servicing for mortgage loans purchased by ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.
The Master Servicer shall provide the Trustee and the NIM Insurer (upon
such party's reasonable request) with copies of any such insurance policies and
fidelity bond. The Master Servicer shall be deemed to have complied with this
provision if an Affiliate of the Master Servicer has such errors and omissions
and fidelity bond coverage and, by the terms of such insurance policy or
fidelity bond, the coverage afforded thereunder extends to the Master Servicer.
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(1) any failure by the Master Servicer to deposit in the
Certificate Account or the Distribution Account or remit to the Trustee
any payment (excluding a payment required to be made under Section 4.01
hereof) required to be made under the terms of this Agreement, which
failure shall continue unremedied for five calendar days and, with
respect to a payment required to be made under Section 4.01(b) or (c)
hereof, for one Business Day, after the date on which written notice of
such failure shall have been given to the Master Servicer by the
Trustee, the NIM Insurer or the Depositor, or to the Trustee, the NIM
Insurer and the Master Servicer by the Holders of Certificates
evidencing not less than 25% of the Voting Rights; or
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(2) any failure by the Master Servicer to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in this Agreement (except with
respect to a failure related to a Limited Exchange Act Reporting
Obligation) or any representation or warranty shall prove to be untrue,
which failure or breach shall continue unremedied for a period of 60
days after the date on which written notice of such failure shall have
been given to the Master Servicer by the Trustee, the NIM Insurer or
the Depositor, or to the Trustee by the Holders of Certificates
evidencing not less than 25% of the Voting Rights; provided, that the
sixty-day cure period shall not apply to the initial delivery of the
Mortgage File for Delay Delivery Mortgage Loans or the failure to
repurchase or substitute in lieu thereof; or
(3) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(4) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(5) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(6) the Master Servicer shall fail to reimburse in full the
Trustee not later than 6:00 p.m. (New York time) on the Business Day
following the related Distribution Date for any Advance made by the
Trustee pursuant to Section 4.01(d) together with accrued and unpaid
interest.
If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
shall, but only at the direction of either the NIM Insurer or the Holders of
Certificates evidencing not less than 25% of the Voting Rights, by notice in
writing to the Master Servicer (with a copy to each Rating Agency and the
Depositor), terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. In addition, if during
the period that the Depositor is required to file Exchange Act Reports with
respect to the Trust Fund, the Master Servicer shall fail to observe or perform
any of the obligations that constitute a Limited Exchange Act Reporting
Obligation or the obligations set forth in Section 3.17(a) or Section
11.07(a)(1) and (2), and such failure continues for the lesser of 10 calendar
days or such period in which the applicable Exchange Act Report can be filed
timely (without taking into account any extensions), so long as such failure
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shall not have been remedied, the Trustee shall, but only at the direction of
the Depositor, terminate all of the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder. The Depositor
shall not be entitled to terminate the rights and obligations of the Master
Servicer if a failure of the Master Servicer to identify a Subcontractor
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB was attributable solely to the role or functions of such
Subcontractor with respect to mortgage loans other than the Mortgage Loans.
On or after the receipt by the Master Servicer of such written notice,
all authority and power of the Master Servicer hereunder, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee.
The Trustee shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article VIII.
The Master Servicer agrees to cooperate with the Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee of all cash amounts
which shall at the time be credited to the Certificate Account, or thereafter be
received with respect to the Mortgage Loans. The Trustee shall promptly notify
the Rating Agencies and the Depositor of the occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Master Servicer
hereunder, such Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.08(a)(i)
through (viii), and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
If the Master Servicer is terminated, the Trustee shall provide the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
a successor master servicer in the event the Trustee should succeed to the
duties of the Master Servicer as set forth herein.
Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof
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and applicable law including the obligation to make advances pursuant to Section
4.01. As compensation therefor, the Trustee shall be entitled to all fees, costs
and expenses relating to the Mortgage Loans that the Master Servicer would have
been entitled to if the Master Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Trustee has become the successor to the
Master Servicer in accordance with Section 7.01 hereof, the Trustee may, if it
shall be unwilling to so act, or shall, if it is prohibited by applicable law
from making Advances pursuant to Section 4.01 hereof or if it is otherwise
unable to so act, (i) appoint any established mortgage loan servicing
institution reasonably acceptable to the NIM Insurer (as evidenced by the prior
written consent of the NIM Insurer), or (ii) if it is unable for 60 days to
appoint a successor servicer reasonably acceptable to the NIM Insurer, petition
a court of competent jurisdiction to appoint any established mortgage loan
servicing institution, the appointment of which does not adversely affect the
then-current rating of the Certificates and the NIM Insurer guaranteed notes
(without giving any effect to any policy or guaranty provided by the NIM
Insurer) by each Rating Agency as the successor to the Master Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Master Servicer hereunder. Any successor Master Servicer
shall be an institution that is a ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac approved
seller/servicer in good standing, that has been approved by each Mortgage
Insurer if required, that has a net worth of at least $15,000,000 and that is
willing to service the Mortgage Loans and executes and delivers to the Depositor
and the Trustee an agreement accepting such delegation and assignment, that
contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer (other than
liabilities and indemnities of the Master Servicer under Section 6.03 hereof
incurred prior to termination of the Master Servicer under Section 7.01), with
like effect as if originally named as a party to this Agreement; and provided
further that each Rating Agency acknowledges that its rating of the Certificates
in effect immediately prior to such assignment and delegation will not be
qualified or reduced as a result of such assignment and delegation. No
appointment of a successor to the Master Servicer hereunder shall be effective
until (i) the Trustee shall have consented thereto, (ii) written notice of such
proposed appointment shall have been provided by the Trustee to each
Certificateholder and (iii) at least 15 calendar days prior to the effective
date of such appointment, (x) the Trustee shall provide written notice to the
Depositor of such successor pursuant to this Section 7.02 and (y) such successor
Master Servicer shall provide to the Depositor in writing and in form and
substance reasonably satisfactory to the Depositor, all information reasonably
requested by the Depositor in order to comply with its reporting obligation
under Item 6.02 of Form 8-K with respect to a replacement master servicer. The
Trustee shall not resign as servicer until a successor servicer has been
appointed and has accepted such appointment. Pending appointment of a successor
to the Master Servicer hereunder, the Trustee, unless the Trustee is prohibited
by law from so acting, shall, subject to Section 3.04 hereof, act in such
capacity as herein above provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided that no such compensation shall be in excess of that permitted
the Master Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case
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caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give notice to
the NIM Insurer and the Mortgagors of such change of servicer and shall, during
the term of its service as servicer maintain in force the policy or policies
that the Master Servicer is required to maintain pursuant to Section 6.05.
In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Trustee promptly
upon receipt of the original with evidence of recording thereon or a copy
certified by the public recording office in which such assignment was recorded.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
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The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee (or the Co-Trustee, to the extent provided in this Agreement) that are
specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(1) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable,
individually or as Trustee, except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably
believed in good faith to be genuine and to have been duly executed by
the proper authorities respecting any matters arising hereunder;
(2) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee was
grossly negligent or acted in bad faith or with willful misfeasance;
(3) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
Holders of each Class of Certificates evidencing not less than 25% of
the Voting Rights of such Class relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee under this
Agreement; and
(4) without in any way limiting the provisions of this Section
8.01 or Section 8.02 hereof, the Trustee shall be entitled to rely
conclusively on the information delivered to it by the Master Servicer
in a Trustee Advance Notice in determining whether or not it is
required to make an Advance under Section 4.01(d), shall have no
responsibility to ascertain or confirm any information contained in any
Trustee Advance Notice, and shall have no obligation to make any
Advance under Section 4.01(d) in the absence of a Trustee Advance
Notice or actual knowledge by a Responsible Officer that (A) a required
Advance was not made and (B) such required Advance was not a
Nonrecoverable Advance.
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The Trustee hereby represents, warrants, covenants and agrees that,
except as permitted by Article IX hereof, it shall not cause the Trust Fund to
consolidate or amalgamate with, or merge with or into, or transfer all or
substantially all of the Trust Fund to, another Person.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(1) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(2) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(3) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(4) prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default that may have occurred,
the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by the NIM Insurer or the Holders of each Class of Certificates
evidencing not less than 25% of the Voting Rights of such Class;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee not reasonably assured to the Trustee by the NIM Insurer or
such Certificateholders, the Trustee may require reasonable indemnity
against such expense, or liability from the NIM Insurer or such
Certificateholders as a condition to taking any such action;
(5) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(6) the Trustee shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any of
its duties hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
liability is not assured to it;
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(7) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(8) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(9) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of the NIM Insurer or any of the Certificateholders,
pursuant to the provisions of this Agreement, unless the NIM Insurer or
such Certificateholders, as applicable, shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
The Depositor hereby directs the Trustee to execute, deliver and
perform its obligations under the Swap Contract Administration Agreement (in its
capacity as Swap Trustee). The Sellers, the Depositor, the Master Servicer and
the Holders of the Interest-Bearing Certificates by their acceptance of such
Certificates acknowledge and agree that the Trustee shall execute, deliver and
perform its obligations under the Swap Contract Administration Agreement and
shall do so solely in its capacity as Swap Trustee, as the case may be, and not
in its individual capacity. Every provision of this Agreement relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall apply to the Trustee's execution of the Swap Contract Administration
Agreement in its capacity as Swap Trustee, and the performance of its duties and
satisfaction of its obligations thereunder.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of any Mortgage Loan or related
document or of MERS or the MERS(R) System other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any funds paid to the Depositor or the Master Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Certificate Account by
the Depositor or the Master Servicer.
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Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(i) incurred in connection with any legal action relating to this Agreement or
the Certificates, or in connection with the performance of any of the Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or by reason of reckless disregard of the Trustee's
obligations and duties hereunder or (ii) resulting from any error in any tax or
information return prepared by the Master Servicer. Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the Trustee
hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Sellers and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
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affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the Master Servicer and by mailing notice of resignation by first class mail,
postage prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register and each Rating Agency, not less than 60 days before the
date specified in such notice when, subject to Section 8.08, such resignation is
to take effect, and (2) acceptance of appointment by a successor trustee in
accordance with Section 8.08 and meeting the qualifications set forth in Section
8.06. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
As a condition to the effectiveness of any such resignation, at least
15 calendar days prior to the effective date of such resignation, the Trustee
shall provide (x) written notice to the Depositor of any successor pursuant to
this Section and (y) in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to the resignation of the Trustee.
If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the NIM Insurer or the Depositor, (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, (iii)(A)
a tax is imposed with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund is located, (B) the imposition of such tax would be
avoided by the appointment of a different trustee and (C) the Trustee fails to
indemnify the Trust Fund against such tax, or (iv) during the period which the
Depositor is required to file Exchange Act Reports with respect to the Trust
Fund, the Trustee fails to comply with its obligations under the last sentence
of Section 7.01, the preceding paragraph, Section 8.09 or Article XI and such
failure is not remedied within the lesser of 10 calendar days or such period in
which the applicable Exchange Act Report can be filed timely (without taking
into account any extensions), then, in the case of clauses (i) through (iii),
the Depositor, the NIM Insurer or the Master Servicer, or in the case of clause
(iv), the Depositor, may remove the Trustee and appoint a successor trustee,
reasonably acceptable to the NIM Insurer, by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Trustee, one copy of
which shall be delivered to the Master Servicer and one copy of which shall be
delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to
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the Master Servicer one complete set to the Trustee so removed, one complete set
to the successor so appointed and one complete set to the Depositor, together
with a written description of the basis for such removal. Notice of any removal
of the Trustee shall be given to each Rating Agency by the successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, its predecessor trustee
and the Master Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. In addition, if the Swap Contract is still outstanding,
the Person appointed as successor trustee shall execute, acknowledge and deliver
to the predecessor trustee, CHL and the Master Servicer an instrument accepting
the appointment as successor Swap Contract Administrator under the Swap Contract
Administration Agreement.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof, is reasonably
acceptable to the NIM Insurer, its appointment shall not adversely affect the
then-current ratings of the Certificates and has provided to the Depositor in
writing and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
Trustee. Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to the NIM Insurer and all Holders of Certificates. If the
Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to substantially all of the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be eligible under the provisions of Section 8.06 hereof
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Trustee, the
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Trustee shall provide (x) written notice to the Depositor of any successor
pursuant to this Section and (y) in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to a replacement Trustee.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and reasonably acceptable to the NIM Insurer to
act as co-trustee or co-trustees jointly with the Trustee, or separate trustee
or separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment, or the NIM Insurer shall not have approved such
appointment, within 15 days after receipt by it of a request to do so, or in the
case an Event of Default shall have occurred and be continuing, the Trustee
shall have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 8.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(1) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master Servicer,
shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee
hereunder or as successor to the Master Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(2) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(3) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
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Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC created pursuant
to the Preliminary Statement qualifies as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Trustee covenants and agrees that it shall
act as agent (and the Trustee is hereby appointed to act as agent) on behalf of
the Trust Fund and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Returns (Form 1066 or any successor form adopted
by the Internal Revenue Service) and prepare and file or cause to be prepared
and filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each REMIC created hereunder containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the Holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for the Trust Fund; (c) make or cause
to be made elections, on behalf of each REMIC created hereunder to be treated as
a REMIC on the federal tax return of each such REMIC for its first taxable year
(and, if necessary, under applicable state law); (d) prepare and forward, or
cause to be prepared and forwarded, to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Class A-R Certificate to a Person that is not a Permitted Transferee, or an
agent
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(including a broker, nominee or other middleman) of a Non-Permitted Transferee,
or a pass-through entity in which a Non-Permitted Transferee is the record
holder of an interest (the reasonable cost of computing and furnishing such
information may be charged to the Person liable for such tax); (f) to the extent
that they are under its control conduct the affairs of the Trust Fund at all
times that any Certificates are outstanding so as to maintain the status of each
REMIC created hereunder as a REMIC under the REMIC Provisions; (g) not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any REMIC created hereunder; (h) pay, from
the sources specified in the third paragraph of this Section 8.11, the amount of
any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on any REMIC created hereunder prior to the termination
of the Trust Fund when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings); (i) sign or cause to be signed federal, state or
local income tax or information returns; (j) maintain records relating to each
REMIC created hereunder, including but not limited to the income, expenses,
assets and liabilities of each such REMIC, and the fair market value and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC created hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of the
Trust Fund, and otherwise act on behalf of any REMIC created hereunder in
relation to any tax matter involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans (and, to the extent not part of the
aforementioned, the information referred to in paragraphs (1), (2), (3)and (4)
of Section 4.05(d)). Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or data
that the Trustee may, from time to time, request in order to enable the Trustee
to perform its duties as set forth herein. The Depositor hereby indemnifies the
Trustee for any losses, liabilities, damages, claims or expenses of the Trustee
arising from any errors or miscalculations of the Trustee that result from any
failure of the Depositor to provide, or to cause to be provided, accurate
information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
Trust Fund pursuant to sections 23153 and 24872 of the California Revenue and
Taxation Code if not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee, if any such other
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tax arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) (x) the Master Servicer, in the case of
any such minimum tax, and (y) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or (iii) in all other
cases, or in the event that any liable party here fails to honor its obligations
under the preceding clauses (i) or (ii), any such tax will be paid first with
amounts otherwise to be distributed to the Class A-R Certificateholders, and
second with amounts otherwise to be distributed to all other Certificateholders
in the same manner as if such tax were a Realized Loss that occurred ratably
within each Loan Group. Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Class A-R Certificates,
the Trustee is hereby authorized to retain on any Distribution Date, from the
Holders of the Class A-R Certificates (and, if necessary, second, from the
Holders of all other Certificates in the priority specified in the preceding
sentence), funds otherwise distributable to such Holders in an amount sufficient
to pay such tax. The Trustee agrees to promptly notify in writing the party
liable for any such tax of the amount thereof and the due date for the payment
thereof.
