Document:

Exhibit 4.1

TRUST AGREEMENT

TRUST AGREEMENT, between MS Structured Asset Corp. (the “Depositor”) and LaSalle Bank National Association (the “Trustee”), made as of the date set forth in Schedule I attached hereto, which Schedule together with Schedules II and III attached hereto, are made a part hereof.  The terms of the Standard Terms for Trust Agreements, dated April 13, 2006 (the “Standard Terms”) are, except to the extent otherwise expressly stated, hereby incorporated by reference herein in their entirety with the same force and effect as though set forth herein.  Capitalized terms used herein and not defined shall have the meanings defined in the Standard Terms. References to “herein”, “hereunder”, “this Trust Agreement” and the like shall include the Schedule I attached hereto and the Standard Terms so incorporated by reference.

WHEREAS, the Depositor and the Trustee desire to establish the Trust identified in Schedule I attached hereto (the “Trust”) for the primary purposes of (i) holding the Underlying Securities, (ii) issuing the Warrants and (iii) issuing the Units;

WHEREAS, the Depositor desires that the respective beneficial interests in the Trust be divided into transferable fractional shares, such shares to be represented by the Units; 

WHEREAS, the Depositor desires to appoint the Trustee as trustee of the Trust and the Trustee desires to accept such appointment;

WHEREAS, the Depositor shall transfer, convey and assign to the Trust without recourse, and the Trust shall acquire, all of the Depositor’s right, title and interest in and under the Underlying Securities and other property identified in Schedule II to the Trust Agreement (the “Trust Property”); and

WHEREAS, the Trust agrees to acquire the Trust Property specified herein in consideration for Units having an initial Unit Principal Balance and an Initial Notional Amount, as applicable, identified in Schedule I attached hereto, subject to the terms and conditions specified in the Trust Agreement;

NOW THEREFORE, the Depositor hereby appoints the Trustee as trustee hereunder and hereby requests the Trustee to receive the Underlying Securities from the Depositor and to issue in accordance with the instructions of the Depositor Units having the terms specified in Schedule I attached hereto, and the Trustee accepts such appointment and, for itself and its successors and assigns, hereby declares that it shall hold all the estate, right, title and interest in any property contributed to the trust account established hereunder (except property to be applied to the payment or reimbursement of or by the Trustee for any fees or expenses which under the terms hereof is to be so applied) in trust for the benefit of all present and future Holders of the fractional shares of beneficial interest issued hereunder, namely, the Unitholders, and subject to the terms and provisions hereof.

 

 

	
             
 	
             
 	
             
 

 

 

 

 

IN WITNESS WHEREOF, each of the undersigned has executed this instrument as of the date set forth in the Schedule I attached hereto.

 

	 	LASALLE BANK NATIONAL ASSOCIATION	 
	 	 	as Trustee on behalf of the Trust identified in Schedule I hereto, and not in its individual capacity	 
	 	 	 	 
	 	 	 	 
	 
	By:
	/s/ Andy Streepey            
	 

	 
	Name:
	Andy Streepey
	 

	 
	Title:
	Assistant Vice President

	 	 	 	 

	 	LASALLE BANK NATIONAL ASSOCIATION	 
	 	 	as Warrant Agent	 
	 	 	 	 
	 	 	 	 
	 
	By:
	/s/ Andy Streepey            
	 

	 
	Name:
	Andy Streepey
	 

	 
	Title:
	Assistant Vice President

						

	 	MS STRUCTURED ASSET CORP.	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 
	By:
	/s/  Madhu Philips        
	 

	 
	Name:
	Madhu Philips
	 

	 
	Title:
	 Vice President

						

 

Attachments: Schedules I, II and III

 

 

 

 

 

Schedule I

(Terms of Trust and Units)

	
            Trust:
 	
            SATURNS Trust No. 2006-2
 

	
            Date of Trust Agreement:
 	
            August 2, 2006
 

	
            Trustee and Servicer:
 	
            LaSalle Bank National Association
 

	
            Units:
 	
            The Trust will issue one class of Units.
 

	
            Initial Unit Principal Balance:
 	
            25,510,000
 

	
            Issue Price of Units: 
 	
            100%
 

	
            Number of Units:
 	
            1,020,400
 

	
            Swap Agreement:
 	
            Except as provided in this paragraph, references to a Swap Agreement, a Swap Counterparty and related references in the Standard Terms shall be inapplicable.  For purposes of Sections 2.02, 2.03, 3.02(b), 3.02(c), 3.02(f), 3.04, 3.05, 3.08, 4.02(b), 4.02(c), 7.02, 9.03(b), 9.05, 10.02(a)(x), 10.07, 10.12, 10.13, 11.01, and 12.01 of the Standard Terms as incorporated herein, use of the term Swap Counterparty shall be deemed to be use of the term Warrantholder, use of the term Swap Agreement shall be deemed to be use of the term Warrants and use of the term Swap Termination Payment shall be deemed to be use of the term Warrant Termination Payment.  The list of sections in this paragraph shall not be construed as an exclusive list and where the context so requires, the preceding sentence may apply to additional sections of the
Standard Terms.
 

	
            Call Option / Call Rights:
 	
            The Warrants.  Each Warrant issued hereunder represents a Call Option and a Call Right to purchase $1,000 of Unit Principal Balance of the Units. 
 

	
            Callable Series:
 	
            All Units issued hereby are subject to Call Options and Call Rights granted in favor of Warrantholders.  All Units are subject to redemption in the event of a redemption of the Underlying Securities.
 
	 	Any Unitholder who receives notice that its Units are being called or redeemed shall tender the applicable Units to the Trustee in accordance with such notice. Any Units subject to call or redemption shall be automatically canceled, and in the case of a call, shall be automatically re-issued to the 

 

 

 

	
             
 	
             
 	
             
 

 

 

	 	applicable Warrantholder without further action by the applicable Unitholder, Warrantholder, Trustee or any other person or entity on the date of redemption or the Call Date, as applicable. Any failure to so tender any Unit shall have no force or effect. 
	 	Upon exercise of Warrants, the Call Options and Call Rights represented by such Warrants shall be automatically canceled. The certificate representing such Warrants shall be deemed to represent the corresponding Units called by the exercise thereof. The Trustee shall distribute the Trust Property to the Warrantholder as specified in Section 1.2 of Schedule III, and upon such distribution such Units shall be canceled. 
	
            First Regular Call Date:
 	
            As defined in Schedule III.  
 

	
            Minimum Denomination: 
 	
            $25 and $25 increments in excess thereof. Each $25 of Unit Principal Balance is a Unit.
 
	 	The Minimum Denominations shall not prevent transfers of fractional Units if such fractional Units arise due to exercises of the Warrants, redemption of the Underlying Securities or otherwise by operation of this Trust Agreement.

	
            Cut-off Date: 
 	
            Closing Date
 

	
            Closing Date: 
 	
            August 2, 2006
 

	
            Specified Currency: 
 	
            United States dollars
 

	
            Business Day: 
 	
            New York, New York and Chicago, Illinois
 

	
            Interest Rate: 
 	
            The interest rate on the Units is 7.375% per annum on the basis of a 360 day year consisting of twelve 30 day months.  
 

	
            Interest Reset Period: 
 	
            Not Applicable
 

	
            Rating: 
 	
            Baa3 by Moody’s
 
	 	BBB- by S&P

	
            Rating Agencies: 
 	
            Moody’s and S&P
 

	
            Scheduled Final Distribution Date:
 	
            March 1, 2098. The Units will have the same final maturity as the Underlying Securities.  The underlying securities are subject to shortening of their maturity in connection with a 
 

 

 

	
             
 	
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	 	Tax Event as described in Schedule II. In the event that the maturity of the underlying securities is shortened, the maturity of the Units will be similarly adjusted.
	
            Prepayment, Redemption and Call:
 	
            The Trust Property is subject to redemption by the Underlying Security Issuer in accordance with the terms of the Underlying Securities and as described in Schedule II.  Any such redemption will cause a redemption of a corresponding portion of the Units
 

	 	The Units are subject to call in accordance with the Warrant Terms.
	 	If the Warrants are partially exercised or there is a partial redemption of the Underlying Securities, the Trustee will randomly select Units to be redeemed in full from the proceeds of such a partial redemption or called in full from the proceeds of such partial exercise. 
	
            Additional Distribution: 
 	
            If a Warrantholder exercises Warrants in connection with a tender offer for settlement prior to the First Regular Call Date, each Unit called in connection with such exercise shall receive, in addition to principal and accrued interest, $1.50 per Unit from the proceeds of the Warrant exercise.   
 

	
            Warrant Terms:
 	
            The Warrants represent a Call Option and Call Rights for the Units pursuant to Section 5.13 of the Standard Terms.  Schedule III provides additional Warrant Terms.  
 

	
            Call Date:
 	
            Specified in Schedule III
 

	
            Call Price:
 	
            Specified in Schedule III
 

	
            Warrant Agent:
 	
            LaSalle Bank National Association
 

	
            Warrantholder:
 	
            A holder of Warrants.
 

	
            Distribution Dates:
 	
            Each March 1 and September 1, or the next succeeding Business Day if such day is not a Business Day, commencing September 1, 2006, and any other date upon which funds are available (including without limitation funds available due to a Trust Wind-Up Event) for distribution in accordance with the terms hereof.  
 
	 	If any payment with respect to the Underlying Securities held by the Trust is not received by the Trustee by 12 noon (New York City time) on a Distribution Date, the corresponding distribution on the Units will not occur until 

 

 

 

	
             
 	
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	 	the next Business Day that the Trust is in receipt of proceeds of such payment prior to 12 noon, with no adjustment to the amount distributed or the Record Date.
	
            Distribution Priorities:
 	
            Ordinary Distribution Date Priority:  On any Distribution Date as to which only payments of interest on the Underlying Securities have been received, or to the extent such Distribution Date occurs due to receipt of payments of interest on the Underlying Securities, the Trustee shall apply amounts available:
 
	 	FIRST, to the payment of any accrued and unpaid interest on the Units, and
	 	SECOND, to the payment of any accrued and unpaid Expense Administrator’s Fee.

	
             
 	
Exercise of Warrants Priority:
 
	 	On any Distribution Date occurring in connection with an exercise of the Warrants, or to the extent such Distribution Date occurs due to the exercise of Warrants, whether in whole or in part, whether or not such exercise results in a Trust Wind-Up Event, the Trustee shall apply amounts available in connection with such exercise (corresponding to the amounts allocable to the aggregate Corresponding Underlying Security Amount related to such exercise):
	 	FIRST, to the payment of any accrued and unpaid interest on the Units, 
	 	SECOND, to the payment of the outstanding principal on the Units being called, 
	 	THIRD, to the payment of $1.50 on each Unit called as an Additional Distribution, if the related Call Date occurs prior to the First Regular Call Date and occurs in connection with a tender offer for the Underlying Securities, 
	 	FOURTH, to the payment of any accrued and unpaid Expense Administrator’s Fee, including the Expense Administrator Make-Whole Amount, if any, and
	 	FIFTH, to the exercising Warrantholders, to the extent such Warrantholders specified or were deemed to specify that their exercise was in connection with a redemption of or a tender offer for the Underlying Securities. 

 

 

	
             
 	
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	 	If any exercise of Warrants would result in the Trust not having sufficient funds to pay each of items FIRST through FOURTH in full, notwithstanding any other provision in this Trust Agreement (including the Additional Warrants Terms on Schedule III) or the Warrants, such exercise will be rescinded pursuant to Section 1.1(h) or Section 1.1(i) of Schedule III. 
	
            Redemptions Priority:
 	
            On any Distribution Date occurring in connection with a redemption of the Underlying Securities, to the extent such Distribution Date occurs due to a redemption of the Underlying Securities and only to the extent such Distribution Date does not relate to an exercise of Warrants, whether or not such redemption results in a Trust Wind-Up Event, the Trustee shall apply amounts available in connection with such redemption (excluding the amounts allocable to the aggregate Corresponding Underlying Security Amount related to any exercise of Warrants provided for above):
 
	 	FIRST, to the payment of any accrued and unpaid interest on the Units, 
	 	SECOND, to the payment of the outstanding principal on the Units being redeemed,
	 	THIRD, any remaining amounts, if any, to the payment of any accrued and unpaid Expense Administrator’s Fee, and 
	 	FOURTH, any remaining amounts, if any, to the Warrantholders, as payment of any Warrant Termination Payment. 
	 	FIFTH, if there is no Warrant Termination Payment, any remaining amounts, if any, to the payment of an additional distribution amount to the holders of the Units equal to the pro rata portion of the excess of (i) the principal payment received with respect to the underlying securities over (ii) the aggregate unit principal balance on the final scheduled distribution date. 
	 	Any amortization or other payment by the Underlying Security Issuer on the Underlying Securities shall be treated as a redemption if not otherwise addressed herein. 

	
      Other Trust Wind-Up 

      Events Priority:
 	
            

      On any Distribution Date occurring in connection with a Trust Wind-Up Event due to an event or events other than 
 

 

 

	
             
 	
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	 	an exercise of Warrants or a redemption of Underlying Securities (or to the extent thereof), the Trustee shall apply amounts available (excluding the amounts allocable to the aggregate Corresponding Underlying Security Amount related to any exercise of Warrants provided for above or the amounts distributable in connection with a redemption as provided for above):
	 	FIRST, to the payment of the claims of the Units such claims being equal to the Unit Principal Balance plus accrued and unpaid interest, if any, 
	 	SECOND, to the payment of any accrued and unpaid Expense Administrator’s Fee, and 
	 	THIRD, any remaining amounts are paid to the Warrantholders, as payment of any Warrant Termination Payment. 
	 	FOURTH, if there is no Warrant Termination Payment, any remaining amounts, if any, are paid to the Unitholders of the Units being redeemed, pro rata in proportion to the Unit Principal Balance.
	
            Record Date:
 	
            The Record Date for each Distribution Date shall be the third Business Day prior to such Distribution Date, without adjustment for any change in the Distribution Date due to the receipt of funds for distribution after 12 noon, except that in respect of the final Distribution Date, when distributions will be made against presentation of the Units.
 

	
            Form:
 	
            Global security; except Units re-issued in connection with an exercise of Warrants.  
 

	
            Depositary:
 	
            DTC
 

 

	
            Trustee Fees and Expenses:
 	
            As compensation for and in payment of trust expenses related to its services under the trust agreement other than extraordinary trust expenses, the trustee will receive trustee fees on each date on which the Trust receives a distribution on the underlying securities in an amount equal to $2,000.  The Trustee Fee shall cease to accrue after termination of the Trust.  The Trust is also expected to have ongoing expenses of $5,000 per year for listing fees.  The expense administrator will receive monies for these expenses on each date on which the Trust receives a distribution on the underlying securities in the amount equal to $2,500.  The trigger amount with respect to extraordinary trust expenses 
 

 

 

	
             
 	
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	 	for the Trust is $20,000 and the maximum reimbursable amount is $100,000. 
	 	The Trustee Fee will be paid by the Expense Administrator. Expenses will be reimbursed by the Expense Administrator in accordance with the Expense Administration Agreement. 
	
            Expense Administrator:
 	
            The Trustee will act as Expense Administrator on behalf of the Trust pursuant to an Expense Administration Agreement, dated as of the date of the Trust Agreement (the “Expense Administration Agreement”), between the Trustee as Expense Administrator (the “Expense Administrator”) and the Trust. 
 
	 	The Expense Administrator will receive a fee equal to $5,500 payable on each Distribution Date. The Expense Administrator Make-Whole Amount, if any, shall also be considered part of the Expense Administrator’s fee hereunder and under the Expense Administration Agreement. The Amounts specified in this paragraph are also referred to as the “Expense Administrator’s Fee”.
	 	The Expense Administrator will be responsible for paying the Trustee Fee and reimbursing certain other expenses of the Trust in accordance with the Expense Administration Agreement. 

	
      Expense Administrator

      Make-Whole Amount:
 	
            

            Except to the extent such exercise is in connection with a redemption, if any exercise of Warrants, together with any other Warrants exercised on the same Call Date, is an exercise of less than all Warrants remaining unexercised, the applicable Call Price shall include an amount equal to the present value of a stream of payments equal to $5,500 payable on each scheduled Distribution Date discounted at a rate of 5.0% per annum on the basis of a 360 day year consisting of twelve 30 day months from but excluding the date of such exercise until and including the Scheduled Final Distribution Date, assuming for this purpose that the Trust is not terminated prior to the Scheduled Final Distribution Date, multiplied by the Unit Principal Balance of applicable Units to be called and divided by the Initial Unit Principal Balance of the
Units.
 

	
            Listing:
 	
            The Depositor has applied to list the Units on the New York Stock Exchange.   
 

 

 

	
             
 	
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            ERISA Restrictions:
 	
            With respect to the Units, no ERISA restrictions apply on the Closing Date.
 
	 	In the event that an Exchange Act Reporting Event occurs (as described below), any Unitholder which would constitute a Plan (or a governmental plan or church plan subject to Similar Law) may be given the right to elect a partial sale of the trust property solely as to the portion of the trust property represented by its holding of Units. Each Unitholder which is given notice of such a right and does not make such election, and each fiduciary who makes such determination on its behalf, shall be deemed to have represented and warranted, for so long as it holds the Unit or a beneficial interest therein, that by reason of the application of one or more of the exemptions from the prohibited transactions rules of Section 406 of ERISA and Section 4975 of the Code provided under prohibited transaction class exemption (“PTCE”) 96-23, 95-60, 91-38, 90-1 or 84-14 or an exemption from a Similar Law prohibition, its holding and subsequent disposition of such Units (and the transactions of the underlying trust, including the holding of the underlying securities) shall not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or violation of Similar Law. Any Plan (or governmental or church plan subject to Similar Law) acquiring Units after an Exchange Act Reporting Termination (as defined below) will be deemed to have made the representations and warranties set forth in the immediately preceding sentence with respect to its acquisition, holding and disposition of Units for so long as it holds the Units or any beneficial interest therein.

	
            QIB Restriction:
 	
            Not Applicable
 

	
            Termination:
 	
            If a Trust Wind-Up Event occurs, any Underlying Securities held by the Trust will be liquidated (by delivery to the Underlying Security Issuer in the event of a redemption, pursuant to the Warrant Terms in the event of an exercise of the Warrants or otherwise by sale thereof).  
 

	
            Warrant Termination Payment: 
 	
            Any amounts available for payment pursuant to the Distribution Priorities above as a Warrant Termination Payment.
 

	
            Tender Offers:
 	
            The Trust will not participate in any tender offer for the Underlying Securities and the Trustee will not accept any 
 

 

 

	
             
 	
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	 	instructions to the contrary from the Unitholders, except in connection with an exercise by a Warrantholder of Warrants. Any Warrantholder may exercise Warrants in connection with any tender offer for the Underlying Securities and the Trustee may participate in the tender offer on behalf of an exercising Warrantholder.
	
            Depositor Optional Exchange:
 	
            Depositor Optional Exchange applies to this Series of Units.
 
	 	Section 5.12(c)(i) of the Standard Terms shall be incorporated herein and amended by replacing the dollar figure “$25” with “$1,000”. 
	 	Pursuant to 5.12(c)(iii), a corresponding portion of the Warrants must consent to such an exchange. The Depositor may satisfy the consent requirement of the preceding sentence by tendering a corresponding portion of Warrants or by delivering consents from a corresponding portion of Warrants (including Warrants it owns) or any combination thereof. Pursuant to 5.12(c)(iii), the Expense Administrator must consent to such an exchange.
	 	Section 5.12(c)(iv) of the Standard Terms shall be incorporated herein by adding the following to Section 5.12(c): “(iv) the Depositor determines that more than 100 holders of the Units, independent of the Trust and each other will remain after such exchange; unless the Depositor determines that such an exchange is otherwise consistent with the restrictions under ERISA and Section 4975 of the Internal Revenue Code of 1986.”

	
      Optional Exchange 

      Under Warrants:
 	
            

      A Call Notice under Schedule III shall also constitute a notice of and a demand to exchange each of the Units acquired pursuant to the related exercise for a corresponding portion of Trust Property pursuant to Section 5.12(d) of the Standard Terms.  Such notice and demand may only be revoked or rescinded to the extent that the related exercise is revoked or rescinded and the settlement of the Optional Exchange shall be the Exercise Date.  
 
	 	Trust Property distributable to a Warrantholder who has acquired Units by exercise in connection with a tender offer or redemption as addressed in Section 1.1(i) of Schedule III, shall be the Trust Property specified in Section 1.1(i) of 

 

 

 

	
             
 	
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	 	Schedule III payable in the manner specified in the Distribution Priority. 
	
            Terms of Retained Interest:
 	
            Notwithstanding any other provision herein or in the Standard Terms, the Depositor retains the right to receive any and all interest that accrues on the Underlying Securities prior to the Closing Date.  The Depositor will receive such accrued interest on the first Distribution Date (or redemption date or Call Date if earlier) for the Units and such amount shall be paid from the interest payment made with respect to the Underlying Securities on the first Distribution Date.
 
	 	The amount of the Retained Interest is $789,127.
	 	If an Underlying Security Default occurs on or prior to the first Distribution Date and the Depositor does not receive such Retained Interest amount in connection with such Distribution Date, the Depositor will have a claim for such Retained Interest, and will share pro  rata with holders of the Units to the extent of such claim in the proceeds from the recovery on the Underlying Securities.

	
            Sale of Underlying Securities:
 	
            In connection with any sale of the Underlying Securities by the Selling Agent pursuant to the terms hereof, if a Warrantholder is not an affiliate of the Selling Agent, the Selling Agent will extend a right of first refusal to each such Warrantholder to purchase the Underlying Securities at the highest bid received by the Selling Agent.
 
	 	If more than one Warrantholder exercises such right of first refusal, Underlying Securities will be sold to each exercising Warrantholder in proportion to the number of Warrants held by such Warrantholder; provided, that if only one Warrantholder exercises such right of first refusal, such Warrantholder shall be entitled to purchase any or all of the Underlying Securities to be sold by the Selling Agent. If only one Warrantholder exercises its right of first refusal, the selling agent may deliver the underlying securities directly to the warrantholder and forego obtaining bids for the underlying securities if and to the extent that the warrantholder agrees to pay an amount equal to the amounts referred to in clauses FIRST and SECOND under “Other Trust Wind-Up Events Priority.”

	
            Selling Agent:
 	
            Morgan Stanley & Co. Incorporated.
 

 

 

	
             
 	
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            Rating Agency Condition:
 	
            The definition of Rating Agencies Condition in the Standard Terms shall not apply and the following shall apply instead:
 
	 	“Rating Agency Condition”: With respect to any specified action or determination, means receipt of (i) written confirmation by Moody’s (if the Units are rated by Moody’s, for so long as the Units are outstanding and rated by Moody’s) and (ii) written confirmation by S&P (if the Units are rated by S&P, for so long as the Units are outstanding and rated by S&P), that such specified action or determination will not result in the reduction or withdrawal of their then-current ratings on the Units. Such confirmation may relate either to a specified transaction or may be a confirmation with respect to any future transactions which comply with generally applicable conditions published by the applicable rating agency. 

	
            Amendments:
 	
            Notwithstanding anything to the contrary in the Standard Terms, amendments to the Warrants and to Schedule III hereof shall be governed by Section 7.02 of the Standard Terms.  For the avoidance of doubt, the terms of the Warrant and Schedule III may not be amended without consent of all Warrantholders.
 
	 	Notwithstanding the foregoing, the Depositor and Trustee may agree to amend and restate this Trust Agreement from time to time regarding the Warrants, without consent of the Warrantholders, to provide that Warrantholders shall be entitled to call and receive directly the underlying Trust Property corresponding to the Units that would have been redeemed following an exercise of Warrants, and not to call the Units. For the avoidance of doubt, such amendment shall not affect the Call Price.

	
            Additional Terms:
 	
            The Definition of Corporate Trust Office in Section 1.01 of the Standard Terms is modified by deleting the words “Asset-Backed” and inserting the word “Global” in lieu thereof.
 
	 	The Definition of Disqualified Swap Counterparty in Section 1.01 of the Standard Terms is modified by deleting the words “swap counterparty” and inserting the words “Swap Counterparty” in lieu thereof.
	 	Section 3.06 is modified by deleting the words “shall invest funds held in any Account in the Permitted Investments 

 

 

 

 

	
             
 	
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	 	specified in clause (i) of the definition thereof upon receipt of such funds. Such funds shall be invested in Permitted Investments that will mature at least one Business Day prior to the next Distribution Date” and inserting the words “hold the funds in any Account univested” in lieu thereof.
	 	Section 5.10(b) is modified by deleting the word “compensating” and inserting the word “compensation” in lieu thereof.
	 	Section 10.01(d) is modified by inserting the words “that the depositor and Trust are subject to the reporting obligations of the Exchange Act” following the words “each year” in both instances.
	 	Section 12.10 of the Standard Terms shall apply as modified below to include the Warrantholders:
	 	“Prior to the date that is one year and one day after all distributions in respect of the Units have been made, none of the Trustee, the Trust, the Depositor or the Warrantholders shall take any action, institute any proceeding, join in any action or proceeding or otherwise cause any action or proceeding against any of the others under the United States Bankruptcy Code or any other liquidations, insolvency, bankruptcy, moratorium, reorganization or similar law (“Insolvency Law”) applicable to any of them, now or hereafter in effect, or which would be reasonably likely to cause any of the others to be subject to, or seek the protection of, any such Insolvency Law.”
	
            Compliance Certificate:
 	
            The Trustee will provide to the Depositor an appropriate compliance certificate in connection with the annual report of the Depositor and/or the Trust and, upon the reasonable request of the Depositor, at other times, with respect to the Trustee's compliance with its duties and obligations under this Trust Agreement.  A form of such certification is attached as Annex A.  
 

	
            Officer’s Certificate:  
 	
            The Trustee will provide to the Depositor an appropriate officer’s certificate (or other such form that may be reasonably requested by the Depositor from the Trustee to conform to the requirements of Regulation AB of the Securities Act of 1933) by not later than March 15th of each year that the Trust is subject to the reporting requirements of the Exchange Act, starting in the year following the year 
 

 

 

	
             
 	
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	 	of issuance of the related Units, that: (i) a review of the activities of the Trustee during the preceding calendar year and of performance under this Trust Agreement has been made under such officer’s supervision; and (ii) to the best of such officer’s knowledge, based on such review, the Trustee has fulfilled all of its obligations in all material respects under this Trust Agreement for such year, or, if there has been a default in the fulfillment of any such obligation in any material respect, specifying each such default known to such officer and the nature and status of such default, including the steps being taken by the trustee to remedy such default. 
	
