EXHIBIT 4.1

CWABS, INC.,

Depositor

COUNTRYWIDE HOME LOANS, INC.,

Seller

PARK MONACO INC.,

Seller

PARK SIENNA LLC,

Seller

PARK GRANADA LLC,

Seller

COUNTRYWIDE HOME LOANS SERVICING LP,

Master Servicer

and

THE BANK OF NEW YORK,

Trustee

_____________________________________

POOLING AND SERVICING AGREEMENT

Dated as of May 1, 2006

______________________________________

ASSET-BACKED CERTIFICATES, SERIES 2006-BC2

Table of Contents

ARTICLE I.
DEFINITIONS

Section 1.01	Defined Terms.
Section 1.02	Certain Interpretive Provisions.

ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

Section 2.01	Conveyance of Mortgage Loans.
Section 2.02	Acceptance by Trustee of the Mortgage Loans.
Section 2.03	Representations, Warranties and Covenants of the Master Servicer and the Sellers.
Section 2.04	Representations and Warranties of the Depositor.
Section 2.05	Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases.
Section 2.06	Authentication and Delivery of Certificates.
Section 2.07	Covenants of the Master Servicer.

ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 3.01	Master Servicer to Service Mortgage Loans.
Section 3.02	Subservicing; Enforcement of the Obligations of 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.
Section 3.04	Trustee to Act as Master Servicer.
Section 3.05	Collection of Mortgage Loan Payments; Certificate Account; Distribution Account; Pre-Funding Account; Seller Shortfall Interest Requirement.
Section 3.06	Collection of Taxes, Assessments and Similar Items; Escrow Accounts.
Section 3.07	Access to Certain Documentation and Information Regarding the Mortgage Loans.
Section 3.08	Permitted Withdrawals from the Certificate Account, Distribution Account, Carryover Reserve Fund and the Principal Reserve Fund.
Section 3.09	[Reserved].
Section 3.10	Maintenance of Hazard Insurance.
Section 3.11	Enforcement of Due-On-Sale Clauses; Assumption Agreements.
Section 3.12	Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans.
Section 3.13	Trustee to Cooperate; Release of Mortgage Files.
Section 3.14	Documents, Records and Funds in Possession of Master Servicer to be Held for the Trustee.
Section 3.15	Servicing Compensation.
Section 3.16	Access to Certain Documentation.
Section 3.17	Annual Statement as to Compliance.
Section 3.18	[Reserved].
Section 3.19	[Reserved].
Section 3.20	Prepayment Charges.
Section 3.21	Swap Contract.

ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

Section 4.01	Advances; Remittance Reports.
Section 4.02	Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls.
Section 4.03	[Reserved].
Section 4.04	Distributions.
Section 4.05	Monthly Statements to Certificateholders.
Section 4.06	[Reserved].
Section 4.07	Carryover Reserve Fund.
Section 4.08	[reserved].
Section 4.09	Swap Trust and Swap Account.
Section 4.10	Distributions on REMIC 1 and REMIC 2 Regular Interests.
Section 4.11	Allocation of Realized Losses to REMIC 1 and REMIC 2 Regular Interests.
Section 4.12	Tax Treatment of Swap Payments and Swap Termination Payments.

ARTICLE V.
THE CERTIFICATES
Section 5.01	The Certificates.
Section 5.02	Certificate Register; Registration of Transfer and Exchange of Certificates.
Section 5.03	Mutilated, Destroyed, Lost or Stolen Certificates.
Section 5.04	Persons Deemed Owners.
Section 5.05	Access to List of Certificateholders’ Names and Addresses.
Section 5.06	Book-Entry Certificates.
Section 5.07	Notices to Depository.
Section 5.08	Definitive Certificates.
Section 5.09	Maintenance of 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.
Section 6.02	Merger or Consolidation of the Depositor, the Master Servicer or the Sellers.
Section 6.03	Limitation on Liability of the Depositor, the Sellers, the Master Servicer, the NIM Insurer and Others.
Section 6.04	Limitation on Resignation of Master Servicer.
Section 6.05	Errors and Omissions Insurance; Fidelity Bonds.

ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER

Section 7.01	Events of Default.
Section 7.02	Trustee to Act; Appointment of Successor.
Section 7.03	Notification to Certificateholders.

ARTICLE VIII.
CONCERNING THE TRUSTEE

Section 8.01	Duties of Trustee.
Section 8.02	Certain Matters Affecting the Trustee.
Section 8.03	Trustee Not Liable for Mortgage Loans.
Section 8.04	Trustee May Own Certificates.
Section 8.05	Master Servicer to Pay Trustee’s Fees and Expenses.
Section 8.06	Eligibility Requirements for Trustee.
Section 8.07	Resignation and Removal of Trustee.
Section 8.08	Successor Trustee.
Section 8.09	Merger or Consolidation of Trustee.
Section 8.10	Appointment of Co-Trustee or Separate Trustee.
Section 8.11	Tax Matters.
Section 8.12	[Reserved].
Section 8.13	Access to Records of the Trustee.
Section 8.14	Suits for Enforcement.

ARTICLE IX.
TERMINATION

Section 9.01	Termination upon Liquidation or Repurchase of all Mortgage Loans.
Section 9.02	Final Distribution on the Certificates.
Section 9.03	Additional Termination Requirements.

ARTICLE X.
MISCELLANEOUS PROVISIONS

Section 10.01	Amendment.
Section 10.02	Recordation of Agreement; Counterparts.
Section 10.03	Governing Law.
Section 10.04	Intention of Parties.
Section 10.05	Notices.
Section 10.06	Severability of Provisions.
Section 10.07	Assignment.
Section 10.08	Limitation on Rights of Certificateholders.
Section 10.09	Inspection and Audit Rights.
Section 10.10	Certificates Nonassessable and Fully Paid.
Section 10.11	Rights of NIM Insurer.

ARTICLE XI.
EXCHANGE ACT REPORTING

Section 11.01	Filing Obligations.
Section 11.02	Form 10-D Filings.
Section 11.03	Form 8-K Filings.
Section 11.04	Form 10-K Filings.
Section 11.05	Sarbanes-Oxley Certification.
Section 11.06	Form 15 Filing.
Section 11.07	Report on Assessment of Compliance and Attestation.
Section 11.08	Use of Subservicers and Subcontractors.
Section 11.09	Amendments.
Section 11.10	Reconciliation of Accounts.

Exhibits

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 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)
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 Novation Agreement
EXHIBIT V-2	Form of Swap Contract Administration Agreement
EXHIBIT V-3	Form of Swap Guarantee
EXHIBIT W	Form of Monthly Statement
EXHIBIT X-1	Form of Performance Certification (Subservicer)
EXHIBIT X-2	Form of Performance Certification (Trustee)
EXHIBIT Y	Form of Servicing Criteria to be Addressed in Assessment of Compliance Statement
EXHIBIT Z	List of Item 1119 Parties
EXHIBIT AA	Form of Sarbanes-Oxley Certification (Replacement Master Servicer)
SCHEDULE I	Prepayment Charge Schedule and Prepayment Charge Summary
SCHEDULE II	Collateral Schedule

POOLING AND SERVICING AGREEMENT, dated as of May 1, 2006, by and among CWABS, INC., a Delaware corporation, as depositor (the “Depositor”), COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller (“CHL” or a “Seller”), PARK MONACO INC., a Delaware corporation, as a seller (“Park Monaco” or a “Seller”), PARK GRANADA LLC., a Delaware limited liability company, as a seller (“Park Granada” or a “Seller”), PARK SIENNA LLC, a Delaware limited liability company, as a seller (“Park Sienna” or a “Seller”, and together with CHL, Park Granada and Park Monaco, the “Sellers”), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership, as master servicer (the “Master Servicer”), and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the “Trustee”).

PRELIMINARY STATEMENT:

The Depositor intends to sell mortgage asset-backed pass-through certificates (collectively, the “Certificates”), to be issued hereunder in eighteen classes, which in the aggregate will evidence the entire beneficial ownership interest in the Mortgage Loans (as defined herein).

REMIC I

As provided herein, the Trustee will make an election to treat the segregated pool of assets consisting of the Mortgage Loans and certain other related assets (exclusive of the Swap Contract, the Swap Trust, the Swap Account and the Carryover Reserve Fund) subject to this Agreement as a real estate mortgage investment conduit (a “REMIC”) for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC 1.” The R-1-R Interest will represent the sole class of “residual interests” in REMIC 1 for purposes of the REMIC Provisions (as defined herein) under federal income tax law. The following table irrevocably sets forth the designation, REMIC 1 Remittance Rate and initial Uncertificated Principal Balance for each of the “regular interests” in REMIC 1 (the “REMIC 1 Regular Interests”). None of the REMIC 1 Regular Interests will be certificated.

Designation	REMIC 1 Remittance Rate	Initial Uncertificated Principal Balance		Latest Possible Maturity Date⁽¹⁾
I	(2)	$	68,564,115.82	February 25, 2046
I-1-A	(2)	$	1,783,346.47	February 25, 2046
I-1-B	(2)	$	1,783,346.47	February 25, 2046
I-2-A	(2)	$	1,917,466.72	February 25, 2046
I-2-B	(2)	$	1,917,466.72	February 25, 2046
I-3-A	(2)	$	2,046,460.38	February 25, 2046
I-3-B	(2)	$	2,046,460.38	February 25, 2046
I-4-A	(2)	$	2,170,829.78	February 25, 2046
I-4-B	(2)	$	2,170,829.78	February 25, 2046
I-5-A	(2)	$	2,290,046.08	February 25, 2046
I-5-B	(2)	$	2,290,046.08	February 25, 2046
I-6-A	(2)	$	2,401,211.09	February 25, 2046
I-6-B	(2)	$	2,401,211.09	February 25, 2046
I-7-A	(2)	$	2,429,678.38	February 25, 2046
I-7-B	(2)	$	2,429,678.38	February 25, 2046
I-8-A	(2)	$	2,544,171.64	February 25, 2046
I-8-B	(2)	$	2,544,171.64	February 25, 2046
I-9-A	(2)	$	2,651,193.81	February 25, 2046
I-9-B	(2)	$	2,651,193.81	February 25, 2046
I-10-A	(2)	$	2,743,808.24	February 25, 2046
I-10-B	(2)	$	2,743,808.24	February 25, 2046
I-11-A	(2)	$	2,821,859.86	February 25, 2046
I-11-B	(2)	$	2,821,859.86	February 25, 2046
I-12-A	(2)	$	2,891,725.75	February 25, 2046
I-12-B	(2)	$	2,891,725.75	February 25, 2046
I-13-A	(2)	$	2,869,612.78	February 25, 2046
I-13-B	(2)	$	2,869,612.78	February 25, 2046
I-14-A	(2)	$	2,772,579.37	February 25, 2046
I-14-B	(2)	$	2,772,579.37	February 25, 2046
I-15-A	(2)	$	2,672,704.52	February 25, 2046
I-15-B	(2)	$	2,672,704.52	February 25, 2046
I-16-A	(2)	$	2,576,045.55	February 25, 2046
I-16-B	(2)	$	2,576,045.55	February 25, 2046
I-17-A	(2)	$	2,482,601.28	February 25, 2046
I-17-B	(2)	$	2,482,601.28	February 25, 2046
I-18-A	(2)	$	2,392,261.92	February 25, 2046
I-18-B	(2)	$	2,392,261.92	February 25, 2046
I-19-A	(2)	$	4,329,197.49	February 25, 2046
I-19-B	(2)	$	4,329,197.49	February 25, 2046
I-20-A	(2)	$	4,108,607.86	February 25, 2046
I-20-B	(2)	$	4,108,607.86	February 25, 2046
I-21-A	(2)	$	3,853,320.48	February 25, 2046
I-21-B	(2)	$	3,853,320.48	February 25, 2046
I-22-A	(2)	$	3,613,616.96	February 25, 2046
I-22-B	(2)	$	3,613,616.96	February 25, 2046
I-23-A	(2)	$	3,388,530.69	February 25, 2046
I-23-B	(2)	$	3,388,530.69	February 25, 2046
I-24-A	(2)	$	3,177,156.75	February 25, 2046
I-24-B	(2)	$	3,177,156.75	February 25, 2046
I-25-A	(2)	$	1,769,562.11	February 25, 2046
I-25-B	(2)	$	1,769,562.11	February 25, 2046
I-26-A	(2)	$	1,671,919.64	February 25, 2046
I-26-B	(2)	$	1,671,919.64	February 25, 2046
I-27-A	(2)	$	1,605,739.79	February 25, 2046
I-27-B	(2)	$	1,605,739.79	February 25, 2046
I-28-A	(2)	$	1,541,810.14	February 25, 2046
I-28-B	(2)	$	1,541,810.14	February 25, 2046
I-29-A	(2)	$	1,480,050.45	February 25, 2046
I-29-B	(2)	$	1,480,050.45	February 25, 2046
I-30-A	(2)	$	1,420,383.29	February 25, 2046
I-30-B	(2)	$	1,420,383.29	February 25, 2046
I-31-A	(2)	$	1,488,555.02	February 25, 2046
I-31-B	(2)	$	1,488,555.02	February 25, 2046
I-32-A	(2)	$	1,424,966.50	February 25, 2046
I-32-B	(2)	$	1,424,966.50	February 25, 2046
I-33-A	(2)	$	1,363,865.85	February 25, 2046
I-33-B	(2)	$	1,363,865.85	February 25, 2046
I-34-A	(2)	$	1,304,298.40	February 25, 2046
I-34-B	(2)	$	1,304,298.40	February 25, 2046
I-35-A	(2)	$	36,218,828.64	February 25, 2046
I-35-B	(2)	$	36,218,828.64	February 25, 2046
II	(2)	$	77,556,226.91	February 25, 2046
II-1-A	(2)	$	2,017,227.53	February 25, 2046
II-1-B	(2)	$	2,017,227.53	February 25, 2046
II-2-A	(2)	$	2,168,937.28	February 25, 2046
II-2-B	(2)	$	2,168,937.28	February 25, 2046
II-3-A	(2)	$	2,314,848.12	February 25, 2046
II-3-B	(2)	$	2,314,848.12	February 25, 2046
II-4-A	(2)	$	2,455,528.22	February 25, 2046
II-4-B	(2)	$	2,455,528.22	February 25, 2046
II-5-A	(2)	$	2,590,379.42	February 25, 2046
II-5-B	(2)	$	2,590,379.42	February 25, 2046
II-6-A	(2)	$	2,716,123.41	February 25, 2046
II-6-B	(2)	$	2,716,123.41	February 25, 2046
II-7-A	(2)	$	2,748,324.12	February 25, 2046
II-7-B	(2)	$	2,748,324.12	February 25, 2046
II-8-A	(2)	$	2,877,832.86	February 25, 2046
II-8-B	(2)	$	2,877,832.86	February 25, 2046
II-9-A	(2)	$	2,998,890.69	February 25, 2046
II-9-B	(2)	$	2,998,890.69	February 25, 2046
II-10-A	(2)	$	3,103,651.26	February 25, 2046
II-10-B	(2)	$	3,103,651.26	February 25, 2046
II-11-A	(2)	$	3,191,939.14	February 25, 2046
II-11-B	(2)	$	3,191,939.14	February 25, 2046
II-12-A	(2)	$	3,270,967.75	February 25, 2046
II-12-B	(2)	$	3,270,967.75	February 25, 2046
II-13-A	(2)	$	3,245,954.72	February 25, 2046
II-13-B	(2)	$	3,245,954.72	February 25, 2046
II-14-A	(2)	$	3,136,195.63	February 25, 2046
II-14-B	(2)	$	3,136,195.63	February 25, 2046
II-15-A	(2)	$	3,023,222.48	February 25, 2046
II-15-B	(2)	$	3,023,222.48	February 25, 2046
II-16-A	(2)	$	2,913,886.95	February 25, 2046
II-16-B	(2)	$	2,913,886.95	February 25, 2046
II-17-A	(2)	$	2,808,187.72	February 25, 2046
II-17-B	(2)	$	2,808,187.72	February 25, 2046
II-18-A	(2)	$	2,706,000.58	February 25, 2046
II-18-B	(2)	$	2,706,000.58	February 25, 2046
II-19-A	(2)	$	4,896,960.01	February 25, 2046
II-19-B	(2)	$	4,896,960.01	February 25, 2046
II-20-A	(2)	$	4,647,440.64	February 25, 2046
II-20-B	(2)	$	4,647,440.64	February 25, 2046
II-21-A	(2)	$	4,358,673.02	February 25, 2046
II-21-B	(2)	$	4,358,673.02	February 25, 2046
II-22-A	(2)	$	4,087,533.04	February 25, 2046
II-22-B	(2)	$	4,087,533.04	February 25, 2046
II-23-A	(2)	$	3,832,927.31	February 25, 2046
II-23-B	(2)	$	3,832,927.31	February 25, 2046
II-24-A	(2)	$	3,593,832.25	February 25, 2046
II-24-B	(2)	$	3,593,832.25	February 25, 2046
II-25-A	(2)	$	2,001,635.39	February 25, 2046
II-25-B	(2)	$	2,001,635.39	February 25, 2046
II-26-A	(2)	$	1,891,187.36	February 25, 2046
II-26-B	(2)	$	1,891,187.36	February 25, 2046
II-27-A	(2)	$	1,816,328.21	February 25, 2046
II-27-B	(2)	$	1,816,328.21	February 25, 2046
II-28-A	(2)	$	1,744,014.36	February 25, 2046
II-28-B	(2)	$	1,744,014.36	February 25, 2046
II-29-A	(2)	$	1,674,155.05	February 25, 2046
II-29-B	(2)	$	1,674,155.05	February 25, 2046
II-30-A	(2)	$	1,606,662.71	February 25, 2046
II-30-B	(2)	$	1,606,662.71	February 25, 2046
II-31-A	(2)	$	1,683,774.98	February 25, 2046
II-31-B	(2)	$	1,683,774.98	February 25, 2046
II-32-A	(2)	$	1,611,847.00	February 25, 2046
II-32-B	(2)	$	1,611,847.00	February 25, 2046
II-33-A	(2)	$	1,542,733.15	February 25, 2046
II-33-B	(2)	$	1,542,733.15	February 25, 2046
II-34-A	(2)	$	1,475,353.60	February 25, 2046
II-34-B	(2)	$	1,475,353.60	February 25, 2046
II-35-A	(2)	$	40,968,829.86	February 25, 2046
II-35-B	(2)	$	40,968,829.86	February 25, 2046
I-LT-P	(2)	$	100.00	February 25, 2046
I-LT-AR	(2)	$	100.00	February 25, 2046

________________

⁽¹⁾ For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC 1 Regular Interest.

⁽¹⁾ Calculated in accordance with the definition of “REMIC 1 Remittance Rate” herein.

REMIC 2

As provided herein, the Trustee will elect to treat the segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as REMIC 2. The R-2-R Interest will represent the sole class of “residual interests” in REMIC 2 for purposes of the REMIC Provisions under federal income tax law. The following table irrevocably sets forth the designation, REMIC 2 Remittance Rate, initial Uncertificated Principal Balance or each of the “regular interests” in REMIC 2 (the “REMIC 2 Regular Interests”). None of the REMIC 2 Regular Interests will be certificated.

Designation	REMIC 2 Remittance Rate			Uncertificated Principal Balance			Latest Possible Maturity Date(1)
LT-AA		(2	)	$	318,500,167.45			February 25, 2046
LT-1A		(2	)	$	1,189,500.00			February 25, 2046
LT-2A1		(2	)	$	860,960.00			February 25, 2046
LT-2A2		(2	)	$	110,705.00			February 25, 2046
LT-2A3		(2	)	$	299,920.00			February 25, 2046
LT-2A4		(2	)	$	73,915.00			February 25, 2046
LT-M1		(2	)	$	123,500.00			February 25, 2046
LT-M2		(2	)	$	117,000.00			February 25, 2046
LT-M3		(2	)	$	68,250.00			February 25, 2046
LT-M4		(2	)	$	61,750.00			February 25, 2046
LT-M5		(2	)	$	61,750.00			February 25, 2046
LT-M6		(2	)	$	53,625.00			February 25, 2046
LT-M7		(2	)	$	47,125.00			February 25, 2046
LT-M8		(2	)	$	45,500.00			February 25, 2046
LT-M9		(2	)	$	34,125.00			February 25, 2046
LT-B		(2	)	$	37,375.00			February 25, 2046
LT-ZZ		(2	)	$	3,315,003.42			February 25, 2046
II-LT-P		(2	)	$	100.00			February 25, 2046
II-LT-AR		(2	)	$	100.00			February 25, 2046
LT-1SUB		(2	)	$	6,710.00			February 25, 2046
LT-1GRP		(2	)	$	30,500.02			February 25, 2046
LT-2SUB		(2	)	$	7,590.02			February 25, 2046
LT-2GRP		(2	)	$	34,500.02			February 25, 2046
LT-XX		(2	)	$	324,920,870.80			February 25, 2046
II-IO		(2	)		(3	)		February 25, 2046

________________________

(1)	For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC 2 Regular Interest.