The Trustee shall treat the Carryover Reserve Fund and the Swap Trust,
including the Swap Account, as outside reserve funds within the meaning of
Treasury Regulation 1.860G-2(h), neither of which is an asset of any REMIC
created hereunder. The Carryover Reserve Fund shall be treated as owned by the
Class C Certificateholders and the Swap Trust, including the Swap Account, shall
be treated as owned by the Class C Certificateholders. The rights of the Holders
of each Class of Certificates (other than the Class P and Class A-R
Certificates) to receive payments from, and the deemed obligations of such
Holders to make payments to, the Carryover Reserve Fund or the Swap Trust,
including the Swap Account, shall be treated as rights and obligations with
respect to notional principal contracts written by the Holders of the Class C
Certificates in respect of any Net Rate Carryover distributed pursuant to
Sections 4.04(c)(4), and (ii) the Swap Counterparty in respect of any Net Rate
Carryover funded by the Swap Contract and in respect of any residual payments
from such Swap Contract received by the Class C Certificates. Thus, the
Certificates (other than the Class P and Class A-R Certificates), shall be
treated as representing ownership of Master REMIC regular interests coupled with
contractual rights and obligations within the meaning of Treasury Regulation
1.860G-2(i). For purposes of determining the issue price of the various Master
REMIC regular interests, the Trustee shall assume that the Swap Contract has a
value of $1,650,000. Any differences in the distributions to a Certificateholder
(positive or negative) that would result from the application of the Strip REMIC
Cap rather than the applicable Net Rate Cap shall be treated by the Trustee as
reconciled among the Certificates by swap payments made pursuant to notional
principal contracts entered into among the Certificateholders.
The Trustee shall treat the entitlement to Credit Comeback Excess
Amounts as owned by the Holders of the Class C Certificates and not as an asset
of, or interest in, any REMIC created hereunder. Further, the Trustee shall
treat any payments of Credit Comeback Excess Amounts to Persons other than the
Holders of the Class C Certificates as payments made by the Holders of the Class
C Certificates pursuant to a credit enhancement contract under Treasury
Regulation 1.860G-2(c). The Trustee shall also treat any amount payable to a
Class C Certificate with respect to the STR-C-OC Interest as deposited into the
Carryover Reserve Fund. To the extent the amount payable with respect to the
Swap Contract exceeds the amount payable with respect to the Class C
Certificates, the Trustee, for federal income tax purposes, shall treat
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such excess as Realized Losses from Mortgage Loans and to the extent such
Realized Losses (if they had occurred) would be allocated to a
Certificateholder, the Trustee shall treat such amount as first payable to the
Certificateholder as principal and as then payable by the Certificateholder with
respect to a notional principal contract.
The Trustee shall treat the Final Maturity Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.860G-2(h) that is owned
by the Holders of the Class C Certificates, and that is not an asset of any
REMIC created hereunder. Beginning on the Distribution Date in February 2017,
the Trustee shall treat any monies payable to the Class C Certificateholders
with respect to their interest in the STR-C-40 Year IO, as first paid to the
Class C Certificates and then deposited in the Final Maturity Reserve Fund. Any
monies payable on the STR-C-40 Year IO in excess of the Final Maturity Required
Deposit shall be the "Excess Deposit." For income tax purposes, to the extent
the amount of any Excess Deposit is payable to Holders of Certificates other
than the Class C Certificates, such amount shall be treated as payable to such
Holders as Net Rate Carryover and any remaining amount of Excess Deposit shall
be treated as payable to the Holders of the Class C Certificates. Any other
monies received by the Holders of the Interest-Bearing Certificates from the
Final Maturity Reserve Fund will be treated as monies paid by the Holders of the
Class C Certificates to acquire the Interest-Bearing Certificates receiving such
monies. Thus, with respect to such other monies, the Interest-Bearing
Certificates and the Class C Certificates shall be treated as representing
ownership of not only a Master REMIC regular interest, but also ownership of an
interest in a forward purchase contract and the Trustee shall treat the rights
of the holders of the Interest-Bearing Certificates to receive such other monies
from the Final Maturity Reserve Fund as rights in forward purchase contracts
entered into with the Holders of the Class C Certificates.
Section 8.12 Co-Trustee.
(a) The Co-Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Co-Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they conform
to the requirements of this Agreement, to the extent required by this Agreement.
If any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Co-Trustee shall take action as it deems
appropriate to have the instrument corrected. In addition, the Co-Trustee shall
act as the insured under each Mortgage Insurance Policy and hereby directs the
Master Servicer, on behalf of the Co-Trustee, to take all actions appropriate or
required of the Co-Trustee under each Mortgage Insurance Policy, other than the
payment of each Mortgage Insurance Premium and obtaining the approval of each
Mortgage Insurer with respect to the appointment of a successor servicer.
(b) No provision of this Agreement shall be construed to relieve the
Co-Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(1) the duties and obligations of the Co-Trustee shall be
determined solely by the express provisions of this Agreement with the
exception of Section 8.10, the
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Co-Trustee shall not be liable, individually or as Co-Trustee, except
for the performance of such duties and obligations as are specifically
set forth in this Agreement, no implied covenants or obligations shall
be read into this Agreement against the Co-Trustee and the Co-Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Co-Trustee and conforming to the requirements
of this Agreement that it reasonably believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder; and
(2) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Co-Trustee, unless
the Co-Trustee was grossly negligent or acted in bad faith or with
willful misfeasance.
(c) Except as otherwise provided in paragraph (b) above:
(1) the Co-Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(2) the Co-Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(3) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(4) the Co-Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document;
(5) the Co-Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys; and
(6) the Co-Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such liability is not assured to it.
(d) The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Co-Trustee
assumes no responsibility for their correctness. The Co-Trustee makes no
representations as to the validity
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or sufficiency of this Agreement or of any Mortgage Loan or related document or
of MERS or the MERS(R) System. The Co-Trustee shall not be accountable for the
use or application by the Depositor or the Master Servicer of any funds paid to
the Depositor or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Certificate Account by the Depositor or the
Master Servicer.
(e) The Co-Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Co-Trustee.
(f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and (ii)
to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or services are
not in the ordinary course of the duties of a trustee, paying agent or
certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct). The Co-Trustee and any director,
officer, employee or agent of the Co-Trustee shall be indemnified by the Master
Servicer and held harmless against any loss, liability or expense (i) incurred
in connection with any legal action relating to this Agreement or the
Certificates, or in connection with the performance of any of the Co-Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Co-Trustee's duties hereunder or by reason of reckless disregard of the
Co-Trustee's obligations and duties hereunder and (ii) resulting from any error
in any tax or information return prepared by the Master Servicer. Such indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Co-Trustee hereunder.
(g) The Co-Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.12 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
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so published. In case at any time the Co-Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.12, the Co-Trustee shall resign
immediately in the manner and with the effect specified in paragraph (h) below.
The corporation or national banking association serving as Co-Trustee may have
normal banking and trust relationships with the Depositor, the Sellers and the
Master Servicer and their respective affiliates; provided that such corporation
cannot be an affiliate of the Master Servicer other than the Trustee in its role
as successor to the Master Servicer.
(h) The Co-Trustee may at any time resign and be discharged from the
trusts hereby created by giving 30 days prior written notice of resignation to
the Trustee, the Depositor and the Master Servicer. Upon such resignation the
Trustee (x) may appoint a successor Co-Trustee meeting the requirements in
paragraph (g) above and acceptable to the Master Servicer and the NIM Insurer
(in their sole discretion), so long as such Co-Trustee executes and delivers to
the other parties hereto an instrument agreeing to be bound by the provisions of
this Agreement or (y) may if permitted by the Master Servicer (in its sole
discretion) assume the rights and duties of the resigning Co-Trustee so long as
the Trustee executes and delivers an instrument to that effect.
Section 8.13 Access to Records of the Trustee.
The Trustee and the Co-Trustee shall afford the Sellers, the Depositor,
the Master Servicer, the NIM Insurer and each Certificate Owner upon reasonable
notice during normal business hours access to all records maintained by the
Trustee or the Co-Trustee in respect of its duties under this Agreement and
access to officers of the Trustee and the Co-Trustee responsible for performing
its duties. Upon request, the Trustee or the Co-Trustee shall furnish the
Depositor, the Master Servicer, the NIM Insurer and any requesting Certificate
Owner with its most recent financial statements. The Trustee and the Co-Trustee
shall cooperate fully with the Sellers, the Master Servicer, the Depositor, the
NIM Insurer and the Certificate Owner for review and copying any books,
documents, or records requested with respect to the Trustee's and the
Co-Trustee's respective duties under this Agreement. The Sellers, the Depositor,
the Master Servicer and the Certificate Owner shall not have any responsibility
or liability for any action for failure to act by the Trustee or the Co-Trustee
and are not obligated to supervise the performance of the Trustee or the
Co-Trustee under this Agreement or otherwise.
Section 8.14 Suits for Enforcement.
If an Event of Default or other material default by the Master Servicer
or the Depositor under this Agreement occurs and is continuing, at the direction
of the Certificateholders holding not less than 51% of the Voting Rights or the
NIM Insurer, the Trustee shall proceed to protect and enforce its rights and the
rights of the Certificateholders or the NIM Insurer under this Agreement by a
suit, action, or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement or
in aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable, or other remedy, as the Trustee,
being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee, the NIM
Insurer and the Certificateholders.
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ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
Subject to Section 9.03 and Section 9.04, the Trust Fund shall
terminate and the obligations and responsibilities of the Depositor, the Master
Servicer, the Sellers, the Trustee and the Co-Trustee created hereby with
respect to the Trust Fund shall terminate upon the earliest of (a) the purchase
by the Master Servicer or NIM Insurer (the party exercising such purchase
option, the "Terminator") of all of the Mortgage Loans (and REO Properties) at a
price (the "Termination Price") equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan (other than in respect of an REO
Property), (ii) accrued interest thereon at the applicable Mortgage Rate (or, if
such repurchase is effected by the Master Servicer, at the applicable Net
Mortgage Rate), (iii) the appraised value of any REO Property (up to the Stated
Principal Balance of the related Mortgage Loan), such appraisal to be conducted
by an appraiser mutually agreed upon by the Terminator and the Trustee, (iv) any
remaining unpaid costs and damages incurred by the Trust Fund that arises out of
an actual violation of any predatory or abusive lending law or regulation and
(v) if the Terminator is the NIM Insurer, any unreimbursed Servicing Advances,
and the principal portion of any unreimbursed Advances, made on the Mortgage
Loans prior to the exercise of such repurchase, (b) the purchase by the Winning
Bidder of all of the Mortgage Loans (and REO Properties) after a Successful
Auction is conducted pursuant to Section 9.04 and the related auction proceeds
are distributed pursuant to Section 9.02(c) and (c) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to the Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement, as applicable. In
no event shall the trusts created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and (ii) the Latest Possible Maturity Date.
Notwithstanding anything set forth herein to the contrary (including,
without limitation, in Section 9.04), the right to purchase all Mortgage Loans
and REO Properties by the Terminator or the Winning Bidder pursuant to clause
(a) or clause (b) of the immediately preceding paragraph, as the case may be,
shall be conditioned upon (1) the Stated Principal Balance of the Mortgage
Loans, at the time of any such repurchase, aggregating ten percent (10%) or less
of the sum of the aggregate Cut-off Date Principal Balance of the Initial
Mortgage Loans and the Pre-Funded Amount, (2) unless the NIM Insurer otherwise
consents, the purchase price for such Mortgage Loans and REO Properties shall
result in a final distribution on any NIM Insurer guaranteed notes that is
sufficient (x) to pay such notes in full and (y) to pay any amounts due and
payable to the NIM Insurer pursuant to the indenture related to such notes and
(3) only in case of a purchase by the Master Servicer pursuant to clause (a) of
the immediately preceding paragraph, the absence of a request for an auction, or
the absence of a Successful Auction, of the Mortgage Loans and REO Properties
pursuant to Section 9.04.
The NIM Insurer's right to purchase all Mortgage Loans and REO
Properties shall be further conditioned upon the written consent of the Master
Servicer.
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The Swap Trust shall terminate on the earliest of (i) the Swap Contract
Termination Date, (ii) the reduction of the aggregate Certificate Principal
Balance of the Interest-Bearing Certificates to zero and (iii) the termination
of this Agreement.
Section 9.02 Final Distribution on the Certificates.
(a) Timing of Notice of Final Distribution, Auction or Optional
Termination.
(1) If on any Determination Date, the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other
funds or assets in the Trust Fund other than the funds in the
Certificate Account, then the Master Servicer shall direct the Trustee
promptly to send a final distribution notice to each Certificateholder
in accordance with Section 9.02(b). In the event such notice is given,
the Master Servicer shall cause all funds in the Certificate Account to
be remitted to the Trustee for deposit in the Distribution Account on
or before the Business Day prior to the applicable Distribution Date,
net of any amounts permitted to be withdrawn pursuant to Section
3.08(a). Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for File Release therefor, the
Co-Trustee shall promptly release to the Master Servicer the Mortgage
Files for the Mortgage Loans.