            Assessment of Compliance:
 	
            On or prior to March 15th of each year that the Trust is subject to the reporting requirements of the Exchange Act, commencing with the year following the year of issuance of the related Units, the Trustee will be required to deliver to the Depositor an Assessment of Compliance (or other such form that may be reasonably requested by the Depositor from the Trustee to conform to the requirements of Regulation AB of the Securities Act of 1933) that contains the following:
 

	
             
 	
            (1)
 	
            a statement of the Trustee’s responsibility for assessing compliance with the servicing criteria applicable to it under this Trust Agreement;
 

	
             
 	
            (2)
 	
            a statement that the Trustee used the criteria in Item 1122(d) of Regulation AB (17 CFR 229.1122) to assess compliance with the applicable servicing criteria under this Trust Agreement;
 

	
             
 	
            (3)
 	
            the Trustee’s assessment of compliance with the applicable servicing criteria during and as of the end of the prior calendar year, setting forth any material instance of noncompliance identified by the Trustee; and
 

	
             
 	
            (4)
 	
            a statement that a registered public accounting firm has issued an attestation report on the Trustee’s assessment of compliance with the applicable servicing criteria under the trust agreement during and as of the end of the prior calendar year.
 
	 	The Trustee will also be required to simultaneously deliver an attestation report of a registered public accounting firm, prepared in accordance with the standards for attestation 

 

 

 

	
             
 	
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	 	engagements issued or adopted by the Public Company Accounting Oversight Board, that expresses an opinion, or states that an opinion cannot be expressed, concerning the Trustee’s assessment of compliance with the applicable servicing criteria under this Trust Agreement. 
	
            Additional Reports to the Depositor:
 	
            Upon the reasonable request of the Depositor, the Trustee shall deliver to the Depositor other reports with respect to the Trustee's compliance with its duties and obligations under this Trust Agreement as may be deemed reasonably necessary by the Depositor to maintain compliance with applicable laws and regulations.
 

	
            Additional Reports to Unitholders:
 	
            In addition to the provisions of Section 4.02 of the Standard Terms and in accordance with the cashflow model and based on the underlying asset information provided at the Closing Date, the Trustee will perform distribution calculations and prepare a semi-annual statement to Unitholders detailing the payments received and the activity on the underlying asset(s) during the each such six-month period.  In performing these reporting obligations to the Unitholders under this Trust Agreement, the Trustee may rely on the information provided to it by the Depositor on the Closing Date.  For the purposes of this provision only, the Trustee will not be required to recompute, recalculate or verify the information provided to it by the Depositor.
 

	
            Distribution Reports:
 	
            The Depositor, or Trustee, if permitted under the applicable rules and regulations of the Securities Exchange Commission and the procedures with respect thereto have been mutually agreed upon by the Depositor and the Trustee, shall file each distribution report on Form 10-D within 15 days of the related Distribution Date.  Each such distribution report or Form 10-D shall contain text substantially similar to the following:
 

The underlying security issuer, as applicable, is subject to the informational requirements of the Exchange Act.  The underlying security issuer, as applicable, currently files reports, proxy statements and other information with the SEC. Those periodic reports, current reports and other reports and other information can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of those materials can be obtained by making a written request to the SEC, Public Reference 

 

 

	
             
 	
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	 	Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC also maintains a website on the internet at http://www.sec.gov at which users can view and download copies of reports, proxy, information statements and other information filed electronically. In addition, those reports and other information may also be obtained from the underlying security issuer by making a request to the underlying security issuer.
	
            Fiscal Year:
 	
            The fiscal year of the Trust shall be the calendar year and end each December 31.  
 

 

 

	
             
 	
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ANNEX A TO SCHEDULE I

 

LASALLE BANK NATIONAL ASSOCIATION

 

ABS ANNUAL REPORT BACKUP CERTIFICATION

 

In connection with the preparation and delivery of the annual report on Form    10-K of MS Structured Asset Corp. for the fiscal year ending December 31, and the certifications given on behalf of SATURNS Trust  No. 2006-2 with respect thereto, the undersigned hereby certifies that he is a duly elected [                       ] of LaSalle Bank National Association and further certifies in his capacity as such as follows:

1.            LaSalle Bank National Association has prepared all distribution reports with respect to each distribution date for SATURNS Trust No. 2006-2 and, if permitted under the applicable rules and regulations of the Securities Exchange Commission and the procedures with respect thereto that have been mutually agreed upon by MS Structured Asset Corp. and LaSalle Bank National Association, has filed a copy of such reports on Form 10-D during the fiscal year as described on Exhibit A hereto.  

2.            I have reviewed all reports on Form 10-D containing distribution reports filed in respect of periods included in the fiscal year covered by the annual report of MS Structured Asset Corp. on behalf of SATURNS Trust 2006-2;

3.            I am familiar with the operations of LaSalle Bank National Association with respect to the SATURNS program and SATURNS Trust 2006-2 and the requirement imposed by the trust agreement;

4.            Based on my knowledge, the information in the distribution reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by the annual report;

5.            Based on my knowledge, the information required to be provided under each trust agreement, for inclusion in these reports, is included in these reports; 

6.            Based on my knowledge, and except as disclosed in the reports, the trustee has fulfilled its obligations, including any servicing obligations, under the trust agreement. 

7.             Based on my knowledge, and except as disclosed in the reports, there are no material legal proceedings pending involving the trust or LaSalle Bank National Association as trustee of the trust. 

 

By:                                          
                          

Name:

Title:

Date: 

 

 

 

 

	
             
 	
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EXHIBIT A TO ANNEX A TO SCHEDULE I

 

 

	
            SATURNS Trust No.:
 	
            Closing Date
 	
            Collateral
 	
            Payment Dates
 	
            Form 10-D Filing Dates (Not Trust Agreement Filings in connection with Closing Date)

For FY [    ]
 
	
            2006-2
 	
            8/2/06
 	
            Cummins Engine Company
 	
            March 1 and September 1
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 

 

 

 

	
             
 	
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Schedule II

(Terms of Trust Property)

	
            Underlying Securities:
 	
            Cummins Engine Company 5.65% Debentures due March 1, 2098
 

	
            Underlying Security Issuer:
 	
            Cummins Inc. (formerly known as Cummins Engine Company, Inc.)
 

	
            Principal Amount:
 	
            $33,500,000
 

	
            Underlying Security Rate:
 	
            5.65%
 

	
            Credit Ratings:
 	
            Baa3 by Moody’s
 
	 	BBB- by S&P

	
      Listing:
 	
            None
 

	
      Underlying Security 

      Issuance Agreement:
 	
            

      An indenture dated as of March 1, 1986 and supplemented as of September 18, 1990 between the Underlying Security Issuer and JPMorgan Chase Bank (as successor to The Chase Manhattan Bank, N.A.) as trustee (the “Underlying Security Trustee.”), as supplemented and amended from time to time.
 

	
      Underlying security

      disclosure documents:
 	
            

      The prospectus dated December 19, 1997 and the prospectus supplement dated February 26, 1998, describing the underlying securities
 

	
            Form:
 	
            Global
 

 

	
      Currency of

      Denomination:
 	
            

      United States dollars
 

	
            Acquisition Price by Trust:
 	
            $25,323,059
 

	
      Underlying Security 

      Payment Date:
 	
            

      Each March 1 and September 1
 

	
            Original Issue Date:
 	
            The Underlying Securities were issued on or about March 3, 1998 under the Securities Act of 1933 in a principal amount of $165,000,000.  
 

	
            Maturity Date:
 	
            March 1, 2098.   The underlying security issuer may shorten the maturity of the underlying securities by notice provided not more than 60 days after the occurrence of a 
 

 

 

	
             
 	
             
 	
             
 

 

 

	 	Tax Event as such term is defined in the Underlying Security Disclosure Documents.
	
            Sinking Fund Terms:
 	
            Not Applicable
 

	
            Redemption Terms:
 	
            As described in the Underlying Security disclosure documents the Underlying Securities may be redeemed as a whole or in part at any time at the option of the Underlying Security Issuer.    
 

	
            CUSIP No.:/ISIN No.
 	
            231021 AK 2
 

	
            Underlying Security Trustee:
 	
            JPMorgan Chase Bank (as successor to The Chase Manhattan Bank, N.A.).
 

 

	
             
 	
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Schedule III

ADDITIONAL WARRANT TERMS

 

ARTICLE I

EXERCISE OF WARRANTS

 

	
             
 	
            Section 1.1
 	
            Principal Terms.  
 
	
             
 	
            (a)
 	
            Call Price.
 	
             

					

The Call Price per Warrant is the sum of (i)(a) $1,000 (corresponding to 40 $25.00 Units) or (b) if such exercise is in connection with a tender offer for Underlying Securities held by the Trust for settlement prior to the First Regular Call Date, $1,060 ($26.50 per Unit), (ii) accrued and unpaid interest on the applicable Units through the related Call Date and (iii) the applicable Expense Administrator Make-Whole Amount.  For the avoidance of doubt, such amounts shall include accruals on deferred amounts.

	
             
 	
            (b)
 	
            Call Dates.
 

A Warrantholder may designate as a Call Date (i) any Business Day from and including 9:00 a.m. New York time on the First Regular Call Date, to and including 4:00 p.m. New York time on the Expiration Date and (ii) any Business Day prior to the First Regular Call Date as a Call Date, but only if notice of redemption or tender offer has been delivered by the Underlying Security Issuer with regard to the Underlying Securities held by the Trust.

Except as otherwise provided in this paragraph, a Warrantholder shall give notice of its intention to exercise Warrants and related designation of a Call Date on not less than 15 or more than 60-calendar days’ notice.  If the Underlying Security Issuer has given notice of redemption with respect to the Underlying Securities or if a tender offer is outstanding for the Underlying Securities, a Warrantholder may give notice of its intention to exercise Warrants and related designation of a Call Date with two Business Days notice prior to the Call Date but no later than 4:00 p.m. New York City time on the second Business Day immediately preceding the then-scheduled settlement of the tender offer or redemption.

	
             
 	
            (c)
 	
            Expiration Date.  March 1, 2093.

      
	
             
 	
            (d)
 	
            First Regular Call Date.  August 2, 2011.
 
	 	(e)  	Corresponding Underlying Security Amount. The product of (x) the applicable number of Warrants, (y) $1,000 and (z) the Security Factor.
	 	(f) 	Security Factor. The aggregate principal amount of Underlying Securities initially held by the Trust divided by the Initial Unit Principal Balance of the Units. 
	 	(g)	Call Notice.

Each exercising Warrantholder shall deliver a notice in the form of Exhibit B to the Trustee and the Warrant Agent, including the certification of solvency specified therein, prior to 

 

 

	
             
 	
             
 	
             
 

 

 

 

the Call Date.  Each such Call Notice must specify exercise of either (i) all Warrants the notifying Warrantholder owns or (ii) at least 250 Warrants.

A Call Notice also constitutes a notice of exchange of the Units to be obtained by a Warrantholder as a result of such exercise for Trust Property pursuant to Section 5.12(d) of the Standard Terms.  

	
             
 	
            (h)
 	
Automatic Rescission of Exercise.  
 

Delivery of a Call Notice does not give rise to an obligation on the part of the Warrantholder to pay the Call Price.  With respect to each Warrant exercised, if by 4 p.m. New York time on the Business Day prior to the Call Date the applicable Warrantholder has not paid the applicable Call Price for a Warrant to the Warrant Agent, except to the extent the Call Notice relates to a tender offer or redemption of Underlying Securities addressed in Section 1.1(i) below, then the exercise of the applicable Warrant shall be automatically rescinded, the applicable Warrant shall be reinstated, no Call Date with respect thereto shall be deemed to have occurred and no Call Notice deemed given, and the applicable Warrantholder shall be entitled to exercise such reinstated Warrants in the future.

	
             
 	
            (i)
 	
            Tender Offer and Redemption.  
 

Each Warrantholder shall specify in its Call Notice if its exercise is in connection with a redemption or tender offer if the specified Call Date will occur on or after the First Regular Call Date.  Any Warrantholder giving a Call Notice with respect to a Call Date prior to the First Regular Call Date shall be deemed to specify that it is exercising its Warrants in connection with a tender offer or redemption.  

A Warrantholder specifying or deemed to specify that it is exercising its Warrants in connection with a tender offer for or a redemption of the Underlying Securities shall be deemed to instruct the Trustee to tender the applicable Corresponding Underlying Security Amount in connection with such redemption or tender offer.  

To the extent Underlying Securities corresponding to such a deemed instruction to tender are not accepted by the tender offeror or Underlying Security Issuer and paid for in accordance with the terms of the tender offer or redemption, a corresponding number of Warrants shall be reinstated, with exercise thereof rescinded, no Call Date with respect thereto shall be deemed to have occurred and no Call Notice deemed given, with the number of such reinstated Warrants to be allocated among the Warrantholders specifying or deemed to specify exercise in connection with such tender offer or redemption in proportion to the number of Warrants initially so exercised by each, and each such Warrantholder shall be entitled to exercise such reinstated Warrants in the future.  The Warrant Agent shall determine such allocation by notice to the applicable Warrantholders.  

A Warrantholder specifying or deemed to specify that it is exercising its Warrants in connection with a tender offer for or a redemption of the Underlying Securities, to the extent such exercise is not rescinded, shall be entitled to Trust Property in an amount equal to the proceeds of the tender offer or redemption allocable to the applicable Corresponding Underlying Security Amount in excess of the aggregate Call Price for the applicable number of Warrants.  

 

 

	
             
 	
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If the Warrant Agent receives a Call Notice or Call Notices with respect to Warrants with an aggregate Corresponding Underlying Security Amount that is less than the aggregate principal amount of Underlying Securities held by the Trust subject to redemption, the Warrant Agent shall determine by notice to the applicable Warrantholders which Warrants are to be terminated in connection with such redemption by allocating the termination of Warrants pro rata among remaining Warrantholders (including exercising Warrantholders holding unexercised Warrants) in proportion to their holdings of unexercised Warrants.  Warrants so terminated shall be entitled to the applicable Warrant Termination Payment.  

If the Warrant Agent receives no Call Notices with respect to a redemption of Underlying Securities, a number of Warrants equal to the aggregate principal amount of Underlying Securities held by the Trust that are redeemed divided by the product of (x) the Security Factor and (y) $1,000, shall be terminated.  The Warrant Agent shall determine by notice to the applicable Warrantholders which Warrants are to be terminated by allocating such termination among Warrantholders in proportion to the number of Warrants held by each.  Warrants so terminated shall be entitled to the applicable Warrant Termination Payment.  

Whenever the Warrant Agent is obligated to allocate the termination of Warrants pro rata, and this allocation would result in some Warrants being partially terminated, the Warrant Agent shall randomly re-allocate terminations to the extent necessary to ensure that only whole Warrants are terminated or such that only one Warrant is partially terminated. 

	
             
 	
            (j)
 	
            Payment of Call Price.
 

Except with respect to Warrants exercised or deemed exercised in connection with a redemption of or tender offer for the Underlying Securities, each exercising Warrantholder shall deposit the applicable Call Price for all Warrants exercised by it with the Warrant Agent no later than the Business Day prior to settlement of exercise.  

The Warrant Agent shall notify the Trustee immediately upon its receipt of payment of the applicable Call Price.  The Warrant Agent shall transfer the amount of any paid Call Price to the Trustee in immediately available funds, for deposit in the Unit Account and application pursuant to the other terms of this Trust Agreement no later than 4 p.m. New York time on the Business Day preceding the Call Date and, pending such transfer, shall hold such amount for the benefit of the Warrantholder in a segregated trust account. 

	
             
 	
            (k)
 	
            Appointment of Warrant Agent.  
 

The Depositor hereby appoints the Warrant Agent as agent to (i) receive for the benefit of the Warrantholders pending payment to the Trust in connection with exercise of the Warrants from time to time, the Call Price amounts paid to the Warrant Agent, (ii) receive for the benefit of the Warrantholders, in connection with exercise of the Warrants from time to time, the Units deemed tendered to the Trust pursuant to Section 1.2, and the Trust Property received pursuant to the related Optional Exchange pending delivery thereof to the relevant Warrantholders and (iii) otherwise act on behalf of and for the benefit of the Trust, the Unitholders and the Warrantholders for purposes of this Agreement, and the Warrant Agent accepts such appointment for itself and its successors and assigns, subject to the terms and provisions hereof.

 

 

	
             
 	
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            (l)
 	
            Amendment of Trust Agreement
 

The Units are currently subject to Call Options and Call Rights granted in favor of the Warrantholders.  Notwithstanding any other provision of this Trust Agreement, the Depositor and Trustee may agree to amend and restate this Trust Agreement from time to time regarding the Warrants, without the consent of the Warrantholders, to provide that Warrantholders shall be entitled to call and receive directly the underlying Trust Property corresponding to the Units that would have been redeemed following an exercise of Warrants, and not to call the Units.  For the avoidance of doubt, such amendment shall not affect the Call Price.  Similarly, nothing in the above should be understood as exempting such amendment from the application of Section 12.01(d) of the Standard Terms for Trust Agreements.

Section 1.2        Delivery of Units.  As soon as practicable after each surrender of Warrants in whole or in part on the Call Date and upon satisfaction of all other requirements described in the Warrants and in Section 1.1 hereof, the Warrant Agent shall instruct the Trustee to confirm that the transfer specified under the “Callable Series” provisions of Schedule I has occurred and to cause a distribution of Trust Property to the Warrantholder as an Optional Exchange taking into account Section 1.1(i) above, if applicable.  A surrender of the Warrants shall be deemed to be a simultaneous surrender of the Units acquired in exchange therefor.  

If such exercise is in part only, the Warrant Agent shall instruct the Trustee to authenticate new Warrants of like tenor, representing the outstanding Warrants of the Warrantholder and the Warrant Agent shall deliver such Warrants to the Warrantholder.

In each case, the Trustee shall act in accordance with such instructions.

Section 1.3         Cancellation and Destruction of Warrants.  All Warrants surrendered to the Warrant Agent for the purpose of exercise (in whole or in part) pursuant to Section 1.1 and actually exercised, or for the purpose of transfer or exchange pursuant to Article III, shall be cancelled by the Warrant Agent, and no Warrant (other than that reflecting any such transfer or exchange) shall be issued in lieu thereof. The Warrant Agent shall destroy all cancelled Warrants.

Section 1.4         No Rights as Holder of Units Conferred by Warrants.  Each Warrantholder agrees that the Warrants do not represent an ownership interest in the Trust or its assets and that none of them shall treat the Warrants as an ownership interest in the Trust for any purpose.  

ARTICLE II

RESTRICTIONS ON TRANSFER

 

Section 2.1        Restrictive Legends.  Each Warrant (including each Warrant issued upon the transfer of any Warrant) shall be issued with a legend in substantially the form contained in Exhibit A hereto.

Section 2.2        Notice of Proposed Transfer.  Prior to any transfer of any Warrant or portion thereof, the Warrantholder will give 5 Business Days (or such lesser period acceptable to the Warrant Agent) prior written notice to the Warrant Agent and the Depositor of such Warrantholder’s intention to effect such transfer.

 

 

	
             
 	
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ARTICLE III

REGISTRATION AND TRANSFER OF WARRANTS, ETC.

 

Section 3.1         Warrant Register; Ownership of Warrants.  The Warrant Agent will keep a register in which the Warrant Agent will provide for the registration of Warrants and the registration of transfers of Warrants representing numbers of Warrants. The Trustee and the Warrant Agent may treat the Person in whose name any Warrant is registered on such register as the owner thereof for all purposes, and the Trustee and the Warrant Agent shall not be affected by any notice to the contrary.  The Warrant Agent shall make such adjustments to its records and the register as shall be necessary to reflect terminations and exercise of Warrants.  

Section 3.2        Transfer and Exchange of Warrants.  (a) No Warrant may be offered, resold, assigned or otherwise transferred (including by pledge or hypothecation) at any time except in accordance with this Section 3.2.  

(1)          Any purchaser or transferee of the Warrants shall represent that it is (A) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act that (1) is not a broker-dealer that owns and invests on a discretionary basis less than $25 million in securities of issuers that are not affiliated persons of the dealer and (2) is not a plan referred to in paragraph (a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A or a trust fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of such a plan, if investment decisions with respect to the plan are made by the beneficiaries of the plan, (B) aware that the sale or transfer of the Warrants to it may be made to it in reliance on the exemption from registration provided by Rule 144A under the Securities Act and
(C) acquiring the Warrants for its own account or for one or more accounts, each of which is a qualified institutional buyer, and as to each of which the purchaser or transferee exercises sole investment discretion, and in each case in accordance with any applicable securities laws of any state of the United States and other jurisdictions.

(2)          Warrants may not be purchased, held by or transferred to any Person unless that Person is not a Plan, is not a governmental or other plan subject to restrictions substantially similar to Title I of ERISA or Section 4975 of the Code, and is not acquiring the Warrants with the assets of any such Plan or other plan.  Each Person who acquires any Warrant, and each fiduciary which causes any such Person to acquire any Warrant, in its individual as well as its fiduciary capacity, will be deemed by such purchase, holding or acquisition, on each date on which the Warrant is held by such person, to have represented that it is not a Plan or any governmental or other plan subject to requirements substantially similar to Title I of ERISA or Section 4975 of the Code and is not using the assets of
any such Plan to purchase those Warrants.  Each Person that acquires a Warrant, and each fiduciary who causes a person to acquire a Warrant, in its individual as well as its fiduciary capacity, agrees to indemnify and hold harmless the Depositor, the Trustee, the Warrant Agent, MS&Co., each Distribution Participant and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations contained in this Section 3.2(a)(2) not being true.

(b)          Upon surrender of any Warrant for registration of transfer or for exchange to the Warrant Agent, the Warrant Agent shall (subject to compliance with Section 3.2(a)) promptly execute and deliver, and cause the Trustee, on behalf of the Trust, to execute and deliver, in exchange therefor, a new Warrant of like tenor and evidencing a like number of Warrants, in the 

 

 

	
             
 	
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name of such Warrantholder or as such Warrantholder (upon payment by such Warrantholder of any applicable transfer taxes or government charges) may direct; provided that as a condition precedent for transferring the Warrants, the prospective transferee shall deliver to the Trustee and the Depositor an executed copy of the Transfer Letter in the form of Exhibit C hereto.

(c)          Any purported transfer of the Warrants (or any interest therein) in violation of Section 3.2(a)(1) or Section 3.2(a)(2) hereof shall be void ab initio and the purported transferee in such transfer shall not be recognized by any Person as a holder of such Warrants for any purpose.  The Depositor and the Trustee shall each have the power to sell the Warrants (or any interest therein) of a purported Warrantholder (or owner of any interest therein) who acquired its interest in violation of Section 3.2(a)(1) or Section 3.2(a)(2) or who continues to hold Warrants in violation of Section 3.2(a)(2).  

Section 3.3        Replacement of Warrants.  Upon receipt of evidence reasonably satisfactory to the Warrant Agent of the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction of any Warrant, upon delivery of an indemnity bond in such reasonable amount as the Warrant Agent may determine, or, in the case of any such mutilation, upon the surrender of such Warrant for cancellation to the Warrant Agent, the Warrant Agent shall execute and deliver, and cause the Trustee, on behalf of the Trust, to execute and deliver, in lieu thereof, a new Warrant of like tenor bearing a number not contemporaneously outstanding.

	
             
 	
            Section 3.4
 	
            Execution and Delivery of Warrants by Trustee; Authentication.  
 

The Trustee agrees and acknowledges that it will, concurrently with the receipt by it of the Underlying Securities and the execution, authentication and delivery of Units, cause to be executed, authenticated and delivered to or upon the order of the Depositor, Warrants duly executed and authenticated by or on behalf of the Trustee.

The Trustee, on behalf of the Trust, hereby agrees (subject to compliance with Article II) to execute and deliver such new Warrants issued in accordance with Section 1.2 or this Article III as the Warrant Agent shall request in accordance herewith.

Upon surrender for registration of transfer of any Warrant at the office or agency of the Trustee, if the requirements of Section 8-401 of the Uniform Commercial Code are met to the Trustee’s satisfaction, and subject to the transfer restrictions set forth in this Schedule III, the Trustee shall execute, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Warrants.  All transfers of Warrants are subject to the approval of the Trustee and the Trustee shall not register any transfer of Warrants if such transfer would violate any provision of the Trust Agreement.

Section 3.5         Federal Income Tax Matters.  Each Warrantholder agrees to treat each Warrant as a call option for federal income tax purposes.

 

 

	
             
 	
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ARTICLE IV

WARRANT AGENT

 

Section 4.1        Limitation on Liability.  The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of the Warrants in reliance upon any instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document in good faith believed by it to be genuine and to be signed, executed and, where necessary, verified and acknowledged, by the proper Person or Persons.  The Warrant Agent and any director, officer, employee or agent of the Warrant Agent shall be indemnified by the Depositor to the same extent that the Trustee is indemnified by the Depositor pursuant to Section 10.05(b) of the
Standard Terms.

Section 4.2        Duties of Warrant Agent.  The Warrant Agent undertakes only the specific duties and obligations imposed hereunder upon the following terms and conditions, by all of which the Depositor, the Trust, the Trustee and each Warrantholder shall be bound:

(a)          The Warrant Agent may consult with legal counsel (who may be legal counsel for the Depositor), and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in good faith and in accordance with such opinion, provided the Warrant Agent shall have exercised reasonable care in the selection by it of such counsel.

(b)          Whenever in the performance of its duties hereunder, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Depositor or the Trustee prior to taking or suffering any action hereunder, such fact or matter may be deemed to be conclusively proved and established by a Depositor Order or a certificate signed by a Responsible Officer of the Trustee and delivered to the Warrant Agent; and such certificate shall be full authorization to the Warrant Agent for any action taken or suffered in good faith by it hereunder in reliance upon such certificate.

(c)          The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith.

(d)          The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained herein or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Trust and the Depositor only.

(e)          The Warrant Agent shall not have any responsibility in respect of and makes no representation as to the validity of the Warrants or the execution and delivery thereof (except the due execution hereof by the Warrant Agent); nor shall it be responsible for any breach by the Trust of any covenant or condition contained in the Warrants; nor shall it by any act thereunder be deemed to make any representation or warranty as to the Units to be purchased thereunder. 

(f)           The Warrant Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from the Chairman of the Board, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, President, a Vice President, 

 

 

	
             
 	
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a Senior Vice President, a Managing Director, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary of the Depositor, and any Responsible Officer of the Trustee, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer.

(g)          The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Trust or otherwise act as fully and freely as though it were not Warrant Agent hereunder, so long as such persons do so in full compliance with all applicable laws. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Trust, the Depositor or for any other legal entity.

(h)          The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents.

(i)           The Warrant Agent shall act solely as the agent of the Trust, the Unitholders and the Warrantholders hereunder as respectively set forth herein. The Warrant Agent shall not be liable except for the failure to perform such duties as are specifically set forth herein, and no implied covenants or obligations shall be read into the Warrants against the Warrant Agent, whose duties shall be determined solely by the express provisions thereof. The Warrant Agent shall not be deemed to be a fiduciary.

(j)           The Warrant Agent shall not be responsible for any failure on the part of the Trustee to comply with any of its covenants and obligations contained herein.