(2)	Calculated as provided in the definition of “REMIC 2 Remittance Rate” herein.

(3)	REMIC 2 Regular Interest II-IO will not have an Uncertificated Principal Balance, but will accrue interest on its Uncertificated Notional Amount.

REMIC 3

As provided herein, the Trustee will elect to treat the segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as REMIC 3. The R-3-R Interest will represent the sole class of “residual interests” in REMIC 3 for purposes of the REMIC Provisions under federal income tax law. The following table irrevocably sets forth the designation, Pass-Through Rate, aggregate Initial Certificate Principal Balance and Final Scheduled Distribution Date for each Class of Certificates comprising the interests representing “regular interests” in REMIC 3.

Designation	Pass-Through Rate			Aggregate Initial Certificate Principal Balance			Latest Possible Maturity Date(1)
Class 1-A		(2	)	$	237,900,000.00			February 25, 2046
Class 2-A-1		(2	)	$	172,192,000.00			February 25, 2046
Class 2-A-2		(2	)	$	22,141,000.00			February 25, 2046
Class 2-A-3		(2	)	$	59,984,000.00			February 25, 2046
Class 2-A-4		(2	)	$	14,783,000.00			February 25, 2046
Class M-1		(2	)	$	24,700,000.00			February 25, 2046
Class M-2		(2	)	$	23,400,000.00			February 25, 2046
Class M-3		(2	)	$	13,650,000.00			February 25, 2046
Class M-4		(2	)	$	12,350,000.00			February 25, 2046
Class M-5		(2	)	$	12,350,000.00			February 25, 2046
Class M-6		(2	)	$	10,725,000.00			February 25, 2046
Class M-7		(2	)	$	9,425,000.00			February 25, 2046
Class M-8		(2	)	$	9,100,000.00			February 25, 2046
Class M-9		(2	)	$	6,825,000.00			February 25, 2046
Class B		(2	)	$	7,475,000.00			February 25, 2046
Class C		(3	)	$	650,000,441.73			February 25, 2046
Class P		(4	)	$	100.00			February 25, 2046
Class A-R		(5	)	$	100.00			February 25, 2046
Class Swap-IO Interest		(6	)		(6	)		February 25, 2046

_______________

(1)	For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC 3 Regular Certificate.

(2) Interest will accrue at a rate equal to the Pass-Through Rate, as defined herein.

(3)

The Class C Certificates will accrue interest at its variable Pass-Through Rate on the Class C Notional Amount outstanding from time to time which shall equal the Uncertificated Principal Balance of the REMIC 2 Regular Interests (other than REMIC I Regular Interest LT-P). The Class C Certificates will not accrue interest on their Certificate Principal Balance initially equal to $13,000,341.73.

(4)	The Class P Certificates will be not entitled to distributions of interest, but will be entitled to all Prepayment Charges distributed with respect REMIC 2 Regular Interest LT-P.

(5)	The Class A-R Certificates represent the sole class of residual interests in each REMIC created hereunder. The Class A-R Certificates will not be entitled to distributions of interest.

(6)	The Class SWAP-IO Interest will not have a Pass-Through Rate or a Certificate Principal Balance, but will be entitled to 100% of amounts distributed on REMIC 2 Regular Interest II-IO.

The foregoing REMIC structure is intended to cause all of the cash from the Mortgage Loans to flow through to REMIC 3 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.

ARTICLE I.

DEFINITIONS

Section 1.01 Defined Terms.

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

Account: The Escrow Account, the Certificate Account, the Distribution Account or any other account related to the Trust Fund or the Mortgage Loans.

Accrual Period: With respect to any Distribution Date and each Class of 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.

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 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.

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 single Loan Group with respect to its corresponding 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	Subordinate
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 at the time of the origination of the related Mortgage Loan, or the sales price of the Mortgaged Property at the time of such origination, whichever is less, or with respect to any Mortgage Loan originated in connection with a refinancing, the appraised value of the Mortgaged Property based upon the appraisal made at the time of such refinancing.

Bankruptcy Code: Title 11 of the United States Code.

Book-Entry Certificates: Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the Depository or on the books of a person maintaining an account with the Depository (directly, as a “Depository Participant”, or indirectly, as an indirect participant in accordance with the rules of the Depository and as described in Section 5.06). As of the Closing Date, each Class of Offered Certificates (other than the Class A-R Certificates) constitutes a Class of Book-Entry Certificates.

Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the State of New York or California or the city in which the Corporate Trust Office of the Trustee is located are authorized or obligated by law or executive order to be closed.

Carryover Reserve Fund: The separate Eligible Account created and initially maintained by the Trustee pursuant to Section 4.07 in the name of the Trustee for the benefit of the Certificateholders and designated “The Bank of New York in trust for registered Holders of CWABS, Inc., Asset-Backed Certificates, Series 2006-BC2”. Funds in the Carryover Reserve Fund shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement.

Certificate: Any one of the certificates of any Class executed and authenticated by the Trustee in substantially the forms attached hereto as Exhibits A-1 through A-14, Exhibit B, Exhibit C, Exhibit D and Exhibit E.

Certificate Account: The separate Eligible Account created and initially maintained by the Master Servicer pursuant to Section 3.05(b) at Countrywide Bank, N.A., which is an affiliate of the Master Servicer 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 2006-BC2”. 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. As to any Class C Certificate and as of any Distribution Date, an amount equal to the excess, if any, of (i) the aggregate Stated Principal Balance of the Mortgage Loans over (ii) the aggregate Certificate Principal Balance of the Senior Certificates and Subordinate Certificates. 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.

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 (except for the first Distribution Date, 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 Net Swap Payment payable to the Swap Counterparty with respect to 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 Principal Balance of the Mortgage Loans in Loan Group 1 as of the first day of the related Due Period (except for the first Distribution Date, 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 Class 1-A Principal Distribution Target Amount and the denominator of which is the sum of the Class 1-A Principal Distribution Target Amount and the Class 2-A Principal Distribution Target Amount.

Class 1-A Principal Distribution Target Amount: With respect to any Distribution Date, the excess of: (1) the Certificate Principal Balance of the Class 1-A Certificates immediately prior to the Distribution Date, over (2) the lesser of (i) 56.00% of the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1 for the Distribution Date and (ii) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1 for the Distribution Date minus 0.50% of the sum of the aggregate Initial Cut-off Date Principal Balance of the Initial Mortgage Loans in Loan Group 1 and the Group 1 Pre-Funded Amount.

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-4 hereto, representing the right to distributions as set forth herein.

Class 2-A Certificate: Any Class 2-A-1, Class 2-A-2, Class 2-A-3 or Class 2-A-4 Certificate.

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 (except for the first Distribution Date, 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 Net Swap Payment payable to the Swap Counterparty with respect to 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 (except for the first Distribution Date, after giving effect to Principal Prepayments received during the Prepayment Period that that 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: For any Distribution Date means the product of (x) the Class A Principal Distribution Target Amount and (y) a fraction, the numerator of which is the Class 2-A Principal Distribution Target Amount and the denominator of which is the sum of the Class 1-A Principal Distribution Target Amount and the Class 2-A Principal Distribution Target Amount.

Class 2-A Principal Distribution Target Amount: For any Distribution Date means the excess of: (1) the aggregate Certificate Principal Balance of the Class 2-A Certificates immediately prior to the Distribution Date, over (2) the lesser of (i) 56.00% of the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 for the Distribution Date and (ii) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 for the Distribution Date minus 0.50% of the sum of the aggregate Initial Cut-off Date Principal Balance of the Initial Mortgage Loans in Loan Group 2 and the Group 2 Pre-Funded Amount.

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 the Distribution Date, over (2) the lesser of (i) 56.00% of the aggregate Stated Principal Balance of the Mortgage Loans for the Distribution Date and (ii) the aggregate Stated Principal Balance of the Mortgage Loans for the Distribution Date minus the OC Floor.

Class A Principal Distribution Allocation Amount: With respect to any Distribution Date, (a) in the case of the Class 1-A Certificates, the Class 1-A Principal Distribution Amount and (b) in the case of the Class 2-A Certificates, the Class 2-A Principal Distribution Amount.

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. The Class A-R Certificates represent ownership of the R-1-R Interest, the R-2-R Interest and the R-3-R Interest.

Class A Certificate: Any Class 1-A or Class 2-A Certificate.

Class B Certificate: Any Certificate designated as a “Class B Certificate” on the face thereof, in the form of Exhibit A-14 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 Current Interest: For any Distribution Date, the interest accrued on the Class C Notional Amount during the related Accrual Period at the related Pass-Through Rate.

Class C Notional Amount: The aggregate amount of the Uncertificated Principal Balance of the REMIC II Regular Interests other than REMIC II Regular Interest LT-P.

Class IO Distribution Amount: As defined in Section 4.9 hereof. For purposes of clarity, the Class IO Distribution Amount for any Distribution Date shall equal the amount payable to the Swap Contract Administrator on such Distribution Date in excess of the amount payable on the Class SWAP-IO Interest on such Distribution Date, all as further provided in Section 4.9 hereof.

Class M Certificates: The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9 Certificates.

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.

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-13 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.

Class P Notional Amount: Solely for purposes of the face of the Class P Certificates, an amount equal to $548,989,588.11.

Class SWAP-IO Interest: An uncertificated interest in the Trust Fund evidencing a Regular Interest in REMIC 3.

Closing Date: May 30, 2006.

Code: The Internal Revenue Code of 1986, including any successor or amendatory provisions.

Collateral Schedule: Schedule II hereto.

Commission: The U.S. Securities and Exchange Commission.

Compensating Interest: With respect to each Loan Group and any Distribution Date, an amount equal to, in that Loan Group, the lesser of (x) one-half of the Servicing Fee for the related Due Period and (y) the aggregate Prepayment Interest Shortfalls for the Mortgage Loans in that Loan Group for such Distribution Date.

Confirmation: The confirmation, reference numbers 1199119L, 1199115L, 1199111L, N923303, 2497518, 2497513, 2497580, with a trade date of May 3, 2006, 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 101 Barclay Street, New York, New York 10286 (Attention: Corporate Trust MBS Administration), telephone: (212) 815-3236, facsimile: (212) 815-3986.

Corresponding Certificate: With respect to each REMIC 2 Regular Interest, as follows:

REMIC 2 Regular Interest	Class
REMIC 2 Regular Interest LT-1A	1A
REMIC 2 Regular Interest LT-2A1	2-A-1
REMIC 2 Regular Interest LT-2A2	2-A-2
REMIC 2 Regular Interest LT-2A3	2-A-3
REMIC 2 Regular Interest LT-2A4	2-A-4
REMIC 2 Regular Interest LT-M1	M-1
REMIC 2 Regular Interest LT-M2	M-2
REMIC 2 Regular Interest LT-M3	M-3
REMIC 2 Regular Interest LT-M4	M-4
REMIC 2 Regular Interest LT-M5	M-5
REMIC 2 Regular Interest LT-M6	M-6
REMIC 2 Regular Interest LT-M7	M-7
REMIC 2 Regular Interest LT-M8	M-8
REMIC 2 Regular Interest LT-M9	M-9
REMIC 2 Regular Interest LT-B	B
REMIC 2 Regular Interest LT-AR	A-R
REMIC 2 Regular Interest II-LTP	P

Credit Bureau Risk Score: A statistical credit score obtained by CHL in connection with the origination of a Mortgage Loan.

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
June 2008 — May 2009	1.70% with respect to June 2008, plus an additional 1/12th of 2.05% for each month thereafter through May 2009
June 2009 — May 2010	3.75% with respect to June 2009, plus an additional 1/12th of 2.15% for each month thereafter through May 2010
June 2010 — May 2011	5.90% with respect to June 2010, plus an additional 1/12th of 1.35% for each month thereafter through May 2011
June 2011 — May 2012	7.25% with respect to June 2011, plus an additional 1/12th of 0.50% for each month thereafter through May 2012
June 2012 and thereafter	7.75%

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.

Cut-off Date: When used with respect to any Mortgage Loan the “Cut-off Date” shall mean the Initial Cut-off Date or the related Subsequent Cut-off Date, as the case may be.

Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid principal balance thereof as of the close of business on the Cut-off Date after application of all payments of principal due on or prior to the Cut-off Date, whether or not received, and all Principal Prepayments received on or prior to the Cut-off Date, but without giving effect to any installments of principal received in respect of Due Dates after the Cut-off Date.

Debt Service Reduction: With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction in a proceeding under the Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became final and non-appealable, except such a reduction resulting from a Deficient Valuation or any other reduction that results in a permanent forgiveness of principal.

Deficient Valuation: With respect to any Mortgage Loan, a valuation by a court of competent jurisdiction of the Mortgaged Property in an amount less than the then outstanding indebtedness under such Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any Scheduled Payment that results in a permanent forgiveness of principal, which valuation or reduction results from an order of such court that is final and non-appealable in a proceeding under the Bankruptcy Code.

Definitive Certificates: As defined in Section 5.06.

Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans identified on the schedule of Mortgage Loans hereto set forth on Exhibit F-2 hereof for which all or a portion of a related Mortgage File is not delivered to the Trustee on or prior to the Closing Date, and (ii) the Subsequent Mortgage Loans identified on the schedule of Subsequent Mortgage Loans set forth in Annex A to each related Subsequent Transfer Agreement for which all or a portion of the related Mortgage File is not delivered to the Trustee on or prior to the related Subsequent Transfer Date. The Depositor shall deliver (or cause delivery of) the Mortgage Files to the Trustee: (A) with respect to at least 50% of the Initial Mortgage Loans 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 Trustee as provided in Section 2.01, Countrywide Home Loans, Inc. shall hold such files as agent and in trust for the Trustee.

Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a Replacement Mortgage Loan.

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	35.00%
Class M-1	42.25%
Class M-2	52.50%
Class M-3	61.50%
Class M-4	72.50%
Class M-5	88.50%
Class M-6	109.00%
Class M-7	137.50%
Class M-8	183.25%
Class M-9	244.25%
Class B	385.00%

Delinquent: A Mortgage Loan is “delinquent” if any payment due thereon is not made pursuant to the terms of such Mortgage Loan by the close of business on the day such payment is scheduled to be due. A Mortgage Loan is “30 days delinquent” if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month), then on the last day of such immediately succeeding month. Similarly for “60 days delinquent,” “90 days delinquent” and so on.

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 15^th day of the month of such Distribution Date or, if such 15^th day is not a Business Day, the immediately preceding Business Day.

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 2006-BC2”. 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 June 2006.

Due Date: With respect to any Mortgage Loan and Due Period, the due date for Scheduled Payments of interest and/or principal on that Mortgage Loan occurring in such Due Period as provided in the related Mortgage Note.

Due Period: With respect to any Distribution Date, the period beginning on the second day of the calendar month preceding the calendar month in which such Distribution Date occurs and ending on the first day of the month in which such Distribution Date occurs.

EDGAR: The Commission’s Electronic Data Gathering, Analysis and Retrieval system.

Eligible Account: Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company, the long-term unsecured debt obligations and short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the debt obligations of such holding company, if Moody’s is not a Rating Agency) are rated by each Rating Agency in one of its two highest long-term and its highest short-term rating categories respectively, at the time any amounts are held on deposit therein, or (ii) an account or accounts in a depository institution or trust company in which such accounts are insured by the FDIC (to the limits established by the FDIC) and the uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating Agency, the Certificateholders have a claim with respect to the funds in such account or a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution or trust company in which such account is maintained, or (iii) a trust account or accounts maintained with the corporate trust department of a federal or state chartered depository institution or trust company having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity or (iv) any other account acceptable to the Rating Agencies without reduction or withdrawal of their then-current ratings of the Certificates 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.

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 ceases to satisfy the applicable rating requirement under the Underwriter’s Exemption.

Escrow Account: As defined in Section 3.06 hereof.

Event of Default: As defined in Section 7.01 hereof.

Excess Cashflow: With respect to any Distribution Date the sum of (i) the amount remaining after the distribution of interest to Certificateholders for such Distribution Date pursuant to Section 4.04(a)(iv)(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)(ii) and (iii) the Overcollateralization Reduction Amount for such Distribution Date.

Excess Overcollateralization Amount: With respect to any Distribution Date, the excess, if any, of the Overcollateralized Amount for such Distribution Date over the Overcollateralization Target Amount for such Distribution Date.

Excess Proceeds: With respect to any Liquidated Mortgage Loan, the amount, if any, by which the sum of any Liquidation Proceeds and Subsequent Recoveries are in excess of the sum of (i) the unpaid principal balance of such Liquidated Mortgage Loan as of the date of liquidation of such Liquidated Mortgage Loan plus (ii) interest at the Mortgage Rate from the Due Date as to which interest was last paid or advanced to Certificateholders (and not reimbursed to the Master Servicer) up to the Due Date in the month in which Liquidation Proceeds are required to be distributed on the Stated Principal Balance of such Liquidated Mortgage Loan outstanding during each Due Period as to which such interest was not paid or advanced.

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form 10-K required to be filed by the Depositor with respect to the Trust Fund under the Exchange Act.

Expense Fee Rate: With respect to any Mortgage Loan, the sum of (i) the Servicing Fee Rate, (ii) the Trustee Fee Rate and (iii) with respect to any Mortgage Loan covered by a lender-paid mortgage insurance policy, the related mortgage insurance premium rate.

Extra Principal Distribution Amount: With respect to any Distribution Date and each of Loan Group 1 and Loan Group 2, the lesser of (1) the Overcollateralization Deficiency Amount and (2) the 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.

Fannie Mae: The Federal National Mortgage Association, a federally chartered and privately owned corporation organized and existing under the Federal National Mortgage Association Charter Act, or any successor thereto.

FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.

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, 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.

Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporate instrumentality of the United States created and existing under Title III of the Emergency Home Finance Act of 1970, as amended, or any successor thereto.

Funding Period: The period from the Closing Date to and including the earlier to occur of (x) the date the amount in the Pre-Funding Account is less than $125,000 and (y) July 28, 2006.

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 $0.

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 $0.

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, such index in general being the average of the London interbank offered rates for six-month U.S. dollar deposits in the London market, as set forth in The Wall Street Journal, as most recently announced as of a date 45 days prior to such Adjustment Date or, if the Index ceases to be published in The Wall Street Journal or becomes unavailable for any reason, then the Index shall be a new index selected by the Master Servicer, based on comparable information.

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.

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) May 1, 2006 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.

Insurance Policy: With respect to any Mortgage Loan included in the Trust Fund, any insurance policy, including all riders and endorsements thereto in effect with respect to such Mortgage Loan, including any replacement policy or policies for any Insurance Policy.

Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans 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.

Interest Determination Date: With respect to the first Accrual Period for the Interest-Bearing Certificates, and solely for purposes of calculating the Marker Rate, REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-B, May 25, 2006. With respect to any Accrual Period for the Interest-Bearing Certificates, and solely for purposes of calculating the Marker Rate, the REMIC 2 Regular Interests listed in the previous sentence, 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.

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 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) and (vi) the related Seller Shortfall Interest Requirement, 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).

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)).

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 Number and Borrower Identification Mortgage Loan Schedule: With respect to any Subsequent Transfer Date, the Loan Number and Borrower Identification Mortgage Loan Schedule delivered in connection with such Subsequent Transfer Date pursuant to Section 2.01(f). Each Loan Number and Borrower Identification Mortgage Loan Schedule shall contain the information specified in the definition of “Mortgage Loan Schedule” with respect to the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, and each Loan Number and Borrower Identification Mortgage Loan Schedule shall be deemed to be included in the Mortgage Loan Schedule.

Loan-to-Value Ratio: The fraction, expressed as a percentage, the numerator of which is the original principal balance of the related Mortgage Loan and the denominator of which is the Appraised Value of the related Mortgaged Property.

Majority Holder: The Holders of Certificates evidencing at least 51% of the Voting Rights allocated to such Class of Certificates.