(2) If the Directing Certificateholder chooses to exercise its
right to cause an auction pursuant to Section 9.04, then the Directing
Certificateholder shall provide written notice to the Master Servicer
no later than the first day of the calendar month in which such auction
is to be conducted. If a Successful Auction is held pursuant to the
requirements of Section 9.04, then the Trustee shall distribute the
proceeds of the Successful Auction that have been remitted to the
Distribution Account to the Certificateholders pursuant to Sections
4.04 and 9.04 hereof on the Distribution Date in the calendar month
immediately following the calendar month in which the Successful
Auction occurs.
(3) If the Directing Certificateholder does not exercise its
right to cause an auction pursuant to Section 9.04 and the Terminator
(after prior written notice to the Master Servicer if the Terminator is
the NIM Insurer) elects to terminate the Trust Fund pursuant to Section
9.01, then at least 20 days prior to the date notice is to be mailed to
Certificateholders in accordance with Section 9.02(b), the Terminator
shall notify the Depositor and the Trustee of (a) its election to
terminate the Trust Fund, (b) the Distribution Date on which it intends
to terminate the Trust Fund pursuant to Section 9.01 and (c) the
applicable purchase price of the Mortgage Loans and REO Properties. In
the event such notice is given, the Terminator shall remit to the
Master Servicer, on or before the Business Day prior to the final
Distribution Date, for deposit into the Certificate Account, the
Termination Price. The Master Servicer shall cause all funds in the
Certificate Account, including the Termination Price, net of any
amounts permitted to be withdrawn pursuant to Section 3.08(a), to be
remitted to the Trustee for deposit in the Distribution Account on or
before the Business Day prior to the applicable Distribution Date. Upon
such final deposit with respect to the Trust Fund and the receipt by
the Trustee of a Request for File Release therefor, the Co-Trustee
shall promptly release to the Master Servicer the Mortgage Files for
the Mortgage Loans.
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(b) Timing of Notice to Certificateholders of Termination. Notice of
any termination of the Trust Fund (whether because of a Successful Auction,
Optional Termination or otherwise), specifying the Distribution Date on which
Certificateholders may surrender their Certificates for payment of the final
distribution and cancellation, shall be given promptly by the Trustee by letter
to Certificateholders mailed not earlier than the 10th day and no later than the
15th day of the month immediately preceding the month of such final
distribution. Any such notice shall specify (i) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of such Certificates at the office therein designated, (ii) the amount
of such final distribution, (iii) the location of the office or agency at which
such presentation and surrender must be made, and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of such Certificates at the
office therein specified. The Master Servicer will give such notice to each
Rating Agency and the Swap Counterparty at the time such notice is given to
Certificateholders.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class, in each
case on the final Distribution Date and in the order set forth in Section 4.04
(and with respect to the Class C Certificates after a Successful Auction,
Sections 9.04(g) and (k)) hereof and in proportion to their respective
Percentage Interests from the Distribution Account (and, if applicable, the
Carryover Reserve Fund) an amount equal to (i) as to each Class of Regular
Certificates, the Certificate Principal Balance thereof plus accrued interest
thereon (or on its Notional Amount, if applicable) in the case of an
interest-bearing Certificate and (ii) as to the Class A-R Certificates, the
amount, if any, which remains on deposit in the Distribution Account (other than
the amounts retained to meet claims) after application pursuant to clause (i)
above. Notwithstanding the reduction of the Certificate Principal Balance of any
Class of Certificates to zero, such Class will be outstanding hereunder (solely
for the purpose of receiving distributions (if any) to which it may be entitled
pursuant to the terms of this Agreement and not for any other purpose) until the
termination of the respective obligations and responsibilities of the Depositor,
each Seller, the Master Servicer and the Trustee hereunder in accordance with
Article IX.
(d) In the event that any affected Certificateholders shall not
surrender their respective Certificates for cancellation within six months after
the date specified in the above mentioned written notice, the Trustee shall give
a second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all Certificates shall not have been surrendered for cancellation, the
Class A-R Certificates shall be entitled to all unclaimed funds and other assets
of the Trust Fund that remain subject to this Agreement.
Section 9.03 Additional Termination Requirements.
(a) In the event the Terminator exercises its purchase option as
provided in Section 9.01 or there is a Successful Auction pursuant to Section
9.04, the Trust Fund shall be
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terminated in accordance with the following additional requirements, unless the
Trustee has been supplied with an Opinion of Counsel, at the expense of the
Terminator (or the Directing Certificateholder, in the case of a Successful
Auction), to the effect that the failure of the Trust Fund to comply with the
requirements of this Section 9.03 will not (i) result in the imposition of taxes
on "prohibited transactions" on any REMIC as defined in Section 860F of the
Code, or (ii) cause any REMIC created hereunder to fail to qualify as a REMIC at
any time that any Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day liquidation
period and notify the Trustee thereof, which shall in turn specify the
first day of such period in a statement attached to the Trust Fund's
final Tax Return pursuant to Treasury Regulation Section 1.860F-1. The
Master Servicer shall prepare a plan of complete liquidation and shall
otherwise satisfy all the requirements of a qualified liquidation under
Section 860F of the Code and any regulations thereunder, as evidenced
by an Opinion of Counsel delivered to the Trustee and the Depositor
obtained at the expense of the Terminator (or the Directing
Certificateholder, in the case of a Successful Auction); and
(2) Within 90 days after the time of adoption of such a plan
of complete liquidation, the Trustee shall sell all of the assets of
the Trust Fund to the Terminator (or the Winning Bidder in the case of
a Successful Auction) for cash in accordance with Section 9.01 and, if
applicable, Section 9.04.
(b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Master Servicer to prepare and the Trustee to adopt and sign a
plan of complete liquidation which authorization shall be binding upon all
successor Certificateholders. The Trustee shall attach a statement to the final
federal income tax return for each of any REMIC created hereunder stating that
pursuant to Treasury Regulation Section 1.860F-1, the first day of the 90-day
liquidation period for each the REMIC was the date on which the Trustee sold the
assets of the Trust Fund to the Terminator.
(c) The Trustee, as agent for any REMIC created hereunder, hereby
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Master Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1) and to take such other action in connection
therewith as may be reasonably requested by the Terminator or the Directing
Certificateholder, as applicable.
Section 9.04 Auction of the Mortgage Loans and REO Properties.
(a) On or after the Optional Termination Date, the Holder of the
largest Percentage Interest of the Class C Certificates (the "Directing
Certificateholder"), at its option, may by written instruction direct the Master
Servicer to direct the Trustee to solicit bids in a commercially reasonable
manner from Qualified Bidders for the purchase of the Mortgage Loans and any REO
Properties owned by the Trust Fund. The Directing Certificateholder shall
provide written notice to the Master Servicer as provided in Section 9.02(a)(2).
Any such direction by the Directing Certificateholder shall (i) be made in
writing and (ii) include contact information for the Directing
Certificateholder. Upon receipt of any direction from the Directing
Certificateholder meeting the requirements of the immediately preceding
sentence, the Trustee
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shall commence the auction process described in this Section 9.04. The Trustee
may engage a financial advisor, which financial advisor may be CHL or one of its
affiliates, in order to perform any of the duties of the Trustee specified in
Section 9.04. To effectuate such sale, the Trustee (or such financial advisor)
shall follow the procedures specified in Section 9.04(b) below. The Trustee
shall facilitate the sale of the assets in the Trust Fund to the Winning Bidder
so long as the Trustee (or any financial advisor on its behalf) has received at
least three bids from Qualified Bidders and at least one such bid is at least
equal to the Acceptable Bid Amount. In the event the auction is not a Successful
Auction, the Trustee may repeat this process periodically thereafter as directed
by the Directing Certificateholder until a Successful Auction is conducted or
the Terminator purchases all of the Mortgage Loans and REO Properties pursuant
to Section 9.01. The Trustee shall be reimbursed for its reasonable costs,
including expenses associated with engaging any financial advisor, from the
Directing Certificateholder if the auction is not a Successful Auction, and, if
the auction is a Successful Auction, from the proceeds of the auction before the
proceeds are distributed to Certificateholders.
The Trustee, upon inquiry from the Master Servicer, agrees to provide
the Master Servicer with the Percentage Interest of Class C Certificates held by
the Directing Certificateholder.
If CHL or any of its affiliates is the Directing Certificateholder,
such Directing Certificateholder shall not have the right to direct the Trustee
to solicit bids for the purchase of the Mortgage Loans and any REO Properties
owned by the Trust Fund.
(b) The Trustee (or any financial advisor on its behalf) shall solicit
bids for the purchase of assets owned by the Trust Fund as provided in Section
9.04(a) not later than two Business Days following receipt of the Directing
Certificateholder's written instruction by contacting by telephone or in writing
at least three Qualified Bidders and requesting that each Qualified Bidder bid
on the Mortgage Loans and REO Properties owned by the Trust Fund (on a
non-recourse basis with no representations or warranties of any nature
whatsoever made by the Trustee (or such financial advisor)) and providing to the
Qualified Bidder any information relating to the Mortgage Loans and REO
Properties owned by the Trust Fund reasonably requested by such Qualified
Bidder, subject to the Qualified Bidder's written agreement not to use such
information in the purchase or sale of Certificates (it being understood no
Qualified Bidder shall be obligated to submit a bid or take any other action in
connection with any auction). The Master Servicer shall cooperate with the
Trustee (and any financial advisor on its behalf) during the auction process. At
1:00 p.m. New York time on the second Business Day after the date on which bids
are last solicited (such second day, the "Bid Determination Date"), the Trustee
(or any financial advisor on its behalf) shall determine the highest bid based
on the bids received by the Trustee (or any financial advisor on its behalf) on
or before such time.
(c) If the highest of the bids that are submitted by Qualified Bidders
are less than the Minimum Auction Amount, then the Trustee shall promptly inform
the Directing Certificateholder of the amount of the shortfall and indicate that
the Directing Certificateholder must notify the Trustee within 24 hours whether
it will contribute the amount of such difference (such difference being the
"Auction Supplement Amount") so that the auction will be a Successful Auction.
If the highest of the bids that are submitted by Qualified Bidders is equal to
or greater than the Minimum Auction Amount, or if the Directing
Certificateholder notifies the
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Trustee within 24 hours of its receipt of notice as described in the previous
sentence that it will contribute the Auction Supplement Amount, then the Trustee
(or any financial advisor on its behalf) shall notify promptly (but in any event
no later than 3:00 p.m. New York time on the Business Day following the Bid
Determination Date) the Winning Bidder that its bid was the highest bid and
shall provide wiring instructions for payment of the bid amount into the
Certificate Account by 12:00 p.m. New York time on the second Business Day
following the Bid Determination Date and, if applicable, provide the Directing
Certificateholder with wiring instructions for payment of the Auction Supplement
Amount into the Certificate Account by such time.
(d) If such Winning Bidder does not wire the bid amount so that it is
received in the Certificate Account in immediately available funds by 12:00 p.m.
New York time on the second Business Day following the Bid Determination Date,
the Trustee shall repeat the process specified in the preceding paragraph with
respect to the second highest bid, but only if such bid is at least the Minimum
Auction Amount or the Directing Certificateholder agrees to pay the new Auction
Supplement Amount. If no other bids are available to be accepted pursuant to the
preceding sentence, or if the amount remitted by the Winning Bidder plus any
Auction Supplement Amount remitted by the Directing Certificateholder is less
than the Minimum Auction Amount, then the auction shall be considered to have
failed for all purposes.
(e) The Trustee shall not be liable with regard to the selection or
engagement of, or for any act or omission of, a financial advisor pursuant to
this Section 9.04 if the Trustee engages CHL to be such financial advisor.
(f) In the event of a Successful Auction and so long as the Winning
Bidder has wired its bid amount (and the Directing Certificateholder has wired
any Auction Supplement Amount, if applicable) to the Certificate Account as
provided above, then the Trustee shall promptly convey to the Winning Bidder the
Mortgage Loans and REO Properties owned by the Trust Fund. The Master Servicer
shall take all reasonable actions requested by the Trustee to effect such
conveyance, including remitting to the Distribution Account from the Certificate
Account, on the Business Day prior to the Distribution Date on which final
distribution on the Certificates is required to be paid under this Agreement,
all amounts on deposit in the Certificate Account, net of any amounts permitted
to be withdrawn pursuant to Section 3.08(a) and amounts owing to the Trustee in
reimbursement of its reasonable costs, including expenses associated with
engaging any financial advisor, incurred in connection with the auction process.
Such amounts owed to the Trustee shall be withdrawn from the Certificate Account
by the Master Servicer and paid to the Trustee.
(g) Any amount paid by the Winning Bidder in excess of the Minimum
Auction Amount shall be distributed by the Trustee pro rata to the Class C
Certificates on the Distribution Date on which the final distribution on the
Certificates is made.
(h) In the event of a Successful Auction and to the extent the Swap
Contract is still outstanding, the Directing Certificateholder shall either:
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(1) if any Swap Termination Payment would be payable by the
Swap Contract Administrator to the Swap Counterparty were the Swap
Contract to be terminated following final distribution on the
Certificates, either:
(A) pay to the Swap Contract Administrator any such
Swap Termination Payment; or
(B) accept assignment of the Swap Contract to the
extent that the Directing Certificateholder is an acceptable
counterparty for the Swap Counterparty;
(2) if any Swap Termination Payment would be payable by the
Swap Counterparty to the Swap Contract Administrator were the Swap
Contract to be terminated following final distribution on the
Certificates, either
(A) (i) if the Directing Certificateholder does not
own 100% of the Class C Certificates, accept assignment of the
Swap Contract to the extent that the Directing
Certificateholder is an acceptable counterparty for the Swap
Counterparty and pay to the Swap Contract Administrator the
Swap Termination Payment that would be owed to the Swap
Contact Administrator by the Swap Counterparty if the Swap
Contract were terminated by the Swap Contract Administrator
following distribution on the Certificates or (ii) if the
Directing Certificateholder owns 100% of the Class C
Certificates, accept assignment of the Swap Contract to the
extent that the Directing Certificateholder is an acceptable
counterparty for the Swap Counterparty; or
(B) instruct the Swap Contract Administrator to
accept from the Swap Counterparty any Swap Termination Payment
that would be owed to the Swap Contract Administrator.
(i) Any amounts paid to the Swap Contract Administrator pursuant to
subsection (h)(2) above shall be distributed to the Class C Certificates, pro
rata, based on entitlement, by the Swap Contract Administrator.