(k)          The Warrant Agent shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of its duties hereunder and shall not be under any obligation or duty to institute, appear in or defend any action, suit or legal proceeding in respect hereof, in each case unless first indemnified to its satisfaction, but this provision shall not affect the power of the Warrant Agent to take such action as the Warrant Agent may consider proper, whether with or without such indemnity. The Warrant Agent shall promptly notify the Depositor and the Trustee in writing of any claim made or action, suit or proceeding instituted against it arising out of or in connection with the Warrants.

(l)           The Trustee will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further acts, instruments and assurances as may be required by the Warrant Agent in order to enable it to carry out or perform its duties hereunder.

Section 4.3         Change of Warrant Agent.  The Warrant Agent may resign and be discharged from its duties hereunder upon thirty (30) days’ notice in writing mailed to the Depositor and the Trustee by registered or certified mail, and to the Warrantholders by first-class mail at the expense of the Depositor; provided that no such resignation or discharge shall become effective until a successor Warrant Agent shall have been appointed hereunder. The Depositor may remove the Warrant Agent or any successor Warrant Agent upon thirty (30) days’ notice in writing, mailed to the Warrant Agent or successor Warrant Agent, as the case may be, and to the 

 

 

	
             
 	
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Warrantholders by first-class mail; provided further that no such removal shall become effective until a successor Warrant Agent shall have been appointed hereunder. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Depositor shall promptly appoint a successor to the Warrant Agent, which may be designated as an interim Warrant Agent. If an interim Warrant Agent is designated, the Depositor shall then appoint a permanent successor to the Warrant Agent, which may be the interim Warrant Agent. If the Depositor shall fail to make such appointment of a permanent successor within a period of thirty (30) days after such removal or within sixty (60) days after notification in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the Warrantholder, then the Warrant Agent or registered Warrantholder may apply to any court of
competent jurisdiction for the appointment of such a successor.

Any successor to the Warrant Agent appointed hereunder must be rated in one of the four highest rating categories by the Rating Agencies. Any entity which may be merged or consolidated with or which shall otherwise succeed to substantially all of the trust or agency business of the Warrant Agent shall be deemed to be the successor Warrant Agent without any further action. 

Section 4.4         Warrant Agent Transfer Fee.  The Warrant Agent will assess a fee of $50.00 upon the issue of any new Warrant, such fee to be assessed upon the new Warrantholder.

 

 

	
             
 	
            III-9
 	
             
 

 

 

 

 

EXHIBIT A TO SCHEDULE III

FORM OF WARRANT CERTIFICATE

STRUCTURED ASSET TRUST UNIT REPACKAGINGS (“SATURNS”)

SERIES 2006-2

WARRANTS

EACH PURCHASER OR OTHER TRANSFEREE OF THIS WARRANT OR ANY INTEREST HEREIN OF THIS WARRANT, BY ITS ACCEPTANCE HEREOF, IS DEEMED TO REPRESENT AND WARRANT FOR THE BENEFIT OF THE TRUSTEE AND THE DEPOSITOR OF THE TRUST, AND EACH DISTRIBUTION PARTICIPANT AS DEFINED IN THE TRUST AGREEMENT THAT SUCH PURCHASER OR OTHER TRANSFEREE IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND OF THE TYPE SET FORTH IN THE WARRANT TRANSFER LETTER.  

THE HOLDER, AND EACH FIDUCIARY WHICH CAUSES ANY PERSON TO ACQUIRE ANY WARRANT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, WILL BE DEEMED BY SUCH PURCHASE, HOLDING OR ACQUISITION, ON EACH DATE ON WHICH THE WARRANT IS HELD BY SUCH PERSON, TO HAVE REPRESENTED THAT IT IS NOT A (I) “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, (II) “PLAN” DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) SUBJECT TO SECTION 4975 OF THE CODE, (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN’S INVESTMENT IN SUCH ENTITY OR OTHERWISE OR (IV) GOVERNMENTAL OR OTHER PLAN SUBJECT TO REQUIREMENTS SUBSTANTIALLY SIMILAR TO TITLE I OF ERISA OR
SECTION 4975 OF THE INTERNAL REVENUE CODE.

EACH PERSON THAT ACQUIRES A WARRANT, AND EACH FIDUCIARY WHO CAUSES A PERSON TO ACQUIRE A WARRANT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, AGREES TO INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE WARRANT AGENT, THE TRUSTEE, MS&CO. AND THEIR RESPECTIVE AFFILIATES FROM ANY COST, DAMAGES, LOSS OR EXPENSE, INCURRED BY THEM AS A RESULT OF THE REPRESENTATIONS MADE BY SUCH PERSON OR FIDUCIARY IN THIS PARAGRAPH NOT BEING TRUE.

THIS WARRANT MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS PROVIDED IN THE TRUST AGREEMENT FOR THE TRUST TO WHICH THIS WARRANT RELATES.

ANY PURPORTED TRANSFER OF THIS WARRANT CERTIFICATE (OR ANY INTEREST HEREIN) IN VIOLATION OF SECTION 3.2(A)(1) OR SECTION 3.2(A)(2) OF SCHEDULE III TO THE TRUST AGREEMENT SHALL BE VOID AB INITIO AND THE 

 

 

	
             
 	
            III-10
 	
             
 

 

 

 

PURPORTED TRANSFEREE IN SUCH TRANSFER SHALL NOT BE RECOGNIZED BY ANY PERSON AS A HOLDER OF SUCH WARRANTS FOR ANY PURPOSE.  THE DEPOSITOR AND THE TRUSTEE SHALL EACH HAVE THE POWER TO SELL THE WARRANTS (OR ANY INTEREST HEREIN) OF A PURPORTED WARRANTHOLDER (OR OWNER OF ANY INTEREST HEREIN) WHO ACQUIRED ITS INTEREST IN VIOLATION OF SECTION 3.2(A)(1) OR SECTION 3.2(A)(2) OF SCHEDULE III TO THE TRUST AGREEMENT OR WHO CONTINUES TO HOLD WARRANTS IN VIOLATION OF SECTION 3.2(A)(2) OF SCHEDULE III OF THE TRUST AGREEMENT.  

THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

	
            Warrant No. 1

 
 	
            CUSIP No. 86360Y116
 
	
            REGISTERED INITIAL NUMBER: 25,510  
 	
             
 
	
            AGGREGATE INITIAL NUMBER

OF ALL WARRANTS:  25,510

 
 	
             
 

 

STRUCTURED ASSET TRUST UNIT REPACKAGINGS (“SATURNS”)

SERIES 2006-2

WARRANTS

This certifies that [                     ] is the registered owner of Warrants in the number specified above.  

The Trust Property will be held in trust by the Trustee identified in the Trust Agreement  (the “Trust”).  The Trust has been created pursuant to a Trust Agreement, dated as of August 2, 2006 (the “Trust Agreement”), between LaSalle Bank National Association, as Trustee of the Trust (the “Trustee”), and MS Structured Asset Corp.

To the extent not defined herein, all capitalized terms shall have the meanings assigned to such terms in the Trust Agreement and the Terms Schedule attached thereto.  This Warrant is one of the Warrants described in the Trust Agreement and is issued under and subject to the terms, provisions and conditions of the Trust Agreement.  By acceptance of this Warrant, the Warrantholder assents to and becomes bound by the Trust Agreement.

Each Warrant issued by the Trust represents a Call Option and Call Right to purchase $1,000 Unit Principal Balance of the Units.  Exercises on this Certificate will be made in accordance with a written notice to the Warrant Agent specified in the Trust Agreement.  

This Certificate does not purport to summarize the Trust Agreement and reference is hereby made to the Trust Agreement for information with respect to the rights, benefits, 

 

 

	
             
 	
            III-11
 	
             
 

 

 

 

obligations and duties evidenced thereby.  A copy of the Trust Agreement may be examined during normal business hours at the Corporate Trust Office of the Trustee, located at 135 South LaSalle Street, Suite 1625, Chicago, Illinois 60603 and at such other places, if any, designated by the Trustee, by any Warrantholder upon request.

Reference is hereby made to the further terms of this Certificate set forth on the reverse hereof, which further terms shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Trustee, by manual signature, this Certificate shall not entitle the Warrantholder hereof to any benefit under the Trust Agreement or be valid for any purpose.

IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its individual capacity, has caused this Certificate to be duly executed.

SATURNS TRUST NO. 2006-2

BY: LASALLE BANK NATIONAL 

	
             
 	
            ASSOCIATION,
 
	
             
 	
            as Trustee
 	
             

 

 

By:  ______________________________

Authorized Signatory

DATED:

[SEAL]

Trustee’s Certificate of

Authentication:

This is one of the Warrants referred

to in the within-mentioned Agreement.

LASALLE BANK NATIONAL ASSOCIATION,

	
             
 	
            as Authenticating Agent
 

 

 

By:  ____________________________

Authorized Signatory

 

 

	
             
 	
            III-12
 	
             
 

 

 

 

 

STRUCTURED ASSET TRUST UNIT REPACKAGINGS (“SATURNS”)

SERIES 2006-2

The Trust Agreement permits the amendment thereof, in certain circumstances, without the consent of the Warrantholders of any of the Certificates.

As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registerable in the Warrant Register upon surrender of this Certificate for registration of transfer at the office or agency maintained by the Trustee in Chicago, Illinois, accompanied by a written instrument of transfer and, if applicable, a transfer letter in form and substance satisfactory to the Trustee duly completed and executed by the Warrantholder hereof or such Warrantholder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same aggregate interest in the Trust will be issued to the designated transferee.

As provided in the Trust Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates representing different numbers of Warrants which evidence the same aggregate Warrants, as requested by the Warrantholder surrendering the same.  No service charge will be made for any such registration of transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or governmental charges payable in connection therewith.

The Depositor, the Trustee and any agent of the Depositor or the Trustee may treat the person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Trustee, or any such agent shall be affected by any notice to the contrary.

Notwithstanding anything contained in the Trust Agreement to the contrary the Trust Agreement has been accepted by LaSalle Bank National Association not in its individual capacity but solely as Trustee and in no event shall LaSalle Bank National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Depositor thereunder or in any of the certificates, notices or agreements delivered pursuant thereto, as to all of which recourse shall be had solely to the assets of the Depositor, and under no circumstances shall LaSalle Bank National Association be personally liable for the payment of any indebtedness or expenses of the Trust.  The Warrants do not represent interests in or obligations of the Trustee and the Trustee shall not be responsible or accountable for any tax, accounting or other treatment proposed to be applied to the
Warrants or any interest therein except as expressly provided in the Trust Agreement.

 

 

	
             
 	
            III-13
 	
             
 

 

 

 

 

ASSIGNMENT FOR SATURNS SERIES 2006-2

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER

OF ASSIGNEE

___________________________________________________________________________

(Please print or typewrite name and address, including postal zip code, of assignee)

____________________________________________________________________________

the within Certificate, and all rights thereunder, hereby irrevocably constituting and appointing

____________________________________________________________________________

Attorney to transfer said Certificate on the books of the Certificate Registrar, with full power of

substitution in the premises.

Dated:

_______________________________ */

 

 

 

 _______________

*/  NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration, enlargement or any change whatever.

 

 

 

	
             
 	
            III-14
 	
             
 

 

 

 

 

EXHIBIT B TO SCHEDULE III

FORM OF EXCERCISE NOTICE AND CERTIFICATION OF SOLVENCY

[DATE]

LaSalle Bank National Association

135 S. LaSalle Street

Chicago, Illinois 60603

MS Structured Asset Corp.

1585 Broadway

New York, New York 10036

	
            Re:
 	
            Structured Asset Trust Unit Repackagings (“SATURNS”), Series 2006-2
 

Ladies and Gentlemen:

We hereby give notice of our intent to acquire __________ Unit Principal Balance Units for settlement on _________ (the “Call Date”).  [We hereby direct the Trustee and the Warrant Agent to treat this exercise [up to] __________ Unit Principal Balance of Units as an exercise in connection with a [redemption][tender offer] up to the maximum amount allocable to us in connection with this exercise.]

We certify that our assets exceed our liabilities, that we are able to meet our obligations as they come due, and that we are not subject to any bankruptcy or insolvency proceeding.

[WARRANTHOLDER]

By:                                          
                          

Name:

Title:

 

 

 

	
             
 	
            III-15
 	
             
 

 

 

 

 

EXHIBIT C TO SCHEDULE III 

FORM OF WARRANT TRANSFER LETTER

[DATE]

LaSalle Bank National Association

135 S. LaSalle Street

Chicago, Illinois 60603

MS Structured Asset Corp.

1585 Broadway

New York, New York 10036

	
            Re:
 	
            Structured Asset Trust Unit Repackagings (“SATURNS”), Series 2006-2
 

Ladies and Gentlemen:

In connection with its proposed purchase of Warrants (the “Warrants”) which represent the right to call $______________ aggregate Unit Principal Balance of SATURNS 2006-2 Cummins Engine Company Debenture Backed Units, the undersigned transferee (the “Transferee”) confirms that:

1.             The Transferee understands that substantial risks are involved in an investment in the Warrants. The Transferee represents that in making its investment decision to acquire the Warrants, the Transferee has not relied on representations, warranties, opinions, projections, financial or other information or analysis, if any, supplied to it by any person, including MS&Co., MS Structured Asset Corp., as depositor (the “Depositor”), or LaSalle Bank National Association, as trustee (the “Trustee”), or any of your or their affiliates, except as expressly contained in written information, if any. The Transferee has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Warrants,
and the Transferee is able to bear the substantial economic risks of such an investment. The Transferee has relied upon its own tax, legal and financial advisors in connection with its decision to purchase the Warrants. 

2.             Such Transferee (A) is a “qualified institutional buyer” (as defined in Rule 144A of the Securities Act) that (1) is not a broker-dealer that owns and invests on a discretionary basis less than $25 million in securities of issuers that are not affiliated persons of the dealer and (2) is not a plan referred to in paragraph (a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A or a trust fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of such a plan, if investment decisions with respect to the plan are made by the beneficiaries of the plan, (B) is aware that the sale or transfer of the Warrants to it may be made to it in reliance on the exemption from registration provided by Rule 144A under the Securities Act and (C) is acquiring the Warrants for its
own account or for one or more accounts, each of which is a qualified institutional buyer, and as to each of which the Transferee exercises sole investment discretion, and in each case in accordance with any applicable securities laws of any state of the United States and other jurisdictions. 

 

 

	
             
 	
            III-16
 	
             
 

 

 

 

 

3.             The Transferee understands that the Warrants have not been and will not be registered under the 1933 Act or under the securities or blue sky laws of any state, and that (i) if it decides to resell, pledge or otherwise transfer any Security, such resale, pledge or other transfer must comply with the provisions of the Trust Agreement relating to the Warrants and (ii) it will, and each subsequent holder will be required to, notify any purchaser of any Warrant from it of the resale restrictions in the Trust Agreement. 

4.             The Transferee understands that each of the Warrants will bear a legend substantially to the following effect, unless otherwise agreed by the Depositor and the Trustee:

EACH PURCHASER OR OTHER TRANSFEREE OF THIS WARRANT OR ANY INTEREST HEREIN OF THIS WARRANT, BY ITS ACCEPTANCE HEREOF, IS DEEMED TO REPRESENT AND WARRANT FOR THE BENEFIT OF THE TRUSTEE AND THE DEPOSITOR OF THE TRUST, AND EACH DISTRIBUTION PARTICIPANT AS DEFINED IN THE TRUST AGREEMENT THAT SUCH PURCHASER OR OTHER TRANSFEREE IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT.  

THE HOLDER, AND EACH FIDUCIARY WHICH CAUSES ANY PERSON TO ACQUIRE ANY WARRANT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, WILL BE DEEMED BY SUCH PURCHASE, HOLDING OR ACQUISITION, ON EACH DATE ON WHICH THE WARRANT IS HELD BY SUCH PERSON, TO HAVE REPRESENTED THAT IT IS NOT A (I) “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, (II) “PLAN” DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) SUBJECT TO SECTION 4975 OF THE CODE, (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN’S INVESTMENT IN SUCH ENTITY OR OTHERWISE OR (IV) GOVERNMENTAL OR OTHER PLAN SUBJECT TO REQUIREMENTS SUBSTANTIALLY SIMILAR TO TITLE I OF ERISA OR
SECTION 4975 OF THE INTERNAL REVENUE CODE.

EACH PERSON THAT ACQUIRES A WARRANT, AND EACH FIDUCIARY WHO CAUSES A PERSON TO ACQUIRE A WARRANT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, AGREES TO INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, THE WARRANT AGENT, MS&CO. AND THEIR RESPECTIVE AFFILIATES FROM ANY COST, DAMAGES, LOSS OR EXPENSE, INCURRED BY THEM AS A RESULT OF THE REPRESENTATIONS MADE BY SUCH PERSON OR FIDUCIARY IN THIS PARAGRAPH NOT BEING TRUE.

THIS WARRANT MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS PROVIDED IN THE TRUST AGREEMENT FOR THE TRUST TO WHICH THIS WARRANT RELATES.

ANY PURPORTED TRANSFER OF THIS WARRANT CERTIFICATE (OR ANY INTEREST HEREIN) IN VIOLATION OF SECTION 3.2(A)(1) OR SECTION 3.2(A)(2) OF SCHEDULE III TO THE TRUST AGREEMENT SHALL BE VOID AB INITIO AND THE 

 

 

	
             
 	
            III-17
 	
             
 

 

 

 

PURPORTED TRANSFEREE IN SUCH TRANSFER SHALL NOT BE RECOGNIZED BY ANY PERSON AS A HOLDER OF SUCH WARRANTS FOR ANY PURPOSE.  THE DEPOSITOR AND THE TRUSTEE SHALL EACH HAVE THE POWER TO SELL THE WARRANTS (OR ANY INTEREST HEREIN) OF A PURPORTED WARRANTHOLDER (OR OWNER OF ANY INTEREST HEREIN) WHO ACQUIRED ITS INTEREST IN VIOLATION OF SECTION 3.2(A)(1) OR SECTION 3.2(A)(2) OF SCHEDULE III TO THE TRUST AGREEMENT OR WHO CONTINUES TO HOLD WARRANTS IN VIOLATION OF SECTION 3.2(A)(2) OF SCHEDULE III OF THE TRUST AGREEMENT.  

THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

5.             The Transferee and each fiduciary which causes the Transferee to acquire any Warrant, in its individual as well as its fiduciary capacity, represents and agrees that the Transferee is NOT a Plan, is NOT a governmental or other plan subject to restrictions substantially similar to Title I of ERISA or Section 4975 of the Code, and is NOT acquiring the Warrants with the assets of any such Plan or other plan.  The Transferee and each such fiduciary understands that the representations made in this section 5 will be deemed made on each day from the date hereof through and including the date on which the Transferee disposes of the Warrants.  The Transferee and each fiduciary who causes the Transferee to acquire a Warrant, in its individual as well as its fiduciary capacity, agrees to
indemnify and hold harmless the Depositor, the Trustee, the Warrant Agent, MS&Co., each Distribution Participant and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations made in this paragraph not being true.

6.             The Transferee understands that no subsequent transfer of the Warrants is permitted unless such transfer is to a transferee who will own, after giving effect to such transfer and any other simultaneous transfers, at least 250 Warrants and the Transferee causes the proposed transferee to provide to the Depositor and the Trustee such documentation as may be required pursuant to Section 3.2 of the Warrant Agent Agreement, including, if required, a letter substantially in the form hereof, or such other written statement as the Depositor shall reasonably prescribe. 

	
             
 	
            7.
 	
            The Transferee is a Person who is either:
 

A.            (1) a citizen or resident of the United States, (2) a corporation, partnership or other entity organized in or under the laws of the United States or any political subdivision thereof, or (3) an estate the income of which is includible in gross income for federal income tax purposes regardless of source, or (4) a trust if a court within the United States is able to exercise primary supervision of the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or 

B.            a Person not described in (A), whose ownership of such Warrant is effectively connected with such Person’s conduct of a trade or business within the United States within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), and its ownership of 

 

 

	
             
 	
            III-18
 	
             
 

 

 

 

any interest in such Warrant will not result in any withholding obligation with respect to any payments with respect to the Warrants by any Person (other than withholding, if any, under Section 1446 of the Code), or

C.            a Person not described in (A) or (B) above, who is not a Person: (1) that owns, directly or indirectly, 10% or more of the total combined voting power of all classes of stock in the Underlying Security Issuer (as defined in Schedule II to the Trust Agreement) entitled to vote, (2) that is a controlled foreign corporation related to the Underlying Security Issuer within the meaning of Section 864(d)(4) of the Code, or (3) that is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business.

8.             The Transferee agrees that (i) if it is a Person described in clause (A) above, it will furnish to the Depositor and the Trustee a properly executed IRS Form W-9, and (ii) if it is a Person described in clause (B) above, it will furnish to the Depositor and the Trustee a properly executed IRS Form W-8ECI, and (iii) if it is a Person described in clause (C) above, it will furnish to the Depositor and the Trustee a properly executed IRS Form W-8BEN (or, if the Transferee is treated as a partnership for federal income tax purposes, a properly executed IRS Form W-8IMY with appropriate certification for all partners or members attached). The Transferee also agrees that it will provide a new IRS form upon the expiration or obsolescence of any previously delivered form, and that it
will provide such other certifications, representations or Opinions of Counsel as may be requested by the Depositor and the Trustee.

9.             The Transferee understands that any acquisition of Warrants (or any interest therein) in violation of Section 3.2(a)(1) (addressed in paragraph 2 hereof) or Section 3.2(a)(2) (addressed in paragraph 5 hereof) of Schedule III to the Trust Agreement shall be void ab initio and the purported transferee in such transfer shall not be recognized by any Person as a holder of such Warrants for any purpose.  The Transferee understands that the Depositor and the Trustee shall each have the power to sell the Warrants (or any interest therein) of a purported Warrantholder (or owner of any interest therein) who acquired its interest in violation of Section 3.2(a)(1) or Section 3.2(a)(2) of Schedule III to the Trust Agreement or who continues to hold Warrants in violation of Section 3.2(a)(2)
of Schedule III to the Trust Agreement.  

 

 

	
             
 	
            III-19
 	
             
 

 

 

 

 

You and the Trustee are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. 

Very truly yours,

[Name of Transferee]

By:_______________________________

Name:

Title:

 

	
            Registered 

      Name:
 	
            ___________________
 

 

	
            Address:
 	
            ___________________
 
	
             
 	
            ___________________
 

 

	
            Payment Instructions:
 	
            ___________________
 

 

 

 

 

 

 

	
             
 	
            III-20Exhibit 4.1

                                                                  EXECUTION COPY

================================================================================

                                  CWABS, INC.,
                                    Depositor

                          COUNTRYWIDE HOME LOANS, INC.,
                                     Seller

                                PARK MONACO INC.,
                                     Seller

                                PARK SIENNA LLC,
                                     Seller

                      COUNTRYWIDE HOME LOANS SERVICING LP,
                                 Master Servicer

                                       and

                              THE BANK OF NEW YORK,
                                     Trustee

                         -------------------------------

                         POOLING AND SERVICING AGREEMENT

                            Dated as of June 1, 2006

                         -------------------------------

                    ASSET-BACKED CERTIFICATES, SERIES 2006-7

<PAGE>

                                Table of Contents
                                -----------------

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----

                                                ARTICLE I.
                                               DEFINITIONS
<S>               <C>                                                                                            <C>
Section 1.01      Defined Terms..................................................................................10
Section 1.02      Certain Interpretive Provisions................................................................52

                                               ARTICLE II.
                                      CONVEYANCE OF MORTGAGE LOANS;
                                      REPRESENTATIONS AND WARRANTIES

Section 2.01      Conveyance of Mortgage Loans...................................................................52
Section 2.02      Acceptance by Trustee of the Mortgage Loans....................................................60
Section 2.03      Representations, Warranties and Covenants of the Master Servicer and the Sellers...............65
Section 2.04      Representations and Warranties of the Depositor................................................85
Section 2.05      Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases................86
Section 2.06      Authentication and Delivery of Certificates....................................................87
Section 2.07      Covenants of the Master Servicer...............................................................87

                                               ARTICLE III.
                              ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 3.01      Master Servicer to Service Mortgage Loans......................................................87
Section 3.02      Subservicing; Enforcement of the Obligations of Master Servicer................................89
Section 3.03      Rights of the Depositor, the Sellers, the Certificateholders, the NIM Insurer and the
                  Trustee in Respect of the Master Servicer......................................................90
Section 3.04      Trustee to Act as Master Servicer..............................................................91
Section 3.05      Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
                  Pre-Funding Account; Seller Shortfall Interest Requirement.....................................91
Section 3.06      Collection of Taxes, Assessments and Similar Items; Escrow Accounts............................95
Section 3.07      Access to Certain Documentation and Information Regarding the Mortgage Loans...................95
Section 3.08      Permitted Withdrawals from the Certificate Account, Distribution Account, Carryover
                  Reserve Fund and the Principal Reserve Fund....................................................96
Section 3.09      [Reserved].....................................................................................98
Section 3.10      Maintenance of Hazard Insurance................................................................98
Section 3.11      Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................99
Section 3.12      Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
                  Realized Losses; Repurchase of Certain Mortgage Loans.........................................100
Section 3.13      Trustee to Cooperate; Release of Mortgage Files...............................................104
Section 3.14      Documents, Records and Funds in Possession of Master Servicer to be Held for the
                  Trustee.......................................................................................105
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
<S>               <C>                                                                                           <C>
Section 3.15      Servicing Compensation........................................................................106
Section 3.16      Access to Certain Documentation...............................................................106
Section 3.17      Annual Statement as to Compliance.............................................................106
Section 3.18      [Reserved]....................................................................................107
Section 3.19      [Reserved]....................................................................................110
Section 3.20      Prepayment Charges............................................................................110
Section 3.21      Swap Contract.................................................................................111

                                               ARTICLE IV.
                            DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER

Section 4.01      Advances; Remittance Reports..................................................................113
Section 4.02      Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls.........114
Section 4.03      [Reserved]....................................................................................114
Section 4.04      Distributions.................................................................................115
Section 4.05      Monthly Statements to Certificateholders......................................................121
Section 4.06      [Reserved]....................................................................................122
Section 4.07      Carryover Reserve Fund........................................................................122
Section 4.08      Credit Comeback Excess Account................................................................123
Section 4.09      Swap Trust and Swap Account...................................................................123

                                                ARTICLE V.
                                             THE CERTIFICATES

Section 5.01      The Certificates..............................................................................125
Section 5.02      Certificate Register; Registration of Transfer and Exchange of Certificates...................126
Section 5.03      Mutilated, Destroyed, Lost or Stolen Certificates.............................................130
Section 5.04      Persons Deemed Owners.........................................................................130
Section 5.05      Access to List of Certificateholders' Names and Addresses.....................................130
Section 5.06      Book-Entry Certificates.......................................................................131
Section 5.07      Notices to Depository.........................................................................132
Section 5.08      Definitive Certificates.......................................................................132
Section 5.09      Maintenance of Office or Agency...............................................................132

                                               ARTICLE VI.
                            THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS

Section 6.01      Respective Liabilities of the Depositor, the Master Servicer and the Sellers..................133
Section 6.02      Merger or Consolidation of the Depositor, the Master Servicer or the Sellers..................133
Section 6.03      Limitation on Liability of the Depositor, the Sellers, the Master Servicer, the NIM
                  Insurer and Others............................................................................133
Section 6.04      Limitation on Resignation of Master Servicer..................................................134
Section 6.05      Errors and Omissions Insurance; Fidelity Bonds................................................135
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                               ARTICLE VII.
                                 DEFAULT; TERMINATION OF MASTER SERVICER
<S>               <C>                                                                                           <C>
Section 7.01      Events of Default.............................................................................135
Section 7.02      Trustee to Act; Appointment of Successor......................................................137
Section 7.03      Notification to Certificateholders............................................................139

                                              ARTICLE VIII.
                                          CONCERNING THE TRUSTEE

Section 8.01      Duties of Trustee.............................................................................139
Section 8.02      Certain Matters Affecting the Trustee.........................................................140
Section 8.03      Trustee Not Liable for Mortgage Loans.........................................................142
Section 8.04      Trustee May Own Certificates..................................................................142
Section 8.05      Master Servicer to Pay Trustee's Fees and Expenses............................................142
Section 8.06      Eligibility Requirements for Trustee..........................................................143
Section 8.07      Resignation and Removal of Trustee............................................................143
Section 8.08      Successor Trustee.............................................................................144
Section 8.09      Merger or Consolidation of Trustee............................................................145
Section 8.10      Appointment of Co-Trustee or Separate Trustee.................................................145
Section 8.11      Tax Matters...................................................................................147
Section 8.12      [Reserved]....................................................................................149
Section 8.13      Access to Records of the Trustee..............................................................149
Section 8.14      Suits for Enforcement.........................................................................150

                                               ARTICLE IX.
                                               TERMINATION

Section 9.01      Termination upon Liquidation or Repurchase of all Mortgage Loans..............................150
Section 9.02      Final Distribution on the Certificates........................................................151
Section 9.03      Additional Termination Requirements...........................................................152

                                                ARTICLE X.
                                         MISCELLANEOUS PROVISIONS

Section 10.01     Amendment.....................................................................................153
Section 10.02     Recordation of Agreement; Counterparts........................................................155
Section 10.03     Governing Law.................................................................................155
Section 10.04     Intention of Parties..........................................................................155
Section 10.05     Notices.......................................................................................157
Section 10.06     Severability of Provisions....................................................................158
Section 10.07     Assignment....................................................................................158
Section 10.08     Limitation on Rights of Certificateholders....................................................158
Section 10.09     Inspection and Audit Rights...................................................................159
Section 10.10     Certificates Nonassessable and Fully Paid.....................................................160
Section 10.11     Rights of NIM Insurer.........................................................................160
</TABLE>

                                      iii
<PAGE>

<TABLE>
<CAPTION>
                                               ARTICLE XI.
                                          EXCHANGE ACT REPORTING
<S>               <C>                                                                                           <C>
Section 11.01     Filing Obligations............................................................................162
Section 11.02     Form 10-D Filings.............................................................................162
Section 11.03     Form 8-K Filings..............................................................................163
Section 11.04     Form 10-K Filings.............................................................................163
Section 11.05     Sarbanes-Oxley Certification..................................................................164
Section 11.06     Form 15 Filing................................................................................164
Section 11.07     Report on Assessment of Compliance and Attestation............................................165
Section 11.08     Use of Subservicers and Subcontractors........................................................166
Section 11.09     Amendments....................................................................................167
Section 11.10     Reconciliation of Accounts....................................................................167
</TABLE>

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 M-9 Certificate
  EXHIBIT A-15    Form of Class B Certificate
EXHIBIT B         Form of Class P Certificate
EXHIBIT C         Form of Class C Certificate
EXHIBIT D         Form of Class A-R Certificate
EXHIBIT E         Form of Tax Matters Person Certificate
EXHIBIT F         Mortgage Loan Schedule
  EXHIBIT F-1     List of Mortgage Loans
  EXHIBIT F-2     Mortgage Loans for which All or a Portion of a Related
                     Mortgage File is not Delivered to the Trustee on or prior
                     to the Closing Date
EXHIBIT G         Forms of Certification of Trustee
  EXHIBIT G-1     Form of Initial Certification of Trustee (Initial Mortgage
                     Loans)
  EXHIBIT G-2     Form of Interim Certification of Trustee
  EXHIBIT G-3     Form of Delay Delivery Certification
  EXHIBIT G-4     Form of Initial Certification of Trustee (Subsequent Mortgage
                     Loans)

                                       iv
<PAGE>

EXHIBIT H         Form of Final Certification of Trustee
EXHIBIT I         Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1       Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2       Form of Transferor Certificate for Private Certificates
EXHIBIT K         Form of Investment Letter (Non-Rule 144A)
EXHIBIT L         Form of Rule 144A Letter
EXHIBIT M         Form of Request for Document Release
EXHIBIT N         Form of Request for File Release
EXHIBIT O         Copy of Depository Agreement
EXHIBIT P         Form of Subsequent Transfer Agreement
EXHIBIT Q         [Reserved]
EXHIBIT R         [Reserved]
EXHIBIT S-1       [Reserved]
EXHIBIT S-2       [Reserved]
EXHIBIT T         Officer's Certificate with respect to Prepayments
EXHIBIT U         Form of Swap Contract
EXHIBIT V-1       Form of Swap Contract Assignment Agreement
EXHIBIT V-2       Form of Swap Contract Administration Agreement
EXHIBIT W         Form of Monthly Statement
EXHIBIT X-1       Form of Performance Certification (Subservicer)
EXHIBIT X-2       Form of Performance Certification (Trustee)
EXHIBIT Y         Form of Servicing Criteria to be Addressed in Assessment of
                     Compliance Statement
EXHIBIT Z         List of Item 1119 Parties
EXHIBIT AA        Form of Sarbanes-Oxley Certification (Replacement Master
                     Servicer)
SCHEDULE I        Prepayment Charge Schedule and Prepayment Charge Summary
SCHEDULE II       Collateral Schedule

                                       v

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

                              PRELIMINARY STATEMENT

         The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund (excluding the Credit
Comeback Excess Account, the Carryover Reserve Fund and the assets held in the
Pre-Funding Account) for federal income tax purposes will consist of three
REMICs (the "Swap-IO REMIC," the "Strip REMIC" and the "Master REMIC"). Each
Certificate, other than the Class A-R Certificate, will represent ownership of
one or more regular interests in the Master REMIC for purposes of the REMIC
Provisions. The Class A-R Certificate represents ownership of the sole class of
residual interest in the Swap-IO REMIC, the Strip REMIC and the Master REMIC.
The Master REMIC will hold as assets the several classes of uncertificated Strip
REMIC Interests (other than the STR-A-R Interest). Each Strip REMIC Interest
(other than the STR-A-R Interest) is hereby designated as a regular interest in
the Strip REMIC. The Strip REMIC will hold as assets the several classes of
uncertificated Swap-IO REMIC Interests (other than the SWR-A-R Interest). Each
Swap-IO REMIC Interest (other than the SWR-A-R Interest) is hereby designated as
a regular interest in the Swap-IO REMIC. The Swap-IO REMIC will hold as assets
all property of the Trust Fund (excluding the Credit Comeback Excess Account,
the Carryover Reserve Fund and the assets held in the Pre-Funding Account). The
latest possible maturity date of all REMIC regular interests created in this
Agreement shall be the Latest Possible Maturity Date.

         None of the REMICs described herein shall hold any interest in the Swap
Trust, Swap Contract or Swap Account.

         SWAP-IO REMIC:

         The Swap-IO REMIC Interests will have the principal balances and
pass-through rates as set forth below.

Swap-IO REMIC Interest     Initial Principal Balance(1)     Pass-Through Rate
----------------------     -------------------------        -----------------
SWR-1A                           $  1,048,768.00                  (2)
SWR-1B                           $  1,048,768.00                  (3)
SWR-2A                           $  1,491,666.50                  (2)
SWR-2B                           $  1,491,666.50                  (3)
SWR-3A                           $  1,937,899.00                  (2)
SWR-3B                           $  1,937,899.00                  (3)
SWR-4A                           $  2,385,824.50                  (2)
SWR-4B                           $  2,385,824.50                  (3)

                                       1
<PAGE>
Swap-IO REMIC Interest     Initial Principal Balance(1)     Pass-Through Rate
----------------------     -------------------------        -----------------
SWR-5A                           $  2,833,752.00                  (2)
SWR-5B                           $  2,833,752.00                  (3)
SWR-6A                           $  3,284,063.50                  (2)
SWR-6B                           $  3,284,063.50                  (3)
SWR-7A                           $  3,572,328.50                  (2)
SWR-7B                           $  3,572,328.50                  (3)
SWR-8A                           $  4,007,137.50                  (2)
SWR-8B                           $  4,007,137.50                  (3)
SWR-9A                           $  4,434,762.50                  (2)
SWR-9B                           $  4,434,762.50                  (3)
SWR-10A                          $  4,667,904.00                  (2)
SWR-10B                          $  4,667,904.00                  (3)
SWR-11A                          $  5,050,365.00                  (2)
SWR-11B                          $  5,050,365.00                  (3)
SWR-12A                          $  5,482,408.00                  (2)
SWR-12B                          $  5,482,408.00                  (3)
SWR-13A                          $  5,799,004.00                  (2)
SWR-13B                          $  5,799,004.00                  (3)
SWR-14A                          $  6,169,814.00                  (2)
SWR-14B                          $  6,169,814.00                  (3)
SWR-15A                          $  6,522,480.00                  (2)
SWR-15B                          $  6,522,480.00                  (3)
SWR-16A                          $  6,855,381.50                  (2)
SWR-16B                          $  6,855,381.50                  (3)
SWR-17A                          $  7,166,982.00                  (2)
SWR-17B                          $  7,166,982.00                  (3)
SWR-18A                          $  7,459,013.00                  (2)
SWR-18B                          $  7,459,013.00                  (3)
SWR-19A                          $  7,306,515.50                  (2)
SWR-19B                          $  7,306,515.50                  (3)
SWR-20A                          $  7,090,274.00                  (2)
SWR-20B                          $  7,090,274.00                  (3)
SWR-21A                          $  6,879,422.50                  (2)
SWR-21B                          $  6,879,422.50                  (3)
SWR-22A                          $  6,673,825.50                  (2)
SWR-22B                          $  6,673,825.50                  (3)
SWR-23A                          $  6,473,352.00                  (2)
SWR-23B                          $  6,473,352.00                  (3)
SWR-24A                          $ 10,582,907.00                  (2)
SWR-24B                          $ 10,582,907.00                  (3)
SWR-25A                          $ 10,191,953.00                  (2)
SWR-25B                          $ 10,191,953.00                  (3)
SWR-26A                          $  9,634,494.00                  (2)
SWR-26B                          $  9,634,494.00                  (3)
SWR-27A                          $  9,106,823.50                  (2)

                                       2
<PAGE>
Swap-IO REMIC Interest     Initial Principal Balance(1)     Pass-Through Rate
----------------------     -------------------------        -----------------
SWR-27B                          $  9,106,823.50                  (3)
SWR-28A                          $  8,607,258.00                  (2)
SWR-28B                          $  8,607,258.00                  (3)
SWR-29A                          $  8,134,209.00                  (2)
SWR-29B                          $  8,134,209.00                  (3)
SWR-30A                          $  5,133,195.00                  (2)
SWR-30B                          $  5,133,195.00                  (3)
SWR-31A                          $  4,717,133.50                  (2)
SWR-31B                          $  4,717,133.50                  (3)
SWR-32A                          $  4,556,741.50                  (2)
SWR-32B                          $  4,556,741.50                  (3)
SWR-33A                          $  4,400,368.00                  (2)
SWR-33B                          $  4,400,368.00                  (3)
SWR-34A                          $  4,247,900.00                  (2)
SWR-34B                          $  4,247,900.00                  (3)
SWR-35A                          $  4,099,228.00                  (2)
SWR-35B                          $  4,099,228.00                  (3)
SWR-36A                          $  4,198,770.00                  (2)
SWR-36B                          $  4,198,770.00                  (3)
SWR-37A                          $  4,007,092.00                  (2)
SWR-37B                          $  4,007,092.00                  (3)
SWR-38A                          $  3,862,841.00                  (2)
SWR-38B                          $  3,862,841.00                  (3)
SWR-39A                          $  3,722,503.00                  (2)
SWR-39B                          $  3,722,503.00                  (3)
SWR-40A                          $  3,585,948.00                  (2)
SWR-40B                          $  3,585,948.00                  (3)
SWR-41A                          $  3,453,048.00                  (2)
SWR-41B                          $  3,453,048.00                  (3)
SWR-42A                          $  3,301,934.00                  (2)
SWR-42B                          $  3,301,934.00                  (3)
SWR-43A                          $  3,190,496.50                  (2)
SWR-43B                          $  3,190,496.50                  (3)
SWR-44A                          $  3,074,832.50                  (2)
SWR-44B                          $  3,074,832.50                  (3)
SWR-45A                          $  2,961,832.00                  (2)
SWR-45B                          $  2,961,832.00                  (3)
SWR-46A                          $  2,863,058.50                  (2)
SWR-46B                          $  2,863,058.50                  (3)
SWR-47A                          $  2,771,609.50                  (2)
SWR-47B                          $  2,771,609.50                  (3)
SWR-48A                          $  2,717,302.50                  (2)
SWR-48B                          $  2,717,302.50                  (3)
SWR-49A                          $  2,732,093.00                  (2)
SWR-49B                          $  2,732,093.00                  (3)

                                       3
<PAGE>
Swap-IO REMIC Interest     Initial Principal Balance(1)     Pass-Through Rate
----------------------     -------------------------        -----------------
SWR-50A                          $  2,633,399.50                  (2)
SWR-50B                          $  2,633,399.50                  (3)
SWR-51A                          $  2,537,008.50                  (2)
SWR-51B                          $  2,537,008.50                  (3)
SWR-52A                          $  2,448,870.00                  (2)
SWR-52B                          $  2,448,870.00                  (3)
SWR-53A                          $  2,369,959.00                  (2)
SWR-53B                          $  2,369,959.00                  (3)
SWR-54A                          $  2,296,635.50                  (2)
SWR-54B                          $  2,296,635.50                  (3)
SWR-55A                          $  2,222,692.00                  (2)
SWR-55B                          $  2,222,692.00                  (3)
SWR-56A                          $  2,150,811.50                  (2)
SWR-56B                          $  2,150,811.50                  (3)
SWR-57A                          $  2,081,129.50                  (2)
SWR-57B                          $  2,081,129.50                  (3)
SWR-58A                          $  2,013,245.00                  (2)
SWR-58B                          $  2,013,245.00                  (3)
SWR-59A                          $  1,950,353.50                  (2)
SWR-59B                          $  1,950,353.50                  (3)
SWR-60A                          $ 77,492,528.50                  (2)
SWR-60B                          $ 77,492,528.50                  (3)
SWR-Support                       (4)                             (5)
SWR-P                                  $  100.00                  (6)
SW-A-R                            (7)                             (7)

--------------
(1)    Scheduled principal, prepayments and Realized Losses will be allocated
       first, to the SWR-Support Interest and second, to the numbered classes
       sequentially (from lowest to highest). Amounts so allocated to a numbered
       class shall be further allocated among the "A" and "B" components of such
       numbered class pro-rata until the entire class is reduced to zero.

(2)    Prior to the 61st Distribution Date, a rate equal to twice the Pool Tax
       Cap less 10.760% per annum. On and after the 61st Distribution Date a
       rate equal to the Pool Tax Cap. The "Pool Tax Cap" means the weighted
       average of the Adjusted Net Mortgage Rates of all the Mortgage Loans.

(3)    Prior to the 61st Distribution Date, a rate equal to the lesser of (i)
       10.760% per annum and (ii) twice the Pool Tax Cap. On and after the 61st
       Distribution Date, a rate equal to the Pool Tax Cap.

(4)    On the Closing Date and on each Distribution Date, following the
       allocation of Principal Amounts and Realized Losses, the principal
       balance in respect of the SWR-Support Interest will equal the excess of
       (a)(i) the principal balance of the Mortgage Loans (as of the end of the
       related Due Period, reduced by principal prepayments received after such
       Due Period that are to be distributed on such Distribution Date) and (ii)
       the amount, if any, on deposit in the Pre-Funding Account in respect of
       the Mortgage Loans over (b) the

                                       4
<PAGE>

       principal balance in respect of the remaining Swap-IO REMIC Interests
       other than the SWR-P and the SWR-A-R Interests.

(5)    A rate equal to the Pool Tax Cap.

(6)    On each Distribution Date the Class SWR-P Interest is entitled to all
       Prepayment Charges collected with respect to the Mortgage Loans. It pays
       no interest.

(7)    The Class SW-A-R Interest is the sole class of residual interest in the
       Swap-IO REMIC. It has no principal and pays no principal or interest.

         On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the Mortgage Loans shall be payable
with respect to the Swap-IO REMIC Interests in the following manner:

         (1) Interest. Interest is to be distributed with respect to each
Swap-IO REMIC Interest at the rate, or according to the formulas, described
above.

         (2) Principal. Principal Distribution Amounts shall be allocated among
the Swap-IO REMIC Interests as described above.

         (3) Prepayment Penalties. All Prepayment Charges are allocated to the
SWR-P Interest.

         STRIP REMIC:

The Strip REMIC Regular Interests will have the principal balances, pass-through
rates and Corresponding Classes of Certificates as set forth in the following
table:

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                                                    Pass-Through            Corresponding Class of
     Strip REMIC Interest        Initial Principal Balance               Rate                    Certificates
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                              <C>                                <C>                     <C>
STR-1-A.......................              (1)                          (2)                          1-A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-A-1.....................              (1)                          (2)                         2-A-1
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-A-2.....................              (1)                          (2)                         2-A-2
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-A-3.....................              (1)                          (2)                         2-A-3
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-A-4.....................              (1)                          (2)                         2-A-4
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-1.......................              (1)                          (2)                          M-1
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-2.......................              (1)                          (2)                          M-2
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-3.......................              (1)                          (2)                          M-3
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-4.......................              (1)                          (2)                          M-4
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-5.......................              (1)                          (2)                          M-5
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-6.......................              (1)                          (2)                          M-6
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-7.......................              (1)                          (2)                          M-7
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-8.......................              (1)                          (2)                          M-8
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-M-9.......................              (1)                          (2)                          M-9
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-B.........................              (1)                          (2)                           B
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-$100......................                $100                       (3)                          A-R
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-C-OC......................              (4)                          (2)                          N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-C-Swap-IO                               (5)                          (5)                          N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-P.........................                $100                       (6)                           P
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                                                    Pass-Through            Corresponding Class of
     Strip REMIC Interest        Initial Principal Balance               Rate                    Certificates
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                              <C>                                <C>                     <C>
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-A-R.......................              (7)                          (7)                          N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

(1) This Strip REMIC Interest has a principal balance that is initially equal to
100% of its Corresponding Certificate Class issued by the Master REMIC.
Principal payments, both scheduled and prepaid, Realized Losses and Subsequent
Recoveries attributable to the Swap-IO REMIC Interests held by the Strip REMIC
will be allocated to this class to maintain its size relative to its
Corresponding Certificate Class.

(2) On each Distribution Date, the pass through rate will equal the weighted
average of the pass-through rates of the Swap-IO REMIC Interests (other than the
Class SWR-P and Class SWR-A-R Interests) treating each "B" Interest the cardinal
number of which (for example, SW-1B, SW-2B, SW-3B, etc.) is not less than the
ordinal number of the Distribution Date (first Distribution Date, second
Distribution Date, third Distribution Date, etc.) as capped at a rate equal to
the product of (i) 2 and (ii) LIBOR (the "Strip REMIC Cap").

(3) This Strip REMIC Interest pays no interest.

(4) This Strip REMIC Interest has a principal balance that is initially equal to
100% of the Overcollateralized Amount. Principal payments, both scheduled and
prepaid, Realized Losses and Subsequent Recoveries attributable to the Swap-IO
REMIC Interests held by the Strip REMIC will be allocated to this class to
maintain its size relative to the Overcollateralized Amount.

(5) For each Distribution Date, the STR-C-Swap-IO Interest is entitled to
receive from each Swap REMIC "B" Interest the cardinal number of which (for
example, SW-1B, SW-2B, SW-3B, etc.) is not less than the ordinal number of the
Distribution Date (first Distribution Date, second Distribution Date, third
Distribution Date, etc.) the interest accruing on such interest in excess of a
per annum rate equal to the product of (i) 2 and (ii) LIBOR.

(6) The STR-P Interest is entitled to all amounts payable with respect to the
SWR-P Interest. It pays no interest.

(7) The STR-A-R Interest is the sole class of residual interest in the Strip
REMIC. It has no principal balance and pays no principal or interest.

         On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the Swap-IO Interests shall be
payable with respect to the Strip REMIC Interests in the following manner:

         (1) Interest. Interest is to be distributed with respect to each Strip
REMIC Interest at the rate, or according to the formulas, described above.

         (2) Principal. Principal Distribution Amounts shall be allocated among
the Strip REMIC Interests as described above.

         (3) Prepayment Penalties. All Prepayment Charges are allocated to the
STR-P Interest.

                                       6
<PAGE>

      MASTER REMIC:

         The following table specifies the class designation, interest rate, and
principal amount for each class of Master REMIC Interest:

                                Original Certificate
Class                             Principal Balance            Pass-Through Rate
-----------------------         --------------------           -----------------
Class 1-A..............             $313,365,000                      (1)
Class 2-A-1............             $246,320,000                      (1)
Class 2-A-2............             $ 56,242,000                      (1)
Class 2-A-3............             $137,245,000                      (1)
Class 2-A-4............             $ 85,682,000                      (1)
Class M-1..............             $ 38,628,000                      (1)
Class M-2..............             $ 34,452,000                      (1)
Class M-3..............             $ 19,836,000                      (1)
Class M-4..............             $ 17,748,000                      (1)
Class M-5..............             $ 17,748,000                      (1)
Class M-6..............             $ 15,138,000                      (1)
Class M-7..............             $ 15,138,000                      (1)
Class M-8..............             $ 13,050,000                      (1)
Class M-9..............             $ 6,786,000                       (1)
Class B................             $ 10,962,000                      (1)
Class C................                     (2)                       (3)
Class P................                    $100                       (4)
Class A-R..............                    $100                       (5)

(1)   The Certificates will accrue interest at the related Pass-Through Rates
      identified in this Agreement. For federal income tax purposes, including
      the computation of the Class C Distributable Amount and entitlement to Net
      Rate Carryover the pass-through rate in respect of each Class 1-A
      Certificate, Class 2-A Certificate, Class M Certificate and Class B
      Certificate will be subject to a cap equal to the Strip REMIC Cap rather
      than its applicable Net Rate Cap.

(2)   For federal income tax purposes, the Class C Certificates will be treated
      as having a Certificate Principal Balance equal to the Overcollateralized
      Amount.

(3)   For each Interest Accrual Period the Class C Certificates are entitled to
      an amount (the "Class C Distributable Amount") equal to the sum of (a) the
      interest payable on the STR-C-Swap-IO Interest, (b) the interest payable
      on the STR-C-OC Interest and (c) a specified portion of the interest
      payable on the Strip REMIC Regular Interests (other than the STR-$100,
      STR-C-OC, STR-C-Swap-IO and STR-P Interests) equal to the excess of the
      Strip REMIC Cap over the weighted average interest rate of the Strip REMIC
      Regular Interests (other than the STR-$100, STR-C-OC, STR-C-Swap-IO and
      STR-P Interests) with each such Class subject to a cap equal to the
      Pass-Through Rate of the Corresponding Master REMIC Class. The
      Pass-Through Rate of the Class C Certificates shall be a rate sufficient
      to entitle it to an amount equal to all interest accrued on the Mortgage
      Loans less the interest accrued on the other interests issued by the
      Master REMIC. The Class C Distributable Amount for any Distribution Date
      is payable from current interest on the

                                       7
<PAGE>

      Mortgage Loans and any related Overcollateralization Reduction Amount for
      that Distribution Date.

(4)   For each Distribution Date the Class P Certificates are entitled to all
      Prepayment Charges distributed with respect to the STR-P Interest.

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

         The foregoing REMIC structure is intended to cause all of the cash from
the Mortgage Loans to flow through to the Master REMIC as cash flow on REMIC
regular interests, without creating any shortfall--actual or potential (other
than for credit losses)-- to any REMIC regular interest. It is not intended that
the Class A-R Certificates be entitled to any cash flows pursuant to this
Agreement except as provided in Section 3.08(a) hereunder

                                       8
<PAGE>

                                   ARTICLE I.
                                   DEFINITIONS

         Section 1.01 Defined Terms.

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

         Account: Any Escrow Account, the Carryover Reserve Fund, the
Certificate Account, the Credit Comeback Excess Account, the Distribution
Account, the Pre-Funding Account, the Principal Reserve Fund, the Swap 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.

         Additional Designated Information:  As defined in Section 11.02.

         Adjustable Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable in
accordance with the terms of the related Mortgage Note.

         Adjusted 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

                                       9
<PAGE>

pursuant to Section 3.12 may be used to offset such Advance for the related REO
Property; provided, further, that for the avoidance of doubt, no Advances shall
be required to be made in respect of any Liquidated Mortgage Loan.

         Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.

         Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of business on the
immediately preceding Determination Date on account of (i) all Scheduled
Payments or portions thereof received in respect of the Mortgage Loans due after
the related Due Date, (ii) Principal Prepayments received in respect of such
Mortgage Loans after the last day of the related Prepayment Period and (iii)
Liquidation Proceeds and Subsequent Recoveries received in respect of such
Mortgage Loans after the last day of the related Due Period.

         Applied Realized Loss Amount: With respect to any Distribution Date and
any Loan Group or Loan Groups, the amount, if any, by which, the aggregate
Certificate Principal Balance of the Class(es) of Certificates listed opposite
such Loan Group(s) in the following table (after all distributions of principal
on such Distribution Date) exceeds the sum of (x) the aggregate Stated Principal
Balance of the Mortgage Loans in such Loan Group(s) for such Distribution Date
and (y) the amount on deposit in the Pre-Funding Account in respect of such Loan
Group(s); provided, however, that an Applied Realized Loss Amount will not exist
for a Class of Class A Certificates unless the Certificate Principal Balances of
the Subordinate Certificates have been reduced to zero.

                Loan Group(s)                   Class(es) of Certificates

                   1 and 2                           Interest-Bearing
                      1                                    1-A
                      2                                    2-A

         Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made for the originator of the related Mortgage Loan by an
independent fee appraiser at the time of the origination of the related Mortgage
Loan, or the sales price of the Mortgaged Property at the time of such
origination, whichever is less, or with respect to any Mortgage Loan originated
in connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing.

         Bankruptcy Code:  Title 11 of the United States Code.