Marker Rate: With respect to the Class C Certificates and any Distribution Date, a per annum rate equal to two (2) times the weighted average of the REMIC 2 Remittance Rate for REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-B and REMIC 2 Regular Interest LT-ZZ, with the rate on each such REMIC 2 Regular Interest (other than REMIC 2 Regular Interest LT-ZZ) subject to the lesser of (i) One-Month LIBOR plus the related Margin and (ii) the related Net Rate Cap for the purpose of this calculation for such Distribution Date and with the rate on REMIC 2 Regular Interest LT-ZZ subject to a cap of zero for the purpose of this calculation; provided, however, that solely for this purpose, calculations of the REMIC 2 Remittance Rate and the related caps with respect to REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-B shall be multiplied by a fraction, the numerator of which is the actual number of days in the Interest Accrual Period and the denominator of which is 30.

Margin: With respect to any Accrual Period and Class of Interest-Bearing Certificates, the per annum rate indicated in the following table:

Class	Margin (1)	Margin (2)
Class 1-A	0.170%	0.340%
Class 2-A-1	0.040%	0.080%
Class 2-A-2	0.100%	0.200%
Class 2-A-3	0.150%	0.300%
Class 2-A-4	0.250%	0.500%
Class M-1	0.280%	0.420%
Class M-2	0.290%	0.435%
Class M-3	0.300%	0.450%
Class M-4	0.370%	0.555%
Class M-5	0.380%	0.570%
Class M-6	0.470%	0.705%
Class M-7	0.900%	1.350%
Class M-8	1.050%	1.575%
Class M-9	1.870%	2.805%
Class B	2.000%	3.000%

(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.

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 LT-ZZ Uncertificated Interest Deferral Amount: With respect to any Distribution Date, the excess of (i) accrued interest at the REMIC 2 Remittance Rate applicable to REMIC 2 Regular Interest LT-ZZ for such Distribution Date on a balance equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest LT-ZZ minus the REMIC 2 Overcollateralization Amount, in each case for such Distribution Date, over (ii) the Uncertificated Interest on REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-B for such Distribution Date, with the rate on each such REMIC 2 Regular Interest subject to a cap equal to the lesser of (i) One-Month LIBOR plus the related Certificate Margin and (ii) the related Pass-Through Rate; provided, however, that solely for this purpose, calculations of the REMIC 2 Remittance Rate and the related caps with respect to each such REMIC 2 Regular Interest (other than REMIC 2 Regular Interest LT-ZZ) shall be multiplied by a fraction, the numerator of which is the actual number of days in the Interest Accrual Period and the denominator of which is 30.

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.

MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS® System.

MERS® System: The system of recording transfers of mortgages electronically maintained by MERS.

MIN: The Mortgage Identification Number for any MERS Mortgage Loan.

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: 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 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)

[reserved];

(xiv)

the purpose of the Mortgage Loan;

(xv)

with respect to each Adjustable Rate Mortgage Loan:

(a) the frequency of each Adjustment Date;

(b) the next Adjustment Date;

(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, a Park Granada Mortgage Loan or a Park Sienna Mortgage Loan;

(xvii)

the premium rate for any lender-paid mortgage insurance, if applicable; and

(xviii)

a code indicating whether the Mortgage Loan is a Fixed Rate Mortgage Loan or an Adjustable Rate Mortgage Loan.

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 Loan Number and Borrower Identification Mortgage Loan Schedule delivered pursuant to Section 2.01(f) and all the related Subsequent Mortgage Loans and Subsequent Mortgage Loan information included therein.

Mortgage Loans: Such of the mortgage loans transferred and assigned to the Trustee pursuant to the provisions hereof and any Subsequent Transfer Agreement as from time to time are held as part of the Trust Fund (including any REO Property), the mortgage loans so held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of title of the related Mortgaged Property. Any mortgage loan that was intended by the parties hereto to be transferred to the Trust Fund as indicated by such Mortgage Loan Schedule which is in fact not so transferred for any reason, including a breach of the representation contained in Section 2.02 hereof, shall continue to be a Mortgage Loan hereunder until the Purchase Price with respect thereto has been paid to the Trust Fund.

Mortgage Note: The original executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

Mortgage Pool: The aggregate of the Mortgage Loans identified in the Mortgage Loan Schedule.

Mortgage Rate: The annual rate of interest borne by a Mortgage Note from time to time.

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 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.

Offered Certificates: The Class A, Class M and Class A-R Certificates.

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 5.09063% 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.

One-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate that is fixed for 12 months after origination thereof before such Mortgage Rate becomes subject to adjustment.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Depositor or the Master Servicer, reasonably acceptable to each addressee of such opinion; provided that with respect to Section 6.04 or 10.01, or the interpretation or application of the REMIC Provisions, such counsel must (i) in fact be independent of the Depositor and the Master Servicer, (ii) not have any direct financial interest in the Depositor or the Master Servicer or in any affiliate of either and (iii) not be connected with the Depositor or the Master Servicer as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Optional Termination: The termination of the Trust Fund provided hereunder pursuant to the purchase of the Mortgage Loans pursuant to clause (a) of the first sentence of Section 9.01 hereof.

Optional Termination Date: The first Distribution Date on which the aggregate Stated Principal Balance of the Mortgage Loans is less than or equal to 10% of the sum of the aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans and the Pre-Funded Amount.

Original Value: The value of the property underlying a Mortgage Loan based, in the case of the purchase of the underlying Mortgaged Property, on the lower of an appraisal satisfactory to the Master Servicer or the sales price of such property or, in the case of a refinancing, on an appraisal satisfactory to the Master Servicer.

OTS: The Office of Thrift Supervision.

Outstanding: With respect to the Certificates as of any date of determination, all Certificates theretofore executed and authenticated under this Agreement except:

(i) Certificates theretofore canceled by the Trustee or delivered to the Trustee for cancellation; and

(ii) Certificates in exchange for which or in lieu of which other Certificates have been executed and delivered by the Trustee pursuant to this Agreement.

Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage Loan with a Stated Principal Balance greater than zero that was not the subject of a Principal Prepayment in full, and that did not become a Liquidated Mortgage Loan, prior to the end of the related Prepayment Period.

Overcollateralization Deficiency Amount: With respect to any Distribution Date, the amount, if any, by which the Overcollateralization Target Amount exceeds the Overcollateralized Amount on such Distribution Date (after giving effect to 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 2.00% 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 4.00% of the aggregate Stated Principal Balance of the Mortgage Loans for the current Distribution Date and (ii) the OC Floor; provided, however, that if a Trigger Event is in effect on any Distribution Date, the Overcollateralization Target Amount will be the Overcollateralization Target Amount as in effect for the prior Distribution Date.

Overcollateralized Amount: With respect to any Distribution Date, the amount, if any, by which (x) the sum of the aggregate Stated Principal Balance of the Mortgage Loans for such Distribution Date and any amount on deposit in the Pre-Funding Account exceeds (y) the aggregate Certificate Principal Balance of the Interest-Bearing Certificates as of such Distribution Date (after giving effect to distribution of the Principal Remittance Amounts to be made on such Distribution Date and, in the case of the Distribution Date immediately following the end of the Funding Period, any amounts to be released from the Pre-Funding Account).

Ownership Interest: As to any Certificate, any ownership interest in such Certificate including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial.

Park Granada: Park Granada LLC, a Delaware limited liability company, and its successors and assigns.

Park Granada Mortgage Loans: The Mortgage Loans identified as such on the Mortgage Loan Schedule for which Park Granada is the applicable Seller.

Park Monaco: Park Monaco Inc., a Delaware corporation, and its successors and assigns.

Park Monaco Mortgage Loans: The Mortgage Loans identified as such on the Mortgage Loan Schedule for which Park Monaco is the applicable Seller.

Park Sienna: Park Sienna LLC, a Delaware limited liability company, and its successors and assigns.

Park Sienna Mortgage Loans: The Mortgage Loans identified as such on the Mortgage Loan Schedule for which Park Sienna is the applicable Seller.

Pass-Through 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 Margin for such Class and Accrual Period and (y) the applicable Net Rate Cap for such Class and the related Distribution Date.

With respect to the Class C Certificate and any Distribution Date, a rate per annum equal to the percentage equivalent of a fraction, the numerator of which is (x) the sum of (i) 100% of the interest on REMIC 2 Regular Interest LT-P and REMIC 2 Regular Interest LT-AR and (ii) interest on the Uncertificated Principal Balance of each REMIC 2 Regular Interest listed in clause (y) at a rate equal to the related REMIC 2 Remittance Rate minus the Marker Rate and the denominator of which is (y) the aggregate Uncertificated Principal Balance of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-B and REMIC 2 Regular Interest LT-ZZ.

With respect to the Class SWAP-IO Interest, the Class SWAP-IO Interest shall not have a Pass-Through Rate, but interest for such Regular Interest and each Distribution Date shall be an amount equal to 100% of the amounts distributable to REMIC 2 Regular Interest II-IO for such 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 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 Moody’s is not a Rating Agency) are then rated one of the two highest long-term and the highest short-term ratings of each such Rating Agency for such securities, or such lower ratings as each Rating Agency has confirmed in writing is sufficient for the ratings originally assigned to the Certificates by such Rating Agency;

(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

(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 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 § 2510.3-101 or otherwise under ERISA) of such an employee benefit plan or plan.

Pool Stated Principal Balance: The aggregate of the Stated Principal Balances of the Mortgage Loans which were Outstanding Mortgage Loans.

Pre-Funded Amount: The amount deposited in the Pre-Funding Account on the Closing Date, which shall equal $0.

Pre-Funding Account: The separate Eligible Account created and maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee for the benefit of the Certificateholders and designated “The Bank of New York, in trust for registered holders of CWABS, Inc., Asset-Backed Certificates, Series 2006-BC2.” Funds in the Pre-Funding Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement and shall not be a part of any REMIC created hereunder, provided, however that any investment income earned from Permitted Investments made with funds in the Pre-Funding Account will be for the account of CHL.

Prepayment Assumption: The applicable rate of prepayment, as described in the Prospectus Supplement relating to the Certificates.

Prepayment Charge: With respect to any Mortgage Loan, the charges or premiums, if any, due in connection with a full or partial prepayment of such Mortgage Loan within the related Prepayment Charge Period in accordance with the terms thereof (other than any Master Servicer Prepayment Charge Payment Amount).

Prepayment Charge Period: With respect to any Mortgage Loan, the period of time during which a Prepayment Charge may be imposed.

Prepayment Charge Schedule: As of the Initial Cut-off Date with respect to each Initial Mortgage Loan and as of the Subsequent Cut-off Date with respect to each Subsequent Mortgage Loan, a list attached hereto as Schedule I (including the Prepayment Charge Summary attached thereto), setting forth the following information with respect to each Prepayment Charge:

(i) the Mortgage Loan identifying number;

(ii) a code indicating the type of Prepayment Charge;

(iii) the state of origination of the related Mortgage Loan;

(iv) the date on which the first monthly payment was due on the related Mortgage Loan;

(v) the term of the related Prepayment Charge; and

(vi) the principal balance of the related Mortgage Loan as of the Cut-off Date.

As of the Closing Date, the Prepayment Charge Schedule shall contain the necessary information for each Initial Mortgage Loan. The Prepayment Charge Schedule shall be amended by the Master Servicer upon the sale of any Subsequent Mortgage Loans to the Trust Fund. In addition, the Prepayment Charge Schedule shall be amended from time to time by the Master Servicer in accordance with the provisions of this Agreement and a copy of each related amendment shall be furnished by the Master Servicer to the Class P and Class C Certificateholders and the NIM Insurer.

Prepayment Interest Excess: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment during the period from the related Due Date to the end of the related Prepayment Period, any payment of interest received in connection therewith (net of any applicable Servicing Fee) representing interest accrued for any portion of such month of receipt.

Prepayment Interest Shortfall: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a partial Principal Prepayment or a Principal Prepayment in full during the period from the beginning of the related Prepayment Period to the Due Date in such Prepayment Period (other than a Principal Prepayment in full resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof) and for each Mortgage Loan that became a Liquidated Mortgage Loan during the related Due Period, the amount, if any, by which (i) one month’s interest at the applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan immediately prior to such prepayment (or liquidation) or in the case of a partial Principal Prepayment on the amount of such prepayment (or Liquidation Proceeds) exceeds (ii) the amount of interest paid or collected in connection with such Principal Prepayment or such Liquidation Proceeds.

Prepayment Period: As to any Distribution Date and related Due Date, the period beginning with the opening of business on the sixteenth day of the calendar month preceding the month in which such Distribution Date occurs (or, with respect to the first Distribution Date, the period beginning with the opening of business on the day immediately following the Initial Cut-off Date) and ending on the close of business on the fifteenth day of the month in which such Distribution Date occurs.

Prime Rate: The prime commercial lending rate of The Bank of New York, as publicly announced to be in effect from time to time. The Prime Rate shall be adjusted automatically, without notice, on the effective date of any change in such prime commercial lending rate. The Prime Rate is not necessarily The Bank of New York’s lowest rate of interest.

Principal Distribution Amount: With respect to each Distribution Date 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 2006-BC2”. Funds in the Principal Reserve Fund shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement.

Private Certificates: The Class B, Class C and Class P Certificates.

Prospectus: The prospectus dated February 23, 2006, relating to asset-backed securities to be sold by the Depositor.

Prospectus Supplement: The prospectus supplement dated May 26, 2006, relating to the public offering of the certain Classes of Certificates offered thereby.

PTCE 95-60: As defined in Section 5.02(b).

PUD: A Planned Unit Development.

Purchase Price: With respect to any Mortgage Loan (x) required to be (1) repurchased by a Seller or purchased by the Master Servicer, as applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased by the Depositor pursuant to Section 2.04 hereof, or (y) that the Master Servicer has a right to purchase pursuant to Section 3.12 hereof, an amount equal to the sum of (i) 100% of the unpaid principal balance (or, if such purchase or repurchase, as the case may be, is effected by the Master Servicer, the Stated Principal Balance) of the Mortgage Loan as of the date of such purchase, (ii) accrued interest thereon at the applicable Mortgage Rate (or, if such purchase or repurchase, as the case may be, is effected by the Master Servicer, at the Net Mortgage Rate) from (a) the date through which interest was last paid by the Mortgagor (or, if such purchase or repurchase, as the case may be, is effected by the Master Servicer, the date through which interest was last advanced and not reimbursed by the Master Servicer) to (b) the Due Date in the month in which the Purchase Price is to be distributed to Certificateholders and (iii) any costs, expenses and damages incurred by the Trust Fund resulting from any violation of any predatory or abusive lending law in connection with such Mortgage Loan.

R-1-R Interest: The uncertificated Residual Interest in REMIC 1.

R-2-R Interest: The uncertificated Residual Interest in REMIC 2.

R-3-R Interest: The uncertificated Residual Interest in REMIC 3.

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, designated by the Depositor, notice of which designation shall be given to the Trustee. References herein to a given rating category of a Rating Agency shall mean such rating category without giving effect to any modifiers.

Realized Loss: With respect to each Liquidated Mortgage Loan, an amount (not less than zero or more than the Stated Principal Balance of the Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated Principal Balance of such Liquidated Mortgage Loan as of the date of such liquidation, minus (ii) the Liquidation Proceeds, if any, received in connection with such liquidation during the month in which such liquidation occurs, to the extent applied as recoveries of principal of the Liquidated Mortgage Loan. With respect to each Mortgage Loan that has become the subject of a Deficient Valuation, (i) if the value of the related Mortgaged Property was reduced below the principal balance of the related Mortgage Note, the amount by which the value of the Mortgaged Property was reduced below the principal balance of the related Mortgage Note, and (ii) if the principal amount due under the related Mortgage Note has been reduced, the difference between the principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the principal balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect to each Mortgage Loan that has become the subject of a Debt Service Reduction and any Distribution Date, the amount, if any, by which the related Scheduled Payment was reduced.

Record Date: With respect to any Distribution Date and the Interest-Bearing Certificates, the Business Day immediately preceding such Distribution Date, or if such Certificates are no longer Book-Entry Certificates, the last Business Day of the month preceding the month of such Distribution Date. With respect to the Class A-R, Class C and Class P Certificates, the last Business Day of the month preceding the month of a Distribution Date.

Reference Bank Rate: With respect to any Accrual Period, the arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of 0.03125%) of the offered rates for United States dollar deposits for one month that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on the related Interest Determination Date to prime banks in the London interbank market for a period of one month in amounts approximately equal to the outstanding aggregate Certificate Principal Balance of the 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.

Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. §§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.

REMIC 1: The segregated pool of assets described in the Preliminary Statement.

REMIC 1 Group I Regular Interests: REMIC 1 Regular Interest I, REMIC 1 Regular Interest I-1-A through REMIC II Regular Interest I-35-B as designated in the Preliminary Statement hereto.

REMIC 1 Group II Regular Interests: REMIC 1 Regular Interest II, REMIC 1 Regular Interest II-1-A through REMIC II Regular Interest II-35-B as designated in the Preliminary Statement hereto.

REMIC 1 Regular Interest: Any of the separate non-certificated beneficial ownership interests in REMIC 1 issued hereunder and designated as a Regular Interest in REMIC 1. Each REMIC 1 Regular Interest shall accrue interest at the related REMIC 1 Remittance Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto. The designations for the respective REMIC 1 Regular Interests are set forth in the Preliminary Statement hereto. The REMIC 1 Regular Interests consist of the REMIC 1 Group I Regular Interests and the REMIC 1 Group II Regular Interests.

REMIC 1 Remittance Rate: With respect to each REMIC 1 Group I Regular Interest ending with the designation “A”, a per annum rate equal to the weighted average of the Mortgage Rates of the Group 1 Mortgage Loans less the sum of (i) the Servicing Fee Rate and (ii) the Trustee Fee Rate, multiplied by 2, subject to a maximum rate of 10.600%. With respect to each REMIC 1 Group I Regular Interest ending with the designation “B”, the greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the weighted average of the Mortgage Rates of the Group 1 Mortgage Loans less the sum of (i) the Servicing Fee Rate and (ii) the Trustee Fee Rate, over (ii) 10.600% and (y) 0.00%. With respect to each REMIC 1 Group II Regular Interest ending with the designation “A”, a per annum rate equal to the weighted average of the Mortgage Rates of the Group 2 Mortgage Loans less the sum of (i) the Servicing Fee Rate and (ii) the Trustee Fee Rate, multiplied by 2, subject to a maximum rate of 10.600%. With respect to each REMIC 1 Group II Regular Interest ending with the designation “B”, the greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the weighted average of the Mortgage Rates of the Group 2 Mortgage Loans less the sum of (i) the Servicing Fee Rate and (ii) the Servicing Fee Rate over (ii) 10.600% and (y) 0.00%. With respect to REMIC 1 Regular Interest I, the weighted average of the Mortgage Rates of the Group 1 Mortgage Loans. With respect to REMIC 1 Regular Interest II, the weighted average of the Mortgage Rates of the Group 2 Mortgage Loans.

REMIC 2: The segregated pool of assets described in the Preliminary Statement.

REMIC 2 Interest Loss Allocation Amount: With respect to any Distribution Date, an amount (subject to adjustment based on the actual number of days elapsed in the respective Interest Accrual Periods for the indicated Regular Interests for such Distribution Date) equal to (a) the product of (i) 50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) the REMIC 2 Remittance Rate for REMIC 2 Regular Interest LT-AA minus the Marker Rate, divided by (b) 12.

REMIC 2 Marker Allocation Percentage: 50% of any amount payable or loss attributable from the Mortgage Loans, which shall be allocated to REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-B, REMIC 2 Regular Interest LT-ZZ and REMIC 2 Regular Interest LT-P.

REMIC 2 Overcollateralization Target Amount: 0.50% of the Overcollateralization Target Amount.

REMIC 2 Overcollateralized Amount: With respect to any date of determination, (i) 0.50% of the aggregate Uncertificated Principal Balance of the REMIC 2 Regular Interests minus (ii) the aggregate Uncertificated Balance of REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-B, REMIC 2 Regular Interest LT-AR and REMIC 2 Regular Interest LT-P in each case as of such date of determination.

REMIC 2 Principal Loss Allocation Amount: With respect to any Distribution Date, an amount equal to the product of (i) 50% of the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) one minus a fraction, the numerator of which is two times the aggregate Uncertificated Principal Balance of REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-B, and the denominator of which is the aggregate Uncertificated Principal Balance of REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-B and REMIC 2 Regular Interest LT-ZZ.