(j) The Master Servicer may purchase the Mortgage Loans and REO
Properties owned by the Trust Fund for its own account pursuant to Section 9.01
or consent to the NIM Insurer's purchase of the Mortgage Loans and REO
Properties owned by the Trust Fund pursuant to Section 9.01 only if (1) the
Directing Certificateholder chooses not to request an auction as described above
or if the immediately preceding auction is unsuccessful or (2) the Master
Servicer notifies the Directing Certificateholder no later than 30 days prior to
the date on which the Master Servicer or the NIM Insurer, as applicable, intends
to effect the purchase of the Mortgage Loans and REO Properties owned by the
Trust Fund and the Directing Certificateholder does not direct the Trustee to
conduct an auction prior to the end of that 30-day period.
(k) If the Directing Certificateholder pays any Auction Supplement
Amount pursuant to Section 9.04(c) or any Swap Termination Payment pursuant to
Section 9.04(h)(1)(A), on the final Distribution Date any amounts to be
distributed to the Class C Certificates pursuant
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to Section 4.02 will be distributed as follows, first to the Directing
Certificateholder, in an amount up to the sum of such Auction Supplement Amount
and such Swap Termination Payment and second to the Class C Certificates, pro
rata. For federal income tax purposes, such Auction Supplement Amount and such
Swap Termination Payment so distributed shall be deemed paid pro rata to the
Class C Certificates, and the portion of such amounts deemed distributed to
holders of the Class C Certificates other than the Directing Certificateholder
shall be deemed paid from such other holders to the Directing Certificateholder.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Sellers, the Trustee and the Co-Trustee with the consent of
the NIM Insurer, without the consent of any of the Certificateholders (i) to
cure any ambiguity, (ii) to correct or supplement any provisions herein, (iii)
to conform this Agreement to the Prospectus Supplement or the Prospectus, (iv)
to modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement to comply with any rules or regulations promulgated
by the Securities and Exchange Commission from time to time, or (v) to make such
other provisions with respect to matters or questions arising under this
Agreement, as shall not be inconsistent with any other provisions herein if such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder; provided that any such
amendment shall be deemed not to adversely affect in any material respect the
interests of the Certificateholders and no such Opinion of Counsel shall be
required if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates, it being
understood and agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating. Any
amendment described above made solely to conform this Agreement to the
Prospectus or the Prospectus Supplement shall be deemed not to adversely affect
in any material respect the interests of the Certificateholders. Notwithstanding
the foregoing, no amendment that significantly changes the permitted activities
of the trust created by this Agreement may be made without the consent of
Certificateholders representing not less than 51% of the Voting Rights of each
Class of Certificates affected by such amendment. Each party to this Agreement
hereby agrees that it will cooperate with each other party in amending this
Agreement pursuant to clause (iv) above.
The Trustee, the Co-Trustee, the Depositor, the Master Servicer and the
Sellers with the consent of the NIM Insurer may also at any time and from time
to time amend this Agreement, without the consent of the Certificateholders, to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or appropriate to maintain the qualification of the Trust Fund as a
REMIC under the Code or to avoid or minimize the risk of the imposition of any
tax on the Trust Fund pursuant to the Code that would be a claim against the
Trust Fund at any time prior to the final redemption of the Certificates,
provided that the Trustee has been provided an Opinion of Counsel, which opinion
shall be an expense of the party requesting such
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opinion but in any case shall not be an expense of the Trustee, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Sellers, the Trustee and the Co-Trustee with the
consent of the NIM Insurer and the Holders of each Class of Certificates
affected thereby evidencing not less than 51% of the Voting Rights of such Class
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments required to be distributed on any Certificate without the consent of
the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in (i), without the consent of the Holders of Certificates of such
Class evidencing 66% or more of the Voting Rights of such Class, or (iii) reduce
the aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, no amendment
shall adversely affect in any material respect the Swap Counterparty without at
least ten Business Days' prior notice to the Swap Counterparty and without the
prior written consent of the Swap Counterparty, which consent shall not be
unreasonably withheld. CHL shall provide the Swap Counterparty with prior
written notice of any proposed material amendment of this Agreement.
Notwithstanding any contrary provision of this Agreement, the Trustee
and the NIM Insurer shall not consent to any amendment to this Agreement unless
each shall have first received an Opinion of Counsel satisfactory to the Trustee
and the NIM Insurer, which opinion shall be an expense of the party requesting
such amendment but in any case shall not be an expense of the Trustee or the NIM
Insurer, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause any REMIC formed
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this Agreement, the
Trustee shall furnish written notification of the substance of such amendment to
the Swap Counterparty, to each Certificateholder (if the consent of
Certificateholders is required) and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, reasonably satisfactory to
the Trustee and the NIM Insurer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the
169
amendment does not adversely affect in any material respect the interests of any
Certificateholder or (B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties.
(a) It is the express intent of the parties hereto that the conveyance
of the Mortgage Notes, Mortgages, assignments of Mortgages, title insurance
policies and any modifications, extensions and/or assumption agreements and
private mortgage insurance policies relating to the Mortgage Loans by the
Depositor to the Trustee be, and be construed as, an absolute sale thereof to
the Trustee. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Depositor to the Trustee. However,
in the event that, notwithstanding the intent of the parties, such assets are
held to be the property of the Depositor, or if for any other reason this
Agreement or any Subsequent Transfer Agreement is held or deemed to create a
security interest in such assets, then (i) this Agreement shall be deemed to be
a security agreement (within the meaning of the Uniform Commercial Code of the
State of New York) with respect to all such assets and security interests and
(ii) the conveyance provided for in this Agreement and any Subsequent Transfer
Agreement shall be deemed to be an assignment and a grant pursuant to the terms
of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders and the Swap Counterparty, of a security interest in all of
the assets that constitute the Trust Fund, whether now owned or hereafter
acquired.
The Depositor for the benefit of the Certificateholders, the NIM
Insurer and the Swap Counterparty shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the assets of the Trust
Fund, such security interest would be deemed to be a perfected security interest
of first priority under applicable law and will be maintained as such throughout
the term
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of the Agreement. The Depositor shall arrange for filing any Uniform Commercial
Code continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders and the Swap
Counterparty.
(b) The Depositor hereby represents that:
(i) This Agreement creates a valid and continuing security
interest (as defined in the Uniform Commercial Code as enacted in the
State of New York (the "NY UCC")) in the Mortgage Notes in favor of the
Trustee, which security interest is prior to all other liens, and is
enforceable as such as against creditors of and purchasers from the
Depositor.
(ii) The Mortgage Notes constitute "instruments" within the
meaning of the NY UCC.
(iii) Immediately prior to the assignment of each Mortgage
Loan to the Trustee, the Depositor owns and has good and marketable
title to such Mortgage Loan free and clear of any lien, claim or
encumbrance of any Person.
(iv) The Depositor has received all consents and approvals
required by the terms of the Mortgage Loans to the sale of the Mortgage
Loans hereunder to the Trustee.
(v) All original executed copies of each Mortgage Note that
are required to be delivered to the Co-Trustee pursuant to Section 2.01
have been delivered to the Co-Trustee.
(vi) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Mortgage Loans. The Depositor has not authorized the filing of and is
not aware of any financing statements against the Depositor that
include a description of collateral covering the Mortgage Loans other
than any financing statement relating to the security interest granted
to the Trustee hereunder or that has been terminated. The Depositor is
not aware of any judgment or tax lien filings against the Depositor.
(c) The Master Servicer shall take such action as is reasonably
necessary to maintain the perfection and priority of the security interest of
the Trustee in the Mortgage Loans; provided, however, that the obligation to
deliver the Mortgage File to the Co-Trustee pursuant to Section 2.01 shall be
solely the Depositor's obligation and the Master Servicer shall not be
responsible for the safekeeping of the Mortgage Files by the Co-Trustee.
(d) It is understood and agreed that the representations and warranties
set forth in subsection (b) above shall survive delivery of the Mortgage Files
to the Co-Trustee. Upon discovery by the Depositor or the Trustee of a breach of
any of the foregoing representations and warranties set forth in subsection (b)
above, which breach materially and adversely affects the interest of the
Certificateholders, the party discovering such breach shall give prompt written
notice to the others and to each Rating Agency.
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Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency and the Swap Counterparty with respect to each of the
following of which it has actual knowledge:
(1) Any material change or amendment to this Agreement;
(2) The occurrence of any Event of Default that has not been
cured;
(3) The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
(4) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 2.04 and 3.12; and
(5) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(1) Each report to Certificateholders described in Section
4.05;
(2) Each annual statement as to compliance described in
Section 3.17; and
(3) Each annual independent public accountants' servicing
report described in Section 11.07.
(c) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when sent by facsimile transmission,
first class mail or delivered to (i) in the case of the Depositor, CWABS, Inc.,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number: (818)
225-4016, Attention: ▇▇▇▇ ▇▇▇▇▇, or such other address as may be hereafter
furnished to the Sellers, the Master Servicer and the Trustee by the Depositor
in writing; (ii) in the case of CHL, Countrywide Home Loans, Inc., ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇, or such other address as may be hereafter furnished to
the Depositor, the Master Servicer and the Trustee by the Sellers in writing;
(iii) in the case of Park Monaco, Park Monaco Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇
▇▇▇, or such other address as may be hereafter furnished to the Depositor, the
Master Servicer and the Trustee by the Sellers in writing; (iv) in the case of
Park Sienna, Park Sienna LLC, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇, or such other address as
may be hereafter furnished to the Depositor, the Master Servicer and the Trustee
by the Sellers in writing; (v) in the case of the Master Servicer, Countrywide
Home Loans Servicing LP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, facsimile
number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇ or such other address as may be
hereafter furnished to the Depositor, the Sellers and the Trustee by the Master
Servicer in writing; (vi) in the case of the Trustee, The Bank of New York, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
172
Corporate Trust MBS Administration, CWABS, Series 2007-1, or such other address
as the Trustee may hereafter furnish to the parties hereto; (vii) in the case of
the Co-Trustee, The Bank of New York Trust Company, N.A., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: MBS Support Services, or such other
address as the Co-Trustee may hereafter furnish to the Depositor, the Master
Servicer and the Trustee; (viii) in the case of the Rating Agencies, (x) ▇▇▇▇▇'▇
Investors Service, Inc., Attention: ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and (y) Standard & Poor's Ratings
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Attention: Mortgage
Surveillance Group, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and
(viii) in the case of the Swap Counterparty, Deutsche Bank AG, New York Branch,
Attention: New York Derivatives Documentation, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇,
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such
other address as may be hereafter furnished by the Swap Counterparty. Notices to
Certificateholders shall be deemed given when mailed, first postage prepaid, to
their respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the
173
Trustee a written notice of an Event of Default and of the continuance thereof,
as hereinbefore provided, the Holders of Certificates evidencing not less than
25% of the Voting Rights shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, any Seller, the NIM Insurer or the
Trustee during the Master Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Master Servicer
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants selected by
the Depositor, a Seller, the NIM Insurer or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes such accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor, any Seller, the NIM Insurer or the Trustee of any
right under this Section 10.09 shall be borne by the party requesting such
inspection; all other such expenses shall be borne by the Master Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Rights of NIM Insurer.
(a) The rights of the NIM Insurer under this Agreement shall exist only
so long as either:
174
(1) the notes certain payments on which are guaranteed by the
NIM Insurer remain outstanding or
(2) the NIM Insurer is owed amounts paid by it with respect to
that guaranty.
(b) The rights of the NIM Insurer under this Agreement are exercisable
by the NIM Insurer only so long as no default by the NIM Insurer under its
guaranty of certain payments under notes backed or secured by the Class C or
Class P Certificates has occurred and is continuing. If the NIM Insurer is the
subject of any insolvency proceeding, the rights of the NIM Insurer under this
Agreement will be exercisable by the NIM Insurer only so long as:
(1) the obligations of the NIM Insurer under its guaranty of
notes backed or secured by the Class C or Class P Certificates have not
been disavowed and
(2) CHL and the Trustee have received reasonable assurances
that the NIM Insurer will be able to satisfy its obligations under its
guaranty of notes backed or secured by the Class C or Class P
Certificates.
(c) The NIM Insurer is a third party beneficiary of this Agreement to
the same extent as if it were a party to this Agreement and may enforce any of
those rights under this Agreement.
(d) A copy of any documents of any nature required by this Agreement to
be delivered by the Trustee, or to the Trustee or the Rating Agencies, shall in
each case at the same time also be delivered to the NIM Insurer. Any notices
required to be given by the Trustee, or to the Trustee or the Rating Agencies,
shall in each case at the same time also be given to the NIM Insurer. If the
Trustee receives a notice or document that is required hereunder to be delivered
to the NIM Insurer, and if such notice or document does not indicate that a copy
thereof has been previously sent to the NIM Insurer, the Trustee shall send the
NIM Insurer a copy of such notice or document. If such document is an Opinion of
Counsel, the NIM Insurer shall be an addressee thereof or such Opinion of
Counsel shall contain language permitting the NIM Insurer to rely thereon as if
the NIM Insurer were an addressee thereof.
(e) Anything in this Agreement that is conditioned on not resulting in
the downgrading or withdrawal of the ratings then assigned to the Certificates
by the Rating Agencies shall also be conditioned on not resulting in the
downgrading or withdrawal of the ratings then assigned by the Rating Agencies to
the notes backed or secured by the Class C or Class P Certificates (without
giving effect to any policy or guaranty provided by the NIM Insurer).
175
ARTICLE XI
EXCHANGE ACT REPORTING
Section 11.01 Filing Obligations.
The Master Servicer, the Trustee and each Seller shall reasonably
cooperate with the Depositor in connection with the satisfaction of the
Depositor's reporting requirements under the Exchange Act with respect to the
Trust Fund. In addition to the information specified below, if so requested by
the Depositor for the purpose of satisfying its reporting obligation under the
Exchange Act, the Master Servicer, the Trustee and each Seller shall (and the
Master Servicer shall cause each Subservicer to) provide the Depositor with (a)
such information which is available to such Person without unreasonable effort
or expense and within such timeframe as may be reasonably requested by the
Depositor to comply with the Depositor's reporting obligations under the
Exchange Act and (b) to the extent such Person is a party (and the Depositor is
not a party) to any agreement or amendment required to be filed, copies of such
agreement or amendment in ▇▇▇▇▇-compatible form.
Section 11.02 Form 10-D Filings.