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

                                       10
<PAGE>

         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 2006-7". 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-15, Exhibit B, Exhibit C, Exhibit D and Exhibit E.

         Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans Servicing LP in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2006-7". Funds in the Certificate Account shall be held in
trust for the Certificateholders for the uses and purposes set forth in this
Agreement.

         Certificate Owner: With respect to a Book-Entry Certificate, the person
that is the beneficial owner of such Book-Entry Certificate.

         Certificate Principal Balance: As to any Certificate (other than the
Class C Certificates) and as of any Distribution Date, the Initial Certificate
Principal Balance of such Certificate (A) less the sum of (i) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04(b) and (ii) any Applied Realized Loss Amounts allocated to such Certificate
on previous Distribution Dates pursuant to Section 4.04(g), and (B) increased by
any Subsequent Recoveries allocated to such Certificate pursuant to Section
4.04(h) on such Distribution Date. References herein to the Certificate
Principal Balance of a Class of Certificates shall mean the Certificate
Principal Balances of all Certificates in such Class. The Class C Certificates
do not have a Certificate Principal Balance. With respect to any Certificate
(other than the Class C Certificates) of a Class and any Distribution Date, the
portion of the Certificate Principal Balance of such Class represented by such
Certificate equal to the product of the Percentage Interest evidenced by such
Certificate and the Certificate Principal Balance of such Class.

         Certificate Register: The register maintained pursuant to Section 5.02
hereof.

         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

                                       11
<PAGE>

evidenced thereby shall not be taken into account in determining whether the
requisite amount of Voting Interests necessary to effect such consent has been
obtained; provided that if any such Person (including the Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates, such Certificates
shall be deemed to be Outstanding for purposes of any provision hereof (other
than the second sentence of Section 10.01 hereof) that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.

         Certification Party:  As defined in Section 11.05.

         Certifying Person:  As defined in Section 11.05.

         CHL: Countrywide Home Loans, Inc., a New York corporation, and its
successors and assigns.

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

         Class: All Certificates bearing the same Class designation as set forth
in Section 5.01 hereof.

         Class 1-A Certificate: Any Certificate designated as a "Class 1-A
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.

         Class 1-A Net Rate Cap: For any Distribution Date, the weighted average
Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 1 as of the first
day of the related Due Period (after giving effect to Principal Prepayments
received during the Prepayment Period that ends during such Due Period),
adjusted to an effective rate reflecting the calculation of interest on the
basis of the actual number of days elapsed during the related Accrual Period and
a 360-day year, minus a fraction, expressed as a percentage, the numerator of
which is (a) the product of (x) the sum of (1) the 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
(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

                                       12
<PAGE>

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 such Distribution Date, over (2) the
lesser of (x) 60.70% of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 1 for such Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1 for such Distribution
Date minus 0.50% of the sum of the aggregate Cut-off Date Principal Balance of
the Initial Mortgage Loans in Loan Group 1 and the original 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-5 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 (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
(after giving effect to Principal Prepayments received during the Prepayment
Period that

                                       13
<PAGE>

ends during such Due Period) plus any amounts on deposit in the Pre-Funding
Account in respect of Loan Group 2 as of the first day of that Due Period.

         Class 2-A Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class A Principal Distribution Target
Amount and (y) a fraction, the numerator of which is the 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: With respect to any
Distribution Date, the excess of (1) the aggregate Certificate Principal Balance
of the Class 2-A Certificates immediately prior to such Distribution Date, over
(2) the lesser of (x) 60.70% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 for such Distribution Date and (y) the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 for such
Distribution Date minus 0.50% of the sum of the aggregate Cut-off Date Principal
Balance of the Initial Mortgage Loans in Loan Group 2 and the original Group 2
Pre-Funded 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.

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

         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 Principal Distribution Target Amount: With respect to any
Distribution Date, the excess of (1) the aggregate Certificate Principal Balance
of the Class A Certificates immediately prior to such Distribution Date, over
(2) the lesser of (x) 60.70% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date minus the OC Floor.

         Class B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the form of Exhibit A-15 hereto,
representing the right to distributions as set forth herein.

         Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.

         Class C Distributable Amount:  As defined in the Preliminary Statement.

         Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.

         Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.

                                       14
<PAGE>

         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-14 hereto,
representing the right to distributions as set forth herein.
         Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.

         Class P Principal Distribution Date: The first Distribution Date that
occurs after the end of the latest Prepayment Charge Period for all Mortgage
Loans that have a Prepayment Charge Period.

         Closing Date:  June 28, 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.

                                       15
<PAGE>

         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 number 1187076B, with a trade
date of May 5, 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.

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

         Credit Comeback Excess Account: The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 4.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2006-7". Funds in the Credit Comeback Excess Account shall
be held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.

         Credit Comeback Excess Amount: With respect to the Credit Comeback
Loans in any Loan Group and any Master Servicer Advance Date, the portion of the
sum of the following (without duplication) attributable to the excess, if any,
of the actual mortgage rate on each Credit Comeback Loan in such Loan Group and
the Mortgage Rate on such Credit Comeback Loan: (i) all scheduled interest
collected during the related Due Period with respect to the Credit Comeback
Loans in such Loan Group, (ii) all interest on prepayments received during the
related Prepayment Period with respect to the Credit Comeback Loans in such Loan
Group, other than Prepayment Interest Excess, (iii) all Advances relating to
interest with respect to the Credit Comeback Loans in such Loan Group, (iv) all
Compensating Interest with respect to the Credit Comeback Loans in such Loan
Group and (v) Liquidation Proceeds with respect to the Credit Comeback Loans in
such Loan Group collected during the related Due Period (to the extent such
Liquidation Proceeds relate to interest), less all Nonrecoverable Advances for
such Loan Group relating to interest reimbursed during the related Due Period.

         Credit Comeback Excess Cashflow: With respect to any Distribution Date,
any amounts in the Credit Comeback Excess Account available for such
Distribution Date.

         Credit Comeback Loan: Any Fixed Rate Mortgage Loan for which the
related Mortgage Rate is subject to reduction (not exceeding 0.375% per annum)
for good payment history of Scheduled Payments by the related Mortgagor.

         Cumulative Loss Trigger Event: With respect to a Distribution Date on
or after the Stepdown Date, a Cumulative Loss Trigger Event will be in effect if
(x) the aggregate

                                       16
<PAGE>

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
-----------------                      ----------

July 2008 -- June 2009................ 1.50% with respect to July 2008, plus an
                                       additional 1/12th of 1.90% for each month
                                       thereafter through June 2009

July 2009 -- June 2010................ 3.40% with respect to July 2009, plus an
                                       additional 1/12th of 2.00% for each month
                                       thereafter through June 2010

July 2010 -- June 2011................ 5.40% with respect to July 2010, plus an
                                       additional 1/12th of 1.60% for each month
                                       thereafter through June 2011

July 2011 -- June 2012................ 7.00% with respect to July 2011, plus an
                                       additional 1/12th of 0.75% for each month
                                       thereafter through June 2012

July 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

                                       17
<PAGE>

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

                 Class A.........................           40.17%
                 Class M-1.......................           49.49%
                 Class M-2.......................           62.40%
                 Class M-3.......................           73.43%

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<PAGE>

                              Class                       Percentage

                 Class M-4.......................           87.22%
                 Class M-5.......................           107.39%
                 Class M-6.......................           133.79%
                 Class M-7.......................           177.38%
                 Class M-8.......................           246.67%
                 Class M-9.......................           309.55%
                 Class B.........................           526.23%

         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 15th day
of the month of such Distribution Date or, if such 15th 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

                                       19
<PAGE>

CWABS, Inc., Asset-Backed Certificates, Series 2006-7". 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 July 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.

                                       20
<PAGE>

         ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the applicable requirements of the
Underwriter's Exemption.

         ERISA-Restricted Certificates: The Class A-R Certificates, Class P
Certificates, Class C Certificates, Class B Certificates and Certificates of any
Class that does not have or no longer has a rating of BBB- or its equivalent, or
better, from at least one Rating Agency.

         Escrow Account:  As defined in Section 3.06 hereof.

         Event of Default:  As defined in Section 7.01 hereof.

         Excess Cashflow: With respect to any Distribution Date the sum of (i)
the amount remaining after the distribution of interest to Certificateholders
for such Distribution Date pursuant to Section 4.04(a)(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)(C) 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 and Credit
Comeback Excess Cashflow available for payment thereof, to be allocated between
Loan Group 1 and Loan Group 2, pro rata, based on the Principal Remittance
Amount for each such Loan Group for such Distribution Date.

                                       21
<PAGE>

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

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

         Five-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage Rate
that is fixed for 60 months after origination thereof before such Mortgage Rate
becomes subject to adjustment.

         Fixed Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life of
the related Mortgage and any Credit Comeback Loans, including in each case any
Mortgage Loans delivered in replacement thereof.

         Form 10-D Disclosure Item: With respect to any Person, any material
litigation or governmental proceedings pending against such Person, or against
any of the Trust Fund, the Depositor, the Trustee, any co-trustee, the Master
Servicer or any Subservicer, if such Person has actual knowledge thereof.

         Form 10-K Disclosure Item: With respect to any Person, (a) Form 10-D
Disclosure Item, and (b) any affiliations or relationships between such Person
and any Item 1119 Party.

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

         Funding Period: The period from the Closing Date to and including the
earlier to occur of (x) the date the amount in the Pre-Funding Account is less
than $175,000 and (y) September 24, 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.

                                       22
<PAGE>

         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 $16,155,531.47.

         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 $26,624,108.22.

         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) June 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.

                                       23
<PAGE>

         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, June 26, 2006. With respect to any
Accrual Period for the Interest-Bearing Certificates thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual Period.

         Interest Funds: With respect to any Distribution Date and Loan Group,
the Interest Remittance Amount for such Loan Group and Distribution Date, less
the portion of the Trustee Fee for such Distribution Date allocable to such Loan
Group, plus the Adjusted Replacement Upfront Amount, if any, allocable to that
Loan Group.

         Interest Remittance Amount: With respect to the Mortgage Loans in each
Loan Group and any Distribution Date, (x) the sum, without duplication, of (i)
all scheduled interest collected during the related Due Period (for the
avoidance of doubt, other than Credit Comeback Excess Amounts) with respect to
the related Mortgage Loans less the related Servicing Fee, (ii) all interest on
prepayments received during the related Prepayment Period with respect to such
Mortgage Loans, other than Prepayment Interest Excess, (iii) all related
Advances relating to interest with respect to such Mortgage Loans, (iv) all
related Compensating Interest with respect

                                       24
<PAGE>

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.

                                       25
<PAGE>

         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: In the case of any Mortgage Loan secured by a
first lien on the related Mortgaged Property, the fraction, expressed as a
percentage, the numerator of which is the original principal balance of such
Mortgage Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property. In the case of any Mortgage Loan secured by a second lien on
the related Mortgaged Property, the fraction, expressed as a percentage, the
numerator of which is the original principal balance of the Mortgage Loan at the
date of origination plus the outstanding principal balance at the date of
origination of that Mortgage Loan of the senior mortgage loan secured by the
same Mortgaged Property and the denominator of which is the Appraised Value of
the related Mortgaged Property.

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

         Master REMIC:  As defined in the Preliminary Statement.

         Master Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as master servicer
hereunder.

         Master Servicer Advance Date: As to any Distribution Date, the Business
Day immediately preceding such Distribution Date.

         Master Servicer Prepayment Charge Payment Amount: The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived other
than in accordance with the standard set forth in the first sentence of Section
3.20(a), or (ii) collected from the Master Servicer in respect of a remedy for
the breach of the representation made by CHL set forth in Section 3.20(c).

         Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the maximum rate of interest set forth as such in the related Mortgage
Note.

         MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

         MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.

         MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.

                                       26
<PAGE>

         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;

                                       27
<PAGE>

            (x)   the Loan-to-Value Ratio at origination;

            (xi) a code indicating whether the residential dwelling at the time
      of origination was represented to be owner-occupied;

            (xii) a code indicating whether the residential dwelling is either
      (a) a detached single-family dwelling, (b) a two-family residential
      property, (c) a three-family residential property, (d) a four-family
      residential property, (e) planned unit development, (f) a low-rise
      condominium unit, (g) a high-rise condominium unit or (h) manufactured
      housing;

            (xiii) a code indicating whether such Mortgage Loan is a Credit
      Comeback Loan;

            (xiv) the purpose of the Mortgage Loan;

            (xv)  with respect to each Adjustable Rate Mortgage Loan:

                  (a) the frequency of each Adjustment Date;

                  (b) the next Adjustment Date;

                  (c) the Maximum Mortgage Rate;

                  (d) the Minimum Mortgage Rate;

                  (e) the Mortgage Rate as of the Cut-off Date;

                  (f) the related Initial Periodic Rate Cap and Subsequent
            Periodic Rate Cap; and

                  (g) the Gross Margin;

                  (xvi) a code indicating whether the Mortgage Loan is a CHL
            Mortgage Loan, a Park Monaco Mortgage Loan or a Park Sienna Mortgage
            Loan;

                  (xvii) the premium rate for any lender-paid mortgage
            insurance, if applicable;

                  (xviii) a code indicating whether the Mortgage Loan is a Fixed
            Rate Mortgage Loan or an Adjustable Rate Mortgage Loan; and

                  (xix) a code indicating whether the Mortgage Loan is secured
            by a first lien or a second lien.

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

                                       28
<PAGE>

pursuant to Section 2.01(f) and all the related Subsequent Mortgage Loans and
Subsequent Mortgage Loan information included therein.

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

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

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

         Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time; provided, however, the Mortgage Rate for each Credit Comeback
Loan shall be treated for all purposes of payments on the Certificates,
including the calculation of the Pass-Through Rates and the applicable Net Rate
Cap, as reduced by 0.375% on the Due Date following the end of each of the first
four annual periods after the origination date, irrespective of whether the
Mortgagor qualifies for the reduction by having a good payment history.

         Mortgaged Property:  The underlying property securing a Mortgage Loan.

         Mortgagor:  The obligors on a Mortgage Note.

         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.

                                       29
<PAGE>

         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.

         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

                                       30
<PAGE>

5.34063% per annum. If such rate is not quoted on the Bloomberg Terminal (or if
such service is no longer offered, such other service for displaying One-Month
LIBOR or comparable rates as may be reasonably selected by the Trustee),
One-Month LIBOR for the applicable Accrual Period for the Interest-Bearing
Certificates will be the Reference Bank Rate. If no such quotations can be
obtained by the Trustee and no Reference Bank Rate is available, One-Month LIBOR
will be One-Month LIBOR applicable to the preceding Accrual Period for the
Interest-Bearing Certificates.

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

                                       31
<PAGE>

         Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distribution of the Principal Distribution Amount (other than
the portion thereof consisting of the Extra Principal Distribution Amount) on
such Distribution Date).

         Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (i) the Excess
Overcollateralization Amount for such Distribution Date and (ii) the aggregate
Principal Remittance Amount for Loan Group 1 and Loan Group 2 for such
Distribution Date.

         Overcollateralization Target Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date, an amount equal to 1.50% of the sum of the
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans and the
Pre-Funded Amount and (b) on or after the Stepdown Date, the greater of (i) an
amount equal to 3.00% 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 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.

                                       32
<PAGE>

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

         ----------------------------------- --------------- -----------------
                                              Pass-Through     Pass-Through
                        Class                   Margin (1)       Margin (2)
         ----------------------------------- --------------- -----------------
         Class 1-A......................         0.130%           0.260%
         ----------------------------------- --------------- -----------------
         Class 2-A-1....................         0.030%           0.060%
         ----------------------------------- --------------- -----------------
         Class 2-A-2....................         0.090%           0.180%
         ----------------------------------- --------------- -----------------
         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......................         0.300%           0.450%
         ----------------------------------- --------------- -----------------
         Class M-3......................         0.310%           0.465%
         ----------------------------------- --------------- -----------------
         Class M-4......................         0.360%           0.540%
         ----------------------------------- --------------- -----------------
         Class M-5......................         0.380%           0.570%
         ----------------------------------- --------------- -----------------
         Class M-6......................         0.460%           0.690%
         ----------------------------------- --------------- -----------------
         Class M-7......................         0.900%           1.350%
         ----------------------------------- --------------- -----------------
         Class M-8......................         1.100%           1.650%
         ----------------------------------- --------------- -----------------
         Class M-9......................         1.900%           2.850%
         ----------------------------------- --------------- -----------------
         Class B........................         2.500%           3.750%
         ----------------------------------- --------------- -----------------

(1)   For any Accrual Period relating to any Distribution Date occurring on or
      prior to the Optional Termination Date.

(2)   For any Accrual Period relating to any Distribution Date occurring after
      the Optional Termination Date.

         Pass-Through Rate: With respect to any Accrual Period and each Class of
Interest-Bearing Certificates the lesser of (x) One-Month LIBOR for such Accrual
Period plus the Pass-Through Margin for such Class and Accrual Period and (y)
the applicable Net Rate Cap for such Class and the related Distribution Date.

         Percentage Interest: With respect to any Interest-Bearing Certificate,
a fraction, expressed as a percentage, the numerator of which is the Certificate
Principal Balance represented by such Certificate and the denominator of which
is the aggregate Certificate Principal Balance of the related Class. With
respect to the Class C, Class P and Class A-R Certificates, the portion of the
Class evidenced thereby, expressed as a percentage, as stated on the face of
such Certificate.

         Performance Certification: As defined in Section 11.05.

         Permitted Investments: At any time, any one or more of the following
obligations and securities:

                  (i) obligations of the United States or any agency thereof,
         provided such obligations are backed by the full faith and credit of
         the United States;

                                       33
<PAGE>

                  (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

                                       34
<PAGE>

         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

                                       35
<PAGE>

(vii) any other Person so designated by the Trustee based upon an Opinion of
Counsel that the Transfer of an Ownership Interest in a Class A-R Certificate to
such Person may cause any REMIC formed hereunder to fail to qualify as a REMIC
at any time that any Certificates are Outstanding. The terms "United States,"
"State" and "International Organization" shall have the meanings set forth in
section 7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject to
tax and, with the exception of the Federal Home Loan Mortgage Corporation, a
majority of its board of directors is not selected by such government unit.

         Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political subdivision thereof.

         Plan: An "employee benefit plan" as defined in section 3(3) of ERISA
that is subject to Title I of ERISA, a "plan" as defined in section 4975 of the
Code that is subject to section 4975 of the Code, or any Person investing on
behalf of or with plan assets (as defined in 29 CFR ss.2510.3-101 or otherwise
under ERISA) of such an employee benefit plan or plan.

         Pool Tax Cap:  As defined in the Preliminary Statement.

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

         Pre-Funded Amount: The amount deposited in the Pre-Funding Account on
the Closing Date, which shall equal $42,779,639.69.

         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 2006-7." 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.

                                       36
<PAGE>

         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

                                       37
<PAGE>

month in which such Distribution Date occurs (or, with respect to the first
Distribution Date, the period beginning with the opening of business on June 2,
2006) and ending on the close of business on the fifteenth day of the month in
which such Distribution Date occurs.

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

         Principal Distribution Amount: With respect to each Distribution Date
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 2006-7". Funds in the Principal Reserve Fund

                                       38
<PAGE>

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 June 26, 2006, relating to
asset-backed securities to be sold by the Depositor.

         Prospectus Supplement: The prospectus supplement dated June 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.

         Rating Agency: Each of Moody's and S&P. If any such organization or its
successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
identified as a "Rating Agency" in the Underwriter's Exemption and designated by
the Depositor, notice of which designation shall be given to the Trustee.
References herein to a given rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers.

         Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of 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

                                       39
<PAGE>

been reduced, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation.

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

         Reference Bank Rate: With respect to any Accrual Period, the arithmetic
mean (rounded upwards, if necessary, to the nearest whole multiple of 0.03125%)
of the offered rates for United States dollar deposits for one month that are
quoted by the Reference Banks as of 11:00 a.m., New York City time, on the
related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the
outstanding aggregate Certificate Principal Balance of the Interest-Bearing
Certificates on such Interest Determination Date, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple of 0.03125%) of the rates quoted by one
or more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York City time, on such date for loans in U.S. dollars to leading European
banks for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Interest-Bearing Certificates on such
Interest Determination Date.

         Reference Banks: Barclays Bank PLC, Deutsche Bank and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor,
CHL or the Master Servicer and (iii) which have been designated as such by the
Trustee.

         Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.

         Regular Certificate: Any Certificate other than the Class A-R
Certificates.

         Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time and publicly available.

         Relief Act:  The Servicemembers Civil Relief Act.

                                       40
<PAGE>

         REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits which appear at section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.

         Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM Insurer in accordance with Section 4.04.

         REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.

         Replacement Mortgage Loan: A Mortgage Loan substituted by a Seller for
a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for File Release, (i) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) with respect to any Fixed
Rate Mortgage Loan, have a Mortgage Rate not less than or no more than 1% per
annum higher than the Mortgage Rate of the Deleted Mortgage Loan and, with
respect to any Adjustable Rate Mortgage Loan: (a) have a Maximum Mortgage Rate
no more than 1% per annum higher or lower than the Maximum Mortgage Rate of the
Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no more than 1% per
annum higher or lower than the Minimum Mortgage Rate of the Deleted Mortgage
Loan; (c) have the same Index and intervals between Adjustment Dates as that of
the Deleted Mortgage Loan; (d) have a Gross Margin not more than 1% per annum
higher or lower than that of the Deleted Mortgage Loan; and (e) have an Initial
Periodic Rate Cap and a Subsequent Periodic Rate Cap each not more than 1% lower
than that of the Deleted Mortgage Loan; (iii) have the same or higher credit
quality characteristics than that of the Deleted Mortgage Loan; (iv) be accruing
interest at a rate not more than 1% per annum higher or lower than that of the
Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio no higher than that of the
Deleted Mortgage Loan; (vi) have a remaining term to maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan; (vii)
not permit conversion of the Mortgage Rate from a fixed rate to a variable rate
or vice versa; (viii) provide for a Prepayment Charge on terms substantially
similar to those of the Prepayment Charge, if any, of the Deleted Mortgage Loan;
(ix) have the same occupancy type and lien priority as the Deleted Mortgage
Loan; 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

                                       41
<PAGE>

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(e).

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

                                       42
<PAGE>

         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.

         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 and Park Sienna, in its capacity as seller of
the Park Sienna Mortgage Loans to the Depositor.

                                       43
<PAGE>

         Seller Shortfall Interest Requirement: With respect to the Distribution
Date in each of July 2006, August 2006, September 2006 and October 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 product of: (1) the amount on deposit in the Pre-Funding
Account at the beginning of the related Due Period, and (2) a fraction, the
numerator of which is the weighted average Net Mortgage Rate of the Mortgage
Loans (including Subsequent Mortgage Loans, if any) owned by the Trust Fund at
the beginning of the related Due Period (weighted on the basis of the Stated
Principal Balances thereof for such Distribution Date) and the denominator of
which is 12.

         Senior Certificates:  The Class A and Class A-R Certificates.

         Senior Enhancement Percentage: With respect to a Distribution Date on
or after the Stepdown Date, the fraction (expressed as a percentage) (1) the
numerator of which is the excess of (a) the aggregate Stated Principal Balance
of the Mortgage Loans for the preceding Distribution Date over (b) (i) before
the Certificate Principal Balances of the 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

                                       44
<PAGE>

Fee Rate on the Stated Principal Balance of such Mortgage Loan for the period
covered by such payment of interest.

         Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.

         Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.

         Sixty-Day Delinquency Rate: With respect to any Distribution Date on or
after the Stepdown Date, a fraction, expressed as a percentage, the numerator of
which is the aggregate Stated Principal Balance for such Distribution Date of
all Mortgage Loans 60 or more days delinquent as of the close of business on the
last day of the calendar month preceding such Distribution Date (including
Mortgage Loans in foreclosure, bankruptcy and REO Properties) and the
denominator of which is the aggregate Stated Principal Balance for such
Distribution Date of all Mortgage Loans.

         Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property (i) as of the Cut-off Date, the unpaid principal balance of the
Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due on or prior to such date and
irrespective any delinquency in payment by the related Mortgagor, and (ii) as of
any other Distribution Date, the Stated Principal Balance of the Mortgage Loan
as of its Cut-off Date, minus the sum of (a) the principal portion of the
Scheduled Payments (x) due with respect to such Mortgage Loan during each Due
Period ending prior to such Distribution Date and (y) that were received by the
Master Servicer as of the close of business on the Determination Date related to
such Distribution Date or with respect to which Advances were made as of the
Master Servicer Advance Date related to such Distribution Date, (b) all
Principal Prepayments with respect to such Mortgage Loan received by the Master
Servicer during each Prepayment Period ending prior to such Distribution Date,
(c) all Liquidation Proceeds collected with respect to such Mortgage Loan during
each Due Period ending prior to such Distribution Date, to the extent applied by
the Master Servicer as recoveries of principal in accordance with Section 3.12
and (d) any Realized Loss previously incurred in connection with a Deficient
Valuation. The Stated Principal Balance of any Mortgage Loan that becomes a
Liquidated Mortgage Loan will be zero on each date following the Due Period in
which such Mortgage Loan becomes a Liquidated Mortgage Loan. References herein
to the Stated Principal Balance of the Mortgage Loans at any time shall mean the
aggregate Stated Principal Balance of all Mortgage Loans in the Trust Fund as of
such time, and references herein to the Stated Principal Balance of a Loan Group
at any time shall mean the aggregate Stated Principal Balance of all Mortgage
Loans in such Loan Group at such time.

         Stepdown Date: The earlier to occur of (a) the Distribution Date 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 July
2009 and (y) the first Distribution Date on which the aggregate Certificate
Principal Balance of the Senior Certificates (after calculating

                                       45
<PAGE>

anticipated distributions on such Distribution Date) is less than or equal to
60.70% 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.................................                 31.90%
Class M-2.................................                 25.30%
Class M-3.................................                 21.50%
Class M-4.................................                 18.10%
Class M-5.................................                 14.70%
Class M-6.................................                 11.80%
Class M-7.................................                 8.90%
Class M-8.................................                 6.40%
Class M-9.................................                 5.10%
Class B...................................                 3.00%

         Strip REMIC:  As defined in the Preliminary Statement.

         Strip REMIC Cap:  As defined in the Preliminary Statement.

         Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to the Mortgage Loans under the direction or authority of the
Master Servicer or a Subservicer or the Trustee, as the case may be.

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

         Subordinate Class Principal Distribution Amount: With respect to any
Distribution Date and any Class of Subordinate Certificates, the excess of (1)
the sum of (a) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account distribution of the Class 1-A Principal
Distribution Amount and Class 2-A Principal Distribution Amount for such
Distribution Date), (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

                                       46
<PAGE>

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

                                       47
<PAGE>

Business Day and may not be a date earlier than the date on which the Subsequent
Transfer Agreement is executed and delivered by the parties thereto pursuant to
Section 2.01(d).

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

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

         Subservicer:  As defined in Section 3.02(a).

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

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

         Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(e), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.