REMIC 2 Regular Interest: Any of the separate non-certificated beneficial ownership interests in REMIC 2 issued hereunder and designated as a “regular interest” in REMIC 2. Each REMIC 2 Regular Interest shall accrue interest at the related REMIC 2 Remittance Rate in effect from time to time, and shall be entitled to distributions of principal (other than REMIC 2 Regular Interest II-IO), subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Balance as set forth in the Preliminary Statement hereto. The following is a list of each of the REMIC 2 Regular Interests: REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-B, REMIC 2 Regular Interest LT-ZZ, REMIC 2 Regular Interest LT-P, REMIC 2 Regular Interest LT-AR, REMIC 2 Regular Interest LT-XX, REMIC 2 Regular Interest LT-1SUB, REMIC 2 Regular Interest LT-1GRP, REMIC 2 Regular Interest LT-2SUB, REMIC 2 Regular Interest LT-2GRP and REMIC 2 Regular Interest II-IO.

REMIC 2 Remittance Rate: With respect to REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-ZZ, REMIC 2 Regular Interest LT-P, REMIC 2 Regular Interest LT-1SUB, REMIC 2 Regular Interest LT-2SUB and REMIC 2 Regular Interest LT-XX, a per annum rate (but not less than zero) equal to the weighted average of: (x) with respect to REMIC 1 Regular Interest I, REMIC 2 Regular Interest II and each REMIC 1 Regular Interest ending with the designation “B”, the weighted average of the REMIC 1 Remittance Rates for such REMIC 1 Regular Interests, weighted on the basis of the Uncertificated Principal Balances of such REMIC 1 Regular Interests for each such Distribution Date and (y) with respect to REMIC 1 Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for each such REMIC 1 Regular Interest listed below, weighted on the basis of the Uncertificated Principal Balances of each such REMIC 1 Regular Interest for each such Distribution Date:

Distribution Date	REMIC I Regular Interest	Rate
1	I-1-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
2	I-2-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-2-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A	REMIC II Remittance Rate
	II-1-A	REMIC II Remittance Rate
3	I-3-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-3-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A and I-2-A	REMIC II Remittance Rate
	II-1-A and II-2-A	REMIC II Remittance Rate
4	I-4-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-4-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-3-A	REMIC II Remittance Rate
	II-1-A through II-3-A	REMIC II Remittance Rate
5	I-5-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-5-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-4-A	REMIC II Remittance Rate
	II-1-A through II-4-A	REMIC II Remittance Rate
6	I-6-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-6-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-5-A	REMIC II Remittance Rate
	II-1-A through II-5-A	REMIC II Remittance Rate
7	I-7-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-7-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-6-A	REMIC II Remittance Rate
	II-1-A through II-6-A	REMIC II Remittance Rate
8	I-8-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-8-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-7-A	REMIC II Remittance Rate
	II-1-A through II-7-A	REMIC II Remittance Rate
9	I-9-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-9-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-8-A	REMIC II Remittance Rate
	II-1-A through II-8-A	REMIC II Remittance Rate
10	I-10-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-10-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-9-A	REMIC II Remittance Rate
	II-1-A through II-9-A	REMIC II Remittance Rate
11	I-11-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-11-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-10-A	REMIC II Remittance Rate
	II-1-A through II-10-A	REMIC II Remittance Rate
12	I-12-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-12-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-11-A	REMIC II Remittance Rate
	II-1-A through II-11-A	REMIC II Remittance Rate
13	I-13-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-13-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-12-A	REMIC II Remittance Rate
	II-1-A through II-12-A	REMIC II Remittance Rate
14	I-14-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-14-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-13-A	REMIC II Remittance Rate
	II-1-A through II-13-A	REMIC II Remittance Rate
15	I-15-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-15-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-14-A	REMIC II Remittance Rate
	II-1-A through II-14-A	REMIC II Remittance Rate
16	I-16-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-16-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-15-A	REMIC II Remittance Rate
	II-1-A through II-15-A	REMIC II Remittance Rate
17	I-17-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-17-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-16-A	REMIC II Remittance Rate
	II-1-A through II-16-A	REMIC II Remittance Rate
18	I-18-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-18-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-17-A	REMIC II Remittance Rate
	II-1-A through II-17-A	REMIC II Remittance Rate
19	I-19-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-19-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-18-A	REMIC II Remittance Rate
	II-1-A through II-18-A	REMIC II Remittance Rate
20	I-20-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-20-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-19-A	REMIC II Remittance Rate
	II-1-A through II-19-A	REMIC II Remittance Rate
21	I-21-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-21-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-20-A	REMIC II Remittance Rate
	II-1-A through II-20-A	REMIC II Remittance Rate
22	I-22-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-22-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-21-A	REMIC II Remittance Rate
	II-1-A through II-21-A	REMIC II Remittance Rate
23	I-23-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-23-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-22-A	REMIC II Remittance Rate
	II-1-A through II-22-A	REMIC II Remittance Rate
24	I-24-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-24-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-23-A	REMIC II Remittance Rate
	II-1-A through II-23-A	REMIC II Remittance Rate
25	I-25-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-25-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-24-A	REMIC II Remittance Rate
	II-1-A through II-24-A	REMIC II Remittance Rate
26	I-26-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-26-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-25-A	REMIC II Remittance Rate
	II-1-A through II-25-A	REMIC II Remittance Rate
27	I-27-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-27-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-26-A	REMIC II Remittance Rate
	II-1-A through II-26-A	REMIC II Remittance Rate
28	I-28-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-28-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-27-A	REMIC II Remittance Rate
	II-1-A through II-27-A	REMIC II Remittance Rate
29	I-29-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-29-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-28-A	REMIC II Remittance Rate
	II-1-A through II-28-A	REMIC II Remittance Rate
30	I-30-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-30-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-29-A	REMIC II Remittance Rate
	II-1-A through II-29-A	REMIC II Remittance Rate
31	I-31-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-31-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-30-A	REMIC II Remittance Rate
	II-1-A through II-30-A	REMIC II Remittance Rate
32	I-32-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-32-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-31-A	REMIC II Remittance Rate
	II-1-A through II-31-A	REMIC II Remittance Rate
33	I-33-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-33-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-32-A	REMIC II Remittance Rate
	II-1-A through II-32-A	REMIC II Remittance Rate
34	I-34-A and I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-34-A and II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-33-A	REMIC II Remittance Rate
	II-1-A through II-33-A	REMIC II Remittance Rate
35	I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-34-A	REMIC II Remittance Rate
	II-1-A through II-34-A	REMIC II Remittance Rate
thereafter	I-1-A through I-35-A	REMIC II Remittance Rate
	II-1-A through II-35-A	REMIC II Remittance Rate

With respect to REMIC 2 Regular Interest LT-1GRP, a per annum rate (but not less than zero) equal to the weighted average of (x) with respect to REMIC 1 Regular Interest I and REMIC 1 Group I Regular Interests ending with the designation “B”, the weighted average of the REMIC 1 Remittance Rates for such REMIC 1 Regular Interests, weighted on the basis of the Uncertificated Principal Balances of each such REMIC 1 Regular Interest for each such Distribution Date and (y) with respect to REMIC 1 Group I Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for such REMIC 1 Regular Interests listed below, weighted on the basis of the Uncertificated Principal Balances of each such REMIC 1 Regular Interest for each such Distribution Date:

Distribution Date	REMIC I Regular Interest	Rate
1	I-1-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate

2	I-2-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A	REMIC II Remittance Rate

3	I-3-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A and I-2-A	REMIC II Remittance Rate

4	I-4-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-3-A	REMIC II Remittance Rate

5	I-5-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-4-A	REMIC II Remittance Rate

6	I-6-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-5-A	REMIC II Remittance Rate

7	I-7-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-6-A	REMIC II Remittance Rate

8	I-8-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-7-A	REMIC II Remittance Rate

9	I-9-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-8-A	REMIC II Remittance Rate

10	I-10-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-9-A	REMIC II Remittance Rate

11	I-11-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-10-A	REMIC II Remittance Rate

12	I-12-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-11-A	REMIC II Remittance Rate

13	I-13-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-12-A	REMIC II Remittance Rate

14	I-14-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-13-A	REMIC II Remittance Rate

15	I-15-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-14-A	REMIC II Remittance Rate

16	I-16-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-15-A	REMIC II Remittance Rate

17	I-17-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-16-A	REMIC II Remittance Rate

18	I-18-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-17-A	REMIC II Remittance Rate

19	I-19-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-18-A	REMIC II Remittance Rate

20	I-20-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-19-A	REMIC II Remittance Rate

21	I-21-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-20-A	REMIC II Remittance Rate

22	I-22-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-21-A	REMIC II Remittance Rate

23	I-23-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-22-A	REMIC II Remittance Rate

24	I-24-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-23-A	REMIC II Remittance Rate

25	I-25-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-24-A	REMIC II Remittance Rate

26	I-26-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-25-A	REMIC II Remittance Rate

27	I-27-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-26-A	REMIC II Remittance Rate

28	I-28-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-27-A	REMIC II Remittance Rate

29	I-29-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-28-A	REMIC II Remittance Rate

30	I-30-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-29-A	REMIC II Remittance Rate

31	I-31-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-30-A	REMIC II Remittance Rate

32	I-32-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-31-A	REMIC II Remittance Rate

33	I-33-A through I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-32-A	REMIC II Remittance Rate

34	I-34-A and I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-33-A	REMIC II Remittance Rate

35	I-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	I-1-A through I-34-A	REMIC II Remittance Rate

thereafter	I-1-A through I-35-A	REMIC II Remittance Rate

With respect to REMIC 2 Regular Interest LT-2GRP, a per annum rate (but not less than zero) equal to the weighted average of (x) with respect to REMIC 1 Regular Interest II and REMIC 1 Group II Regular Interests ending with the designation “B”, the weighted average of the REMIC 1 Remittance Rates for such REMIC 1 Regular Interests, weighted on the basis of the Uncertificated Principal Balances of each such REMIC 1 Regular Interest for each such Distribution Date and (y) with respect to REMIC 1 Group II Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for such REMIC 1 Regular Interests listed below, weighted on the basis of the Uncertificated Principal Balances of each such REMIC 1 Regular Interest for each such Distribution Date:

Distribution Date	REMIC I Regular Interest	Rate
1	II-1-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate

2	II-2-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A	REMIC II Remittance Rate

3	II-3-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A and II-2-A	REMIC II Remittance Rate

4	II-4-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-3-A	REMIC II Remittance Rate

5	II-5-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-4-A	REMIC II Remittance Rate

6	II-6-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-5-A	REMIC II Remittance Rate

7	II-7-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-6-A	REMIC II Remittance Rate

8	II-8-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-7-A	REMIC II Remittance Rate

9	II-9-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-8-A	REMIC II Remittance Rate

10	II-10-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-9-A	REMIC II Remittance Rate

11	II-11-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-10-A	REMIC II Remittance Rate

12	II-12-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-11-A	REMIC II Remittance Rate

13	II-13-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-12-A	REMIC II Remittance Rate

14	II-14-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-13-A	REMIC II Remittance Rate

15	II-15-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-14-A	REMIC II Remittance Rate

16	II-16-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-15-A	REMIC II Remittance Rate

17	II-17-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-16-A	REMIC II Remittance Rate

18	II-18-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-17-A	REMIC II Remittance Rate

19	II-19-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-18-A	REMIC II Remittance Rate

20	II-20-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-19-A	REMIC II Remittance Rate

21	II-21-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-20-A	REMIC II Remittance Rate

22	II-22-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-21-A	REMIC II Remittance Rate

23	II-23-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-22-A	REMIC II Remittance Rate

24	II-24-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-23-A	REMIC II Remittance Rate

25	II-25-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-24-A	REMIC II Remittance Rate

26	II-26-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-25-A	REMIC II Remittance Rate

27	II-27-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-26-A	REMIC II Remittance Rate

28	II-28-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-27-A	REMIC II Remittance Rate

29	II-29-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-28-A	REMIC II Remittance Rate

30	II-30-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-29-A	REMIC II Remittance Rate

31	II-31-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-30-A	REMIC II Remittance Rate

32	II-32-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-31-A	REMIC II Remittance Rate

33	II-33-A through II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-32-A	REMIC II Remittance Rate

34	II-34-A and II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-33-A	REMIC II Remittance Rate

35	II-35-A	2 multiplied by Swap LIBOR, subject to a maximum rate of REMIC II Remittance Rate
	II-1-A through II-34-A	REMIC II Remittance Rate

thereafter	II-1-A through II-35-A	REMIC II Remittance Rate

With respect to REMIC 2 Regular Interest II-IO, and (i) the first Distribution Date through the 35^th Distribution Date, the excess of (x) the weighted average of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interests including the designation “A”, over (y) 2 multiplied by Swap LIBOR and (1) thereafter, 0.00%.

REMIC 2 Subordinate Allocation Percentage: 50% of any amount payable from or loss attributable to the Mortgage Loans, which shall be allocated to REMIC 2 Regular Interest LT-1SUB, REMIC 2 Regular Interest LT-1GRP, REMIC 2 Regular Interest LT-2SUB, REMIC 2 Regular Interest LT-2GRP and REMIC 2 Regular Interest LT-XX.

REMIC 2 Subordinated Balance Ratio: The ratio among the Uncertificated Principal Balances of each REMIC 2 Regular Interest ending with the designation “SUB,” equal to the ratio between, with respect to each such REMIC 2 Regular Interest, the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balance of Class A Certificates in the related Loan Group.

REMIC 3: The segregated pool of assets consisting of all of the REMIC 2 Regular Interests conveyed in trust to the Trustee, for the benefit of the Holders of the LIBOR Certificates, the Class SWAP-IO Interest, the Class P Certificate and the Class AR Certificate (in respect of the R-3-R Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.

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; and (x) 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 (x) of this definition would cause a proposed Replacement Mortgage Loan to fail to comply with one or more of clauses (i), (ii), (iv), (viii) and/or (ix) of this definition, then such proposed Replacement Mortgage Loan must comply with clause (x) 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 (x).

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.

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(g).

Request for Document Release: A Request for Document Release submitted by the Master Servicer to the Trustee, substantially in the form of Exhibit M.

Request for File Release: A Request for File Release submitted by the Master Servicer to the Trustee, substantially in the form of Exhibit N.

Required Carryover Reserve Fund Deposit: With respect to any Distribution Date, an amount equal to the excess of (i) $1,000 over (ii) the amount of funds on deposit in the Carryover Reserve Fund.

Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy that is required to be maintained from time to time under this Agreement.

Residual Interest: The sole class of “residual interests” in a REMIC within the meaning of Section 860G(a)(2) of the Code.

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 McGraw-Hill Companies, Inc. and its successors.

Sarbanes-Oxley Certification: As defined in Section 11.05.

Scheduled Payment: With respect to any Mortgage Loan, the scheduled monthly payment of principal and/or interest due on any Due Date on such Mortgage Loan which is payable by the related Mortgagor from time to time under the related Mortgage Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act or any similar state or local law; (b) without giving effect to any extension granted or agreed to by the Master Servicer pursuant to Section 3.05(a); and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.

Securities Act: The Securities Act of 1933, as amended.

Sellers: CHL, in its capacity as seller of the CHL Mortgage Loans to the Depositor, Park Monaco, in its capacity as seller of the Park Monaco Mortgage Loans to the Depositor, Park Granada, in its capacity as seller of the Park Granada Mortgage Loans to the Depositor and Park Sienna, in its capacity as seller of the Park Sienna Mortgage Loans to the Depositor.

Seller Shortfall Interest Requirement: With respect to the Distribution Date in each of June 2006, July 2006 and August 2006, is the sum of:

(a) the product of: (1) the excess of the aggregate Stated Principal Balance for such Distribution Date of all the Mortgage Loans in the Mortgage Pool (including the Subsequent Mortgage Loans, if any) owned by the Trust Fund at the beginning of the related Due Period, over the aggregate Stated Principal Balance for such Distribution Date of such Mortgage Loans (including such Subsequent Mortgage Loans, if any) that have a scheduled payment of interest due in the related Due Period, and (2) a fraction, the numerator of which is the weighted average Net Mortgage Rate of all the Mortgage Loans in the Mortgage Pool (including such Subsequent Mortgage Loans, if any) (weighted on the basis of the Stated Principal Balances thereof for such Distribution Date) and the denominator of which is 12; and

(b) the lesser of:

(i) the product of: (1) the amount on deposit in the Pre-Funding Account at the beginning of the related Due Period, and (2) a fraction, the numerator of which is the weighted average Net Mortgage Rate of the Mortgage Loans (including Subsequent Mortgage Loans, if any) owned by the Trust Fund at the beginning of the related Due Period (weighted on the basis of the Stated Principal Balances thereof for such Distribution Date) and the denominator of which is 12; and

(ii) the excess of (x) the amount of Current Interest and Interest Carry Forward Amount due and payable on the Interest-Bearing Certificates for such Distribution Date, over (y) the sum of (1) Interest Funds (less any portion of Interest Funds allocated to the Swap Trust to cover any Net Swap Payment due to the Swap Counterparty with respect to such Distribution Date) otherwise available to pay the amount specified in clause (b)(ii)(x) (after giving effect to the addition of any amounts in clause (a) of this definition of Seller Shortfall Interest Requirement to Interest Funds for such Distribution Date) and (2) any Net Swap Payment received by the Swap Contract Administrator from the Swap Counterparty for such Distribution Date and allocated to the Swap Trust to pay Current Interest and Interest Carry Forward Amounts on the Interest-Bearing Certificates for such Distribution Date.

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 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.

Startup Date: The Closing Date is hereby designated as the “startup day” of the Trust Fund within the meaning of Section 860G(a)(9) of the Code.

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 and (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. 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 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 June 2009 and (y) the first Distribution Date on which the aggregate Certificate Principal Balance of the Senior Certificates (after calculating anticipated distributions on such Distribution Date) is less than or equal to 56.00% of the aggregate Stated Principal Balance of the Mortgage Loans for such Distribution Date.

Stepdown Target Subordination Percentage: For each Class of Subordinate Certificates, the respective percentage indicated in the following table:

	Stepdown Target Subordination Percentage
Class M-1	36.40%
Class M-2	29.20%
Class M-3	25.00%
Class M-4	21.20%
Class M-5	17.40%
Class M-6	14.10%
Class M-7	11.20%
Class M-8	8.40%
Class M-9	6.30%
Class B	4.00%

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, 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 A Principal Distribution Target Amount for such Distribution Date), (b) the aggregate Certificate Principal Balance of any Class(es) of Subordinate Certificates that are senior to the subject Class (in each case, after taking into account distribution of the Subordinate Class Principal Distribution Amount(s) for such senior Class(es) of Certificates for such Distribution Date), and (c) the Certificate Principal Balance of the subject Class of Subordinate Certificates immediately prior to such Distribution Date over (2) the lesser of (a) the product of (x) 100% minus the Stepdown Target Subordination Percentage for the subject Class of Certificates and (y) the aggregate Stated Principal Balance of the Mortgage Loans for such Distribution Date and (b) the aggregate Stated Principal Balance of the Mortgage Loans for such Distribution Date minus the OC Floor; provided, however, that if such Class of Subordinate Certificates is the only Class of Subordinate Certificates outstanding on such Distribution Date, that Class will be entitled to receive the entire remaining Principal Distribution Amount 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 and the amount on deposit in the Pre-Funding Account in respect of that Loan Group over the outstanding Certificate Principal Balance of the related Senior Certificates.

Subsequent Certificate Account Deposit: With respect to any Subsequent Transfer Date, an amount equal to the aggregate of all amounts in respect of (i) principal of the related Subsequent Mortgage Loans due after the related Subsequent Cut-off Date and received by the Master Servicer on or before such Subsequent Transfer Date and not applied in computing the Cut-off Date Principal Balance thereof and (ii) interest on the such Subsequent Mortgage Loans due after such Subsequent Cut-off Date and received by the Master Servicer on or before the Subsequent Transfer Date.

Subsequent Cut-off Date: In the case of any Subsequent Mortgage Loan, the later of (x) the first day of the month of the related Subsequent Transfer Date and (y) the date of origination of such Subsequent Mortgage Loan.

Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the Trustee on a Subsequent Transfer Date, and listed on the related Loan Number and Borrower Identification Mortgage Loan Schedule delivered pursuant to Section 2.01(f). When used with respect to a single Subsequent Transfer Date, “Subsequent Mortgage Loan” shall mean a Subsequent Mortgage Loan conveyed to the Trustee on such Subsequent Transfer Date.

Subsequent 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.

Subsequent Transfer Agreement: A Subsequent Transfer Agreement substantially in the form of Exhibit P hereto, executed and delivered by the Sellers, the Depositor and the Trustee as provided in Section 2.01(d).

Subsequent Transfer Date: For any Subsequent Transfer Agreement, the “Subsequent Transfer Date” identified in such Subsequent Transfer Agreement; provided, however, the Subsequent Transfer Date for any Subsequent Transfer Agreement must be a Business Day and may not be a date earlier than the date on which the Subsequent Transfer Agreement is executed and delivered by the parties thereto pursuant to Section 2.01(d).

Subsequent Transfer Date Purchase Amount: With respect to any Subsequent Transfer Date, the “Subsequent Transfer Date Purchase Amount” identified in the related Subsequent Transfer Agreement which shall be an estimate of the aggregate Stated Principal Balances of the Subsequent Mortgage Loans identified in such Subsequent Transfer Agreement.

Subsequent Transfer Date Transfer Amount: With respect to any Subsequent Transfer Date, an amount equal to the lesser of (i) the aggregate Stated Principal Balances as of the related Subsequent Cut-off Dates of the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, as listed on the related Loan Number and Borrower Identification Mortgage Loan Schedule delivered pursuant to Section 2.01(f) and (ii) the amount on deposit in the Pre-Funding Account.

Subservicer: As defined in Section 3.02(a).

Subservicing Agreement: As defined in Section 3.02(a).

Substitution Adjustment Amount: The meaning ascribed to such term pursuant to Section 2.03(g).

Substitution Amount: With respect to any Mortgage Loan substituted pursuant to Section 2.03(g), 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.

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 Novation 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.

Swap Contract Administrator: The Bank of New York, in its capacity as swap contract administrator under the Swap Contract Administration Agreement.

Swap Contract Novation 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 Counterparty: Lehman Brothers Special Financing Inc. and its successors.

Swap Contract Termination Date: The Distribution Date in April 2009.

Swap Counterparty Trigger Event: A Swap Termination Payment that is triggered upon (i) an “Event of Default” under the Swap Contract with respect to which the Swap Counterparty is the sole “Defaulting Party” (as defined in the Swap Contract) or (ii) a “Termination Event” or “Additional Termination Event” under the Swap Contract with respect to which the Swap Counterparty is the sole “Affected Party” (as defined in the Swap Contract).

Swap Guarantee: The guaranty, dated as of May 30, 2006, by the Swap Guarantor in favor of the Swap Contract Administrator, a form of which is attached hereto as Exhibit V-3.

Swap Guarantor: Lehman Brothers Holdings Inc.

Swap LIBOR: A per annum rate equal to the floating rate payable by the Swap Counterparty to the Swap Contract Administrator under the Swap Contract.

Swap Termination Payment: The payment payable to either party under the Swap Contract due to an early termination of the Swap Contract.

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 § 1.860F-4(d) and Treasury regulation § 301.6231(a)(7)-1. Initially, this person shall be the Trustee.

Tax Matters Person Certificate: With respect to the REMIC 1, REMIC 2 and REMIC 3, the Class A-R Certificate with a Denomination of $0.05 and in the form of Exhibit E hereto.

Ten-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate that is fixed for 120 months after origination thereof before such Mortgage Rate becomes subject to adjustment.

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.

Transaction Documents: This Agreement, the Swap Contract, the Swap Contract Administration Agreement and any other document or agreement entered into in connection with the Trust Fund, the Certificates or the Mortgage Loans.

Transfer: Any direct or indirect transfer or sale of any Ownership Interest in a Certificate.

Transfer Affidavit: As defined in Section 5.02(c).

Transferor Certificate: As defined in Section 5.02(b).

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 Pre-Funding 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.

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.

Uncertificated Principal Balance: The amount of any REMIC Regular Interest (other than REMIC 2 Regular Interest II-IO) outstanding as of any date of determination. As of the Closing Date, the Uncertificated Principal Balance of each REMIC Regular Interest (other than REMIC 2 Regular Interest II-IO) shall equal the amount set forth in the Preliminary Statement hereto as its initial uncertificated balance. On each Distribution Date, the Uncertificated Principal Balance of each REMIC Regular Interest (other than REMIC 2 Regular Interest II-IO) shall be reduced by all distributions of principal made on such REMIC Regular Interest on such Distribution Date pursuant to Section 4.10 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 4.11. The Uncertificated Principal Balance of REMIC 2 Regular Interest LT-ZZ shall be increased by interest deferrals as provided in Section 4.10. The Uncertificated Principal Balance of each REMIC Regular Interest shall never be less than zero.

Uncertificated Interest: With respect to any REMIC Regular Interest for any Distribution Date, one month’s interest at the REMIC Remittance Rate applicable to such REMIC Regular Interest for such Distribution Date, accrued on the Uncertificated Principal Balance or Uncertificated Notional Amount thereof immediately prior to such Distribution Date. Uncertificated Interest in respect of any REMIC Regular Interest shall accrue on the basis of a 360-day year consisting of twelve 30-day months. Uncertificated Interest with respect to each Distribution Date, as to any REMIC Regular Interest, shall be reduced by an amount equal to the sum of the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to the extent not covered by payments of Compensating Interest pursuant to Section 3.05(b), if any, allocated, in each case, to such REMIC Regular Interest pursuant to Section 4.10. In addition, Uncertificated Interest with respect to each Distribution Date, as to any REMIC Regular Interest shall be reduced by Realized Losses, if any, allocated to such REMIC Regular Interest pursuant to Section 4.11.

Uncertificated Notional Amount: With respect to REMIC 2 Regular Interest II-IO and each Distribution Date listed below, the aggregate Uncertificated Principal Balance of the REMIC 2 Regular Interests ending with the designation “A” listed below:

Distribution Date		REMIC II Regular Interests
1		I-1-A through I-35-A and II-1-A through II-35-A
2		I-2-A through I-35-A and II-2-A through II-35-A
3		I-3-A through I-35-A and II-3-A through II-35-A
4		I-4-A through I-35-A and II-4-A through II-35-A
5		I-5-A through I-35-A and II-5-A through II-35-A
6		I-6-A through I-35-A and II-6-A through II-35-A
7		I-7-A through I-35-A and II-7-A through II-35-A
8		I-8-A through I-35-A and II-8-A through II-35-A
9		I-9-A through I-35-A and II-9-A through II-35-A
10		I-10-A through I-35-A and II-10-A through II-35-A
11		I-11-A through I-35-A and II-11-A through II-35-A
12		I-12-A through I-35-A and II-12-A through II-35-A
13		I-13-A through I-35-A and II-13-A through II-35-A
14		I-14-A through I-35-A and II-14-A through II-35-A
15		I-15-A through I-35-A and II-15-A through II-35-A
16		I-16-A through I-35-A and II-16-A through II-35-A
17		I-17-A through I-35-A and II-17-A through II-35-A
18		I-18-A through I-35-A and II-18-A through II-35-A
19		I-19-A through I-35-A and II-19-A through II-35-A
20		I-20-A through I-35-A and II-20-A through II-35-A
21		I-21-A through I-35-A and II-21-A through II-35-A
22		I-22-A through I-35-A and II-22-A through II-35-A
23		I-23-A through I-35-A and II-23-A through II-35-A
24		I-24-A through I-35-A and II-24-A through II-35-A
25		I-25-A through I-35-A and II-25-A through II-35-A
26		I-26-A through I-35-A and II-26-A through II-35-A
27		I-27-A through I-35-A and II-27-A through II-35-A
28		I-28-A through I-35-A and II-28-A through II-35-A
29		I-29-A through I-35-A and II-29-A through II-35-A
30		I-30-A through I-35-A and II-30-A through II-35-A
31		I-31-A through I-35-A and II-31-A through II-35-A
32		I-32-A through I-35-A and II-32-A through II-35-A
33		I-33-A through I-35-A and II-33-A through II-35-A
34		I-34-A and I-35-A and II-34-A and II-35-A
35		I-35-A and II-35-A
thereafter		$0.00

With respect to the Class IO Interest and any Distribution Date, an amount equal to the Uncertificated Notional Amount of the REMIC 2 Regular Interest II-IO.

Underwriter’s Exemption: Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any substantially similar administrative exemption granted by the U.S. Department of Labor.

Underwriter: Countrywide Securities Corporation.

Unpaid Realized Loss Amount: For any Class of Certificates and any Distribution Date, (x) the portion of the aggregate Applied Realized Loss Amount previously allocated to that Class remaining unpaid from prior Distribution Dates 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.

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 “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; and (g) references to any Person include that Person’s permitted successors and assigns.

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 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 Novation Agreement.

(b) Subject to the execution and delivery of the related Subsequent Transfer Agreement as provided by Section 2.01(d) and the terms and conditions of this Agreement, each Seller sells, transfers, assigns, sets over and otherwise conveys to the Depositor, without recourse, on each Subsequent Transfer Date, all the right, title and interest of such Seller in and to the related Subsequent Mortgage Loans, including all interest and principal received and receivable by such Seller on or with respect to such Subsequent Mortgage Loans after the related Subsequent Cut-off Date (to the extent not applied in computing the Cut-off Date Principal Balance thereof) or deposited into the Certificate Account by the Master Servicer on behalf of such Seller as part of any related Subsequent Certificate Account Deposit as provided in this Agreement, other than principal due on such Subsequent Mortgage Loans on or prior to the related Subsequent Cut-off Date and interest accruing prior to the related Subsequent Cut-off Date.

Immediately upon the conveyance of the Subsequent Mortgage Loans referred to in the preceding paragraph, the Depositor sells, transfers, assigns, sets over and otherwise conveys to the Trustee for benefit of the Certificateholders, without recourse, all right title and interest in the Subsequent Mortgage Loans.

(c) Each Seller has entered into this Agreement in consideration for the purchase of the Mortgage Loans by the Depositor and has agreed to take the actions specified herein. The Depositor, concurrently with the execution and delivery of this Agreement, hereby sells, transfers, assigns and otherwise conveys to the Trustee for the use and benefit of the Certificateholders, without recourse, all right title and interest in the portion of the Trust Fund not otherwise conveyed to the Trustee pursuant to Section 2.01(a) or (b).

(d) On any Business Day during the Funding Period designated by CHL to the Trustee, the Sellers, the Depositor and the Trustee shall complete, execute and deliver a Subsequent Transfer Agreement. After the execution and delivery of such Subsequent Transfer Agreement, on the Subsequent Transfer Date, the Trustee shall set aside in the Pre-Funding Account an amount equal to the related Subsequent Transfer Date Purchase Amount.

(e) The transfer of Subsequent Mortgage Loans on the Subsequent Transfer Date is subject to the satisfaction of each of the following conditions:

(1) the Trustee and the Underwriter will be provided Opinions of Counsel addressed to the Rating Agencies as with respect to the sale of the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date (such opinions being substantially similar to the opinions delivered on the Closing Date to the Rating Agencies with respect to the sale of the Initial Mortgage Loans on the Closing Date), to be delivered as provided in Section 2.01(f);

(2) the execution and delivery of such Subsequent Transfer Agreement or conveyance of the related Subsequent Mortgage Loans does not result in a reduction or withdrawal of any ratings assigned to the Certificates by the Rating Agencies;

(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(g) of this Agreement of the applicable Seller, to cure, repurchase or replace such Subsequent Mortgage Loan shall constitute the sole remedy against such Seller respecting such breach available to Certificateholders, the Depositor or the Trustee;

(5) the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date were selected in a manner reasonably believed not to be adverse to the interests of the Certificateholders;

(6) no Subsequent Mortgage Loan conveyed on such Subsequent Transfer Date was 30 or more days delinquent;

(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 the percentage of Mortgage Loans secured by Mortgaged Properties located in the State of California, which will not exceed 50% of the Mortgage Pool and the percentage of mortgage loans in the Credit Grade Categories of “C” or below, which will not exceed 10% 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 or Range
Average Stated Principal Balance	$222,932	10%
Weighted Average Mortgage Rate	7.370%	0.10%
Weighted Average Original Loan-to-Value Ratio	81.90%	3%
Weighted Average Remaining Term to Maturity	357 months	3 months
Weighted Average Credit Bureau Risk Score	617	5 points

Loan Group 2
Characteristic	Value	Permitted Variance or Range
Average Stated Principal Balance	$238,974	10%
Weighted Average Mortgage Rate	7.717%	0.10%
Weighted Average Original Loan-to-Value Ratio	78.55%	3%
Weighted Average Remaining Term to Maturity	358 months	3 months
Weighted Average Credit Bureau Risk Score	633	5 points

(8) none of the Sellers or the Depositor is insolvent and neither of the Sellers nor the Depositor will be rendered insolvent by the conveyance of Subsequent Mortgage Loans on such Subsequent Transfer Date; and

(9) the Trustee and the Underwriter will be provided with an Opinion of Counsel, which Opinion of Counsel shall not be at the expense of either the Trustee or the Trust Fund, addressed to the Trustee, to the effect that such purchase of Subsequent Mortgage Loans will not (i) result in the imposition of the tax on “prohibited transactions” on the Trust Fund or contributions after the Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any REMIC formed hereunder to fail to qualify as a REMIC, such opinion to be delivered as provided in Section 2.01(f).

The Trustee shall not be required to investigate or otherwise verify compliance with these conditions, except for its own receipt of documents specified above, and shall be entitled to rely on the required Officer’s Certificate.

(f) Within six Business Days after each Subsequent Transfer Date, upon (1) delivery to the Trustee by the Depositor of the Opinions of Counsel referred to in Section 2.01(e)(1) and (e)(9), (2) delivery to the Trustee by CHL (on behalf of each Seller) of a Loan Number and Borrower Identification Mortgage Loan Schedule reflecting the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date 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), the Trustee shall pay the applicable Seller the Subsequent Transfer Date Transfer Amount from such funds that were set aside in the Pre-Funding Account pursuant to Section 2.01(d). The positive difference, if any, between the Subsequent Transfer Date Transfer Amount and the Subsequent Transfer Date Purchase Amount shall be re-invested by the Trustee in the Pre-Funding Account.

The Trustee shall not be required to investigate or otherwise verify compliance with the conditions set forth in the preceding paragraph, except for its own receipt of documents specified above, and shall be entitled to rely on the required Officer’s Certificate.

Within thirty days after each Subsequent Transfer Date, the Depositor shall deliver to the Trustee a letter of a nationally recognized firm of independent public accountants stating whether or not the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date conform to the characteristics described in Section 2.01(e)(6) and (7).

(g) In connection with the transfer and assignment of each Mortgage Loan, the Depositor has delivered to, and deposited with, the Trustee (or, in the case of the Delay Delivery Mortgage Loans, will deliver to, and deposit with, the Trustee within the time periods specified in the definition of Delay Delivery Mortgage Loans) (except as provided in clause (vi) below) for the benefit of the Certificateholders, the following documents or instruments with respect to each such Mortgage Loan so assigned (with respect to each Mortgage Loan, clause (i) through (vi) below, together, the “Mortgage File” for each such Mortgage Loan):

(i) the original Mortgage Note, endorsed by manual or facsimile signature in blank in the following form: “Pay to the order of ________________ without recourse”, with all intervening endorsements that show a complete chain of endorsement from the originator to the Person endorsing the Mortgage Note (each such endorsement being sufficient to transfer all right, title and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note), or, if the original Mortgage Note has been lost or destroyed and not replaced, an original lost note affidavit, stating that the original Mortgage Note was lost or destroyed, together with a copy of the related Mortgage Note and all such intervening endorsements;

(ii) in the case of each Mortgage Loan that is not a MERS Mortgage Loan, the original recorded Mortgage or a copy of such Mortgage, with recording information, and in the case of each MERS Mortgage Loan, the original Mortgage or a copy of such Mortgage, with recording information, noting the presence of the MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon, or a copy of the Mortgage certified by the public recording office in which such Mortgage has been recorded;

(iii) in the case of each Mortgage Loan that is not a MERS Mortgage Loan, a duly executed assignment of the Mortgage to “Asset-Backed Certificates, Series 2006-BC2, CWABS, Inc., by The Bank of New York, a New York banking corporation, as trustee under the Pooling and Servicing Agreement dated as of May 1, 2006, without recourse” or a copy of such assignment, with recording information, (each such assignment, when duly and validly completed, to be in recordable form and sufficient to effect the assignment of and transfer to the assignee thereof, under the Mortgage to which such assignment relates);

(iv) the original recorded assignment or assignments of the Mortgage or a copy of such assignments, with recording information, together with all interim recorded assignments of such Mortgage or a copy of such assignments, with recording information (in each case noting the presence of a MIN in the case of each MERS Mortgage Loan);

(v) the original or copies of each assumption, modification, written assurance or substitution agreement, if any; and

(vi) the original or duplicate original lender’s title policy or a copy of lender’s title policy or a printout of the electronic equivalent and all riders thereto or, in the event such original title policy has not been received from the insurer, such original or duplicate original lender’s title policy and all riders thereto shall be delivered within one year of the Closing Date.

In addition, in connection with the assignment of any MERS Mortgage Loan, each Seller agrees that it will cause, at such Seller’s own expense, the MERS® System to indicate (and provide evidence to the Trustee that it has done so) that such Mortgage Loans have been assigned by such Seller to the Trustee in accordance with this Agreement for the benefit of the Certificateholders by including (or deleting, in the case of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code “[IDENTIFY TRUSTEE SPECIFIC CODE]” in the field “[IDENTIFY THE FIELD NAME FOR TRUSTEE]” which identifies the Trustee and (b) the code “[IDENTIFY SERIES SPECIFIC CODE NUMBER]” in the field “Pool Field” which identifies the series of the Certificates issued in connection with such Mortgage Loans. The Sellers further agree that they will not, and will not permit the Master Servicer to, and the Master Servicer agrees that it will not, alter the codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement.

In the event that in connection with any Mortgage Loan that is not a MERS Mortgage Loan a Seller cannot deliver the original recorded Mortgage or all interim recorded assignments of the Mortgage satisfying the requirements of clause (ii), (iii) or (iv) concurrently with the execution and delivery hereof, such Seller shall deliver or cause to be delivered to the Trustee a true copy of such Mortgage and of each such undelivered interim assignment of the Mortgage each certified by such Seller, the applicable title company, escrow agent or attorney, or the originator of such Mortgage, as the case may be, to be a true and complete copy of the original Mortgage or assignment of Mortgage submitted for recording. For any such Mortgage Loan that is not a MERS Mortgage Loan each Seller shall promptly deliver or cause to be delivered to the Trustee such original Mortgage and such assignment or assignments with evidence of recording indicated thereon upon receipt thereof from the public recording official, or a copy thereof, certified, if appropriate, by the relevant recording office, but in no event shall any such delivery be made later than 270 days following the Closing Date; provided that in the event that by such date such Seller is unable to deliver or cause to be delivered each such Mortgage and each interim assignment by reason of the fact that any such documents have not been returned by the appropriate recording office, or, in the case of each interim assignment, because the related Mortgage has not been returned by the appropriate recording office, such Seller shall deliver or cause to be delivered such documents to the Trustee as promptly as possible upon receipt thereof. If the public recording office in which a Mortgage or interim assignment thereof is recorded retains the original of such Mortgage or assignment, a copy of the original Mortgage or assignment so retained, with evidence of recording thereon, certified to be true and complete by such recording office, shall satisfy a Seller’s obligations in Section 2.01. If any document submitted for recording pursuant to this Agreement is (x) lost prior to recording or rejected by the applicable recording office, the applicable Seller shall immediately prepare or cause to be prepared a substitute and submit it for recording, and shall deliver copies and originals thereof in accordance with the foregoing or (y) lost after recording, the applicable Seller shall deliver to the Trustee a copy of such document certified by the applicable public recording office to be a true and complete copy of the original recorded document. Each Seller shall promptly forward or cause to be forwarded to the Trustee (x) from time to time additional original documents evidencing an assumption or modification of a Mortgage Loan and (y) any other documents required to be delivered by the Depositor or the Master Servicer to the Trustee within the time periods specified in this Section 2.01.