(a) In accordance with the Exchange Act, the Trustee shall prepare for
filing and file within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act) with the Commission with respect to
the Trust Fund, a Form 10-D with copies of the Monthly Statement and, to the
extent delivered to the Trustee, no later than 10 days following the
Distribution Date, such other information identified by the Depositor or the
Master Servicer, in writing, to be filed with the Commission (such other
information, the "Additional Designated Information"). If the Depositor or
Master Servicer directs that any Additional Designated Information is to be
filed with any Form 10-D, the Depositor or Master Servicer, as the case may be,
shall specify the Item on Form 10-D to which such information is responsive and,
with respect to any Exhibit to be filed on Form 10-D, the Exhibit number. Any
information to be filed on Form 10-D shall be delivered to the Trustee in
▇▇▇▇▇-compatible form or as otherwise agreed upon by the Trustee and the
Depositor or the Master Servicer, as the case may be, at the Depositor's
expense, and any necessary conversion to ▇▇▇▇▇-compatible format will be at the
Depositor's expense. At the reasonable request of, and in accordance with the
reasonable directions of, the Depositor or the Master Servicer, subject to the
two preceding sentences, the Trustee shall prepare for filing and file an
amendment to any Form 10-D previously filed with the Commission with respect to
the Trust Fund. The Master Servicer shall sign the Form 10-D filed on behalf of
the Trust Fund.
(b) No later than each Distribution Date, each of the Master Servicer
and the Trustee shall notify (and the Master Servicer shall cause any
Subservicer to notify) the Depositor and the Master Servicer of any Form 10-D
Disclosure Item, together with a description of any such Form 10-D Disclosure
Item in form and substance reasonably acceptable to the Depositor. In addition
to such information as the Master Servicer and the Trustee are obligated to
provide pursuant to other provisions of this Agreement, if so requested by the
Depositor, each of the Master Servicer and the Trustee shall provide such
information which is available to the Master Servicer and the Trustee, as
applicable, without unreasonable effort or expense regarding the performance or
servicing of the Mortgage Loans (in the case of the Trustee, based on the
176
information provided by the Master Servicer) as is reasonably required to
facilitate preparation of distribution reports in accordance with Item 1121 of
Regulation AB. Such information shall be provided concurrently with the
Remittance Reports in the case of the Master Servicer and the Monthly Statement
in the case of the Trustee, commencing with the first such report due not less
than five Business Days following such request.
(c) The Trustee shall not have any responsibility to file any items
(other than those generated by it) that have not been received in a format
suitable (or readily convertible into a format suitable) for electronic filing
via the ▇▇▇▇▇ system and shall not have any responsibility to convert any such
items to such format (other than those items generated by it or that are readily
convertible to such format). The Trustee shall have no liability to the
Certificateholders, the Trust Fund, the Master Servicer, the Depositor or the
NIM Insurer with respect to any failure to properly prepare or file any of Form
10-D to the extent that such failure is not the result of any negligence, bad
faith or willful misconduct on its part.
Section 11.03 Form 8-K Filings.
The Master Servicer shall prepare and file on behalf of the Trust Fund
any Form 8-K required by the Exchange Act. Each Form 8-K must be signed by the
Master Servicer. Each of the Master Servicer (and the Master Servicer shall
cause any Subservicer to promptly notify) and the Trustee shall promptly notify
the Depositor and the Master Servicer (if the notifying party is not the Master
Servicer), but in no event later than one (1) Business Day after its occurrence,
of any Reportable Event of which it has actual knowledge. Each Person shall be
deemed to have actual knowledge of any such event to the extent that it relates
to such Person or any action or failure to act by such Person. Concurrently with
any Subsequent Transfer, CHL shall notify the Depositor and the Master Servicer,
if any material pool characteristic of the actual asset pool at the time of
issuance of the Certificates differs by 5% or more (other than as a result of
the pool assets converting into cash in accordance with their terms) from the
description of the asset pool in the Prospectus Supplement.
Section 11.04 Form 10-K Filings.
Prior to March 30th of each year, commencing in 2008 (or such earlier
date as may be required by the Exchange Act), the Depositor shall prepare and
file on behalf of the Trust Fund a Form 10-K, in form and substance as required
by the Exchange Act. A senior officer in charge of the servicing function of the
Master Servicer shall sign each Form 10-K filed on behalf of the Trust Fund.
Such Form 10-K shall include as exhibits each (i) annual compliance statement
described under Section 3.17, (ii) annual report on assessments of compliance
with servicing criteria described under Section 11.07 and (iii) accountant's
report described under Section 11.07. Each Form 10-K shall also include any
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification required to be included therewith, as described in
Section 11.05.
If the Item 1119 Parties listed on Exhibit Z have changed since the
Closing Date, no later than March 1 of each year, the Master Servicer shall
provide each of the Master Servicer (and the Master Servicer shall provide any
Subservicer) and the Trustee with an updated Exhibit Z setting forth the Item
1119 Parties. No later than March 15 of each year, commencing in 2008, the
Master Servicer and the Trustee shall notify (and the Master Servicer shall
cause any
177
Subservicer to notify) the Depositor and the Master Servicer of any Form 10-K
Disclosure Item, together with a description of any such Form 10-K Disclosure
Item in form and substance reasonably acceptable to the Depositor. Additionally,
each of the Master Servicer and the Trustee shall provide, and shall cause each
Reporting Subcontractor retained by the Master Servicer or the Trustee, as
applicable, and in the case of the Master Servicer shall cause each Subservicer,
to provide, the following information no later than March 15 of each year in
which a Form 10-K is required to be filed on behalf of the Trust Fund: (i) if
such Person's report on assessment of compliance with servicing criteria
described under Section 11.07 or related registered public accounting firm
attestation report described under Section 11.07 identifies any material
instance of noncompliance, notification of such instance of noncompliance and
(ii) if any such Person's report on assessment of compliance with servicing
criteria or related registered public accounting firm attestation report is not
provided to be filed as an exhibit to such Form 10-K, information detailing the
explanation why such report is not included.
Section 11.05 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
Each Form 10-K shall include a certification (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act
(pursuant to Section 302 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2008, the Master Servicer and the Trustee shall (unless
such person is the Certifying Person), and the Master Servicer shall cause each
Subservicer and each Reporting Subcontractor and the Trustee shall cause each
Reporting Subcontractor to, provide to the Person who signs the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification (the "Certifying Person") a certification (each, a "Performance
Certification"), in the form attached hereto as Exhibit X-1 (in the case of a
Subservicer or any Reporting Subcontractor of the Master Servicer or a
Subservicer) and Exhibit X-2 (in the case of the Trustee or any Reporting
Subcontractor of the Trustee), on which the Certifying Person, the entity for
which the Certifying Person acts as an officer, and such entity's officers,
directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The senior officer in charge of
the servicing function of the Master Servicer shall serve as the Certifying
Person on behalf of the Trust Fund. Neither the Master Servicer nor the
Depositor will request delivery of a certification under this clause unless the
Depositor is required under the Exchange Act to file an annual report on Form
10-K with respect to the Trust Fund. In the event that prior to the filing date
of the Form 10-K in March of each year, the Trustee or the Depositor has actual
knowledge of information material to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification, the
Trustee or the Depositor, as the case may be, shall promptly notify the Master
Servicer and the Depositor. The respective parties hereto agree to cooperate
with all reasonable requests made by any Certifying Person or Certification
Party in connection with such Person's attempt to conduct any due diligence that
such Person reasonably believes to be appropriate in order to allow it to
deliver any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification or portion thereof with respect to the
Trust Fund.
Section 11.06 Form 15 Filing.
Prior to January 30 of the first year in which the Depositor is able to
do so under applicable law, the Depositor shall file a Form 15 relating to the
automatic suspension of reporting in respect of the Trust Fund under the
Exchange Act.
178
Section 11.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15 of each calendar year, commencing in 2008:
(1) Each of the Master Servicer and the Trustee shall deliver
to the Depositor and the Master Servicer a report (in form and
substance reasonably satisfactory to the Depositor) regarding the
Master Servicer's or the Trustee's, as applicable, assessment of
compliance with the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be
signed by an authorized officer of such Person and shall address each
of the Servicing Criteria specified on a certification substantially in
the form of Exhibit Y hereto delivered to the Depositor concurrently
with the execution of this Agreement. To the extent any of the
Servicing Criteria are not applicable to such Person, with respect to
asset-backed securities transactions taken as a whole involving such
Person and that are backed by the same asset type backing the
Certificates, such report shall include such a statement to that
effect. The Depositor and the Master Servicer, and each of their
respective officers and directors shall be entitled to rely on upon
each such servicing criteria assessment.
(2) Each of the Master Servicer and the Trustee shall deliver
to the Depositor and the Master Servicer a report of a registered
public accounting firm reasonably acceptable to the Depositor that
attests to, and reports on, the assessment of compliance made by Master
Servicer or the Trustee, as applicable, and delivered pursuant to the
preceding paragraphs. Such attestation shall be in accordance with
Rules 1-02(a)(3)and 2-02(g) of Regulation S-X under the Securities Act
and the Exchange Act, including, without limitation that in the event
that an overall opinion cannot be expressed, such registered public
accounting firm shall state in such report why it was unable to express
such an opinion. Such report must be available for general use and not
contain restricted use language. To the extent any of the Servicing
Criteria are not applicable to such Person, with respect to
asset-backed securities transactions taken as a whole involving such
Person and that are backed by the same asset type backing the
Certificates, such report shall include such a statement that that
effect.
(3) The Master Servicer shall cause each Subservicer and each
Reporting Subcontractor to deliver to the Depositor an assessment of
compliance and accountant's attestation as and when provided in
paragraphs (a) and (b) of this Section 11.07.
(4) The Trustee shall cause each Reporting Subcontractor to
deliver to the Depositor and the Master Servicer an assessment of
compliance and accountant's attestation as and when provided in
paragraphs (a) and (b) of this Section.
(5) The Master Servicer and the Trustee shall execute (and the
Master Servicer shall cause each Subservicer to execute, and the Master
Servicer and the Trustee shall cause each Reporting Subcontractor to
execute) a reliance certificate to enable the Certification Parties to
rely upon each (i) annual compliance statement provided pursuant to
Section 3.17, (ii) annual report on assessments of compliance with
servicing criteria
179
provided pursuant to this Section 11.07 and (iii) accountant's report
provided pursuant to this Section 11.07 and shall include a
certification that each such annual compliance statement or report
discloses any deficiencies or defaults described to the registered
public accountants of such Person to enable such accountants to render
the certificates provided for in this Section 11.07.
(b) In the event the Master Servicer, any Subservicer, the Trustee or
Reporting Subcontractor is terminated or resigns during the term of this
Agreement, such Person shall provide documents and information required by this
Section 11.07 with respect to the period of time it was subject to this
Agreement or provided services with respect to the Trust Fund, the Certificates
or the Mortgage Loans.
(c) Each assessment of compliance provided by a Subservicer pursuant to
Section 11.07(a)(3)shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit Y hereto delivered to the
Depositor concurrently with the execution of this Agreement or, in the case of a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant to
Section 11.07(a)(3)or (4) need not address any elements of the Servicing
Criteria other than those specified by the Master Servicer or the Trustee, as
applicable, pursuant to Section 11.07(a)(1).
Section 11.08 Use of Subservicers and Subcontractors.
(a) The Master Servicer shall cause any Subservicer used by the Master
Servicer (or by any Subservicer) for the benefit of the Depositor to comply with
the provisions of Section 3.17 and this Article XI to the same extent as if such
Subservicer were the Master Servicer (except with respect to the Master
Servicer's duties with respect to preparing and filing any Exchange Act Reports
or as the Certifying Person). The Master Servicer shall be responsible for
obtaining from each Subservicer and delivering to the Depositor any servicer
compliance statement required to be delivered by such Subservicer under Section
3.17, any assessment of compliance and attestation required to be delivered by
such Subservicer under Section 11.07 and any certification required to be
delivered to the Certifying Person under Section 11.05 as and when required to
be delivered. As a condition to the succession to any Subservicer as subservicer
under this Agreement by any Person (i) into which such Subservicer may be merged
or consolidated, or (ii) which may be appointed as a successor to any
Subservicer, the Master Servicer shall provide to the Depositor, at least 15
calendar days prior to the effective date of such succession or appointment, (x)
written notice to the Depositor of such succession or appointment and (y) in
writing and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K.
(b) It shall not be necessary for the Master Servicer, any Subservicer
or the Trustee to seek the consent of the Depositor or any other party hereto
prior to the utilization of any Subcontractor. The Master Servicer or the
Trustee, as applicable, shall promptly upon request provide to the Depositor (or
any designee of the Depositor, such as the Master Servicer or administrator) a
written description (in form and substance satisfactory to the Depositor) of the
role and function of each Subcontractor utilized by such Person (or in the case
of the Master
180
Servicer, any Subservicer), specifying (i) the identity of each such
Subcontractor, (ii) which (if any) of such Subcontractors are "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB, and
(iii) which elements of the Servicing Criteria will be addressed in assessments
of compliance provided by each Subcontractor identified pursuant to clause (ii)
of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
a Reporting Subcontractor, the Master Servicer or the Trustee, as applicable,
shall cause any such Subcontractor used by such Person (or in the case of the
Master Servicer, any Subservicer) for the benefit of the Depositor to comply
with the provisions of Sections 11.07 and 11.09 of this Agreement to the same
extent as if such Subcontractor were the Master Servicer (except with respect to
the Master Servicer's duties with respect to preparing and filing any Exchange
Act Reports or as the Certifying Person) or the Trustee, as applicable. The
Master Servicer or the Trustee, as applicable, shall be responsible for
obtaining from each Subcontractor and delivering to the Depositor and the Master
Servicer, any assessment of compliance and attestation required to be delivered
by such Subcontractor under Section 11.05 and Section 11.07, in each case as and
when required to be delivered.
Section 11.09 Amendments.
In the event the parties to this Agreement desire to further clarify or
amend any provision of this Article XI, this Agreement shall be amended to
reflect the new agreement between the parties covering matters in this Article
XI pursuant to Section 10.01, which amendment shall not require any Opinion of
Counsel or Rating Agency confirmations or the consent of any Certificateholder
or the NIM Insurer.
If, during the period that the Depositor is required to file Exchange
Act Reports with respect to the Trust Fund, the Master Servicer is no longer an
Affiliate of the Depositor, the Depositor shall assume the obligations and
responsibilities of the Master Servicer in this Article XI with respect to the
preparation and filing of the Exchange Act Reports and/or acting as the
Certifying Person, if the Depositor has received indemnity from such successor
Master Servicer satisfactory to the Depositor, and such Master Servicer has
agreed to provide a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification to the Depositor substantially
in the form of Exhibit AA and the certifications referred to in Section 11.07.
Section 11.10 Reconciliation of Accounts.
Any reconciliation of Accounts performed by any party hereto, or any
Subservicer or Subcontractor shall be prepared no later than 45 calendar days
after the bank statement cut-off date.