         Swap Account: The separate Eligible Account created and initially
maintained by the Swap Trustee pursuant to Section 4.09.

         Swap Contract: The transaction evidenced by the Confirmation (as
assigned to the Swap Contract Administrator pursuant to the Swap Contract
Assignment Agreement), a form of which is attached hereto as Exhibit U.

         Swap Contract Administration Agreement: The swap contract
administration agreement dated as of the Closing Date among CHL, the Trustee and
the Swap Contract Administrator, a form of which is attached hereto as Exhibit
V-2.

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

         Swap Contract Assignment Agreement: The Assignment Agreement dated as
of the Closing Date among CHL, the Swap Contract Administrator and the Swap
Counterparty, a form of which is attached hereto as Exhibit V-1.

         Swap Counterparty:  Barclays Bank PLC and its successors.

         Swap Contract Termination Date:  The Distribution Date in June 2011.

                                       48
<PAGE>

         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-IO REMIC:  As defined in the Preliminary Statement.

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

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

         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.

                                       49
<PAGE>

         Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof, exclusive of interest not required to be
deposited in the Certificate Account pursuant to Section 3.05(b)(2); (ii) the
Certificate Account, the Distribution Account, the Principal Reserve Fund, the
Carryover Reserve Fund, the Credit Comeback Excess Account, the Pre-Funding
Account and all amounts deposited therein pursuant to the applicable provisions
of this Agreement; (iii) 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.

         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

                                       50
<PAGE>

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,

                                       51
<PAGE>

concurrently with the transfer and assignment, it has deposited into the
Certificate Account the Initial Certificate Account Deposit.

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

         CHL further agrees (x) to cause The Bank of New York to enter into the
Swap Contract Administration Agreement as Swap Contract Administrator and (y) to
assign all of its right, title and interest in and to the interest rate swap
transaction evidenced by the Confirmation, and to cause all of its obligations
in respect of such transaction to be assumed by, the Swap Contract
Administrator, on the terms and conditions set forth in the Swap Contract
Assignment Agreement.

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

                                       52
<PAGE>

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

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

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

            (7) following the conveyance of the Subsequent Mortgage Loans on
      such Subsequent Transfer Date, the characteristics of each Loan Group will
      not vary by more than the amount specified below (other than (i) the
      percentage of Mortgage Loans secured by Mortgaged Properties located in
      the State of California, which will not exceed 50% of the Mortgage Loans
      in each Loan Group and (ii) the percentage of Mortgage Loans in the Credit
      Grade Categories of "C" or below, which will not exceed 15% of the
      Mortgage Loans in each Loan Group) from the characteristics listed below;
      provided that for the purpose of making such calculations, the
      characteristics for any Initial Mortgage Loan made will be taken as of the
      Initial Cut-off Date and the characteristics for any Subsequent Mortgage
      Loans will be taken as of the Subsequent Cut-off Date:

                                       53
<PAGE>

<TABLE>
<CAPTION>
         Loan Group 1
         Characteristic                                                 Value            Permitted Variance
         --------------                                                 -----            ------------------
<S>                                                                   <C>                <C>
         Weighted Average Mortgage Rate.........................        8.511%                 +/-0.10%
         Weighted Average Original Loan-to-Value Ratio..........        80.10%                 +/-3.00%
         Weighted Average Credit Bureau Risk Score..............      600 points              +/-5 points
         Percentage Originated under CHL's Full Documentation
         Program................................................        60.56%                 +/-3.00%
         Weighted Average Gross Margin of Adjustable Rate
         Mortgage Loans.........................................        6.517%                 +/-0.10%

         Loan Group 2
         Characteristic                                                 Value            Permitted Variance
         --------------                                                 -----            ------------------
         Weighted Average Mortgage Rate.........................        8.407%                 +/-0.10%
         Weighted Average Original Loan-to-Value Ratio..........        80.40%                 +/-3.00%
         Weighted Average Credit Bureau Risk Score..............      621 points              +/-5 points
         Percentage Originated under CHL's Full Documentation
         Program................................................        58.05%                 +/-3.00%
         Weighted Average Gross Margin of Adjustable Rate
         Mortgage Loans.........................................        6.629%                 +/-0.10%
</TABLE>

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

            (9) the Trustee and the Underwriter will be provided with an Opinion
      of Counsel, which Opinion of Counsel shall not be at the expense of either
      the Trustee or the Trust Fund, addressed to the Trustee, to the effect
      that such purchase of Subsequent 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

                                       54
<PAGE>

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 Mo
         rtgage Loan, a duly executed assignment of the Mortgage to
         "Asset-Backed Certificates, Series 2006-7, CWABS, Inc., by The Bank of
         New York, a New York banking

                                       55
<PAGE>

         corporation, as trustee under the Pooling and Servicing Agreement dated
         as of June 1, 2006, without recourse" or a copy of such assignment,
         with recording information, (each such assignment, when duly and
         validly completed, to be in recordable form and sufficient to effect
         the assignment of and transfer to the assignee thereof, under the
         Mortgage to which such assignment relates);

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

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

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

         In addition, in connection with the assignment of any MERS Mortgage
Loan, each Seller agrees that it will cause, at such Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have been assigned by such Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code "[IDENTIFY
TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE FIELD NAME FOR TRUSTEE]"
which identifies the Trustee and (b) the code "[IDENTIFY SERIES SPECIFIC CODE
NUMBER]" in the field "Pool Field" which identifies the series of the
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,

                                       56
<PAGE>

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

         With respect to each Mortgage Loan other than a MERS Mortgage Loan as
to which the related Mortgaged Property and Mortgage File are located in any
jurisdiction under the laws of which the recordation of the assignment specified
in clause (iii) above is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan, as evidenced by an
Opinion of Counsel delivered by CHL to the Trustee within 120 days of the
Closing Date (which opinion may be in the form of a "survey" opinion and is not
required to be delivered by counsel admitted to practice law in the jurisdiction
as to which such opinion applies), in lieu of recording the assignment specified
in clause (iii) above, the applicable Seller may deliver an unrecorded
assignment in blank, in form otherwise suitable for recording to the 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

                                       57
<PAGE>

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

                                       58
<PAGE>

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.

                                       59
<PAGE>

         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:

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

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

            (iii) in the case of each Initial Mortgage Loan that is not a
      MERS Mortgage Loan, a duly executed assignment of the Mortgage or a
      copy thereof with recording information, in either case in the form
      permitted by Section 2.01;

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

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

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

         If, in the course of such review, the Trustee finds any document or
documents constituting a part of such Mortgage File that do not meet the
requirements of clauses (i)-(iv) and

                                       60
<PAGE>

(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(R) System
in accordance with MERS' rules and regulations.

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

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

         It is understood and agreed that the obligation of CHL to substitute
for or to purchase, pursuant to Section 2.02(a), any Initial Mortgage Loan whose
Mortgage File contains any document or documents that does not meet the
requirements of clauses (i)-(iv) and (vi) above and which defect is not
corrected or cured by CHL within 90 days from the date it was

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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:

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

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

         (iii) in the case of each Subsequent Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage or a copy thereof with
recording information, in either case in the form permitted by Section 2.01;

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

         (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

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defect referred to above within 90 days from the date it was so notified of such
defect and, if CHL does not correct or cure such defect within such period, CHL
shall either (A) if the time to cure such defect expires prior to the end of the
second anniversary of the Closing Date, substitute for the related Subsequent
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (B) purchase such Subsequent Mortgage Loan from the Trust Fund within
90 days from the date CHL was notified of such defect in writing at the Purchase
Price of such Subsequent Mortgage Loan; provided that any such substitution
pursuant to (A) above or repurchase pursuant to (B) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05 hereof and any substitution pursuant to (A) above shall not be
effected prior to the additional delivery to the Trustee of a Request for File
Release. No substitution will be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Subsequent
Mortgage Loan shall be deposited by CHL in the Certificate Account and, upon
receipt of such deposit and Request for File Release with respect thereto, the
Trustee shall release the related Mortgage File to CHL and shall execute and
deliver at CHL's request such instruments of transfer or assignment as CHL has
prepared, in each case without recourse, as shall be necessary to vest in CHL,
or a designee, the Trustee's interest in any Subsequent Mortgage Loan released
pursuant hereto. If pursuant to the foregoing provisions CHL repurchases a
Subsequent Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer shall
cause MERS to execute and deliver an assignment of the Mortgage in recordable
form to transfer the Mortgage from MERS to CHL and shall cause such Mortgage to
be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations.

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

         It is understood and agreed that the obligation of the Sellers to
substitute for or to purchase, pursuant to Section 2.02(b), any Subsequent
Mortgage Loan whose Mortgage File 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

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<PAGE>

      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

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<PAGE>

      under this Agreement or any Subsequent Transfer Agreement in accordance
      with the terms hereof or thereof.

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

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

            (8) The Master Servicer has fully furnished and will fully furnish,
      in accordance with the Fair Credit Reporting Act and its implementing
      regulations, accurate and complete information (i.e., favorable and
      unfavorable) on its borrower credit files to Equifax, Experian, and Trans
      Union Credit Information Company (three of the credit repositories), on a
      monthly basis for the Mortgage Loans in Loan Group 1.

      (b) CHL hereby represents and warrants to the Depositor and the Trustee as
follows, as of the Initial Cut-off Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Cut-off Date in the case of the
Subsequent Mortgage Loans (unless otherwise indicated or the context otherwise
requires, percentages with respect to the Initial Mortgage 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

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<PAGE>

      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.

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

            (9) None of the Mortgage Loans is 30 days or more delinquent 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
      or second lien on the related Mortgaged Property subject only to (1) the
      lien of non-delinquent current real property taxes and assessments, (2)
      covenants, conditions and restrictions, rights of way, easements and other
      matters of public record as of the date of recording of such Mortgage,
      such exceptions appearing of record being acceptable to mortgage lending
      institutions generally or specifically reflected in the appraisal made in
      connection with the origination of the related Mortgage Loan 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

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<PAGE>

      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

                                       69
<PAGE>

      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

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      percentage specified in the Collateral Schedule of the Initial Mortgage
      Loans in Loan Group 1 and Loan Group 2 are secured by two- to four-family
      dwellings. No more than approximately the percentage specified in the
      Collateral Schedule of the Initial Mortgage Loans in Loan Group 1 and Loan
      Group 2 are secured by low-rise condominium units. No more than
      approximately the percentage specified in the Collateral Schedule of the
      Initial Mortgage Loans in Loan Group 1 and Loan Group 2 are secured by
      high-rise condominium units. No more than approximately the percentage
      specified in the Collateral Schedule of the Initial Mortgage Loans in Loan
      Group 1 and Loan Group 2 are secured by manufactured housing. No more than
      approximately the percentage specified in the Collateral Schedule of the
      Initial Mortgage Loans in Loan Group 1 and Loan Group 2 are secured by
      PUDs.

            (33) Each Initial Mortgage Loan in Loan Group 1 and Loan Group 2 was
      originated on or after the date specified in the Collateral Schedule.

            (34) Each Initial Mortgage Loan that is an Adjustable Rate Mortgage
      Loan, other than a Two-Year Hybrid Mortgage Loan, a Three-Year Hybrid
      Mortgage Loan or a Five-Year Hybrid Mortgage Loan, had an initial
      Adjustment Date no later than the applicable date specified on the
      Collateral Schedule; each Initial Mortgage Loan that is a Two-Year Hybrid
      Mortgage Loan had an initial Adjustment Date no later than the applicable
      date specified on the Collateral Schedule; each Initial Mortgage Loan that
      is a Three-Year Hybrid Mortgage Loan had an initial Adjustment Date no
      later than the applicable date specified on the Collateral Schedule; and
      each Initial Mortgage Loan that is a Five-Year Hybrid Mortgage Loan had an
      initial Adjustment Date no later than the applicable date specified on the
      Collateral Schedule.

            (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

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<PAGE>

      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

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      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.

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            (51) Each of the Initial Mortgage Loans in the Mortgage Pool has a
      Due Date on or before the date specified in the Collateral Schedule.

            (52) The Mortgage Loans, individually and in the aggregate, conform
      in all material respects to the descriptions thereof in the Prospectus
      Supplement.

            (53) There is no obligation on the part of any Seller under the
      terms of the Mortgage or related Mortgage Note to make payments in
      addition to those made by the Mortgagor.

            (54) Any leasehold estate securing a Mortgage Loan has a term of not
      less than five years in excess of the term of the related Mortgage Loan.

            (55) Each Mortgage Loan represents a "qualified mortgage" within the
      meaning of Section 860(a)(3) of the Code (but without regard to the rule
      in Treasury Regulation ss. 1.860G-2(f)(2) that treats a defective
      obligation as a qualified mortgage, or any substantially similar successor
      provision) and applicable Treasury regulations promulgated thereunder.

            (56) No Mortgage Loan was either a "consumer credit contract" or a
      "purchase money loan" as such terms are defined in 16 C.F.R. ss. 433 nor
      is any Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss. 1602(aa).

            (57) To the extent required under applicable law, each originator
      and subsequent mortgagee or servicer of the Mortgage Loan complied with
      all licensing requirements and was authorized to transact and do business
      in the jurisdiction in which the related Mortgaged Property is located at
      all times when it held or serviced the 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

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      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.

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            (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(R) Glossary which is now Version 5.6(c), 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 Code. The fair market value
      of the manufactured home securing each Mortgage Loan was at least equal to
      80% of the adjusted issue price of the contract at either (i) the time the
      contract was originated (determined pursuant to the REMIC Provisions) or
      (ii) the time the contract is transferred to the purchaser.

            (75) No Mortgage Loan in the Trust Fund is a "high cost home,"
      "covered" (excluding home loans defined as "covered home loans" in the New
      Jersey Home Ownership Security Act of 2002 that were originated between
      November 26, 2003 and July 7, 2004), "high risk home" or "predatory" loan
      under any applicable state, federal or local law (or a similarly
      classified loan using different terminology under a law imposing
      heightened regulatory scrutiny or additional legal liability for
      residential mortgage loans having high interest rates, points and/or
      fees).

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            (76) There is no Mortgage Loan in the Trust Fund that was originated
      on or after October 1, 2002 and before March 7, 2003, which is secured by
      property located in the State of Georgia.

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

                  (i) No Mortgage Loan in Loan Group 1 is covered by the Home
            Ownership and Equity Protection Act of 1994 ("HOEPA");

                  (ii) No borrower obtained a prepaid single-premium credit
            life, credit disability, credit unemployment or credit property
            insurance policy in connection with the origination of the Mortgage
            Loan;

                  (iii) With respect to any Mortgage Loan in Loan Group 1 that
            contains a provision permitting imposition of a premium upon a
            prepayment prior to maturity: (a) prior to the mortgage loan's
            origination, the borrower agreed to such premium in exchange for a
            monetary benefit, including but not limited to a rate or fee
            reduction; (b) prior to the mortgage loan's origination, the
            borrower was offered the option of obtaining a mortgage loan that
            did not require payment of such a premium; (c) the prepayment
            premium is adequately disclosed to the borrower pursuant to
            applicable state and federal law; (d) no such Mortgage Loan
            originated on or after October 1, 2002 will impose a prepayment
            premium for a term in excess of three years, and any such Mortgage
            Loan originated prior to such date will not impose prepayment
            penalties 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) notwithstanding any
            state or federal law to the contrary, the servicer shall not impose
            such prepayment premium in any instance when the mortgage loan is
            accelerated or paid off in connection with the workout of a
            delinquent mortgage or due to the borrower's default;

                  (iv) With respect to each Mortgage Loan in Loan Group 1, the
            mortgage loan's originator offered the borrower mortgage loan
            products offered by such mortgage loan's originator, or any
            affiliate of such mortgage loan's originator, for which the borrower
            qualified;

                  (v) The methodology used in underwriting the extension of
            credit for each Mortgage Loan in Loan Group 1 employs objective
            mathematical principles which relate the borrower's income, assets
            and liabilities to the proposed payment and such underwriting
            methodology does not rely on the extent of the borrower's equity in
            the collateral as the principal determining factor in approving such
            credit 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;

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                  (vi) No borrower under a Mortgage Loan in Loan Group 1 was
            charged "points and fees" in an amount greater than (a) $1,000 or
            (b) 5% of the principal amount of such 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
            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 mortgage
            (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;

                  (vii) All points, fees and charges (including finance
            charges), whether or not financed, assessed, collected or to be
            collected in connection with the origination and servicing of each
            Mortgage Loan in Loan Group 1, have been disclosed in writing to the
            borrower in accordance with applicable state and federal law and
            regulation;

                  (viii) With respect to (a) any Mortgage Loan in Loan Group 1
            originated on or after August 1, 2004, 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; and

                  (ix) Each Mortgage Loan in Loan Group 1 had an original
            principal balance that conforms to Freddie Mac guidelines concerning
            original principal balance limits at the time of the origination of
            such mortgage loan.

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

            (79) 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 a first lien or first priority ownership interest
      on the related Mortgaged Property.

         (c) Park Monaco hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Cut-off Date:

            (1) Park Monaco is duly organized as a Delaware corporation and is
      validly existing and in good standing under the laws of the State of
      Delaware and is duly authorized and qualified to transact any and all
      business contemplated by this Agreement and each Subsequent Transfer
      Agreement to be conducted by Park Monaco in any state in which a Mortgaged
      Property securing a Park Monaco Mortgage Loan is located or is

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      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.

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<PAGE>

            (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.

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

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

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

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

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

         (e) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) through (d) that
materially and adversely affects the interests of the Certificateholders 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 (d) that

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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),
(b)(72), (b)(75), (b)(76) or (b)(77) shall be deemed to materially and adversely
affect the Certificateholders.

         With respect to any Replacement Mortgage Loan or Loans, the applicable
Seller delivering such Replacement Mortgage Loan shall deliver to the Trustee
for the benefit of the Certificateholders the related Mortgage Note, Mortgage
and assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the applicable Seller delivering such
Replacement Mortgage Loan on such Distribution Date. For the month of
substitution, distributions to Certificateholders will include the Scheduled
Payment due on any Deleted Mortgage Loan for the related Due Period and
thereafter the applicable Seller shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan. The Master Servicer shall
amend the Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans and the Master Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Replacement

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Mortgage Loan or Loans shall be subject to the terms of this Agreement in all
respects, and the applicable Seller delivering such Replacement Mortgage Loan
shall be deemed to have made with respect to such Replacement Mortgage Loan or
Loans, as of the date of substitution, the representations and warranties set
forth in Section 2.03(b), (c) or (d) with respect to such Mortgage Loan. Upon
any such substitution and the deposit to the Certificate Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph, the Trustee shall release to the
Representing Party the Mortgage File relating to such Deleted Mortgage Loan and
held for the benefit of the Certificateholders and shall execute and deliver at
the Master Servicer's direction such instruments of transfer or assignment as
have been prepared by the Master Servicer, in each case without recourse, as
shall be necessary to vest in the applicable Seller, or its respective designee,
title to the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.

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

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

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

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         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.

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            (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(e).

         Section 2.05 Delivery of Opinion of Counsel in Connection with
                      Substitutions and Repurchases.

         (a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee an Opinion of Counsel (which such
Representing Party shall use reasonable efforts to obtain), addressed to the
Trustee to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause any REMIC formed hereunder to
fail to qualify as a REMIC at any time that any Certificates are outstanding.
Any Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.

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<PAGE>

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

         Section 2.06 Authentication and Delivery of Certificates.

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

         Section 2.07 Covenants of the Master Servicer.

         The Master Servicer hereby covenants to the Depositor and 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,

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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(R) System, or cause the removal from the registration of any
Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns.

         In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.

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         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

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such subservicing agreements or arrangements or by virtue of indemnification
from the subservicer and to the same extent and under the same terms and
conditions as if the Master Servicer alone were servicing and administering the
Mortgage Loans. Every subservicing agreement entered into by the Master Servicer
shall contain a provision giving the successor Master Servicer the option to
terminate such agreement without cost in the event a successor Master Servicer
is appointed. All actions of each subservicer performed pursuant to the related
subservicing agreement shall be performed as an agent of the Master Servicer
with the same force and effect as if performed directly by the Master Servicer.

         (b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.

         Section 3.03 Rights of the Depositor, the Sellers, the
                      Certificateholders, the NIM Insurer and the Trustee in
                      Respect of the Master Servicer.

         None of the Trustee, the Sellers, the Certificateholders, the NIM
Insurer or the Depositor shall have any responsibility or liability for any
action or failure to act by the Master Servicer, and none of them is obligated
to supervise the performance of the Master Servicer hereunder or otherwise. The
Master Servicer shall afford (and any Subservicing Agreement shall provide that
each Subservicer shall afford) the Depositor, the NIM Insurer and the Trustee,
upon reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer (and any such Subservicer) in respect of the
Master Servicer's rights and obligations hereunder and access to officers of the
Master Servicer (and those of any such Subservicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor,
the NIM Insurer and the Trustee its (and any such Subservicer's) most recent
financial statements and such other information relating to the Master
Servicer's capacity to perform its obligations under this Agreement that it
possesses. To the extent such information is not otherwise available to the
public, the Depositor, the NIM Insurer and the Trustee shall not disseminate any
information obtained pursuant to the preceding two sentences without the Masters
Servicer's (or any such Subservicer's) written consent, except as required
pursuant to this Agreement or to the extent that it is necessary to do so (i) in
working with legal counsel, auditors, taxing authorities or other governmental
agencies, rating agencies or reinsurers or (ii) pursuant to any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Depositor, the Trustee, the
NIM Insurer or the Trust Fund, and in either case, the Depositor, the NIM
Insurer or the Trustee, as the case may be, shall use its reasonable best
efforts to assure the confidentiality of any such disseminated non-public
information. The Depositor may, but is not obligated to, enforce the obligations
of the Master Servicer under this Agreement and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer under this Agreement or exercise the rights of the Master Servicer
under this Agreement; provided by virtue of such performance by the Depositor of
its designee. The Depositor shall not have any responsibility or liability for
any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.

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         Section 3.04 Trustee to Act as Master Servicer.

         In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default or
termination by the Depositor), the Trustee or its designee shall thereupon
assume all of the rights and obligations of the Master Servicer hereunder
arising thereafter (except that the Trustee shall not be (i) liable for losses
of the Master Servicer pursuant to Section 3.10 hereof or any acts or omissions
of the predecessor Master Servicer hereunder, (ii) obligated to make Advances if
it is prohibited from doing so by applicable law, (iii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, including pursuant to
Section 2.02 or 2.03 hereof, (iv) responsible for expenses of the Master
Servicer pursuant to Section 2.03 or (v) deemed to have made any representations
and warranties hereunder, including pursuant to Section 2.03 or the first
paragraph of Section 6.02 hereof). If the Master Servicer shall for any reason
no longer be the Master Servicer (including by reason of any Event of Default or
termination by the Depositor), the Trustee (or any other successor servicer)
may, at its option, succeed to any rights and obligations of the Master Servicer
under any subservicing agreement in accordance with the terms thereof; provided
that the Trustee (or any other successor servicer) shall not incur any liability
or have any obligations in its capacity as servicer under a subservicing
agreement arising prior to the date of such succession unless it expressly
elects to succeed to the rights and obligations of the Master Servicer
thereunder; and the Master Servicer shall not thereby be relieved of any
liability or obligations under the subservicing agreement arising prior to the
date of such succession.

         The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

         Section 3.05 Collection of Mortgage Loan Payments; Certificate Account;
                      Distribution Account; Pre-Funding Account; 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

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Mortgage Loans and Subsequent Mortgage Loans. The Master Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.

         (b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited on
a daily basis within two Business Days of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted by
Subservicers or received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans on or before the Cut-off Date) and the following amounts required
to be deposited hereunder:

            (1) all payments on account of principal, including Principal
      Prepayments, on the Mortgage Loans;

            (2) all payments on account of interest on the Mortgage Loans (net
      of the related Servicing Fee and Prepayment Interest Excess permitted
      under Section 3.15 hereof to the extent not previously paid to or withheld
      by the Master Servicer);

            (3) all Insurance Proceeds;

            (4) all Liquidation Proceeds and Subsequent Recoveries, other than
      proceeds to be applied to the restoration or repair of the Mortgaged
      Property or released to the Mortgagor in accordance with the Master
      Servicer's normal servicing procedures;

            (5) all Compensating Interest;

            (6) any amount required to be deposited by the Master Servicer
      pursuant to Section 3.05(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

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generality of the foregoing, payments in the nature of late payment charges or
assumption fees, if collected, need not be remitted by the Master Servicer. In
the event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time withdraw or direct the institution maintaining the
Certificate Account, to withdraw such amount from the Certificate Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the institution
maintaining the Certificate Account, that describes the amounts deposited in
error in the Certificate Account. The Master Servicer shall maintain adequate
records with respect to all withdrawals made pursuant to this Section. All funds
deposited in the Certificate Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08.

         No later than 1:00 p.m. Pacific time on the Business Day prior to the
Master Servicer Advance Date in each of July 2006, August 2006, September 2006
and October 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

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Account (net of investment income), (ii) promptly deposit such amount in the
Distribution Account, and (iii) distribute each amount to the Certificates on
the Distribution Date pursuant to Section 4.04.

         (e) 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.

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         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.

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         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

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         withdrawal from the Certificate Account for deposit into the
         Distribution Account pursuant to the following paragraph;

               (ix) to pay any lender-paid primary mortgage insurance premiums;

               (x) to withdraw any amount deposited in the Certificate Account
         and not required to be deposited therein; and

               (xi) to clear and terminate the Certificate Account upon
         termination of this Agreement pursuant to Section 9.01 hereof.

         In addition, no later than 1:00 p.m. Pacific time on the Distribution
Account Deposit Date, the Master Servicer shall withdraw from the Certificate
Account and remit to the Trustee the Interest Remittance Amount, Principal
Remittance Amount, Prepayment Charges collected and the Master Servicer
Prepayment Charge Payment Amount for each Loan Group, and the Trustee shall
deposit such amount in the Distribution Account.

         The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On the
Closing Date, CHL shall deposit into the Principal Reserve Fund $200.00. Funds
on deposit in the Principal Reserve Fund shall not be invested. The Principal
Reserve Fund shall be treated as an "outside reserve fund" under applicable
Treasury regulations and shall not be part of any REMIC created under this
Agreement.

         On the Business Day before the first Distribution Date, the Trustee
shall transfer $100.00 from the Principal Reserve Fund to the Distribution
Account, and on the first Distribution Date, the Trustee shall withdraw $100 and
distribute such amount to the Class A-R Certificates in reduction of the
Certificate Principal Balance thereof.

         On the Business Day before the Class P Principal Distribution Date, the
Trustee shall transfer 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 third paragraph of Section 8.11). In addition, the Trustee

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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 third paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Carryover Reserve Fund for the following purposes:

            (1) to withdraw any amount deposited in the Carryover Reserve Fund
      and not required to be deposited therein; and

            (2) to clear and terminate the Carryover Reserve Fund upon
      termination of the Agreement pursuant to Section 9.01 hereof.

         Section 3.09 [Reserved].