With respect to each Mortgage Loan other than a MERS Mortgage Loan as to which the related Mortgaged Property and Mortgage File are located in (a) the State of California or (b) any other jurisdiction under the laws of which the recordation of the assignment specified in clause (iii) above is not necessary to protect the Trustee’s and the Certificateholders’ interest in the related Mortgage Loan, as evidenced by an Opinion of Counsel delivered by CHL to the Trustee and a copy to the Rating Agencies, in lieu of recording the assignment specified in clause (iii) above, the applicable Seller may deliver an unrecorded assignment in blank, in form otherwise suitable for recording to the Trustee; provided that if the related Mortgage has not been returned from the applicable public recording office, such assignment, or any copy thereof, of the Mortgage may exclude the information to be provided by the recording office. As to any Mortgage Loan other than a MERS Mortgage Loan, the procedures of the preceding sentence shall be applicable only so long as the related Mortgage File is maintained in the possession of the Trustee in the State or jurisdiction described in such sentence. In the event that with respect to Mortgage Loans other than MERS Mortgage Loans (I) any Seller, the Depositor, the Master Servicer or the NIM Insurer gives written notice to the Trustee that recording is required to protect the right, title and interest of the Trustee on behalf of the Certificateholders in and to any Mortgage Loan, (II) a court recharacterizes any sale of the Mortgage Loans as a financing, or (III) as a result of any change in or amendment to the laws of the State or jurisdiction described in the first sentence of this paragraph or any applicable political subdivision thereof, or any change in official position regarding application or interpretation of such laws, including a holding by a court of competent jurisdiction, such recording is so required, the Trustee shall complete the assignment in the manner specified in clause (iii) above and CHL shall submit or cause to be submitted for recording as specified above or, should CHL fail to perform such obligations, the Trustee shall cause the Master Servicer, at the Master Servicer’s expense, to cause each such previously unrecorded assignment to be submitted for recording as specified above. In the event a Mortgage File is released to the Master Servicer as a result of the Master Servicer’s having completed a Request for Document Release, the Trustee shall complete the assignment of the related Mortgage in the manner specified in clause (iii) above.

So long as the Trustee or its agent maintains an office in the State of California, the Trustee or its agent shall maintain possession of and not remove or attempt to remove from the State of California any of the Mortgage Files as to which the related Mortgaged Property is located in such State. In the event that a Seller fails to record an assignment of a Mortgage Loan as herein provided within 90 days of notice of an event set forth in clause (I), (II) or (III) of the preceding paragraph, the Master Servicer shall prepare and, if required hereunder, file such assignments for recordation in the appropriate real property or other records office. Each Seller hereby appoints the Master Servicer (and any successor servicer hereunder) as its attorney-in-fact with full power and authority acting in its stead for the purpose of such preparation, execution and filing.

In the case of Mortgage Loans that become the subject of a Principal Prepayment between the Closing Date (in the case of Initial Mortgage Loans) or related Subsequent Transfer Date (in the case of Subsequent Mortgage Loans) and the Cut-off Date, CHL shall deposit or cause to be deposited in the Certificate Account the amount required to be deposited therein with respect to such payment pursuant to Section 3.05 hereof.

Notwithstanding anything to the contrary in this Agreement, within thirty days after the Closing Date (in the case of Initial Mortgage Loans) or within twenty days after the related Subsequent Transfer Date (in the case of Subsequent Mortgage Loans), CHL (on behalf of each Seller) shall either (i) deliver to the Trustee the Mortgage File as required pursuant to this Section 2.01 for each Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay Delivery Mortgage Loan or (B) substitute the Delay Delivery Mortgage Loan for a Replacement Mortgage Loan, which repurchase or substitution shall be accomplished in the manner and subject to the 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 Trust Fund pursuant to Sections 2.01(a) or (b).

Section 2.02 Acceptance by Trustee of the Mortgage Loans.

(a) The Trustee acknowledges receipt, subject to the limitations contained in and any exceptions noted in the Initial Certification in the form annexed hereto as Exhibit G-1 and in the list of exceptions attached thereto, of the documents referred to in clauses (i) and (iii) of Section 2.01(g) above with respect to the Initial Mortgage Loans and all other assets included in the Trust Fund and declares that it holds and will hold such documents and the other documents delivered to it constituting the Mortgage Files, and that it holds or will hold such other assets included in the Trust Fund, in trust for the exclusive use and benefit of all present and future Certificateholders.

The Trustee agrees to execute and deliver on the Closing Date to the Depositor, the Master Servicer and CHL (on behalf of each Seller) an Initial Certification substantially in the form annexed hereto as Exhibit G-1 to the effect that, as to each Initial Mortgage Loan listed in the Mortgage Loan Schedule (other than any Initial Mortgage Loan paid in full or any Initial Mortgage Loan specifically identified in such certification as not covered by such certification), the documents described in Section 2.01(g)(i) and, in the case of each Initial Mortgage Loan that is not a MERS Mortgage Loan, the documents described in Section 2.01(g)(iii) with respect to such Initial Mortgage Loans as are in the Trustee’s possession and based on its review and examination and only as to the foregoing documents, such documents appear regular on their face and relate to such Initial Mortgage Loan. The Trustee agrees to execute and deliver within 30 days after the Closing Date to the Depositor, the Master Servicer and CHL (on behalf of each Seller) an Interim Certification substantially in the form annexed hereto as Exhibit G-2 to the effect that, as to each Initial Mortgage Loan listed in the Mortgage Loan Schedule (other than any Initial Mortgage Loan paid in full or any Initial Mortgage Loan specifically identified in such certification as not covered by such certification) all documents required to be delivered to the Trustee pursuant to the Agreement with respect to such Initial Mortgage Loans are in its possession (except those documents described in Section 2.01(g)(vi)) and based on its review and examination and only as to the foregoing documents, (i) such documents appear regular on their face and relate to such Initial Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi), (viii), (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 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 Trustee shall review each Mortgage File with respect to the Initial Mortgage Loans to determine that such Mortgage File contains the following documents:

(ii) in the case of each Initial Mortgage Loan that is not a MERS Mortgage Loan, the original recorded Mortgage or a copy of such Mortgage, with recording information, and in the case of each Initial Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage or a copy of such Mortgage, with recording information, noting the presence of the MIN of the Initial Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan if the Initial Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon, or a copy of the Mortgage certified by the public recording office in which Mortgage has been recorded;

(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;

(v) the original or copies of each assumption, modification, written assurance or substitution agreement, if any; and

(vi) the original or duplicate original lender’s title policy or a copy of lender’s title policy or a printout of the electronic equivalent and all riders thereto.

If, in the course of such review, the Trustee finds any document or documents constituting a part of such Mortgage File that do not meet the requirements of clauses (i)-(iv) and (vi) above, the Trustee shall include such exceptions in such Final Certification (and the Trustee shall state in such Final Certification whether any Mortgage File does not then include the original or duplicate original lender’s title policy or a printout of the electronic equivalent and all riders thereto). If the public recording office in which a Mortgage or assignment thereof is recorded retains the original of such Mortgage or assignment, a copy of the original Mortgage or assignment so retained, with evidence of recording thereon, certified to be true and complete by such recording office, shall be deemed to satisfy the requirements of clause (ii), (iii) or (iv) above, as applicable. CHL shall promptly correct or cure such defect referred to above within 90 days from the date it was so notified of such defect and, if CHL does not correct or cure such defect within such period, CHL shall either (A) if the time to cure such defect expires prior to the end of the second anniversary of the Closing Date, substitute for the related Initial Mortgage Loan a Replacement Mortgage Loan, which substitution shall be accomplished in the manner and subject to the conditions set forth in Section 2.03, or (B) purchase such Initial Mortgage Loan from the Trust Fund within 90 days from the date CHL was notified of such defect in writing at the Purchase Price of such Initial Mortgage Loan; provided that any such substitution pursuant to (A) above or repurchase pursuant to (B) above shall not be effected prior to the delivery to the Trustee of the Opinion of Counsel required by Section 2.05 hereof and any substitution pursuant to (A) above shall not be effected prior to the additional delivery to the Trustee of a Request for File Release. No substitution will be made in any calendar month after the Determination Date for such month. The Purchase Price for any such Initial Mortgage Loan shall be deposited by CHL in the Certificate Account and, upon receipt of such deposit and Request for File Release with respect thereto, the Trustee shall release the related Mortgage File to CHL and shall execute and deliver at CHL’s request such instruments of transfer or 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® System in accordance with MERS’ rules and regulations.

The Trustee shall retain possession and custody of each Mortgage File in accordance with and subject to the terms and conditions set forth herein. Each Seller shall promptly deliver to the Trustee, upon the execution or receipt thereof, the originals of such other documents or instruments constituting the Mortgage File that come into the possession of such Seller from time to time.

It is understood and agreed that the obligation of CHL to substitute for or to purchase any Mortgage Loan that does not meet the requirements of Section 2.02(a) above shall constitute the sole remedy respecting such defect available to the Trustee, the Depositor and any Certificateholder against any Seller.

It is understood and agreed that the obligation of CHL to substitute for or to purchase, pursuant to Section 2.02(a), any Initial Mortgage Loan whose Mortgage File contains any document or documents that does not meet the requirements of clauses (i)-(iv) and (vi) above and which defect is not corrected or cured by CHL within 90 days from the date it was notified of such defect, shall constitute the sole remedy respecting such defect available to the Trustee, the Depositor and any Certificateholder against any Seller.

(b) The Trustee agrees to execute and deliver on the Subsequent Transfer Date to the Depositor, the Master Servicer and CHL (on behalf of each Seller) an Initial Certification substantially in the form annexed hereto as Exhibit G-4 to the effect that, as to each Subsequent Mortgage Loan listed in the Mortgage Loan Schedule (other than any Subsequent Mortgage Loan paid in full or any Subsequent Mortgage Loan specifically identified in such certification as not covered by such certification), the documents described in Section 2.01(g)(i) and, in the case of each Subsequent Mortgage Loan that is not a MERS Mortgage Loan, the documents described in Section 2.01(g)(iii), with respect to such Subsequent Mortgage Loan are in its possession, and based on its review and examination and only as to the foregoing documents, such documents appear regular on their face and relate to such Subsequent Mortgage Loan.

The Trustee agrees to execute and deliver within 30 days after the Subsequent Transfer Date to the Depositor, the Master Servicer and CHL (on behalf of each Seller) an Interim Certification substantially in the form annexed hereto as Exhibit G-2 to the effect that, as to each Subsequent Mortgage Loan listed in the Mortgage Loan Schedule (other than any Subsequent Mortgage Loan paid in full or any Subsequent Mortgage Loan specifically identified in such certification as not covered by such certification), all documents required to be delivered to it pursuant to this Agreement with respect to such Subsequent Mortgage Loan are in its possession (except those described in Section 2.01(g)(vi)) and based on its review and examination and only as to the foregoing documents, (i) such documents appear regular on their face and relate to such Subsequent Mortgage Loan, and (ii) the information set forth in items (i), (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 Trustee shall review each Mortgage File with respect to the Subsequent Mortgage Loans to determine that such Mortgage File contains the following documents:

(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;

(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® System in accordance with MERS’ rules and regulations.

It is understood and agreed that the obligation of the Sellers to substitute for or to purchase, pursuant to Section 2.02(b), any Subsequent Mortgage Loan whose Mortgage File contains any document or documents that does not meet the requirements of clauses (i)-(iv) and (vi) above and which defect is not corrected or cured by such Seller within 90 days from the date it was notified of such defect, shall constitute the sole remedy respecting such defect available to the Trustee, the Depositor and any Certificateholder against the Sellers.

Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the Sellers.

(a) The Master Servicer hereby represents and warrants to the Depositor and the Trustee as follows, as of the date hereof with respect to the Initial Mortgage Loans, and the related Subsequent Transfer Date with respect to the Subsequent Mortgage Loans:

(1) The Master Servicer is duly organized as a Texas limited partnership and is validly existing and in good standing under the laws of the State of Texas and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer in any state in which a Mortgaged Property is located or is otherwise not required under applicable law to effect such qualification and, in any event, is in compliance with the doing business laws of any such state, to the extent necessary to ensure its ability to enforce each Mortgage Loan, to service the Mortgage Loans in accordance with the terms of this Agreement and to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(2) The Master Servicer has the full partnership power and authority to sell and service each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized by all necessary partnership action on the part of the Master Servicer the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against the Master Servicer in accordance with its terms, except that (a) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(3) The execution and delivery of this Agreement by the Master Servicer, the servicing of the Mortgage Loans by the Master Servicer under this Agreement, the consummation of any other of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Master Servicer and will not (A) result in a material breach of any term or provision of the certificate of limited partnership, partnership agreement or other organizational document of the Master Servicer or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which the Master Servicer is a party or by which it may be bound, or (C) constitute a material violation of any statute, order or regulation applicable to the Master Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Master Servicer; and the Master Servicer is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair the Master Servicer’s ability to perform or meet any of its obligations under this Agreement.

(4) The Master Servicer is an approved servicer of conventional mortgage loans for Fannie Mae and Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act.

(5) No litigation is pending or, to the best of the Master Servicer’s knowledge, threatened, against the Master Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Master Servicer to service the Mortgage Loans or to perform any of its other obligations under this Agreement or any Subsequent Transfer Agreement in accordance with the terms hereof or thereof.

(6) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Master Servicer of, or compliance by the Master Servicer with, this Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, the Master Servicer has obtained the same.

(7) The Master Servicer is a member of MERS in good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans for as long as such Mortgage Loans are registered with MERS.

(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 the Mortgage Loans 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 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.

(4) CHL is an approved seller of conventional mortgage loans for Fannie Mae and Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act.

(5) No litigation is pending or, to the best of CHL’s knowledge, threatened, against CHL that would materially and adversely affect the execution, delivery or enforceability of this Agreement or any Subsequent Transfer Agreement or the ability of CHL to sell the CHL Mortgage Loans or to perform any of its other obligations under this Agreement or any Subsequent Transfer Agreement in accordance with the terms hereof or thereof.

(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 delinquent in payment of principal and interest.

(10) No Mortgage Loan had a Loan-to-Value Ratio at origination in excess of 100.00%.

(11) Each Mortgage Loan is secured by a valid and enforceable first lien on the related Mortgaged Property subject only to (1) the lien of non-delinquent current real property taxes and assessments, (2) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage, such exceptions appearing of record being acceptable to mortgage lending institutions generally or specifically reflected in the appraisal made in connection with the origination of the related Mortgage Loan and (3) other matters to which like properties are commonly subject that do not materially interfere with the benefits of the security intended to be provided by such Mortgage.

(12) Immediately prior to the assignment of each CHL Mortgage Loan to the Depositor, CHL had good title to, and was the sole owner of, such CHL Mortgage Loan free and clear of any pledge, lien, encumbrance or security interest and had full right and authority, subject to no interest or participation of, or agreement with, any other party, to sell and assign the same pursuant to this Agreement.

(13) There is no delinquent tax or assessment lien against any Mortgaged Property.

(14) There is no valid offset, claim, defense or counterclaim to any Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay the unpaid principal of or interest on such Mortgage Note.

(15) There are no mechanics’ liens or claims for work, labor or material affecting any Mortgaged Property that are or may be a lien prior to, or equal with, the lien of such Mortgage, except those that are insured against by the title insurance policy referred to in item (18) below.

(16) As of the Closing Date in the case of the Initial Mortgage Loans and as of the related Subsequent Transfer Date in the case of the Subsequent Mortgage Loans, to the best of CHL’s knowledge, each Mortgaged Property is free of material damage and is in good repair.

(17) As of the Closing Date in the case of the Initial Mortgage Loans and as of the related Subsequent Transfer Date in the case of the Subsequent Mortgage Loans, neither CHL nor any prior holder of any Mortgage has modified the Mortgage in any material respect (except that a Mortgage Loan may have been modified by a written instrument that has been recorded or submitted for recordation, if necessary, to protect the interests of the Certificateholders and the original or a copy of which has been delivered to the Trustee); satisfied, cancelled or subordinated such Mortgage in whole or in part; released the related Mortgaged Property in whole or in part from the lien of such Mortgage; or executed any instrument of release, cancellation, modification (except as expressly permitted above) or satisfaction with respect thereto.

(18) A lender’s policy of title insurance together with a condominium endorsement and extended coverage endorsement, if applicable, in an amount at least equal to the Cut-off Date Principal Balance of each such Mortgage Loan or a commitment (binder) to issue the same was effective on the date of the origination of each Mortgage Loan, each such policy is valid and remains in full force and effect, and each such policy was issued by a title insurer qualified to do business in the jurisdiction where the Mortgaged Property is located and acceptable to Fannie Mae and Freddie Mac and is in a form acceptable to Fannie Mae and Freddie Mac, which policy insures the Sellers and successor owners of indebtedness secured by the insured Mortgage, as to the first priority lien, of the Mortgage subject to the exceptions set forth in paragraph (11) above; to the best of CHL’s knowledge, no claims have been made under such mortgage title insurance policy and no prior holder of the related Mortgage, including any Seller, has done, by act or omission, anything that would impair the coverage of such mortgage title insurance policy.

(19) No Initial Mortgage Loan was the subject of a Principal Prepayment in full between the Initial Cut-off Date and the Closing Date. No Subsequent Mortgage Loan was the subject of a Principal Prepayment in full between the Subsequent Cut-off Date and the Subsequent Transfer Date.

(20) To the best of CHL’s knowledge, all of the improvements that were included for the purpose of determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of such property, and no improvements on adjoining properties encroach upon the Mortgaged Property.

(21) To the best of CHL’s knowledge, no improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning law or regulation. To the best of CHL’s knowledge, all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities, unless the lack thereof would not have a material adverse effect on the value of such Mortgaged Property, and the Mortgaged Property is lawfully occupied under applicable law.

(22) The Mortgage Note and the related Mortgage are genuine, and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms and under applicable law, except that (a) the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. To the best of CHL’s knowledge, all parties to the Mortgage Note and the Mortgage had legal capacity to execute the Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have been duly and properly executed by such parties.

(23) The proceeds of the Mortgage Loan have been fully disbursed, there is no requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvements and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making, or closing or recording the Mortgage Loan were paid.

(24) The related Mortgage contains customary and enforceable provisions that render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure.

(25) With respect to each Mortgage constituting a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in such Mortgage, and no fees or expenses are or will become payable by the Certificateholders to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.

(26) Each Mortgage Note and each Mortgage is acceptable in form to Fannie Mae and Freddie Mac.

(27) There exist no deficiencies with respect to escrow deposits and payments, if such are required, for which customary arrangements for repayment thereof have not been made, and no escrow deposits or payments of other charges or payments due the Sellers have been capitalized under the Mortgage or the related Mortgage Note.

(28) The origination, underwriting, servicing and collection practices with respect to each Mortgage Loan have been in all respects legal, proper, prudent and customary in the mortgage lending and servicing business, as conducted by prudent lending institutions which service mortgage loans of the same type in the jurisdiction in which the Mortgaged Property is located.

(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 One-Year Hybrid Mortgage Loan, Two-Year Hybrid Mortgage Loan, a Three-Year Hybrid Mortgage Loan, a Five-Year Hybrid Mortgage Loan or a Ten-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 One-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; 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; and and each Initial Mortgage Loan that is a Ten-Year Hybrid Mortgage Loan had an initial Adjustment Date no later than the applicable date specified on the Collateral Schedule

(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 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 Fannie Mae and Freddie Mac.

(47) None of the Mortgage Loans is a graduated payment mortgage loan or a growing equity mortgage loan, and no Mortgage Loan is subject to a buydown or similar arrangement.

(48) The Mortgage Rates borne by the Initial Mortgage Loans 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 § 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. § 433 nor is any Mortgage Loan a “mortgage” as defined in 15 U.S.C. § 1602(aa).

(57) To the extent required under applicable law, each originator and subsequent mortgagee or servicer of the Mortgage Loan complied with all licensing requirements and was authorized to transact and do business in the jurisdiction in which the related Mortgaged Property is located at all times when it held or serviced the Mortgage Loan. Any and all requirements of any federal, state or local laws or regulations, including, without limitation, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, anti-predatory lending, fair credit reporting, unfair collection practice, equal credit opportunity, fair housing and disclosure laws and regulations, applicable to the solicitation, origination, collection and servicing of such Mortgage Loan have been complied with in all material respects; and any obligations of the holder of the Mortgage Note, Mortgage and other loan documents have been complied with in all material respects; servicing of each Mortgage Loan has been in accordance with prudent mortgage servicing standards, any applicable laws, rules and regulations and in accordance with the terms of the Mortgage Notes, Mortgage and other loan documents, whether such origination and servicing was done by the applicable Seller, its affiliates, or any third party which originated the Mortgage Loan on behalf of, or sold the Mortgage Loan to, any of them, or any servicing agent of any of the foregoing.