181
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
CWABS, INC.,
as Depositor
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
PARK MONACO INC.,
as a Seller
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
PARK SIENNA LLC,
as a Seller
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK
(solely with respect to its obligations under
Section 4.01(d))
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Co-Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 9th day of February, 2007, before me, a notary public in and
for said State, appeared ▇▇▇▇▇▇ ▇▇▇▇▇, personally known to me on the basis of
satisfactory evidence to be an Executive Vice President of Countrywide Home
Loans, Inc., one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such 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
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 9th day of February, 2007, before me, a notary public in and
for said State, appeared ▇▇▇▇▇▇ ▇▇▇▇▇, personally known to me on the basis of
satisfactory evidence to be an Executive Vice President of Countrywide GP, Inc.,
the parent company of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such limited partnership and
acknowledged to me that such limited partnership 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
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 9th day of February, 2007, before me, a notary public in and
for said State, appeared ▇▇▇▇▇▇ ▇▇▇▇▇, personally known to me on the basis of
satisfactory evidence to be an Executive Vice President of CWABS, Inc., one of
the corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such 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
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 9th day of February, 2007, before me, a notary public in and
for said State, appeared ▇▇▇▇▇▇ ▇▇▇▇▇, personally known to me on the basis of
satisfactory evidence to be an Executive Vice President of Park Monaco Inc., one
of the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of such 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
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 9th day of February, 2007, before me, a notary public in and
for said State, appeared ▇▇▇▇▇▇ ▇▇▇▇▇, personally known to me on the basis of
satisfactory evidence to be an Executive Vice President of Park Sienna LLC, one
of the entities that executed the within instrument, and also known to me to be
the person who executed it on behalf of such entity and acknowledged to me that
such entity 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
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 9th day of February, 2007 before me, a notary public in and for
said State, appeared ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, personally known to me on the basis of
satisfactory evidence to be a Vice President of The Bank of New York, a New York
banking corporation that executed the within instrument, and also known to me to
be the person who executed it on behalf of such 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
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 9th day of February, 2007 before me, a notary public in and for
said State, appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇, personally known to me on the basis of
satisfactory evidence to be a Vice President of The Bank of New York, a New York
banking corporation that executed the within instrument, and also known to me to
be the person who executed it on behalf of such 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
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 9th day of February, 2007, before me, a notary public in and
for said State, appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇, personally known to me on the basis of
satisfactory evidence to be a Vice President of The Bank of New York Trust
Company, N.A., one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such 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/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ III
-----------------------------
Notary Public
[Notarial Seal]
Exhibits A-1
through A-15
[Exhibits A-1 through A-15 are
photocopies of such Certificates as delivered.]
[See appropriate documents delivered at closing.]
A-1
Exhibit B
Exhibit B is a photocopy
of the Class P Certificates
as delivered.
[See appropriate document delivered at closing.]
B-1
Exhibit C
Exhibit C is a photocopy
of the Class C Certificates
as delivered.
[See appropriate document delivered at closing.]
C-1
Exhibit D
Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.
[See appropriate documents delivered at closing.]
D-1
Exhibit E
Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.
[See appropriate documents delivered at closing.]
E-1
Exhibit F-1 and F-2
[Exhibits F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee.]
F-1
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of January 1, 2007 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc.,
as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, the undersigned, as Trustee, and The Bank of New York Trust
Company, N.A., as Co-Trustee, the undersigned, as Trustee, hereby certifies
that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or listed in the attached list of exceptions) the
Co-Trustee has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of ______________,
without recourse", or, if the original Mortgage Note has been lost or destroyed
and not replaced, an original lost note affidavit, stating that the original
Mortgage Note was lost or destroyed, together with a copy of the related
Mortgage Note; and
(ii) a duly executed assignment of the Mortgage or a copy of such
assignment, in either case in the form permitted by Section 2.01 of the Pooling
and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
G-1-1
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:_______________________
Name:
Title:
G-1-2
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of January 1, 2007 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc.,
as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, the undersigned, as Trustee, and The Bank of New York Trust
Company, N.A., as Co-Trustee, the undersigned hereby certifies that [, with
respect to the Subsequent Mortgage Loans delivered in connection with the
Subsequent Transfer Agreement, dated as of __________ (the "Subsequent Transfer
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, and The
Bank of New York, as Trustee], except as listed in the following paragraph, as
to each [Initial Mortgage Loan][Subsequent Mortgage Loan] listed in the [related
supplement to the] Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on the attached list of exceptions) the Co-Trustee has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete chain
of endorsement from the originator to the Person endorsing the Mortgage Note
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements;
(ii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage or a copy
of such Mortgage, with recording information, and in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] that is a MERS Mortgage Loan, the
original Mortgage or a copy of such Mortgage, with recording information, noting
thereon the presence of the MIN of the [Initial Mortgage
G-2-1
Loan][Subsequent Mortgage Loan] and language indicating that the [Initial
Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan if the [Initial Mortgage
Loan][Subsequent Mortgage Loan] is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;
(iii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Asset-Backed Certificates, Series 2007-1, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of January 1, 2007, without recourse" or a copy of
such assignment, with recording information, or, in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] with respect to property located in the
State of California that is not a MERS Mortgage Loan, a duly executed assignment
of the Mortgage in blank (each such assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage or
a copy of such assignments, with recording information, together with all
interim recorded assignments of such Mortgage or a copy of such assignments,
with recording information (in each case noting the presence of a MIN in the
case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or a copy
of lender's title policy or a printout of the electronic equivalent and all
riders thereto or, in the event such original title policy has not been received
from the insurer, any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company, with the original policy of title insurance to be delivered
within one year of the Closing Date.
In the event that in connection with any [Initial Mortgage
Loan][Subsequent Mortgage Loan] that is not a MERS Mortgage Loan the applicable
Seller cannot deliver the original recorded Mortgage or all interim recorded
assignments of the Mortgage satisfying the requirements of clause (ii), (iii) or
(iv), as applicable, the Trustee has received, in lieu thereof, a true and
complete copy of such Mortgage and/or such assignment or assignments of the
Mortgage, as applicable, each certified by the applicable Seller, the applicable
title company, escrow agent or attorney, or the originator of such [Initial
Mortgage Loan][Subsequent Mortgage Loan], as the case may be, to be a true and
complete copy of the original Mortgage or assignment of Mortgage submitted for
recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
[Initial Mortgage Loan][Subsequent Mortgage Loan], and (ii) the information set
forth in items (i), (iv), (v), (vi), (viii), (ix) and (xv) of the definition of
the "Mortgage Loan Schedule" in Section 1.01 of the Pooling and Servicing
Agreement accurately reflects information set forth in the Mortgage File.
G-2-2
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [related supplement to the]
Mortgage Loan Schedule or (ii) the collectibility, insurability, effectiveness
or suitability of any such Mortgage Loan.
G-2-3
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:________________________
Name:
Title:
G-2-4
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Sellers]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
[Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the Pooling and Servicing Agreement dated as of January 1, 2007
(the "Pooling and Servicing Agreement") among CWABS, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, the undersigned, as Trustee, and The Bank of New York Trust Company,
N.A., as Co-Trustee.] The undersigned hereby certifies that [, with respect to
the Subsequent Mortgage Loans delivered in connection with the Subsequent
Transfer Agreement, dated as of __________ (the "Subsequent Transfer Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, and The Bank of New
York, as Trustee,] as to each Delay Delivery Mortgage Loan listed on the
Schedule A attached hereto (other than any [Initial Mortgage Loan][Subsequent
Mortgage Loan] paid in full or listed on Schedule B attached hereto) it has
received:
(1) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete chain
of endorsement from the originator to the Person endorsing the Mortgage Note
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements;
(2) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Asset-Backed Certificates, Series 2007-1, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of January 1, 2007, without recourse" or a copy of
such assignment, with recording information, or, in the
G-3-1
case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] with respect to
property located in the State of California that is not a MERS Mortgage Loan, a
duly executed assignment of the Mortgage in blank (each such assignment, when
duly and validly completed, to be in recordable form and sufficient to effect
the assignment of and transfer to the assignee thereof, under the Mortgage to
which such assignment relates).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [related supplement to the]
Mortgage Loan Schedule or (ii) the collectibility, insurability, effectiveness
or suitability of any such [Initial Mortgage Loan][Subsequent Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:________________________
Name:
Title:
G-3-2
EXHIBIT G-4
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(SUBSEQUENT MORTGAGE LOANS)
[Date]
[Depositor]
[Sellers]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of January 1, 2007 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc.,
as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, the undersigned, as Trustee, and The Bank of New York Trust
Company, N.A., as Co-Trustee, the undersigned hereby certifies that, as to each
Subsequent Mortgage Loan listed in the related supplement to the Mortgage Loan
Schedule (other than any Subsequent Mortgage Loan paid in full or listed in the
attached list of exceptions) the Trustee has received:
(1) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete chain
of endorsement from the originator to the Person endorsing the Mortgage Note
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements; and
(2) a duly executed assignment of the Mortgage or a copy of such
assignment with recording information, in either case in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of
G-4-1
the Subsequent Mortgage Loans identified on the related supplement to the
Mortgage Loan Schedule or (ii) the collectibility, insurability, effectiveness
or suitability of any such Subsequent Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:________________________
Name:
Title:
G-4-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Sellers]
Re: CWABS Asset-Backed Certificates, Series ▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇:
In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of January 1, 2007 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc.,
as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, the undersigned, as Trustee, and The Bank of New York Trust
Company, N.A., as Co-Trustee, the undersigned hereby certifies that[, with
respect to the Subsequent Mortgage Loans delivered in connection with the
Subsequent Transfer Agreement, dated as of __________ (the "Subsequent Transfer
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller and The Bank
of New York, as Trustee,] as to each [Initial Mortgage Loan][Subsequent Mortgage
Loan] listed in the [related supplement to the] Mortgage Loan Schedule (other
than any [Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full or
listed on the attached exception report) it has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _________________
without recourse", with all intervening endorsements that show a complete chain
of endorsement from the originator to the Person endorsing the Mortgage Note
(each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and to
that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements;
(ii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage or a copy
of such Mortgage, with recording information, and in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] that is a MERS Mortgage Loan, the
original Mortgage or a copy of such Mortgage, with recording information, noting
the presence of the MIN of the [Initial Mortgage Loan][Subsequent Mortgage Loan]
and language indicating that the [Initial Mortgage Loan][Subsequent Mortgage
Loan] is a MOM Loan if the [Initial Mortgage Loan][Subsequent
H-1
Mortgage Loan] is a MOM Loan, with evidence of recording indicated thereon, or a
copy of the Mortgage certified by the public recording office in which such
Mortgage has been recorded];
(iii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Asset-Backed Certificates, Series 2007-1, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of January 1, 2007, without recourse" or a copy of
such assignment, with recording information, or, in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] with respect to property located in the
State of California that is not a MERS Mortgage Loan, a duly executed assignment
of the Mortgage in blank (each such assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage or
a copy of such assignments, with recording information, together with all
interim recorded assignments of such Mortgage or a copy of such assignments,
with recording information (in each case noting the presence of a MIN in the
case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or a copy
of lender's title policy or a printout of the electronic equivalent and all
riders thereto or any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (ix) and (xv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [related supplement to the]
Mortgage Loan Schedule or (ii) the collectibility, insurability, effectiveness
or suitability of any such [Initial Mortgage Loan][Subsequent Mortgage Loan].
H-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:_______________________
Name:
Title:
H-3
EXHIBIT I
TRANSFER AFFIDAVIT FOR THE CLASS A-R CERTIFICATES
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated as
of January 1, 2007 (the "Agreement"), by and among CWABS, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc.,
as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, The Bank of New York, as Trustee, and The Bank of New York
Trust Company, N.A., as Co-Trustee. Capitalized terms used, but not defined
herein or in Exhibit 1 hereto, shall have the meanings ascribed to such terms in
the Agreement. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee is not an employee benefit plan that is subject to
Title I of ERISA or to section 4975 of the Internal Revenue Code of 1986, nor is
it acting on behalf of or with plan assets of any such plan. The Transferee is,
as of the date hereof, and will be, as of the date of the Transfer, a Permitted
Transferee. The Transferee will endeavor to remain a Permitted Transferee for so
long as it retains its Ownership Interest in the Certificate. The Transferee is
acquiring its Ownership Interest in the Certificate for its own account.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
I-1
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The Transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J-1 to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to which
the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Class
A-R Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code section
7701(a)(30).
10. The Transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the Transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
Transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.
11. The Transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the Transferee to pay such taxes.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of _____________, 20__.
[NAME OF TRANSFEREE]
By:_______________________
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ____________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
-------------------------------------
NOTARY PUBLIC
My Commission expires the ___ day of
, 20__.
I-3
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC formed hereunder to fail to
qualify as a REMIC at any time that any Certificates are Outstanding. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, bank, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
I-4
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(1) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(2) Except in connection with (i) the registration of the Tax
Matters Person Certificate in the name of the Trustee or (ii) any
registration in the name of, or transfer of a Class A-R Certificate to,
an affiliate of the Depositor (either directly or through a nominee) in
connection with the initial issuance of the Certificates, no Ownership
Interest in a Class A-R Certificate may be registered on the Closing
Date or thereafter transferred, and the Trustee shall not register the
Transfer of any Class A-R Certificate, unless the Trustee shall have
been furnished with an affidavit (a "Transfer Affidavit") of the
initial owner or the proposed transferee in the form attached hereto as
Exhibit I.
(3) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class A-R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class A-R
Certificate and (C) not to Transfer its Ownership Interest in a Class
A-R Certificate, or to cause the Transfer of an Ownership Interest in a
Class A-R Certificate to any other Person, if it has actual knowledge
that such Person is not a Permitted Transferee.
(4) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Class A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making
any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of
this Agreement so long as the Transfer was registered after receipt of
the related Transfer Affidavit and Transferor Certificate. The Trustee
shall be entitled but not obligated to recover from any Holder of a
Class A-R Certificate that was in fact not a Permitted Transferee at
the time it became a Holder or, at such subsequent time as it became
other than a Permitted Transferee, all payments made on such Class A-R
Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.
I-5
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, the Sellers or the Master
Servicer to the effect that the elimination of such restrictions will not cause
any constituent REMIC of any REMIC formed hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any ownership Interest in a Class A-R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class A-R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class A-R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
I-6
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR CLASS A-R CERTIFICATES
Date:
CWABS, Inc.