         Section 3.10 Maintenance of Hazard Insurance.

         The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or

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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

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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

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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

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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

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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.

         (c) [Reserved].

         (d) The Master Servicer, in its sole discretion, shall have the right
to elect (by written notice sent to the Trustee) to purchase for its own account
from the Trust Fund any Mortgage Loan that is 150 days or more delinquent at a
price equal to the Purchase Price; provided, however, that the Master Servicer
may only exercise this right on or before the last day of the calendar month in
which such Mortgage Loan became 150 days delinquent (such month, the "Eligible
Repurchase Month"); provided further, that any such Mortgage Loan which

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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(R)
System of such Mortgage and to execute and deliver, on behalf of the Trust Fund
and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Certificate Account, the Distribution Account, the
Carryover Reserve Fund or the related subservicing account. From time to time
and as shall be appropriate for the servicing or foreclosure of any Mortgage
Loan, including for such purpose, collection under any policy of flood insurance
any fidelity bond or errors or omissions policy, or for the purposes of
effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the 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.

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         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.

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         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.

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         (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 Rights of Directing Certificateholder.

         Notwithstanding anything in this Agreement to the contrary:

         (a) The Master Servicer shall not commence foreclosure proceedings with
respect to a Mortgage Loan unless (i) no later than five Business Days prior to
its commencement of such foreclosure proceedings, it notifies the majority
holder of the Class C Certificates (the "Directing Certificateholder") of its
intention to do so, and (ii) the Directing Certificateholder does not, within
such five Business Day period, affirmatively object to such action.

         (b) In the event that the Master Servicer determines not to proceed
with foreclosure proceedings with respect to a Mortgage Loan that becomes 60
days or more delinquent and the Master Servicer has determined that it is unable
to collect payments due under such Mortgage Loan in accordance with accepted
servicing practices, the Master Servicer shall, prior to taking any action with
respect to such Mortgage Loan, promptly provide the Directing Certificateholder
with notice of such determination and a description of such other action as it
intends to take with respect to such Mortgage Loan; provided, that the Master
Servicer shall not be permitted to proceed with any such action unless the
Directing Certificateholder does not, within five Business Days following such
notice, affirmatively object to the Master Servicer taking such action.

         (c) If the Directing Certificateholder timely and affirmatively objects
to an action or contemplated action of the Master Servicer pursuant to either
(a) or (b) above, then the Directing Certificateholder shall instruct the Master
Servicer to hire, at the Directing Certificateholder's sole cost and expense,
three appraisal firms, selected by the Master Servicer in its sole and absolute
discretion from the list of appraisal firms attached as Exhibit [__], to compute
the fair value of the Mortgaged Property relating to the related Mortgage Loan
utilizing the Fannie Mae Form 2055 Exterior-Only Inspection Residential
Appraisal Report (each such appraisal-firm computation, a "Fair Value Price"),
in each case (other than as set forth in (d)

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below) no later than 30 days from the date of the Directing Certificateholder's
objection. If the Master Servicer shall have received three Fair Value Prices by
the end of such 30-day period, then the Directing Certificateholder shall, no
later than 5 days after the expiration of such 30-day period, purchase such
Mortgage Loan and the related Mortgaged Property at an amount equal to the sum
of (i) accrued and unpaid interest on such Mortgage Loan as of such purchase
date ("Accrued Interest") and (ii) the highest of such three Fair Value Prices
respectively determined by such appraisal firms, and shall promptly deliver such
amount to the Master Servicer for deposit into the Certificate Account. All
costs relating to the computation of the related Fair Value Prices shall be for
the account of the Directing Certificateholder and shall be paid by the
Directing Certificateholder at the time such Mortgage Loan and the related
Mortgaged Property are purchased by the Directing Certificateholder.

         (d) If the Master Servicer shall not have received three Fair Value
Prices at the end of the 30-day period set forth in (c) above, then:

            (1) The Master Servicer shall obtain such three Fair Value Prices no
      later than 15 days after the end of such 30-day period.

            (2) If the Master Servicer shall have only received two Fair Value
      Prices at the end of such 15-day extension period, then the Master
      Servicer will determine, in its sole and absolute discretion, the fair
      value of the Mortgaged Property relating to such Mortgage Loan, related
      Insurance Proceeds and the current delinquency status of such Mortgage
      Loan (such fair value, the "Master Servicer Fair Value Price"), and the
      Directing Certificateholder shall, no later than 5 days after the
      expiration of such 15-day extension period, purchase (and deliver to the
      Master Servicer the purchase price for) such Mortgage Loan and the related
      Mortgaged Property at an amount equal to the sum of (A) Accrued Interest
      thereon and (B) the higher of (1) the highest of such two Fair Value
      Prices determined by such appraisal firms and (2) the Master Servicer Fair
      Value Price.

            (3) If the Master Servicer shall have received only one Fair Value
      Price at the end of such 15-day extension period, then the Master Servicer
      will determine, in its sole and absolute discretion, the Master Servicer
      Fair Value Price of the Mortgaged Property related to such Mortgage Loan,
      and:

                  (A) if such Master Servicer Fair Value Price is equal to or
            greater than the unpaid principal balance of the related Mortgage
            Loan as of such date (the "Unpaid Principal Balance"), then the
            Directing Certificateholder shall, no later than 5 days after the
            expiration of such 15-day extension period, purchase (and deliver to
            the Master Servicer the purchase price for) such Mortgage Loan and
            the related Mortgaged Property at an amount equal to the sum of (1)
            Accrued Interest thereon and (2) such Master Servicer Fair Value
            Price; and

                  (B) if such Master Servicer Fair Value Price is less than the
            related Unpaid Principal Balance, then the Directing
            Certificateholder shall, no later than 5 days after the expiration
            of such 15-day extension period, purchase (and deliver to the Master
            Servicer the purchase price for) such Mortgage Loan and the related

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            Mortgaged Property at an amount equal to the sum of (1) Accrued
            Interest thereon and (2) the related Unpaid Principal Balance (such
            sum, the "Preliminary Purchase Price"); provided, that the
            provisions of clause (d)(4) shall thereafter apply.

            (4) Following the payment by the Directing Certificateholder of
      the Preliminary Purchase Price, the Master Servicer shall continue to
      hire appraisal firms at the Directing Certificateholder's sole cost and
      expense to compute the Fair Value Price of the Mortgaged Property
      related to such Mortgage Loan, and at such time as two such Fair Value
      Prices shall have been obtained:

                  (A) if such Master Servicer Fair Value Price is equal to or
            greater than the Unpaid Principal Balance, then the Directing
            Certificateholder shall, no later than 5 days after the expiration
            of such 15-day extension period, purchase (and deliver to the
            Master Servicer the purchase price for) such Mortgage Loan and the
            related Mortgaged Property at an amount equal to the sum of (1)
            Accrued Interest thereon and (2) such Master Servicer Fair Value
            Price; and

                  (B) if the sum of (1) Accrued Interest on the related
            Mortgage Loan and (2) the higher of (x) the highest of such two
            Fair Value Prices determined by such appraisal firms and (y) the
            Master Servicer's Fair Value Price of the Mortgaged Property
            related to such Mortgage Loan (such sum, the "Revised Fair Value
            Price") is greater than such Preliminary Purchase Price, then the
            Master Servicer shall promptly notify the Directing
            Certificateholder of such calculation, and the Directing
            Certificateholder shall, no later than 5 days after such notice,
            remit to the Master Servicer, for deposit into the Certificate
            Account, the difference between such Revised Fair Value Price and
            such Preliminary Purchase Price; and

                  (C) if such Preliminary Purchase Price is greater than such
            Revised Fair Value Price, then the Master Servicer shall promptly
            notify the Directing Certificateholder of such calculation, and
            the Master Servicer shall, no later than 5 days after such notice,
            remit to the Directing Certificateholder, from funds then on
            deposit in the Certificate Account, the difference between such
            Preliminary Purchase Price and such Revised Fair Value Price.

         (e) Notwithstanding anything herein to the contrary, the Directing
Certificateholder shall not be entitled to any of its rights set forth herein
with respect to a Mortgage Loan following its failure to purchase such
Mortgage Loan and the related Mortgaged Property, at the related purchase
price set forth in this Section 3.18 within the timeframe set forth in this
Section 3.18 following the Directing Certificateholder's objection to an
action of the Master Servicer.

         (f) Any notice, confirmation, instruction or objection pursuant to
paragraphs (a), (b), (c) and (d) above may be delivered via facsimile or other
written or electronic communication as the parties hereto and the Directing
Certificateholder may agree to from time to time.

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         (g) For the avoidance of doubt, the Directing Certificateholder's
rights set forth in this Section 3.18 are intended to provide the Directing
Certificateholder, for so long as it has not forfeited its right under this
Section 3.18 as set forth in clause (e) above, with the unilateral right to
control foreclosure decisions in respect of delinquent and defaulted Mortgage
Loans, and certain exclusive purchase rights so as to maximize the recovery
value on delinquent and defaulted Mortgage Loans.

         To the extent that the Directing Certificateholder purchases any
Mortgage Loan pursuant to this Section 3.18, the Master Servicer will continue
to service such Mortgage Loan in accordance with this Agreement.

         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,

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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 Assignment Agreement. The Trustee's rights to receive
certain proceeds of the Swap Contract as provided in the Swap Contract
Administration Agreement shall be rights of the Trustee as Swap Trustee
hereunder, shall be an asset of the Swap Trust and shall not be an asset of the
Trust Fund nor of any REMIC. The Swap Trustee shall deposit any amounts received
from time to time from the Swap Contract Administrator with respect to the Swap
Contract into the Swap Account. The Master Servicer shall deposit any amounts
received on behalf of the Swap Trustee from time to time with respect to the
Swap Contract into the Swap Account.

         On the Business Day preceding each Distribution Date, the Swap Trustee
shall notify the Swap Contract Administrator of any amounts distributable to the
Interest-Bearing Certificates pursuant to Section 4.04(d)(3) through (8) that
will remain unpaid following all distributions to be made on such Distribution
Date pursuant to Section 4.04(a) through (c).

         No later than two Business Days following each Distribution Date, the
Trustee shall provide the Swap Contract Administrator with information regarding
the aggregate Certificate Principal Balance of the Interest-Bearing Certificates
after all distributions on such Distribution Date.

         Upon the Swap Contract Administrator obtaining actual knowledge of the
rating of the Swap Counterparty falling below the Approved Rating Thresholds (as
defined in the Swap Contract), the Swap Trustee shall direct the Swap Contract
Administrator to negotiate an ISDA Credit Support Annex with the Swap
Counterparty that meets the terms of the Swap Contract. If an ISDA Credit
Support Annex is negotiated, the Swap Trustee shall direct the Swap Contract
Administrator to demand payment of the Delivery Amount (as defined in the ISDA
Credit Support Annex). In addition, if an ISDA Credit Support Annex is
negotiated, the Swap Trustee shall set up an account in accordance with Section
4.09 to hold cash or other eligible investments

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pledged under such ISDA Credit Support Annex. Any cash or other eligible
investments pledged under an ISDA Credit Support Annex shall not be part of
the Swap Account or the Distribution Account unless they are applied in
accordance with such ISDA Credit Support Annex to make a payment due to the
Swap Contract Administrator pursuant to the Swap Contract.

         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 for that Distribution Date, pro
rata, based upon their respective Interest Funds for that Distribution Date, and
any upfront amount in excess of the Adjusted Replacement Upfront Amount shall be
distributed to CHL and will not be available to make distributions in respect of
any Class of Certificates. 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.

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                                 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.,

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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].

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         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.

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

                           (b) to the Classes of Class 2-A Certificates (after
                  the distribution of the Principal Distribution Amount from
                  Loan Group 2 as provided in clause (ii)(a) below), in the
                  order 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.

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<PAGE>

         (2) with respect to any Distribution Date on or after the Stepdown
Date and so long as a Trigger Event is not in effect, from the Principal
Distribution Amounts for Loan Group 1 and Loan Group 2, 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 Certificates and
            the Class 2-A Certificates, respectively, concurrently, to (I) 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) the Classes of Class 2-A
            Certificates, in an amount up to the Class 2-A Principal
            Distribution Amount in the order and priorities set forth in
            clause (3) below, until the Certificate Principal Balances thereof
            are reduced to zero; provided, however, that if the Certificate
            Principal Balance of the Class 1-A Certificates is reduced to zero
            then any remaining unpaid Class A Principal Distribution Target
            Amount will be distributed to the Class 2-A Certificates in the
            order and priorities set forth in clause (3) below; provided
            further, however, that if 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 Class 1-A Certificates,

                  (B) 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 each such Class, in each case
            until the Certificate Principal Balance thereof is reduced to
            zero, and

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

                  (3) On each Distribution Date on which any principal amounts
         are to be distributed to the Class 2-A Certificates, such amounts
         shall be distributed sequentially, to the Class 2-A-1, Class 2-A-2,
         Class 2-A-3 and Class 2-A-4 Certificates, in that order, in each case
         until the Certificate Principal Balances thereof are reduced to zero.

         (c) With respect to any Distribution Date, any Excess Cashflow and,
in the case of clauses (1) and (2) below and in the case of the payment of
Unpaid Realized Loss Amounts pursuant to clause (3) below, any Credit Comeback
Excess Cashflow, shall be distributed to the Classes of Certificates in the
following order of priority, in each case first to the extent of the remaining
Credit Comeback Excess Cashflow, if applicable, and second to the extent of
the remaining Excess Cashflow:

                  (1) to the 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;

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<PAGE>

                  (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, the Class C
         Distributable 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;

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<PAGE>

                  (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;

                  (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; and

                  (9) to the Swap Contract Administrator for payment to the
         Swap Counterparty, any Swap Termination Payment due to a Swap
         Counterparty Trigger Event payable to the Swap Counterparty with
         respect to such Distribution Date.

         (e) To the extent that a Class of Interest-Bearing Certificates
receives interest in excess of the applicable Net Rate Cap, if such interest
is paid pursuant to Section 4.04(c), then it shall be deemed to have been paid
to the Carryover Reserve Fund and then paid by the Carryover Reserve Fund to
those Certificateholders, and if such interest is paid pursuant to Section
4.04(d), then such interest shall be deemed to have been paid to the Swap
Account and then paid by the Swap Account to those Certificateholders. For
purposes of the Code, amounts deemed deposited in the Carryover Reserve Fund
shall be deemed to have first been distributed to the Class C Certificates.

         (f) On each Distribution Date, all Prepayment Charges and Master
Servicer Prepayment Charge Payment Amounts shall be distributed to the Class P
Certificates. On the Class P Principal Distribution Date, the Trustee shall
make the $100.00 distribution to the Class P Certificates as specified in
Section 3.08.

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         (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

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<PAGE>

before the related Distribution Date), the Master Servicer shall deliver a
report to the Trustee (in the form of a computer readable magnetic tape or by
such other means as the Master Servicer and the Trustee may agree from time to
time) containing such data and information as agreed to by the Master Servicer
and the Trustee (including, without limitation, the actual mortgage rate for
each Credit Comeback Loan) such as to permit the Trustee to prepare the
Monthly Statement and make the required distributions for the related
Distribution Date (the "Remittance Report"). The Trustee shall not be
responsible to recompute, recalculate or verify information provided to it by
the Master Servicer and shall be permitted to conclusively rely on any
information provided to it by the Master Servicer.

         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;

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            (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.

         (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.

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         Section 4.08 Credit Comeback Excess Account.

         On the Closing Date, the Trustee shall establish and maintain in its
name, in trust for the benefit of the Certificateholders, the Credit Comeback
Excess Account. The Credit Comeback Excess Account shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement.

         On each Distribution Date, the Trustee shall deposit all Credit
Comeback Excess Amounts in the Credit Comeback Excess Account. The Trustee shall
make withdrawals from the Credit Comeback Excess Account to make distributions
as and to the extent required by Section 4.04.

         Funds in the Credit Comeback Excess Account with respect to Loan Group
1 and Loan Group 2 may be invested in Permitted Investments at the written
direction of the Majority Holder of the Class C Certificates, which Permitted
Investments shall mature not later than the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains the Credit Comeback Excess Account, then such Permitted Investment
shall mature not later than such Distribution Date) and shall not be sold or
disposed of prior to maturity. All such Permitted Investments shall be made in
the name of the Trustee, for the benefit of the Certificateholders. In the
absence of such written direction, all funds in the Credit Comeback Excess
Account shall be invested by the Trustee in The Bank of New York cash reserves.
Any net investment earnings on amounts in the Credit Comeback Excess Account
with respect to Loan Group 1 and Loan Group 2 shall be payable pro rata to the
Holders of the Class C Certificates in accordance with their Percentage
Interests. Any losses incurred in the Credit Comeback Excess Account in respect
of any such investments shall be charged against amounts on deposit in the
Credit Comeback Excess Account (or such investments) immediately as realized.

         The Trustee shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Credit
Comeback Excess Account and made in accordance with this Section 4.08. The
Credit Comeback Excess Account shall not constitute an asset of any REMIC
created hereunder. The Class C Certificates shall evidence ownership of the
Credit Comeback Excess Account for federal tax purposes.

         Section 4.09 Swap Trust and Swap Account.

         On the Closing Date, there is hereby established a separate trust (the
"Swap Trust"), the assets of which shall consist of the Trustee's rights and
obligations under the Swap Contract Administration Agreement. The Swap Trust
shall be maintained by the Swap Trustee, who initially, shall be the Trustee.
The Swap Trustee shall hold the assets of the Swap Trust in trust for the
benefit of the Holders of the Interest-Bearing Certificates and the Swap
Counterparty. No later than the Closing Date, the Swap Trustee shall establish
and maintain a separate, segregated trust account to be held in the Swap Trust,
titled, "Swap Account, The Bank of New York, as Swap Trustee, in trust for the
Swap Counterparty and the registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2006-7." Such account shall be an Eligible

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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.

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<PAGE>

                                  ARTICLE V.
                               THE CERTIFICATES

         Section 5.01 The Certificates.

         The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-15, Exhibit B, Exhibit C, Exhibit D and Exhibit E. The
Certificates shall be issuable in registered form, in the minimum dollar
denominations, integral dollar multiples in excess thereof and aggregate dollar
denominations as set forth in the following table:

<TABLE>
<CAPTION>
                                                                Integral Multiples in         Original Certificate
            Class                  Minimum Denomination           Excess of Minimum            Principal Balance
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                                       <C>                            <C>                         <C>
             1-A                          $20,000                        $1                          $313,365,000
            2-A-1                         $20,000                        $1                          $246,320,000
            2-A-2                         $20,000                        $1                           $56,242,000
            2-A-3                         $20,000                        $1                          $137,245,000
            2-A-4                         $20,000                        $1                           $85,682,000
             M-1                          $20,000                        $1                           $38,628,000
             M-2                          $20,000                        $1                           $34,452,000
             M-3                          $20,000                        $1                           $19,836,000
             M-4                          $20,000                        $1                           $17,748,000
             M-5                          $20,000                        $1                           $17,748,000
             M-6                          $20,000                        $1                           $15,138,000
             M-7                          $20,000                        $1                           $15,138,000
             M-8                          $20,000                        $1                           $13,050,000
             M-9                          $20,000                        $1                            $6,786,000
              B                          $100,000                        $1                           $10,962,000
             A-R                         $99.95(1)                       N/A                                $100
              C                             N/A                          N/A                                 N/A
              P                             N/A                          N/A                                $100
</TABLE>

(1) The Tax Matters Person Certificate may be issued in a denomination of
    $0.05.

         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.

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<PAGE>

         The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.

         Section 5.02 Certificate Register; Registration of Transfer and
                      Exchange of Certificates.

         (a) The Trustee shall maintain a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and
to such reasonable regulations as it may prescribe, the Trustee shall provide
for the registration of Certificates and of Transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of Transfer
of any Certificate, the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of the
same Class and of like aggregate Percentage Interest.

         At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Trustee duly
executed by the Holder thereof or his attorney duly authorized in writing.

         No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.

         All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.

         (b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such
Certificateholder's prospective transferee shall (except in connection with
any

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<PAGE>

         transfer of a Private Certificate to an affiliate of the Depositor
(either directly or through a nominee) in connection with the initial issuance
of the Certificates) each certify to the Trustee in writing the facts
surrounding the Transfer in substantially the form set forth in Exhibit J-2
(the "Transferor Certificate") and (i) deliver a letter in substantially the
form of either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule
144A Letter") or (ii) there shall be delivered to the Trustee at the expense
of the Certificateholder desiring to effect such transfer an Opinion of
Counsel that such Transfer may be made pursuant to an exemption from the
Securities Act; provided, however, that in the case of the delivery of an
Investment Letter in connection with the transfer of any Class C or Class P
Certificate to a transferee that is formed with the purpose of issuing notes
backed by such Class C or Class P Certificate, as the case may be, clause (b)
and (c) of the form of Investment Letter shall not be applicable and shall be
deleted by such transferee. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such Transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Trust Fund, each Seller,
the Master Servicer and the NIM Insurer against any liability that may result
if the Transfer is not so exempt or is not made in accordance with such
federal and state laws.

         No Transfer of an ERISA-Restricted Certificate (other than a transfer
of an ERISA-Restricted Certificate to an affiliate of the Depositor (either
directly or through a nominee) in connection with the initial issuance of the
Certificates) shall be made unless the Trustee shall have received either (i)
a representation from the transferee of such Certificate acceptable to and in
form and substance satisfactory to the Trustee (in the event such Certificate
is a Private Certificate, such requirement is satisfied only by the Trustee's
receipt of a representation letter from the transferee substantially in the
form of Exhibit K or Exhibit L, or in the event such Certificate is a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that (x) such transferee is not a Plan, or (y) in the case
of an ERISA-Restricted Certificate that has been the subject of an
ERISA-Qualifying Underwriting, a representation that the transferee is an
insurance company which is purchasing such Certificate with funds contained in
an "insurance company general account" (as such term is defined in section
V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that
the purchase and holding of such Certificate satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60 or (ii) in the case of
any ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan or arrangement subject to ERISA, or a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee of any such plan or arrangement or
any other person acting on behalf of any such plan or arrangement, an Opinion
of Counsel satisfactory to the Trustee, addressed to the Trustee and the
Master Servicer, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in a non-exempt prohibited
transaction under ERISA or the Code and will not subject the Trustee or the
Master Servicer to any obligation in addition to those expressly undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the Master Servicer, or the Trust Fund. For purposes of the preceding
sentence, one of such representations, as appropriate, shall be deemed to have
been made to the Trustee by the transferee's acceptance of an ERISA-Restricted
Certificate (or the acceptance by a Certificate Owner of the beneficial
interest in any such Class of ERISA-Restricted Certificates) unless the
Trustee shall have received from the transferee an Opinion of Counsel as
described in clause (ii) or a representation letter acceptable in form and
substance to the Trustee. Notwithstanding

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<PAGE>

anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code
without the delivery to the Trustee of an Opinion of Counsel satisfactory to
the Trustee meeting the requirements of clause (i) of the first sentence of
this paragraph as described above shall be void and of no effect. The Trustee
shall be under no liability to any Person for any registration of transfer of
any ERISA-Restricted Certificate that is in fact not permitted by this Section
5.02(b) or for making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee, with respect to the
transfer of such Classes of Certificates, required delivery of such
certificates and other documentation or evidence as are expressly required by
the terms of this Agreement and examined such certificates and other
documentation or evidence to determine compliance as to form with the express
requirements hereof. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any ERISA-Restricted Certificate that was in fact
an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code or a Person acting on
behalf of any such plan or arrangement at the time it became a Holder or, at
such subsequent time as it became such a plan or arrangement or Person acting
on behalf of such a plan or arrangement, all payments made on such
ERISA-Restricted Certificate at and after either such time. Any such payments
so recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Holder of such Certificate that is not such a plan or
arrangement or Person acting on behalf of a plan or arrangement.

         Until the Swap Trust terminates, no transfer of an Interest-Bearing
Certificate (other than a transfer of an Interest-Bearing Certificate to an
affiliate of the Depositor (either directly or through a nominee) in
connection with the initial issuance of the Certificates) shall be made unless
the Trustee shall have received either (i) a representation from the
transferee of such Interest-Bearing Certificate acceptable to and in form and
substance satisfactory to the Trustee to the effect that such transferee is
not a Plan, or (ii) a representation that the purchase and holding of the
Interest-Bearing Certificate satisfy the requirements for exemptive relief
under PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar
exemption. In the event that such a representation letter is not delivered,
one of the foregoing representations, as appropriate, shall be deemed to have
been made by the transferee's (including an initial acquiror's) acceptance of
the Interest-Bearing Certificate. In the event that such representation is
violated, such transfer or acquisition shall be void and of no effect.

         (c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:

                  (1) Each Person holding or acquiring any Ownership Interest
         in a Class A-R Certificate shall be a Permitted Transferee and shall
         promptly notify the Trustee of any change or impending change in its
         status as a Permitted Transferee.

                  (2) Except in connection with (i) the registration of the
         Tax Matters Person Certificate in the name of the Trustee or (ii) any
         registration in the name of, or transfer of a Class A-R Certificate
         to, an affiliate of the Depositor (either directly or

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<PAGE>

         through a nominee) in connection with the initial issuance of the
         Certificates, no Ownership Interest in a Class A-R Certificate may be
         registered or transferred, and the Trustee shall not register the
         Transfer of any Class A-R Certificate, unless the Trustee shall have
         been furnished with a certificate (a "Transferor Certificate") of the
         transferor in the form attached hereto as Exhibit J-1 and an
         affidavit (a "Transfer Affidavit") of the initial owner or the
         proposed transferee in the form attached hereto as Exhibit I.

                  (3) Each Person holding or acquiring any Ownership Interest
         in a Class A-R Certificate shall agree (A) to obtain a Transfer
         Affidavit from any other Person to whom such Person attempts to
         Transfer its Ownership Interest in a Class A-R Certificate, (B) to
         obtain a Transfer Affidavit from any Person for whom such Person is
         acting as nominee, trustee or agent in connection with any Transfer
         of a Class A-R Certificate and (C) not to Transfer its Ownership
         Interest in a Class A-R Certificate, or to cause the Transfer of an
         Ownership Interest in a Class A-R Certificate to any other Person, if
         it has actual knowledge that such Person is not a Permitted
         Transferee or that such Transfer Affidavit is false.

                  (4) Any attempted or purported Transfer of any Ownership
         Interest in a Class A-R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Class A-R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class A-R
         Certificate. The Trustee shall be under no liability to any Person
         for any registration of Transfer of a Class A-R Certificate that is
         in fact not permitted by Section 5.02(b) and this Section 5.02(c) or
         for making any payments due on such Certificate to the Holder thereof
         or taking any other action with respect to such Holder under the
         provisions of this Agreement so long as the Transfer was registered
         after receipt of the related Transfer Affidavit and Transferor
         Certificate. The Trustee shall be entitled but not obligated to
         recover from any Holder of a Class A-R Certificate that was in fact
         not a Permitted Transferee at the time it became a Holder or, at such
         subsequent time as it became other than a Permitted Transferee, all
         payments made on such Class A-R Certificate at and after either such
         time. Any such payments so recovered by the Trustee shall be paid and
         delivered by the Trustee to the last preceding Permitted Transferee
         of such Certificate.