(58) The methodology used in underwriting the extension of credit for the Mortgage Loan employs objective mathematical principles which relate the borrower’s income, assets and liabilities to the proposed payment and such underwriting methodology does not rely on the extent of the borrower’s equity in the collateral as the principal determining factor in approving such credit extension. Such underwriting methodology confirmed that at the time of origination (application/approval) the borrower had a reasonable ability to make timely payments on the Mortgage Loan.

(59) No borrower was required to purchase any credit life, disability, accident or health insurance product as a condition of obtaining the extension of credit. No borrower obtained a prepaid single-premium credit life, disability, accident or health insurance policy in connection with the origination of the Mortgage Loan.

(60) If the Mortgage Loan provides that the interest rate on the principal balance of the related Mortgage Loan may be adjusted, all of the terms of the related Mortgage pertaining to interest rate adjustments, payment adjustments and adjustments of the outstanding principal balance have been made in accordance with the terms of the related Mortgage Note and applicable law and are enforceable and such adjustments will not affect the priority of the Mortgage lien.

(61) The Mortgaged Property complies with all applicable laws, rules and regulations relating to environmental matters, including but not limited to those relating to radon, asbestos and lead paint and no Seller nor, to the best of CHL’s knowledge, the Mortgagor, has received any notice of any violation or potential violation of such law.

(62) There is no action, suit or proceeding pending, or to the best of CHL’s knowledge, threatened or likely to be asserted with respect to the Mortgage Loan against or affecting any Seller before or by any court, administrative agency, arbitrator or governmental body.

(63) No action, inaction, or event has occurred and no state of fact exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable hazard insurance policy, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by CHL or any designee of CHL or any corporation in which CHL or any officer, director, or employee had a financial interest at the time of placement of such insurance.

(64) Each Mortgage Loan has a fully assignable life of loan tax service contract which may be assigned without the payment of any fee.

(65) No Mortgagor has notified CHL or the Master Servicer on CHL’s behalf, and CHL has no knowledge, of any relief requested or allowed to a Mortgagor under the Relief Act or any similar state or local law.

(66) Each Mortgage Loan was originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or mortgage banking company which is supervised and examined by a federal or state authority, or by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 2.03 and 2.11 of the National Housing Act.

(67) Each Mortgage Loan was (A) originated no earlier than six months prior to the time the applicable Seller purchased such Mortgage Loan pursuant to a mortgage loan purchase agreement or other similar agreement and (B) underwritten or reunderwritten by the applicable Seller in accordance with the applicable Seller’s underwriting guidelines in effect at the time the loan was underwritten or reunderwritten, as applicable.

(68) Each Mortgage Loan, at the time it was originated and as of the Closing Date or the related Subsequent Transfer Date, as applicable, complied in all material respects with applicable local, state and federal laws, including, but not limited to, all predatory and abusive lending laws.

(69) None of the Mortgage Loans is a “high cost” mortgage loan as defined by applicable federal, state and local predatory and abusive lending laws.

(70) Each Prepayment Charge is enforceable and was originated in compliance with all applicable federal, state and local laws.

(71) None of the Mortgage Loans that are secured by property located in the State of Illinois are in violation of the provisions of the Illinois Interest Act; 815 Ill. Comp. Stat. 205/0.01 (2004).

(72) There is no Mortgage Loan in the Trust Fund that was originated on or after March 7, 2003, which is a “high cost home loan” as defined under the Georgia Fair Lending Act.

(73) No Mortgage Loan in the Trust Fund is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in the then-current Standard & Poor’s LEVELS® Glossary which is now Version 5.6(d), Appendix E) 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 Internal Revenue Code of 1986 (as amended) (the “Code”). The fair market value of the manufactured home securing each Mortgage Loan was at least equal to 80% of the adjusted issue price of the contract at either (i) the time the contract was originated (determined pursuant to the REMIC Provisions) or (ii) the time the contract is transferred to the purchaser. Each Mortgage Loan is a “qualified mortgage” under Section 860G(a)(3) of the Code.

(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) Additional Representations and Warranties relating solely to the Mortgage Loans in Loan Group 1:

(A) With respect to any Group 1 Mortgage Loan that contains a provision permitting imposition of a penalty upon a prepayment prior to maturity: (a) the mortgage loan provides some benefit to the borrower in exchange for accepting such prepayment penalty; (b) the mortgage loan’s originator had a written policy of offering the borrower, or requiring third-party brokers to offer the borrower, the option of obtaining a mortgage loan that did not require payment of such a penalty; (c) the prepayment penalty was adequately disclosed to the borrower pursuant to applicable state and federal law; (d) the mortgage loan does not provide for prepayment penalty for a term in excess of five years; in each case 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 (e) such prepayment penalty will not be imposed in any instance where the mortgage loan is accelerated or paid off in connection with the workout of a delinquent mortgage or due to the borrower’s default, notwithstanding that the terms of the mortgage loan or state or federal law might permit the imposition of such penalty.

(B) The Master Servicer has fully furnished, 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 related to the Group 1 Mortgage Loans to Equifax, Experian and Trans Union Credit Information Company (three of the nationally recognized credit bureaus) on a monthly basis.

(C) The original principal balance of each Group 1 Mortgage Loan is within the dollar amount limits of Freddie Mac and Fannie Mae for conforming one- to four-family mortgage loans.

(D) No Group 1 Mortgage Loan originated between October 1, 2002 and March 7, 2003 is subject to the Georgia Fair Lending Act, as amended. No Group 1 Mortgage Loan originated between October 1, 2002 and March 7, 2003 is secured by a Mortgaged Property located in the state of Georgia, and there is no Group 1 Mortgage Loan originated on or after March 7, 2003 that is a “high cost home loan” as defined under the Georgia Fair Lending Act.

(E) None of the Group 1 Mortgage Loans are “high cost” loans as defined by applicable predatory and abusive lending laws.

(F) None of the Group 1 Mortgage Loans are covered by the Home Ownership and Equity Protection Act of 1994 (“HOEPA”).

(G) No Group 1 Mortgage Loan 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.).

(H) No Group 1 Mortgage Loan is a “High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat. Ann. §§ 58-21a-1 et seq.).

(I) No Group 1 Mortgage Loan is a “High-Cost Home Mortgage Loan” as defined in the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004 (Mass. Gen. Law ch. 183C).

(J) No Group 1 Mortgage Loan originated on or after January 1, 2005 is a “High-Cost Home Loan” as defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind. Code Ann. Sections 24-9-1 through 24-9-9).

(K) All of the Group 1 Mortgage Loans were originated in compliance with all applicable laws, including, but not limited to, all applicable anti-predatory and abusive lending laws.

(L) No Group 1 Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and with respect to the foregoing, the terms “High Cost Loan” and “Covered Loan” have the meaning assigned to them in the then current Standard & Poor’s LEVELS® Version 5.6d Glossary Revised, Appendix E which is attached hereto as Exhibit Q (the “Glossary”) where (x) a “High Cost Loan” is each loan identified in the column “Category under applicable anti-predatory lending law” of the table entitled “Standard & Poor's High Cost Loan Categorization” in the Glossary as each such loan is defined in the applicable anti-predatory lending law of the State or jurisdiction specified in such table and (y) a “Covered Loan” is each loan identified in the column “Category under applicable anti-predatory lending law” of the table entitled “Standard & Poor’s Covered Loan Categorization” in the Glossary as each such loan is defined in the applicable anti-predatory lending law of the State or jurisdiction specified in such table.

(M) No Group 1 Mortgage Loan originated between October 1, 2002 and March 7, 2003 is subject to the Georgia Fair Lending Act, as amended. No Group 1 Mortgage Loan originated between October 1, 2002 and March 7, 2003 is secured by a Mortgaged Property located in the state of Georgia, and there is no Group 1 Mortgage Loan originated on or after March 7, 2003 that is a “high cost home loan” as defined under the Georgia Fair Lending Act.

(N) No Mortgagor related to a Group 1 Mortgage Loan was required to purchase any single premium credit insurance policy (e.g., life, disability, accident, unemployment, or health insurance product) or debt cancellation agreement as a condition of obtaining the extension of credit; no Mortgagor related to a Group 1 Mortgage Loan obtained a prepaid single-premium credit insurance policy (e.g., life, disability, accident, unemployment, mortgage or health insurance) in connection with the origination of such Group 1 Mortgage Loan; no proceeds from any Group 1 Mortgage Loan were used to purchase single premium credit insurance policies or debt cancellation agreements as part of the origination or, or as a condition to closing, such Group 1 Mortgage Loan.

(O) With respect to any Group 1 Mortgage Loan originated on or after August 1, 2004, if the related Group 1 Mortgage Loan or the related Mortgage Note, or any document relating to the loan transaction, contains a mandatory arbitration clause (that is, a clause that requires the borrower to submit to arbitration to resolve any dispute arising out of or relating in any way to the mortgage loan transaction), Countrywide will (i) notify the related borrower in writing within 60 days after the Closing Date that none of the related seller, the related servicer or any subsequent party that acquires an interest in the Group 1 Mortgage Loan or services the Group 1 Mortgage Loan will enforce the arbitration clause against the borrower, but that the borrower will continue to have the right to submit a dispute to arbitration and (ii) place a copy of that notice in the Mortgage File; and neither the related mortgage nor the related mortgage note requires the borrower to submit to arbitration to resolve any dispute arising out of or relating in any way to the mortgage loan transaction.

(P) The originator of each Group 1 Mortgage Loan offered the related borrower mortgage loan products offered by such Group 1 Mortgage Loan’s originator, or any affiliate of such Group 1 Mortgage Loan’s originator, for which the borrower qualified.

(Q) The methodology used in underwriting the extension of credit for each Group 1 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 the reasonable ability to make timely payments on the mortgage loan.

(R) No borrower under a Group 1 Mortgage Loan was charged “points and fees” in an amount greater than (a) $1,000 or (b) 5% of the principal amount of such Group 1 Mortgage Loan, whichever is greater. For purposes of this representation, “points and fees” (x) include origination, underwriting, broker and finder’s fees and charges that the lender imposed as a condition of making the Group 1 Mortgage Loan, whether they are paid to the lender or a third party; and (y) exclude bona fide discount points, fees paid for actual services rendered in connection with the origination of the Group 1 Mortgage Loan (such as attorneys’ fees, notaries fees and fees paid for property appraisals, credit reports, surveys, title examinations and extracts, flood and tax certifications, and home inspections); the cost of mortgage insurance or credit-risk price adjustments; the costs of title, hazard, and flood insurance policies; state and local transfer taxes or fees; escrow deposits for the future payment of taxes and insurance premiums; and other miscellaneous fees and charges that, in total, do not exceed 0.25 percent of the loan amount.

(S) As of the Closing Date with respect to the Group 1 Mortgage Loans or the applicable date of substitution with respect to any Replacement Mortgage Loan, none of the Mortgaged Properties is a mobile home or a manufactured housing unit that is not considered or classified as part of the real estate under the laws of the jurisdiction in which it is located.

(78) The representations in Section 2.03(c)(1)-(6), 2.03(d)(1)-(6) and 2.03(e)(1)-(6) are true and correct.

(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, 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 this Agreement and each Subsequent Transfer Agreement and to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(2) Park Sienna has the full company power and authority to sell each Park Sienna Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and each Subsequent Transfer Agreement and has duly authorized by all necessary company action on the part of Park Sienna the execution, delivery and performance of this Agreement and each Subsequent Transfer Agreement; and this Agreement and each Subsequent Transfer Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of Park Sienna, enforceable against Park Sienna in accordance with its terms, except that (a) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(3) The execution and delivery of this Agreement and each Subsequent Transfer Agreement by Park Sienna, the sale of the Park Sienna Mortgage Loans by Park Sienna under this Agreement and each Subsequent Transfer Agreement, the consummation of any other of the transactions contemplated by this Agreement and each Subsequent Transfer Agreement and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of Park Sienna and will not (A) result in a material breach of any term or provision of the certificate of formation or limited liability company agreement of Park Sienna or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which Park Sienna is a party or by which it may be bound, or (C) constitute a material violation of any statute, order or regulation applicable to Park Sienna of any court, regulatory body, administrative agency or governmental body having jurisdiction over Park Sienna; and Park Sienna is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair Park Sienna’s ability to perform or meet any of its obligations under this Agreement.

(4) No litigation is pending or, to the best of Park Sienna’s knowledge, threatened, against Park Sienna that would materially and adversely affect the execution, delivery or enforceability of this Agreement or any Subsequent Transfer Agreement or the ability of Park Sienna to sell the Park Sienna Mortgage Loans or to perform any of its other obligations under this Agreement or any Subsequent Transfer Agreement in accordance with the terms hereof or thereof.

(5) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Park Sienna of, or compliance by Park Sienna with, this Agreement or any Subsequent Transfer Agreement or the consummation of the transactions contemplated hereby, or if 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) Park Granada hereby represents and warrants to the Depositor and the Trustee as follows, as of the Cut-off Date:

(1) Park Granada 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 Granada in any state in which a Mortgaged Property securing a Park Granada Mortgage Loan is located or is otherwise not required under applicable law to effect such qualification and, in any event, is in compliance with the doing business laws of any such state, to the extent necessary to ensure its ability to enforce each Park Granada Mortgage Loan, to sell the Park Granada Mortgage Loans in accordance with the terms of this Agreement and each Subsequent Transfer Agreement and to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(2) Park Granada has the full company power and authority to sell each Park Granada Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and each Subsequent Transfer Agreement and has duly authorized by all necessary company action on the part of Park Granada the execution, delivery and performance of this Agreement and each Subsequent Transfer Agreement; and this Agreement and each Subsequent Transfer Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of Park Granada, enforceable against Park Granada in accordance with its terms, except that (a) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(3) The execution and delivery of this Agreement and each Subsequent Transfer Agreement by Park Granada, the sale of the Park Granada Mortgage Loans by Park Granada under this Agreement and each Subsequent Transfer Agreement, the consummation of any other of the transactions contemplated by this Agreement and each Subsequent Transfer Agreement and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of Park Granada and will not (A) result in a material breach of any term or provision of the certificate of formation or limited liability company agreement of Park Granada or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which Park Granada is a party or by which it may be bound, or (C) constitute a material violation of any statute, order or regulation applicable to Park Granada of any court, regulatory body, administrative agency or governmental body having jurisdiction over Park Granada; and Park Granada is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair Park Granada’s ability to perform or meet any of its obligations under this Agreement.

(4) No litigation is pending or, to the best of Park Granada’s knowledge, threatened, against Park Granada that would materially and adversely affect the execution, delivery or enforceability of this Agreement or any Subsequent Transfer Agreement or the ability of Park Granada to sell the Park Granada Mortgage Loans or to perform any of its other obligations under this Agreement or any Subsequent Transfer Agreement in accordance with the terms hereof or thereof.

(5) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by Park Granada of, or compliance by Park Granada with, this Agreement or any Subsequent Transfer Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, Park Granada has obtained the same.

(6) Park Granada will treat the transfer of the Park Granada Mortgage Loans to the Depositor as a sale of the Park Granada Mortgage Loans for all tax, accounting and regulatory purposes.

(7) Immediately prior to the assignment of each Park Granada Mortgage Loan to the Depositor, Park Granada had good title to, and was the sole owner of, such the Park Granada Mortgage Loan free and clear of any pledge, lien, encumbrance or security interest and had full right and authority, subject to no interest or participation of, or agreement with, any other party, to sell and assign the same pursuant to this Agreement.

(f) [reserved]

(g) Upon discovery by any of the parties hereto of a breach of a representation or warranty set forth in Section 2.03(a) through (f) 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, the NIM Insurer and the Swap Counterparty. 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 (f) 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 shall be deemed a breach of the applicable representation or warranty. Any breach of a representation set forth in Section 2.03(a)(8) or (b)(77)(A) - (S) 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), (d), (e) or (f) with respect to such Mortgage Loan. Upon any such substitution and the deposit to the Certificate Account of the amount required to be deposited therein in connection with such substitution as described in the following paragraph, the Trustee shall release to the Representing Party the Mortgage File relating to such Deleted Mortgage Loan and held for the benefit of the Certificateholders and shall execute and deliver at the Master Servicer’s direction such instruments of transfer or assignment as have been prepared by the Master Servicer, in each case without recourse, as shall be necessary to vest in the applicable Seller, or its respective designee, title to the Trustee’s interest in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03.

For any month in which any Seller substitutes one or more Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will determine the amount (if any) by which the aggregate principal balance of all such Replacement Mortgage Loans as of the date of substitution is less than the Stated Principal Balance (after application of the principal portion of the Scheduled Payment due in the month of substitution) of all such Deleted Mortgage Loans. An amount equal to the aggregate of the deficiencies described in the preceding sentence (such amount, the “Substitution Adjustment Amount”) shall be forwarded by the applicable Seller to the Master Servicer and deposited by the Master Servicer into the Certificate Account not later than the Determination Date for the Distribution Date relating to the Prepayment Period during which the related Mortgage Loan became required to be purchased or replaced hereunder.

In the event that a Seller shall have repurchased a Mortgage Loan, the Purchase Price therefor shall be deposited in the Certificate Account pursuant to Section 3.05 on the Determination Date for the Distribution Date in the month following the month during which such Seller became obligated to repurchase or replace such Mortgage Loan and upon such deposit of the Purchase Price, the delivery of the Opinion of Counsel required by Section 2.05, if any, and the receipt of a Request for File Release, the Trustee shall release the related Mortgage File held for the benefit of the Certificateholders to such Seller, and the Trustee shall execute and deliver at such Person’s direction the related instruments of transfer or assignment prepared by such Seller, in each case without recourse, as shall be necessary to transfer title from the Trustee for the benefit of the Certificateholders and transfer the Trustee’s interest to such Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is understood and agreed that the obligation under this Agreement of the Sellers to cure, repurchase or replace any Mortgage Loan as to which a breach has occurred and is continuing shall constitute the sole remedy against the Sellers respecting such breach available to Certificateholders, the Depositor or the Trustee.

(h) The representations and warranties set forth in this Section 2.03 shall survive delivery of the respective Mortgage Files to the Trustee for the benefit of the Certificateholders with respect to each Mortgage Loan.

Section 2.04 Representations and Warranties of the Depositor.

The Depositor hereby represents and warrants to the Master Servicer and the Trustee as follows, as of the date hereof and as of each Subsequent Transfer Date:

(1) The Depositor is duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has full power and authority (corporate and other) necessary to own or hold its properties and to conduct its business as now conducted by it and to enter into and perform its obligations under this Agreement and each Subsequent Transfer Agreement.

(2) The Depositor has the full corporate power and authority to execute, deliver and perform, and to enter into and consummate the transactions contemplated by, this Agreement and each Subsequent Transfer Agreement and has duly authorized, by all necessary corporate action on its part, the execution, delivery and performance of this Agreement and each Subsequent Transfer Agreement; and this Agreement and each Subsequent Transfer Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, subject, as to enforceability, to (i) bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally and (ii) general principles of equity, regardless of whether enforcement is sought in a proceeding in equity or at law.

(3) The execution and delivery of this Agreement and each Subsequent Transfer Agreement by the Depositor, the consummation of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Depositor and will not (A) result in a material breach of any term or provision of the charter or by-laws of the Depositor or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which the Depositor is a party or by which it may be bound or (C) constitute a material violation of any statute, order or regulation applicable to the Depositor of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Depositor; and the Depositor is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair the Depositor’s ability to perform or meet any of its obligations under this Agreement.

(4) No litigation is pending, or, to the best of the Depositor’s knowledge, threatened, against the Depositor that would materially and adversely affect the execution, delivery or enforceability of this Agreement or any Subsequent Transfer Agreement or the ability of the Depositor to perform its obligations under this Agreement or any Subsequent Transfer Agreement in accordance with the terms hereof or thereof.

(5) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Depositor of, or compliance by the Depositor with, this Agreement or any Subsequent Transfer Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, the Depositor has obtained the same.

The Depositor hereby represents and warrants to the Trustee with respect to each Mortgage Loan, as of the Closing Date or the related Subsequent Transfer Date, as applicable, following the transfer of such Mortgage Loan to it by the Sellers, the Depositor had good title to the Initial Mortgage Loans or related Subsequent Mortgage Loans, as applicable, and the related Mortgage Notes were subject to no offsets, claims, defenses or counterclaims.