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset Backed
Certificates, Series 2007-1
Ladies and Gentlemen:
In connection with our disposition of the Class A-R Certificates, we
certify that we have no knowledge that the Transferee is not a Permitted
Transferee. All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement dated as of
January 1, 2007, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and The Bank of New York Trust Company, N.A., as Co-Trustee.
Very truly yours,
_____________________________________
Name of Transferor
By: _________________________________
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2007-1, Class [ ]
Ladies and Gentlemen:
In connection with our disposition of the above-captioned Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of January 1,
2007, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide
Home Loans Servicing LP, as Master Servicer, The Bank of New York, as Trustee,
and The Bank of New York Trust Company, N.A., as Co-Trustee.
Very truly yours,
_____________________________________
Name of Transferor
By: _________________________________
Name:
Title:
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2007-1, Class [ ]
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) (I) either (i) we are not an employee benefit
plan that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, or using the assets of any such plan or arrangement to
effect such acquisition or (ii) (A) (if the above-captioned Certificates are
ERISA-Restricted Certificates) if the Certificates have been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, or (B) (if the
above-captioned Certificates are not ERISA-Restricted Certificates) it is an
"accredited investor" as defined in Rule 501(a)(1) under the Act, and (II) we
will obtain from our transferee such a representation and agreement described in
this clause (d), (e) we are acquiring the Certificates for investment for our
own account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in
K-1
accordance with clause (g) below), (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if requested, we will at our expense provide an
opinion of counsel satisfactory to the addressees of this Certificate that such
sale, transfer or other disposition may be made pursuant to an exemption from
the Act, (2) the purchaser or transferee of such Certificate has executed and
delivered to you a certificate to substantially the same effect as this
certificate, and (3)the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement.
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
January 1, 2007, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and The Bank of New York Trust Company, N.A., as Co-Trustee.
Very truly yours,
___________________________________
Name of Transferee
By: _______________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2007-1, Class [ ]
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) (I) either (i) we are not an employee benefit
plan that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, or using the assets of any such plan or arrangement to
effect such acquisition or (ii) (A) (if the above-captioned Certificates are
ERISA-Restricted Certificates) if the Certificates have been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, or (B) (if the
above-captioned Certificates are not ERISA-Restricted Certificates) it is an
"accredited investor" as defined in Rule 501(a)(1) under the Act, and (II) we
will obtain from our transferee such a representation and agreement described in
this clause (d), (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with
L-1
respect to the Certificates, any interest in the Certificates or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
January 1, 2007, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc.,
as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and The Bank of New York Trust Company, N.A., as Co-Trustee.
Very truly yours,
___________________________________
Name of Transferee
By: _______________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer
owned and/or invested on a discretionary basis either at least
$100,000,000 in securities or, if Buyer is a dealer, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in
securities (except for the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A and (ii) the Buyer satisfies
the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3)of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of
L-3
risks underwritten by insurance companies and which is subject
to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are
part of an unsold allotment to or subscription by the Buyer, if the
Buyer is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates
of deposit, (v) loan participations, (vi) repurchase agreements, (vii)
securities owned but subject to a repurchase agreement and (viii)
currency, interest rate and commodity swaps.
For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on
the basis of their market value, and (ii) no current information with
respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market. Further, in determining such aggregate amount, the Buyer may
have included securities owned by subsidiaries of the Buyer, but only
if such subsidiaries are consolidated with the Buyer in its financial
statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included
if the Buyer is a majority-owned, consolidated subsidiary of another
enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer may be in reliance
on Rule 144A.
L-4
Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan is provided above,
the Buyer agrees that it will furnish to such parties updated annual
financial statements promptly after they become available.
______________________________________
Print Name of Buyer
By:___________________________________
Name:
Title:
Date:_________________________________
L-5
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer
is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the
Buyer's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year. For purposes of
determining the amount of securities owned by the Buyer or the Buyer's
Family of Investment Companies, the cost of such securities was used,
except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If
clause (ii) in the preceding sentence applies, the securities may be
valued at market.
___ The Buyer owned $______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or
because one investment adviser is a majority owned subsidiary of the
other).
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
L-6
agreements, (vi) securities owned but subject to a repurchase agreement
and (vii) currency, interest rate and commodity swaps.
The Buyer is familiar with Rule 144A and under-stands that the parties
listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be
in reliance on Rule 144A. In addition, the Buyer will only purchase for
the Buyer's own account.
Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of
the Certificates will constitute a reaffirmation of this certification
by the undersigned as of the date of such purchase.
____________________________________
Print Name of Buyer or Adviser
By:_________________________________
Name:
Title:
IF AN ADVISER:
____________________________________
Print Name of Buyer
Date:_______________________________
L-7
EXHIBIT M
FORM OF REQUEST FOR DOCUMENT RELEASE
Loan Information
Name of Mortgagor: ________________________________________
Master Servicer
Loan No.: ________________________________________
Trustee
Name: ________________________________________
Address: ________________________________________
________________________________________
Trustee
Mortgage File No.: ________________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2006-26, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Document Release shall have the meanings given them in the Pooling
and Servicing Agreement dated as of December 1, 2006 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide
Home Loans Servicing LP, as Master Servicer, The Bank of New York, as Trustee,
and The Bank of New York Trust Company, N.A., as Co-Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal sum of
$________, made by __________________, payable to, or endorsed to the order
of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no. ________________
in the County Recorder's Office of the County of ________________, State of
_______________ in book/reel/docket _______________ of official records at
page/image _____________.
( ) Deed of Trust recorded on _________________ as instrument no. _____________
in the County Recorder's Office of the County of ________________, State of
_______________ in book/reel/docket _______________ of official records at
page/image __________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder's
Office of
M-1
the County of __________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ______________________________________________
( ) ______________________________________________
( ) ______________________________________________
( ) ______________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trust Fund, solely for the
purposes provided in the Pooling and Servicing Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions nor
shall the Master Servicer assert or seek to assert any claims or rights of
setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the need
therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted
to the Certificate Account and except as expressly provided in the Pooling
and Servicing Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer
shall at all times be earmarked for the account of the Trust Fund, and the
Master Servicer shall keep the Documents and any proceeds separate and
distinct from all other property in the Master Servicer's possession,
custody or control.
[Master Servicer]
By ____________________________________
Its ____________________________________
Date: _________________, ____
M-2
EXHIBIT N
FORM OF REQUEST FOR FILE RELEASE
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2006-26
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE PURCHASE PRICE FOR
SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE MORTGAGE LOANS HAVE BEEN LIQUIDATED AND
THE RELATED [INSURANCE PROCEEDS] [LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED
PURSUANT TO SECTION 3.13 OF THE POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT
MORTGAGE LOAN HAS BEEN DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN
ACCORDANCE WITH THE CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE
POOLING AND SERVICING AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
____________ _____________________
DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
N-1
Exhibit O
Exhibit O is a photocopy
of the Depository Agreement
as delivered.
[See appropriate documents delivered at closing.]
O-1
EXHIBIT P
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 200[_] (this
"Subsequent Transfer Agreement"), among CWABS, INC., a Delaware corporation, as
depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York
corporation, in its capacity as a seller under the Pooling and Servicing
Agreement referred to below ("CHL"), PARK MONACO INC., a Delaware corporation,
in its capacity as a seller under the Pooling and Servicing Agreement ("Park
Monaco"), PARK SIENNA LLC, a Delaware limited liability company, in its capacity
as a seller under the Pooling and Servicing Agreement ("Park Sienna" and,
together with CHL and Park Monaco, the "Sellers") and The Bank of New York, a
New York banking corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, CHL, Park Monaco, Park Sienna, the Trustee,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York Trust Company N.A., as Co-Trustee, have entered in the Pooling and
Servicing Agreement, dated as of December 1, 2006 (the "Pooling and Servicing
Agreement"), relating to the CWABS, Inc. Asset-Backed Certificates, Series
2006-26 (capitalized terms not otherwise defined herein are used as defined in
the Pooling and Servicing Agreement);
WHEREAS, Section 2.01(b) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer Agreement
in accordance with the terms and conditions of the Pooling and Servicing
Agreement;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration the receipt and adequacy of which are hereby
acknowledged the parties hereto agree as follows:
(a) The "Subsequent Transfer Date" with respect to this Subsequent
Transfer Agreement shall be ________ __, 200[_].
(b) The "Subsequent Transfer Date Purchase Amount" with respect to
this Subsequent Transfer Agreement shall be $______________.
(c) The Subsequent Mortgage Loans conveyed on the Subsequent Transfer
Date shall be subject to the terms and conditions of the Pooling and Servicing
Agreement.
(d) Annex I hereto sets forth a list of the Mortgage Loans which are
Delay Delivery Mortgage Loans.
(e) In case any provision of this Subsequent Transfer Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions or obligations shall not in any way be affected or
impaired thereby.
(f) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.
P-1
(g) This Subsequent Transfer Agreement shall be governed by, and
shall be construed and enforced in accordance with the laws of the State of New
York.
(h) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
P-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer Agreement
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
CWABS, INC.,
as Depositor
By: __________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: __________________________________
Name:
Title:
PARK MONACO INC.,
as a Seller
By: __________________________________
Name:
Title:
PARK SIENNA LLC,
as a Seller
By: __________________________________
Name:
Title:
▇-▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
not in its individual capacity,
but solely as Trustee
By: __________________________________
Name:
Title:
P-4
Annex I
Mortgage Loans for which All or a Portion of a Related Mortgage File
is not Delivered to the Trustee on or prior
to the Subsequent Transfer Date
P-5
EXHIBIT Q
[RESERVED]
Q-1
EXHIBIT R
[RESERVED]
R-1
EXHIBIT S-1
[RESERVED]
S-1
EXHIBIT S-2
[RESERVED]
S-2
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2006-26
[Date]
Via Facsimile
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement, dated as of
December 1, 2006, (the "Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, The Bank of New York, as Trustee, and The Bank of New York
Trust Company, N.A., as Co-Trustee. Capitalized terms used herein shall have the
meanings ascribed to such terms in the Pooling and Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:
With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received during the
related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage Note with
respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and deposited
in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule for
which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
(i) the Master Servicer's determination that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking
into account the value of such Prepayment Charge, or
T-1
(ii)(A) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership, or other similar law relating to
creditors' rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment, or (B) the enforceability is
otherwise limited or prohibited by applicable law; and
4. We certify that all amounts due in connection with the waiver of a
Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Master Servicer pursuant to Section 3.20 of the Pooling and
Servicing Agreement, have been or will be so deposited.
COUNTRYWIDE HOME LOANS, INC.,
as Master Servicer
By:___________________________________
Name:
Title:
T-2
SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
DURING THE RELATED PREPAYMENT PERIOD
--------------------------------------------------------------------------------
Loan Number Clause 2: Yes/No Clause 3: (i) or (ii)
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
-------------------------- -------------------------- --------------------------
--------------------------------------------------------------------------------
T-3
EXHIBIT U
FORM OF SWAP CONTRACT
[See document delivered at closing.]
U-1
EXHIBIT V-1
FORM OF SWAP CONTRACT ASSIGNMENT AGREEMENT
[See document delivered at closing.]
V-1
EXHIBIT V-2
FORM OF SWAP CONTRACT ADMINISTRATION AGREEMENT
[See document delivered at closing.]
V-2
EXHIBIT V-3
FORM OF SWAP GUARANTEE
[See document delivered at closing.]
V-3
EXHIBIT W
FORM OF MONTHLY STATEMENT
[On file with the Trustee.]
W-1
EXHIBIT X-1
FORM OF PERFORMANCE CERTIFICATION
(Subservicer)
Re: The Pooling and Servicing Agreement dated as of January 1,
2007 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The
Bank of New York, as Trustee, and The Bank of New York Trust
Company, N.A., as Co-Trustee, and [Subservicing Agreement]
dated as of [ ] (the "Agreement")
I, ________________________________, the _______________________ of [NAME
OF COMPANY] (the "Company"), certify to the Depositor and the Master Servicer,
and their officers, with the knowledge and intent that they will rely upon this
certification, that:
(1) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[ ] that were delivered by the
Company to the Depositor, the Master Servicer and the Trustee pursuant to
the Agreement (collectively, the "Company Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in the
light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer];
(4) I am responsible for reviewing the activities performed by the
Company as a servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under
the Agreement; and
X-1-1
(5) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to the Master
Servicer. Any material instances of noncompliance described in such reports
have been disclosed to the Master Servicer. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date: _________________________
By: ________________________________
Name:
Title:
X-1-2
EXHIBIT X-2
FORM OF PERFORMANCE CERTIFICATION
(Trustee)
Re: The Pooling and Servicing Agreement dated as of January 1,
2007 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The
Bank of New York, as Trustee, and The Bank of New York Trust
Company, N.A., as Co-Trustee
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to the Depositor and the Master
Servicer, and their officers, with the knowledge and intent that they will rely
upon this certification, that:
(1) I have reviewed the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with Rules
13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Item 1122 of Regulation AB (the "Servicing
Assessment"), the registered public accounting firm's attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
and Section 1122(b) of Regulation AB (the "Attestation Report"), [all
reports on Form 10-D containing statements to certificateholders filed in
respect of the period included in the year covered by the annual report of
the Trust Fund] (collectively, the "Distribution Date Statements");
(2) Assuming the accuracy and completeness of the information
delivered to the Company by the Master Servicer as provided in the Pooling
and Servicing Agreement and subject to paragraph (4) below, the
distribution information determined by the Company and set forth in the
Distribution Date Statements contained in all Form 10-D's included in the
year covered by the annual report of such Trust on Form 10-K for the
calendar year 200[ ], is complete and does not contain any material
misstatement of fact as of the last day of the period covered by such
annual report;
(3) Based solely on the information delivered to the Company by the
Master Servicer as provided in the Pooling and Servicing Agreement, (i) the
distribution information required under the Pooling and Servicing Agreement
to be contained in the Trust Fund's Distribution Date Statements and (ii)
the servicing information required to be provided by the Master Servicer to
the trustee for inclusion in the Trust Fund's Distribution Date Statements,
to the extent received by the Trustee from the Master Servicer in
accordance with the Pooling and Servicing Agreement, is included in such
Distribution Date Statements;
(4) The Company is not certifying as to the accuracy, completeness or
correctness of the information which it received from the Master Servicer
and did not
X-2-1
independently verify or confirm the accuracy, completeness or correctness
of the information provided by the Master Servicer;
(5) I am responsible for reviewing the activities performed by the
Company as a person "performing a servicing function" under the Pooling and
Servicing Agreement, and based on my knowledge and the compliance review
conducted in preparing the Servicing Assessment and except as disclosed in
the Servicing Assessment or the Attestation Report, the Company has
fulfilled its obligations under the Pooling and Servicing Agreement; and
(6) The Servicing Assessment and Attestation Report required to be
provided by the Company and by Subcontractor pursuant to the Pooling and
Servicing Agreement, have been provided to the Master Servicer and the
Depositor. Any material instances of noncompliance described in such
reports have been disclosed to the Master Servicer and the Depositor. Any
material instance of noncompliance with the Servicing Criteria has been
disclosed in such reports.
Date: _________________________
By: ________________________________
Name:
Title:
X-2-2
EXHIBIT Y
FORM OF
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by [the Master Servicer]
[Trustee] [Name of Subservicer] shall address, at a minimum, the criteria
identified as below as "Applicable Servicing Criteria":
------------------------------------------------------------------------------------------ ----------------------
Applicable Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
General Servicing Considerations
-------------------- ----------------------
Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
1122(d)(1)(i) accordance with the transaction agreements.
-------------------- ----------------------
If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance with
1122(d)(1)(ii) such servicing activities.
-------------------- ----------------------
Any requirements in the transaction agreements to maintain
1122(d)(1)(iii) a back-up servicer for the mortgage loans are maintained.
-------------------- ----------------------
A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of
1122(d)(1)(iv) the transaction agreements.
-------------------- ----------------------
Cash Collection and Administration
-------------------- ----------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days following
receipt, or such other number of days specified in the
1122(d)(2)(i) transaction agreements.
-------------------- ----------------------
Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
1122(d)(2)(ii) personnel.
-------------------- ----------------------
Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved
1122(d)(2)(iii) as specified in the transaction agreements.
-------------------- ----------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
-------------------- ----------------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
1122(d)(2)(v) Securities Exchange Act.
-------------------- ----------------------
Unissued checks are safeguarded so as to prevent
1122(d)(2)(vi) unauthorized access.
-------------------- ----------------------
Y-1
------------------------------------------------------------------------------------------ ----------------------
Applicable Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial
accounts and related bank clearing accounts. These reconciliations
are (A) mathematically accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or such other number of
days specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items.
These reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
-------------------- ----------------------
Investor Remittances and Reporting
-------------------- ----------------------
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total unpaid
principal balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
-------------------- ----------------------
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
1122(d)(3)(ii) terms set forth in the transaction agreements.
-------------------- ----------------------
Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
1122(d)(3)(iii) other number of days specified in the transaction agreements.
-------------------- ----------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
-------------------- ----------------------
Pool Asset Administration
-------------------- ----------------------
Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage
1122(d)(4)(i) loan documents.
-------------------- ----------------------
Mortgage loan and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements
-------------------- ----------------------
Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
1122(d)(4)(iii) conditions or requirements in the transaction agreements.
-------------------- ----------------------
Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to
the Servicer's obligor records maintained no more than two business
days after receipt, or such other number of days specified in the
transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage
1122(d)(4)(iv) loan documents.
-------------------- ----------------------
The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance.
-------------------- ----------------------
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
1122(d)(4)(vi) asset documents.
-------------------- ----------------------
Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
1122(d)(4)(vii) transaction agreements.
-------------------- ----------------------
Y-2
------------------------------------------------------------------------------------------ ----------------------
Applicable Servicing
Servicing Criteria Criteria
------------------------------------------------------------------------------------------ ----------------------
Reference Criteria
-------------------- --------------------------------------------------------------------- ----------------------
Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency
1122(d)(4)(viii) is deemed temporary (e.g., illness or unemployment).
-------------------- ----------------------
Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on
1122(d)(4)(ix) the related mortgage loan documents.
-------------------- ----------------------
Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other
1122(d)(4)(x) number of days specified in the transaction agreements.
-------------------- ----------------------
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other
1122(d)(4)(xi) number of days specified in the transaction agreements.
-------------------- ----------------------
Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the
servicer's funds and not charged to the obligor, unless the
1122(d)(4)(xii) late payment was due to the obligor's error or omission.
-------------------- ----------------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements.
-------------------- ----------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
-------------------- ----------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3)or Item 1115 of Regulation AB,
1122(d)(4)(xv) is maintained as set forth in the transaction agreements.
-------------------- ----------------------
-----------------------------------------------------------------------------------------------------------------
[NAME OF MASTER SERVICER] [NAME OF
TRUSTEE] [NAME OF SUBSERVICER]
Date: _________________________
By: ________________________________
Name:
Title:
Y-3
EXHIBIT Z
[FORM OF] LIST OF ITEM 1119 PARTIES
ASSET BACKED CERTIFICATES,
Series 200_-__
[Date]
--------------------------------------------------------------------------------
Party Contact Information
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
-------------------------------- -----------------------------------------------
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Z-1
EXHIBIT AA
FORM OF
▇▇▇▇▇▇▇▇-▇▇▇▇▇ CERTIFICATION
(Replacement Master Servicer)
(On file with Trustee)
AA-1
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY
[Delivered to Trustee at closing and on file with the Trustee.]
S-I-1
SCHEDULE II
COLLATERAL SCHEDULE
----------------------------------------------------------------------------------------------------------------------
Characteristic Applicable Loan Group 1 Loan Group 2
Section
----------------------------------------------------------------- ----------------- ---------------- -----------------
Single-Family Detached Dwellings 2.03(b)(32) 77.21% 69.95%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Two- to Four-Family Dwellings 2.03(b)(32) 5.84% 5.02%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Low-Rise Condominium Units 2.03(b)(32) 3.78% 6.61%
----------------------------------------------------------------- ----------------- ---------------- -----------------
High-Rise Condominium Units 2.03(b)(32) 0.33% 0.38%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Manufactured Housing 2.03(b)(32) 0.00% 0.23%
----------------------------------------------------------------- ----------------- ---------------- -----------------
PUDs 2.03(b)(32) 12.85% 17.81%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Earliest Origination Date 2.03(b)(33) 6/30/2005 7/30/1998
----------------------------------------------------------------- ----------------- ---------------- -----------------
Prepayment Penalty 2.03(b)(35) 67.51% 77.33%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Investor Properties 2.03(b)(36) 2.98% 2.83%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Primary Residences 2.03(b)(36) 95.44% 96.15%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Lowest Current Mortgage Rate 2.03(b)(48) 4.875% 4.750%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Highest Current Mortgage Rate 2.03(b)(48) 13.000% 14.000%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Weighted Average Current Mortgage Rate 2.03(b)(48) 8.097% 8.028%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Lowest Gross Margin 2.03(b)(50) 2.250% 2.500%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Highest Gross Margin 2.03(b)(50) 7.990% 11.000%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Weighted Average Gross Margin 2.03(b)(50) 6.528% 6.645%
----------------------------------------------------------------- ----------------- ---------------- -----------------
Date on or before which each Initial Mortgage Loan has a
Due Date 2.03(b)(51) 3/1/2007 3/1/2007
----------------------------------------------------------------- ----------------- ---------------- -----------------
----------------------------------------------------------------------------------------------------------------------
Adjustable Rate Mortgage
Loans (other than
Two-Year, Three-Year and Two-Year Three-Year Five-Year
Applicable Five-Year Hybrid Mortgage Hybrid Hybrid Mortgage Hybrid
Adjustment Date Section Loans) Mortgage Loans Loans Mortgage Loans
------------------- ----------------- ---------------------------- ---------------- ----------------- ----------------
Latest Next
Adjustment Date 2.03(b)(34) 8/1/2007 2/1/2009 2/1/2010 2/1/2012
------------------- ----------------- ---------------------------- ---------------- ----------------- ----------------
S-II-1
SCHEDULE III
40-YEAR TARGET SCHEDULE
Month of 40-Year
Distribution Date Target ($)
----------------------- ----------------
February 2017 79,297,744
March 2017 78,200,135
April 2017 77,117,453
May 2017 76,049,496
June 2017 74,996,064
July 2017 73,956,962
August 2017 72,931,995
September 2017 71,920,973
October 2017 70,923,707
November 2017 69,940,011
December 2017 68,969,702
January 2018 68,012,599
February 2018 67,068,523
March 2018 66,137,297
April 2018 65,218,749
May 2018 64,312,707
June 2018 63,419,002
July 2018 62,537,466
August 2018 61,667,936
September 2018 60,810,249
October 2018 59,964,245
November 2018 59,129,765
December 2018 58,306,655
January 2019 57,494,759
February 2019 56,693,927
March 2019 55,904,009
April 2019 55,124,857
May 2019 54,356,326
June 2019 53,598,272
July 2019 52,850,552
August 2019 52,113,028
September 2019 51,385,562
October 2019 50,668,016
November 2019 49,960,258
December 2019 49,262,154
January 2020 48,573,574
February 2020 47,894,390
March 2020 47,224,473
April 2020 46,563,699
May 2020 45,911,943
S-III-1
Month of 40-Year
Distribution Date Target ($)
----------------------- ----------------
June 2020 45,269,084
July 2020 44,635,002
August 2020 44,009,577
September 2020 43,392,692
October 2020 42,784,232
November 2020 42,184,082
December 2020 41,592,130
January 2021 41,008,266
February 2021 40,432,379
March 2021 39,864,362
April 2021 39,304,107
May 2021 38,751,511
June 2021 38,206,469
July 2021 37,668,878
August 2021 37,138,639
September 2021 36,615,651
October 2021 36,099,816
November 2021 35,591,037
December 2021 35,089,219
January 2022 34,594,267
February 2022 34,106,088
March 2022 33,624,591
April 2022 33,149,686
May 2022 32,681,281
June 2022 32,219,291
July 2022 31,763,627
August 2022 31,314,204
September 2022 30,870,937
October 2022 30,433,744
November 2022 30,002,540
December 2022 29,577,247
January 2023 29,157,782
February 2023 28,744,068
March 2023 28,336,026
April 2023 27,933,580
May 2023 27,536,653
June 2023 27,145,171
July 2023 26,759,059
August 2023 26,378,246
September 2023 26,002,658
October 2023 25,632,226
November 2023 25,266,880
December 2023 24,906,549
January 2024 24,551,167
S-III-2
Month of 40-Year
Distribution Date Target ($)
----------------------- ----------------
February 2024 24,200,667
March 2024 23,854,981
April 2024 23,514,044
May 2024 23,177,793
June 2024 22,846,164
July 2024 22,519,093
August 2024 22,196,519
September 2024 21,878,381
October 2024 21,564,619
November 2024 21,255,174
December 2024 20,949,986
January 2025 20,648,998
February 2025 20,352,153
March 2025 20,059,395
April 2025 19,770,667
May 2025 19,485,917
June 2025 19,205,088
July 2025 18,928,129
August 2025 18,654,986
September 2025 18,385,608
October 2025 18,119,944
November 2025 17,857,943
December 2025 17,599,555
January 2026 17,344,732
February 2026 17,093,424
March 2026 16,845,585
April 2026 16,601,166
May 2026 16,360,122
June 2026 16,122,406
July 2026 15,887,974
August 2026 15,656,780
September 2026 15,428,781
October 2026 15,203,933
November 2026 14,982,194
December 2026 14,763,520
January 2027 14,547,871
February 2027 14,335,206
March 2027 14,125,482
April 2027 13,918,662
May 2027 13,714,704
June 2027 13,513,571
July 2027 13,315,224
August 2027 13,119,624
September 2027 12,926,735
S-III-3
Month of 40-Year
Distribution Date Target ($)
----------------------- ----------------
October 2027 12,736,519
November 2027 12,548,940
December 2027 12,363,963
January 2028 12,181,552
February 2028 12,001,671
March 2028 11,824,287
April 2028 11,649,365
May 2028 11,476,872
June 2028 11,306,775
July 2028 11,139,041
August 2028 10,973,638
September 2028 10,810,534
October 2028 10,649,698
November 2028 10,491,099
December 2028 10,334,707
January 2029 10,180,491
February 2029 10,028,422
March 2029 9,878,470
April 2029 9,730,607
May 2029 9,584,803
June 2029 9,441,032
July 2029 9,299,266
August 2029 9,159,476
September 2029 9,021,636
October 2029 8,885,719
November 2029 8,751,700
December 2029 8,619,552
January 2030 8,489,250
February 2030 8,360,768
March 2030 8,234,082
April 2030 8,109,167
May 2030 7,985,999
June 2030 7,864,554
July 2030 7,744,809
August 2030 7,626,740
September 2030 7,510,324
October 2030 7,395,540
November 2030 7,282,364
December 2030 7,170,775
January 2031 7,060,750
February 2031 6,952,269
March 2031 6,845,311
April 2031 6,739,854
May 2031 6,635,878
S-III-4
Month of 40-Year
Distribution Date Target ($)
----------------------- ----------------
June 2031 6,533,363
July 2031 6,432,289
August 2031 6,332,636
September 2031 6,234,385
October 2031 6,137,517
November 2031 6,042,012
December 2031 5,947,852
January 2032 5,855,018
February 2032 5,763,493
March 2032 5,673,258
April 2032 5,584,296
May 2032 5,496,589
June 2032 5,410,121
July 2032 5,324,874
August 2032 5,240,831
September 2032 5,157,976
October 2032 5,076,293
November 2032 4,995,766
December 2032 4,916,378
January 2033 4,838,114
February 2033 4,760,960
March 2033 4,684,898
April 2033 4,609,915
May 2033 4,535,996
June 2033 4,463,127
July 2033 4,391,291
August 2033 4,320,477
September 2033 4,250,669
October 2033 4,181,853
November 2033 4,114,017
December 2033 4,047,146
January 2034 3,981,228
February 2034 3,916,249
March 2034 3,852,196
April 2034 3,789,057
May 2034 3,726,819
June 2034 3,665,469
July 2034 3,604,996
August 2034 3,545,388
September 2034 3,486,632
October 2034 3,428,717
November 2034 3,371,631
December 2034 3,315,363
January 2035 3,259,901
S-III-5
Month of 40-Year
Distribution Date Target ($)
----------------------- ----------------
February 2035 3,205,235
March 2035 3,151,353
April 2035 3,098,245
May 2035 3,045,900
June 2035 2,994,308
July 2035 2,943,457
August 2035 2,893,339
September 2035 2,843,942
October 2035 2,795,258
November 2035 2,747,275
December 2035 2,699,985
January 2036 2,653,377
February 2036 2,607,443
March 2036 2,562,173
April 2036 2,517,558
May 2036 2,473,589
June 2036 2,430,256
July 2036 2,387,552
August 2036 2,345,468
September 2036 2,303,994
October 2036 2,263,123
November 2036 2,222,846
December 2036 2,183,154
January 2037 2,144,041
S-III-6