It is understood and agreed that the representations and warranties set forth in the two immediately preceding paragraphs shall survive delivery of the Mortgage Files to the Trustee. Upon discovery by the Depositor or the Trustee, of a breach of any of the foregoing representations and warranties set forth in the immediately preceding paragraph (referred to herein as a “breach”), which breach materially and adversely affects the interest of the Certificateholders, the party discovering such breach shall give prompt written notice to the others and to each Rating Agency, the NIM Insurer and the Swap Counterparty. 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(g).

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 the any REMIC formed hereunder to fail to qualify as a REMIC at any time that any Certificates are outstanding. Any Mortgage Loan as to which repurchase or substitution was delayed pursuant to this paragraph shall be repurchased or the substitution therefor shall occur (subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a) the occurrence of a default or imminent default with respect to such loan and (b) receipt by the Trustee of an Opinion of Counsel to the effect that such repurchase or substitution, as applicable, will not result in the events described in clause (i) or clause (ii) of the preceding sentence.

(b) Upon discovery by the Depositor, any Seller, the Master Servicer or the Trustee that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning of section 860G(a)(3) of the Code, the party discovering such fact shall promptly (and in any event within five Business Days of discovery) give written notice thereof to the other parties and the NIM Insurer. In connection therewith, the Trustee shall require CHL, at CHL’s option, to either (i) substitute, if the conditions in Section 2.03(g) with respect to substitutions are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of such discovery in the same manner as it would a Mortgage Loan for a breach of representation or warranty contained in Section 2.03. The Trustee shall reconvey to CHL the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty contained in Section 2.03.

Section 2.06 Authentication and Delivery of Certificates.

The Trustee acknowledges the transfer and assignment to it of the Trust Fund and, concurrently with such transfer and assignment, has executed, authenticated and delivered, to or upon the order of the Depositor, the Certificates in authorized denominations evidencing the entire ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights referred to above for the benefit of all present and future Holders of the Certificates and to perform the duties set forth in this Agreement.

Section 2.07 Covenants of the Master Servicer.

The Master Servicer hereby covenants to the Depositor and 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. 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 or (ii) result in the imposition of any tax under section 860(a) or 860(d) of the Code, 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 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® System, or cause the removal from the registration of any Mortgage Loan on the MERS® 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 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.

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 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.

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; Seller Shortfall Interest Requirement.

(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 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(e) 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 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. Reconciliations will be prepared for the Certificate Account within 45 calendar days after the bank statement cut-off date. 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 Business Day prior to the Master Servicer Advance Date in each of and June 2006, July 2006 and August 2006, CHL shall remit to the Master Servicer, and the Master Servicer shall deposit in the Certificate Account, the Seller Shortfall Interest Requirement (if any) for such Master Servicer Advance 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(e) 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 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) Each institution that maintains the Certificate Account, the Distribution Account or the Pre-Funding 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 and the Pre-Funding 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 and (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. 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 amount of any losses incurred in the Pre-Funding Account in respect of any such investments shall be paid by the Master Servicer to the Trustee for deposit into the Pre-Funding Account 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 or the Pre-Funding Account and made in accordance with this Section 3.05.

(f) 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 or the Carryover Reserve Fund prior to any change thereof.

(g) 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 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 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 and Prepayment Charges collected and amounts in respect of Prepayment Charges pursuant to Section 3.20 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 $100.00. 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 Class P Principal Distribution Date, the Trustee shall transfer from the Principal Reserve Fund to the Distribution Account $100.00 and shall distribute such amount to the Class P Certificates on the Class P Principal Distribution Date. 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 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 penultimate 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; and

(vi) to clear and terminate the Distribution Account upon termination of the Agreement pursuant to Section 9.01 hereof.

(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 penultimate 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 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 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 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) The Master Servicer may agree to a 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 Certificate Principal Balance of the related 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 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 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 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 of priority: 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.

(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.

Section 3.13 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 Trustee by delivering a Request for File Release. Upon receipt of such request, the Trustee shall promptly release the related Mortgage File to the Master Servicer, and the 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® 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 Trustee shall, upon delivery to the 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 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 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 Trustee to be returned to the Trustee within 21 calendar days after possession thereof shall have been released by the 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 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 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 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.

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 2007 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 2007 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.

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 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 Novation 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 Rating Thresholds (as defined in the Swap Contract), the Swap Trustee shall direct the Swap Contract Administrator to demand payment of the Delivery Amount (as defined in the IDA Credit Support Annex) on each Valuation Date (as defined in the ISDA Credit Support Annex) and to perform its other obligations in accordance with the ISDA Credit Support Annex. If a Delivery Amount is demanded, the Swap Trustee shall set up an account in accordance with Section 4.09 to hold cash or other eligible investments pledged under the ISDA Credit Support Annex. Any cash or other eligible investments pledged under the ISDA Credit Support Annex shall not be part of the Distribution Account or the Swap Account unless they are applied in accordance with the ISDA Credit Support Annex to make a payment due to the Swap Contract Administrator pursuant to the Swap Contract. If Eligible Credit Support (as defined in the ISDA Credit Support Annex) with a value equal to the Delivery Amount is not delivered, the Swap Trustee shall direct the Swap Contract Administrator to notify the Swap Counterparty of such failure.

Upon the Swap Trustee obtaining actual knowledge of a Failure to Pay or Deliver (as defined in the Swap Contract), the Swap Trustee shall direct the Swap Contract Administrator to demand payment under the Swap Guarantee.

Upon the Swap Trustee obtaining actual knowledge of an Event of Default (as defined in the Swap Contract) or Termination Event (as defined in the Swap Contract) for which the Swap Contract Administrator has the right to designate an Early Termination Date (as defined in the Swap Contract), 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 Swap Contract 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.

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 pro rata based on 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. Any upfront amount 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 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 any Net Swap Payment or Swap Termination Payment payable by the Swap Counterparty and not remitted by the Swap Contract Administrator to the Swap Trustee with respect to any Distribution Date will be remitted to CHL and will not be available to make distributions in respect of any Class of Certificates.

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) 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.

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 of priority:

(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 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;

(ii) 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,

(iii) 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 (ii)(a) and (ii)(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,

(iv) from the remaining Interest Funds for Loan Group 1 and Loan Group 2, sequentially:

(a) sequentially, to 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, in that order, the Current Interest for each such Class, and

(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 of priority:

(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 A-R Certificates, until the Certificate Principal Balance thereof is reduced to zero;

(b) to the Class 1-A Certificates, until the Certificate Principal Balance thereof is reduced to zero; and

(c) 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 and priorities 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 and priorities 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 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, in that order, in each case until the Certificate Principal Balance thereof is reduced to zero,

(ii) any remainder as part of the Excess Cashflow.

(2) For each Distribution Date on or after the Stepdown Date and so long as a Trigger Event is not in effect, sequentially:

(A) in an amount up to the Class A Principal Distribution Target Amount, pro rata based on the related Class A Principal Distribution Allocation Amount for the Class 1-A and Class 2-A Certificates, concurrently:

(i) to the Class 1-A Certificates, in an amount up to the Class 1-A Principal Distribution Amount, until the Certificate Principal Balance thereof is reduced to zero, and

(ii) to the Classes of Class 2-A Certificates, in an amount up to the Class 2-A Principal Distribution Amount, allocated in the amounts and order of priority set forth in clause (3) below, until the Certificate Principal Balances thereof are reduced to zero,

provided, however, that if (a) the Certificate Principal Balance of the Class 1-A Certificates or (b) the aggregate Certificate Principal Balance of the Class 2-A Certificates is reduced to zero, then any remaining unpaid Class A Principal Distribution Target Amount will be distributed to the remaining class(es) of Senior Certificates after distributions pursuant to clauses (i) and (ii) above (and, in the case of the Class 2-A Certificates, in the amounts and order of priority described in clause (3) below), until the Certificate Principal Balance(s) thereof is/are reduced to zero,

(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, 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 Subordinate Class Principal Distribution Amount for that class, in each case until the Certificate Principal Balance thereof is reduced to zero, and

(ii) 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, those amounts will 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 Balance thereof is reduced to zero.

(c) With respect to any Distribution Date, any Excess Cashflow shall be distributed to the Classes of Certificates in the following order of priority, to the extent of the remaining Excess Cashflow:

(1) to the Holders of 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 such Holders of 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 the Holders of the Class A Certificates, pro rata based on the Unpaid Realized Loss Amounts for such Classes, in each case in an amount equal to the Unpaid Realized Loss Amount for such Class;

(3) sequentially, to the Holders of 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, 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 the Holders of 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 Certificates 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 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) 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;

(7) to the Class C Certificateholders, (x) the Class C Current Interest for such Distribution Date and (y) the Overcollateralization Reduction Amount for such Distribution Date; and

(8) 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)(i) 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 of priority:

(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 the Holders of 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 Holders of 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, 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 Holders of 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 Holders of each such Class 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);

(6) to the Holders of each Class of Class A Certificates and Subordinate 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 the Holders of each Class of Class A Certificates, pro rata, based on the remaining Unpaid Realized Loss Amounts for such Classes, in each case in an amount equal to the remaining Unpaid Realized Loss Amount for each such Class; and

(8) sequentially, to the Holders of 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, in that order, in each case in an amount equal to the remaining Unpaid Realized Loss Amount for each such Class.

On each Distribution Date on or prior to the Swap Contract Termination Date, the Swap Trustee shall distribute any remaining amounts on deposit in the Swap Account 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 (including amounts deposited in connection with the full or partial waiver of such Prepayment Charges pursuant to Section 3.20) shall be allocated 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 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 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, 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 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.

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 (http://www.bnyinvestorreporting.com) 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 http://www.bnyinvestorreporting.com.

(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 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 [Reserved].

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. Funds on deposit in the Carryover Reserve Fund shall be held uninvested.

(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.

Section 4.08 [reserved].

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 2006-BC2.” 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 of priority 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.

On each Distribution Date, the Trustee shall make a deposit to the Swap Account pursuant to Section 4.04(a)(i), 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. For federal income tax purposes, any amounts paid to the Swap Counterparty on each Distribution Date shall first be deemed paid to the Swap Counterparty in respect of the Class SWAP-IO Interest to the extent of the amount distributable on such Class SWAP-IO Interest on such Distribution Date, and any remaining amount shall be deemed paid to the Swap Counterparty in respect of a Class IO Distribution Amount (as defined below).

The Trustee shall treat the Holders of Certificates (other than the Class P, Class C and Class A-R Certificates) as having entered into a notional principal contract with respect to the Holders of the Class C Certificates. Pursuant to each such notional principal contract, all Holders of Certificates (other than the Class P, Class C and Class A-R Certificates) shall be treated as having agreed to pay, on each Distribution Date, to the Holder of the Class C Certificates an aggregate amount equal to the excess, if any, of (i) the amount payable on such Distribution Date on the REMIC 3 Regular Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of Certificates on such Distribution Date (such excess, a “Class IO Distribution Amount”). A Class IO Distribution Amount payable from interest collections shall be allocated pro rata among such Certificates based on the excess of (a) the amount of interest otherwise payable to such Certificates over (ii) the amount of interest payable to such Certificates at a per annum rate equal to the Pass-Through Rate, and a Class IO Distribution Amount payable from principal collections shall be allocated to the most subordinate Class of Certificates with an outstanding principal balance to the extent of such balance. In addition, pursuant to such notional principal contract, the Holder of the Class C Certificates shall be treated as having agreed to pay Net Rate Carryover to the Holders of the Certificates (other than the Class C, Class P and Class A-R Certificates) in accordance with the terms of this Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional principal contract shall not be payments with respect to a Regular Interest in a REMIC within the meaning of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class C, Class P and Class A-R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been received by the Holders of such Certificates in respect of their interests in REMIC 3 and as having been paid by such Holders to the Swap Contract Administrator pursuant to the notional principal contract. Thus, each Certificate (other than the Class P and Class A-R Certificates) shall be treated as representing not only ownership of Regular Interests in REMIC 3, but also ownership of an interest in, and obligations with respect to, a notional principal contract.

Section 4.10 Distributions on REMIC 1 and REMIC 2 Regular Interests.

(a) On each Distribution Date, the following amounts, in the following order of priority, shall be distributed by REMIC 1 to REMIC 2 on account of the REMIC 1 Regular Interests and distributed to the holders of the Class A-R Certificates (in respect of the R-1-R Interest), as the case may be:

With respect to the Group 1 Mortgage Loans:

(i) to Holders of REMIC 1 Regular Interest I and each REMIC 1 Regular Interest I-1-A through I-35-B, pro rata, in an amount equal to (A) Uncertificated Interest for such REMIC 1 Regular Interests for such Distribution Date, plus (B) any amounts payable in respect thereof remaining unpaid from previous Distribution Dates.

(ii) to the extent of amounts remaining after the distributions made pursuant to clause (i) above, payments of principal shall be allocated as follows: first to REMIC 1 Regular Interest I, then to REMIC 1 Regular interests I-1-A through I-35-B starting with the lowest numerical denomination until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest is reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such payments of principal shall be allocated pro rata between such REMIC 1 Regular Interests.

With respect to the Group 2 Mortgage Loans:

(i) to Holders of REMIC 1 Regular Interest II and each REMIC 1 Regular Interest II-1-A through II-35-B, pro rata, in an amount equal to (A) Uncertificated Interest for such REMIC 1 Regular Interests for such Distribution Date, plus (B) any amounts payable in respect thereof remaining unpaid from previous Distribution Dates.

(ii) to the extent of amounts remaining after the distributions made pursuant to clause (i) above, payments of principal shall be allocated as follows: first, to REMIC 1 Regular Interest II, then to REMIC 1 Regular interests II-1-A through II-35-B starting with the lowest numerical denomination until the Uncertificated Principal Balance of each such REMIC 1 Regular Interest is reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such payments of principal shall be allocated pro rata between such REMIC 1 Regular Interests.

On each Distribution Date, all amounts representing Prepayment Charges in respect of the Mortgage Loans received during the related Prepayment Period shall be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest LT-P. The payment of the foregoing amounts to the Holders of such REMIC 1 Regular Interest shall not reduce the Uncertificated Principal Balance thereof.

(b) On each Distribution Date, the following amounts, in the following order of priority, shall be distributed by REMIC 2 to REMIC 3 on account of the REMIC 2 Regular Interests and distributed to the Holders of the Class A-R Certificates (in respect of the R-2-R Interest), as the case may be:

(i) first, to the Holders of REMIC 2 Regular Interest II-IO, in an amount equal to (A) Uncertificated Interest for such REMIC 2 Regular Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates and second, to the extent of the REMIC 2 Marker Allocation Percentage of the Interest Funds remaining after the distributions pursuant to clause (i), to the Holders of REMIC 2 Regular Interest LT-AA, REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9, REMIC 2 Regular Interest LT-B and REMIC 2 Regular Interest LT-ZZ, pro rata, in an amount equal to (A) the Uncertificated Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates. Amounts payable as Uncertificated Interest in respect of REMIC 2 Regular Interest LT-ZZ shall be reduced and deferred when the REMIC 2 Overcollateralized Amount is less than the REMIC 2 Overcollateralization Target Amount, by the lesser of (x) the amount of such difference and (y) the Maximum LT-ZZ Uncertificated Interest Deferral Amount and such amount shall be payable to the Holders of REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-B in the same proportion as the Overcollateralization Deficiency Amount is allocated to the Corresponding Certificates and the Uncertificated Principal Balance of the REMIC 2 Regular Interest LT-ZZ shall be increased by such amount;

(ii) to the Holders of REMIC 2 Regular Interests, in an amount equal to the remainder of the REMIC 2 Marker Allocation Percentage of the Principal Distribution Amount for such Distribution Date after the distributions made pursuant to clause (i) above, allocated as follows:

(a) 98.00% of such remainder (other than amounts payable under clause (c) below), to the Holders of REMIC 2 Regular Interest LT-AA and REMIC 2 Regular Interest LT-P, until the Uncertificated Balance of such REMIC 2 Regular Interest is reduced to zero, provided, however, that REMIC 2 Regular Interest LT-P shall not be reduced until the Distribution Date immediately following the expiration of the latest Prepayment Charge as identified on the Prepayment Charge Schedule or any Distribution Date thereafter, at which point such amount shall be distributed to REMIC 2 Regular Interest LT-P, until $100 has been distributed pursuant to this clause;

(b) 2.00% of such remainder (other than amounts payable under clause (c) below) first, to the Holders of REMIC 2 Regular Interest LT-1A, REMIC 2 Regular Interest LT-2A1, REMIC 2 Regular Interest LT-2A2, REMIC 2 Regular Interest LT-2A3, REMIC 2 Regular Interest LT-2A4, REMIC 2 Regular Interest LT-M1, REMIC 2 Regular Interest LT-M2, REMIC 2 Regular Interest LT-M3, REMIC 2 Regular Interest LT-M4, REMIC 2 Regular Interest LT-M5, REMIC 2 Regular Interest LT-M6, REMIC 2 Regular Interest LT-M7, REMIC 2 Regular Interest LT-M8, REMIC 2 Regular Interest LT-M9 and REMIC 2 Regular Interest LT-B, 1.00% and in the same proportion as principal payments are allocated to the Corresponding Certificates, until the Uncertificated Principal Balances of such REMIC 2 Regular Interests are reduced to zero and second, to the Holders of REMIC 2 Regular Interest LT-ZZ, until the Uncertificated Principal Balance of such REMIC 2 Regular Interest is reduced to zero; and

(iii) to the Holders of REMIC 2 Regular Interests, in an amount equal to the REMIC 2 Subordinate Allocation Percentage of Interest Funds and the Principal Distribution Amount for such Distribution Date after the distributions made pursuant to clause (i) and (ii) above such that distributions of interest are deemed to be made to REMIC 2 Regular Interest LT-1SUB, REMIC 2 Regular Interest LT-1GRP, REMIC 2 Regular Interest LT-2SUB, REMIC 2 Regular Interest LT-2GRP and REMIC 2 Regular Interest LT-XX, pro rata, in an amount equal to (A) the Uncertificated Interest for each such REMIC 2 Regular Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous Distribution Dates and such that distributions of principal shall be deemed to be made to the REMIC 2 Regular Interests first, so as to keep the Uncertificated Principal Balance of each REMIC 2 Regular Interest ending with the designation “GRP” equal to 0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group; second, to each REMIC 2 Regular Interest ending with the designation “SUB,” so that the Uncertificated Principal Balance of each such REMIC 2 Regular Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the Mortgage Loans in the related Loan Group over (y) the current Certificate Principal Balance of the Class A Certificate in the related Loan Group (except that if any such excess is a larger number than in the preceding distribution period, the least amount of principal shall be distributed to such REMIC 2 Regular Interests such that the REMIC 2 Subordinated Balance Ratio is maintained); and third, any remaining principal to REMIC 2 Regular Interest LT-XX.

Notwithstanding the priorities and amounts of distribution of funds pursuant to this Section 4.10, actual distributions of Interest Funds and the Principal Distribution Amount for any Distribution Date shall be made only in accordance with Section 4.04.

On each Distribution Date, 100% of the amounts distributed on REMIC 2 Regular Interest II-IO shall be deemed distributed by REMIC 2 to REMIC 3 in respect of the Class SWAP-IO Interest. Such amounts shall be deemed distributed by REMIC 3 to the Swap Contract Administrator for deposit into the Swap Account.

Section 4.11 Allocation of Realized Losses to REMIC 1 and REMIC 2 Regular Interests.

(a) All Realized Losses on the Group 1 Mortgage Loans shall be allocated on each Distribution Date first, to REMIC 1 Regular Interest I, then to REMIC 1 Regular Interest I-1-A through REMIC II Regular Interest I-35-B, starting with the lowest numerical denomination until such REMIC 1 Regular Interest has been reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC 1 Regular Interests.

All Realized Losses on the Group 2 Mortgage Loans shall be allocated on each Distribution Date, first to REMIC 1 Regular Interest I, then to REMIC 1 Regular Interest II-1-A through REMIC 1 Regular Interest II-35-B, starting with the lowest numerical denomination until such REMIC 1 Regular Interest has been reduced to zero, provided that, for REMIC 1 Regular Interests with the same numerical denomination, such Realized Losses shall be allocated pro rata between such REMIC 1 Regular Interests.

CWABS Asset-Backed Certificates Trust 2006-BC2 8-K