                  (5) The Master Servicer shall use its best efforts to make
         available, upon receipt of written request from the Trustee, all
         information necessary to compute any tax imposed under section
         860E(e) of the Code as a result of a Transfer of an Ownership
         Interest in a Class A-R Certificate to any Holder who is not a
         Permitted Transferee.

         The restrictions on Transfers of a Class A-R Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Class A-R Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trustee, any Seller or the Master
Servicer, to the effect that the elimination of such restrictions will not cause
any REMIC

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<PAGE>

formed hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the
Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Class A-R Certificate, by acceptance of
its Ownership Interest, shall be deemed to consent to any amendment of this
Agreement that, based on an Opinion of Counsel furnished to the Trustee, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class A-R Certificate is not transferred, directly
or indirectly, to a Person that is not a Permitted Transferee and (b) to
provide for a means to compel the Transfer of a Class A-R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.

         (d) The preparation and delivery of all affidavits, certifications
and opinions referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Trustee, the Depositor, any Seller or the Master Servicer.

         Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.

         If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Master Servicer and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.

         Section 5.04 Persons Deemed Owners.

         The Master Servicer, the Trustee, the NIM Insurer and any agent of the
Master Servicer, the Trustee or the NIM Insurer may treat the person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and none of the Master Servicer, the Trustee, the NIM
Insurer or any agent of the Master Servicer, the Trustee or the NIM Insurer
shall be affected by any notice to the contrary.

         Section 5.05 Access to List of Certificateholders' Names and
                      Addresses.

         If three or more Certificateholders or Certificate Owners (a) request
such information in writing from the Trustee, (b) state that such
Certificateholders or Certificate Owners desire to communicate with other
Certificateholders or Certificate Owners with respect

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<PAGE>

to their rights under this Agreement or under the Certificates and (c) provide
a copy of the communication that such Certificateholders or Certificate Owners
propose to transmit or if the Depositor or Master Servicer shall request such
information in writing from the Trustee, then the Trustee shall, within ten
Business Days after the receipt of such request, provide the Depositor, the
Master Servicer or such Certificateholders or Certificate Owners at such
recipients' expense the most recent list of the Certificateholders of the
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder or Certificate Owner, by receiving and holding a
Certificate, agree that the Trustee shall not be held accountable by reason of
the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.

         Section 5.06 Book-Entry Certificates.

         The Book-Entry Certificates, upon original issuance, shall be issued
in the form of one typewritten Certificate (or more than one, if required by
the Depository) for each Class of such Certificates, to be delivered to the
Depository by or on behalf of the Depositor. Such Certificates shall initially
be registered on the Certificate Register in the name of the Depository or its
nominee, and no Certificate Owner of such Certificates will receive a
definitive certificate representing such Certificate Owner's interest in such
Certificates, except as provided in Section 5.08. Unless and until definitive,
fully registered Certificates ("Definitive Certificates") have been issued to
the Certificate Owners of such Certificates pursuant to Section 5.08:

         (a) the provisions of this Section shall be in full force and effect;

         (b) the Depositor, the Sellers, the Master Servicer and the Trustee
may deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of
the respective Certificate Owners of such Certificates;

         (c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;

         (d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants
and receive and transmit distributions of principal and interest on the
related Certificates to such Depository Participants;

         (e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;

         (f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and

         (g) to the extent the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.

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<PAGE>

         For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may
be given by Certificate Owners (acting through the Depository and the
Depository Participants) owning Book-Entry Certificates evidencing the
requisite percentage of principal amount of such Class of Certificates.

         Section 5.07 Notices to Depository.

         Whenever any notice or other communication is required to be given to
Certificateholders of any Class with respect to which Book-Entry Certificates
have been issued, unless and until Definitive Certificates shall have been
issued to the related Certificate Owners, the Trustee shall give all such
notices and communications to the Depository.

         Section 5.08 Definitive Certificates.

         If, after Book-Entry Certificates have been issued with respect to
any Certificates, (a) the Depositor advises the Trustee that the Depository is
no longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor or (b) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights
evidenced by any Class of Book-Entry Certificates advise the Trustee and the
Depository in writing through the Depository Participants that the
continuation of a book-entry system with respect to Certificates of such Class
through the Depository (or its successor) is no longer in the best interests
of the Certificate Owners of such Class, then the Trustee shall notify all
Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners of such Class requesting the same. The
Depositor shall provide the Trustee with an adequate inventory of Certificates
to facilitate the issuance and transfer of Definitive Certificates. Upon
surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall authenticate and deliver such Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in
delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or
to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.

         Section 5.09 Maintenance of Office or Agency.

         The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its offices at 101 Barclay Street, New York, New York
10286, Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or
agency.

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<PAGE>

                                 ARTICLE VI.
              THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS

         Section 6.01 Respective Liabilities of the Depositor, the Master
                      Servicer and the Sellers.

         The Depositor, the Master Servicer and each Seller shall each be
liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.

         Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Sellers.

         The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of
the United States or under the laws of one of the states thereof and will
obtain and preserve its qualification or registration to do business as a
foreign partnership in each jurisdiction in which such qualification or
registration is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.

         Any Person into which the Depositor, the Master Servicer or any
Seller may be merged or consolidated, or any Person resulting from any merger
or consolidation to which the Depositor, the Master Servicer or any Seller
shall be a party, or any person succeeding to the business of the Depositor,
the Master Servicer or any Seller, shall be the successor of the Depositor,
the Master Servicer or such Seller, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
the successor or surviving Person to the Master Servicer shall be qualified to
service mortgage loans on behalf of Fannie Mae and Freddie Mac.

         As a condition to the effectiveness of any merger or consolidation,
at least 15 calendar days prior to the effective date of any merger or
consolidation of the Master Servicer, the Master Servicer shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement Master Servicer.

         Section 6.03 Limitation on Liability of the Depositor, the Sellers,
                      the Master Servicer, the NIM Insurer and Others.

         None of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer or any of the directors, officers, employees or agents of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer shall be under
any liability to the Trustee (except as provided in Section

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8.05), the Trust Fund or the Certificateholders for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided that this provision shall not
protect the Depositor, the Sellers, the Master Servicer or any such Person
against any breach of representations or warranties made by it herein or
protect the Depositor, the Sellers, the Master Servicer or any such Person
from any liability that would otherwise be imposed by reasons of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The
Depositor, the Sellers, the NIM Insurer, the Master Servicer and any director,
officer, employee or agent of the Depositor, the Sellers, the NIM Insurer or
the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Sellers, the NIM Insurer, the Master
Servicer and any director, officer, employee or agent of the Depositor, the
Sellers, the NIM Insurer or the Master Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred
in connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement
or the Certificates, other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) and any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. None of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer shall be under
any obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided that any of the Depositor,
the Sellers, the NIM Insurer or the Master Servicer may, in its discretion
undertake any such action that it may deem necessary or desirable in respect
of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be, expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Sellers, the NIM Insurer and the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account as provided
by Section 3.08 hereof.

         Section 6.04 Limitation on Resignation of Master Servicer.

         The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that its duties hereunder are
no longer permissible under applicable law or (ii) upon appointment of a
successor servicer that is reasonably acceptable to the Trustee and the NIM
Insurer and the written confirmation from each Rating Agency (which confirmation
shall be furnished to the Depositor, the Trustee and the NIM Insurer) that such
resignation will not cause such Rating Agency to reduce the then-current rating
of the Certificates. Any such determination pursuant to clause (i) of the
preceding sentence permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
resignation of the Master Servicer shall become effective until the Trustee
shall have assumed the Master Servicer's responsibilities, duties, liabilities
(other than those liabilities arising prior to the appointment of such
successor) and obligations under this Agreement and the Depositor shall have
received the information described in the following sentence. As a condition to
the effectiveness of any such resignation, at least 15 calendar days prior to
the effective date of such resignation, the Master Servicer shall

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provide (x) written notice to the Depositor of any successor pursuant to this
Section and (y) in writing and in form and substance reasonably satisfactory
to the Depositor, all information reasonably requested by the Depositor in
order to comply with its reporting obligation under Item 6.02 of Form 8-K with
respect to the resignation of the Master Servicer.

         Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.

         The Master Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Fannie Mae and Freddie Mac for
persons performing servicing for mortgage loans purchased by Fannie Mae and
Freddie Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.

         The Master Servicer shall provide the Trustee and the NIM Insurer (upon
such party's reasonable request) with copies of any such insurance policies and
fidelity bond. The Master Servicer shall be deemed to have complied with this
provision if an Affiliate of the Master Servicer has such errors and omissions
and fidelity bond coverage and, by the terms of such insurance policy or
fidelity bond, the coverage afforded thereunder extends to the Master Servicer.

                                 ARTICLE VII.
                    DEFAULT; TERMINATION OF MASTER SERVICER

         Section 7.01 Events of Default.

      "Event of Default," wherever used herein, means any one of the following
events:

            (1) any failure by the Master Servicer to deposit in the
      Certificate Account or the Distribution Account or remit to the Trustee
      any payment (excluding a payment required to be made under Section 4.01
      hereof) required to be made under the terms of this Agreement, which
      failure shall continue unremedied for five calendar days and, with
      respect to a payment required to be made under Section 4.01(b) or (c)
      hereof, for one Business Day, after the date on which written notice of
      such failure shall have been given to the Master Servicer by the
      Trustee, the NIM Insurer or the Depositor, or to the Trustee, the NIM
      Insurer and the Master Servicer by the Holders of Certificates
      evidencing not less than 25% of the Voting Rights; or

            (2) any failure by the Master Servicer to observe or perform in
      any material respect any other of the covenants or agreements on the
      part of the Master Servicer contained in this Agreement (except with
      respect to a failure related to a Limited Exchange Act Reporting
      Obligation) or any representation or warranty shall prove to be untrue,
      which failure or breach shall continue unremedied for a period of 60
      days after the date on which written notice of such failure shall have
      been given to the Master Servicer by the Trustee, the NIM Insurer or the
      Depositor, or to the Trustee by the

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      Holders of Certificates evidencing not less than 25% of the Voting
      Rights; provided, that the sixty-day cure period shall not apply to the
      initial delivery of the Mortgage File for Delay Delivery Mortgage Loans
      or the failure to repurchase or substitute in lieu thereof; or

            (3) a decree or order of a court or agency or supervisory
      authority having jurisdiction in the premises for the appointment of a
      receiver or liquidator in any insolvency, readjustment of debt,
      marshalling of assets and liabilities or similar proceedings, or for the
      winding-up or liquidation of its affairs, shall have been entered
      against the Master Servicer and such decree or order shall have remained
      in force undischarged or unstayed for a period of 60 consecutive days;
      or

            (4) the Master Servicer shall consent to the appointment of a
      receiver or liquidator in any insolvency, readjustment of debt,
      marshalling of assets and liabilities or similar proceedings of or
      relating to the Master Servicer or all or substantially all of the
      property of the Master Servicer; or

            (5) the Master Servicer shall admit in writing its inability to
      pay its debts generally as they become due, file a petition to take
      advantage of, or commence a voluntary case under, any applicable
      insolvency or reorganization statute, make an assignment for the benefit
      of its creditors, or voluntarily suspend payment of its obligations; or

            (6) the Master Servicer shall fail to reimburse in full the
      Trustee not later than 6:00 p.m. (New York time) on the Business Day
      following the related Distribution Date for any Advance made by the
      Trustee pursuant to Section 4.01(d) together with accrued and unpaid
      interest.

         If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the
Trustee shall, but only at the direction of either the NIM Insurer or the
Holders of Certificates evidencing not less than 25% of the Voting Rights, by
notice in writing to the Master Servicer (with a copy to each Rating Agency
and the Depositor), terminate all of the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder. In
addition, if during the period that the Depositor is required to file Exchange
Act Reports with respect to the Trust Fund, the Master Servicer shall fail to
observe or perform any of the obligations that constitute a Limited Exchange
Act Reporting Obligation or the obligations set forth in Section 3.17(a) or
Section 11.07(a)(1) and (2), and such failure continues for the lesser of 10
calendar days or such period in which the applicable Exchange Act Report can
be filed timely (without taking into account any extensions), so long as such
failure shall not have been remedied, the Trustee shall, but only at the
direction of the Depositor, terminate all of the rights and obligations of the
Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder. The
Depositor shall not be entitled to terminate the rights and obligations of the
Master Servicer if a failure of the Master Servicer to identify a
Subcontractor "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB was attributable

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solely to the role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.

         On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee. The Trustee shall thereupon make any Advance described in Section
4.01 hereof subject to Section 3.04 hereof. The Trustee is hereby authorized
and empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related
documents, or otherwise. Unless expressly provided in such written notice, no
such termination shall affect any obligation of the Master Servicer to pay
amounts owed pursuant to Article VIII. The Master Servicer agrees to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be
credited to the Certificate Account, or thereafter be received with respect to
the Mortgage Loans. The Trustee shall promptly notify the Rating Agencies and
the Depositor of the occurrence of an Event of Default.

         Notwithstanding any termination of the activities of a Master Servicer
hereunder, such Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.08(a)(i)
through (viii), and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.

         If the Master Servicer is terminated, the Trustee shall provide the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect to
a successor master servicer in the event the Trustee should succeed to the
duties of the Master Servicer as set forth herein.

         Section 7.02 Trustee to Act; Appointment of Successor.

         On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all fees, costs and expenses relating to the Mortgage Loans that the
Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances

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pursuant to Section 4.01 hereof or if it is otherwise unable to so act, (i)
appoint any established mortgage loan servicing institution reasonably
acceptable to the NIM Insurer (as evidenced by the prior written consent of
the NIM Insurer), or (ii) if it is unable for 60 days to appoint a successor
servicer reasonably acceptable to the NIM Insurer, petition a court of
competent jurisdiction to appoint any established mortgage loan servicing
institution, the appointment of which does not adversely affect the
then-current rating of the Certificates and the NIM Insurer guaranteed notes
(without giving any effect to any policy or guaranty provided by the NIM
Insurer) by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any successor Master Servicer
shall be an institution that is a Fannie Mae and Freddie Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000
and that is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement accepting such delegation and
assignment, that contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than liabilities and indemnities of the Master Servicer under Section
6.03 hereof incurred prior to termination of the Master Servicer under Section
7.01), with like effect as if originally named as a party to this Agreement;
and provided further that each Rating Agency acknowledges that its rating of
the Certificates in effect immediately prior to such assignment and delegation
will not be qualified or reduced as a result of such assignment and
delegation. No appointment of a successor to the Master Servicer hereunder
shall be effective until (i) the Trustee shall have consented thereto, (ii)
written notice of such proposed appointment shall have been provided by the
Trustee to each Certificateholder and (iii) at least 15 calendar days prior to
the effective date of such appointment, (x) the Trustee shall provide written
notice to the Depositor of such successor pursuant to this Section 7.02 and
(y) such successor Master Servicer shall provide to the Depositor in writing
and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
master servicer. The Trustee shall not resign as servicer until a successor
servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to
Section 3.04 hereof, act in such capacity as herein above provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the Master Servicer
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other successor servicer shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof or any failure to perform,
or any delay in performing, any duties or responsibilities hereunder, in
either case caused by the failure of the Master Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.

         Any successor to the Master Servicer as servicer shall give notice to
the NIM Insurer and the Mortgagors of such change of servicer and shall, during
the term of its service as servicer maintain in force the policy or policies
that the Master Servicer is required to maintain pursuant to Section 6.05.

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         In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Trustee promptly
upon receipt of the original with evidence of recording thereon or a copy
certified by the public recording office in which such assignment was recorded.

         Section 7.03 Notification to Certificateholders.

         (a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.

         (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.

                                ARTICLE VIII.
                            CONCERNING THE TRUSTEE

         Section 8.01 Duties of Trustee.

         The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.

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         No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:

            (1) prior to the occurrence of an Event of Default, and after the
      curing of all such Events of Default that may have occurred, the duties
      and obligations of the Trustee shall be determined solely by the express
      provisions of this Agreement, the Trustee shall not be liable,
      individually or as Trustee, except for the performance of such duties
      and obligations as are specifically set forth in this Agreement, no
      implied covenants or obligations shall be read into this Agreement
      against the Trustee and the Trustee may conclusively rely, as to the
      truth of the statements and the correctness of the opinions expressed
      therein, upon any certificates or opinions furnished to the Trustee and
      conforming to the requirements of this Agreement that it reasonably
      believed in good faith to be genuine and to have been duly executed by
      the proper authorities respecting any matters arising hereunder;

            (2) the Trustee shall not be liable, individually or as Trustee,
      for an error of judgment made in good faith by a Responsible Officer or
      Responsible Officers of the Trustee, unless the Trustee was grossly
      negligent or acted in bad faith or with willful misfeasance;

            (3) the Trustee shall not be liable, individually or as Trustee,
      with respect to any action taken, suffered or omitted to be taken by it
      in good faith in accordance with the direction of the Holders of each
      Class of Certificates evidencing not less than 25% of the Voting Rights
      of such Class relating to the time, method and place of conducting any
      proceeding for any remedy available to the Trustee, or exercising any
      trust or power conferred upon the Trustee under this Agreement; and

            (4) without in any way limiting the provisions of this Section
      8.01 or Section 8.02 hereof, the Trustee shall be entitled to rely
      conclusively on the information delivered to it by the Master Servicer
      in a Trustee Advance Notice in determining whether or not it is required
      to make an Advance under Section 4.01(d), shall have no responsibility
      to ascertain or confirm any information contained in any Trustee Advance
      Notice, and shall have no obligation to make any Advance under Section
      4.01(d) in the absence of a Trustee Advance Notice or actual knowledge
      by a Responsible Officer that (A) a required Advance was not made and
      (B) such required Advance was not a Nonrecoverable Advance.

         Section 8.02 Certain Matters Affecting the Trustee.

         (a) Except as otherwise provided in Section 8.01:

            (1) the Trustee may request and rely upon and shall be protected
      in acting or refraining from acting upon any resolution, Officer's
      Certificate, certificate of auditors or any other certificate,
      statement, instrument, opinion, report, notice, request,

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      consent, order, appraisal, bond or other paper or document believed by
      it to be genuine and to have been signed or presented by the proper
      party or parties;

            (2) the Trustee may consult with counsel and any Opinion of
      Counsel shall be full and complete authorization and protection in
      respect of any action taken or suffered or omitted by it hereunder in
      good faith and in accordance with such Opinion of Counsel;

            (3) the Trustee shall not be liable, individually or as Trustee,
      for any action taken, suffered or omitted by it in good faith and
      believed by it to be authorized or within the discretion or rights or
      powers conferred upon it by this Agreement;

            (4) prior to the occurrence of an Event of Default hereunder and
      after the curing of all Events of Default that may have occurred, the
      Trustee shall not be bound to make any investigation into the facts or
      matters stated in any resolution, certificate, statement, instrument,
      opinion, report, notice, request, consent, order, approval, bond or
      other paper or document, unless requested in writing so to do by the NIM
      Insurer or the Holders of each Class of Certificates evidencing not less
      than 25% of the Voting Rights of such Class; provided, however, that if
      the payment within a reasonable time to the Trustee of the costs,
      expenses or liabilities likely to be incurred by it in the making of
      such investigation is, in the opinion of the Trustee not reasonably
      assured to the Trustee by the NIM Insurer or such Certificateholders,
      the Trustee may require reasonable indemnity against such expense, or
      liability from the NIM Insurer or such Certificateholders as a condition
      to taking any such action;

            (5) the Trustee may execute any of the trusts or powers hereunder
      or perform any duties hereunder either directly or by or through agents,
      accountants or attorneys;

            (6) the Trustee shall not be required to expend its own funds or
      otherwise incur any financial liability in the performance of any of its
      duties hereunder if it shall have reasonable grounds for believing that
      repayment of such funds or adequate indemnity against such liability is
      not assured to it;

            (7) the Trustee shall not be liable, individually or as Trustee,
      for any loss on any investment of funds pursuant to this Agreement
      (other than as issuer of the investment security);

            (8) the Trustee shall not be deemed to have knowledge of an Event
      of Default until a Responsible Officer of the Trustee shall have
      received written notice thereof; and

            (9) the Trustee shall be under no obligation to exercise any of
      the trusts or powers vested in it by this Agreement or to make any
      investigation of matters arising hereunder or to institute, conduct or
      defend any litigation hereunder or in relation hereto at the request,
      order or direction of the NIM Insurer or any of the Certificateholders,
      pursuant to the provisions of this Agreement, unless the NIM Insurer or
      such Certificateholders, as applicable, shall have offered to the
      Trustee reasonable

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      security or indemnity against the costs, expenses and liabilities that
      may be incurred therein or thereby.

         (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof
at the trial or other proceeding relating thereto, and any such suit, action
or proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.

         The Depositor hereby directs the Trustee to execute, deliver and
perform its obligations under the Swap Contract Administration Agreement (in its
capacity as Swap Trustee). The Sellers, the Depositor, the Master Servicer and
the Holders of the Interest-Bearing Certificates by their acceptance of such
Certificates acknowledge and agree that the Trustee shall execute, deliver and
perform its obligations under the Swap Contract Administration Agreement and
shall do so solely in its capacity as Swap Trustee, as the case may be, and not
in its individual capacity. Every provision of this Agreement relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall apply to the Trustee's execution of the Swap Contract Administration
Agreement in its capacity as Swap Trustee, and the performance of its duties and
satisfaction of its obligations thereunder.

         Section 8.03 Trustee Not Liable for Mortgage Loans.

         The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of any Mortgage Loan or related
document or of MERS or the MERS(R) System other than with respect to the
Trustee's execution and authentication of the Certificates. The Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any funds paid to the Depositor or the Master Servicer in respect of
the Mortgage Loans or deposited in or withdrawn from the Certificate Account by
the Depositor or the Master Servicer.

         Section 8.04 Trustee May Own Certificates.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.

         Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.

         The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and

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         disbursements of such persons, except any such expense, disbursement
or advance as may arise from its negligence, bad faith or willful misconduct).
The Trustee and any director, officer, employee or agent of the Trustee shall
be indemnified by the Master Servicer and held harmless against any loss,
liability or expense (i) incurred in connection with any legal action relating
to this Agreement or the Certificates, or in connection with the performance
of any of the Trustee's duties hereunder, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Trustee's duties hereunder or by reason of
reckless disregard of the Trustee's obligations and duties hereunder or (ii)
resulting from any error in any tax or information return prepared by the
Master Servicer. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Trustee hereunder.

         Section 8.06 Eligibility Requirements for Trustee.

         The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on
the Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation
or national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Sellers and the Master Servicer
and their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.

         Section 8.07 Resignation and Removal of Trustee.

         The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor and
the Master Servicer and by mailing notice of resignation by first class mail,
postage prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register and each Rating Agency, not less than 60 days before the
date specified in such notice when, subject to Section 8.08, such resignation is
to take effect, and (2) acceptance of appointment by a successor trustee in
accordance with Section 8.08 and meeting the qualifications set forth in Section
8.06. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.

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         As a condition to the effectiveness of any such resignation, at least
15 calendar days prior to the effective date of such resignation, the Trustee
shall provide (x) written notice to the Depositor of any successor pursuant to
this Section and (y) in writing and in form and substance reasonably
satisfactory to the Depositor, all information reasonably requested by the
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to the resignation of the Trustee.

         If at any time (i) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the NIM Insurer or the Depositor, (ii) the Trustee
shall become incapable of acting, or shall be adjudged as bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, (iii)(A)
a tax is imposed with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund is located, (B) the imposition of such tax would be
avoided by the appointment of a different trustee and (C) the Trustee fails to
indemnify the Trust Fund against such tax, or (iv) during the period which the
Depositor is required to file Exchange Act Reports with respect to the Trust
Fund, the Trustee fails to comply with its obligations under the last sentence
of Section 7.01, the preceding paragraph, Section 8.09 or Article XI and such
failure is not remedied within the lesser of 10 calendar days or such period in
which the applicable Exchange Act Report can be filed timely (without taking
into account any extensions), then, in the case of clauses (i) through (iii),
the Depositor, the NIM Insurer or the Master Servicer, or in the case of clause
(iv), the Depositor, may remove the Trustee and appoint a successor trustee,
reasonably acceptable to the NIM Insurer, by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Trustee, one copy of
which shall be delivered to the Master Servicer and one copy of which shall be
delivered to the successor trustee.

         The Holders evidencing at least 51% of the Voting Rights of each Class
of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Master Servicer
one complete set to the Trustee so removed, one complete set to the successor so
appointed and one complete set to the Depositor, together with a written
description of the basis for such removal. Notice of any removal of the Trustee
shall be given to each Rating Agency by the successor Trustee.

         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.

         Section 8.08 Successor Trustee.

         Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, its predecessor trustee
and the Master Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and

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obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. In addition, if the Swap Contract is still outstanding,
the Person appointed as successor trustee shall execute, acknowledge and deliver
to the predecessor trustee, CHL and the Master Servicer an instrument accepting
the appointment as successor Swap Contract Administrator under the Swap Contract
Administration Agreement.

         No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof, is reasonably
acceptable to the NIM Insurer, its appointment shall not adversely affect the
then-current ratings of the Certificates and has provided to the Depositor in
writing and in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
Trustee. Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to the NIM Insurer and all Holders of Certificates. If the
Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.

         Section 8.09 Merger or Consolidation of Trustee.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to substantially all of the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be eligible under the provisions of Section 8.06 hereof
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.

         As a condition to the effectiveness of any merger or consolidation, at
least 15 calendar days prior to the effective date of any merger or
consolidation of the Trustee, the Trustee shall provide (x) written notice to
the Depositor of any successor pursuant to this Section and (y) in writing and
in form and substance reasonably satisfactory to the Depositor, all information
reasonably requested by the Depositor in order to comply with its reporting
obligation under Item 6.02 of Form 8-K with respect to a replacement Trustee.

         Section 8.10 Appointment of Co-Trustee or Separate Trustee.

         Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and reasonably acceptable to the NIM Insurer to
act as co-trustee or co-trustees jointly with the Trustee, or separate trustee
or separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 8.10, such

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powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment, or the NIM Insurer shall not have approved such
appointment, within 15 days after receipt by it of a request to do so, or in the
case an Event of Default shall have occurred and be continuing, the Trustee
shall have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 8.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.08.

         Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

            (1) All rights, powers, duties and obligations conferred or
      imposed upon the Trustee, except for the obligation of the Trustee under
      this Agreement to advance funds on behalf of the Master Servicer, shall
      be conferred or imposed upon and exercised or performed by the Trustee
      and such separate trustee or co-trustee jointly (it being understood
      that such separate trustee or co-trustee is not authorized to act
      separately without the Trustee joining in such act), except to the
      extent that under any law of any jurisdiction in which any particular
      act or acts are to be performed (whether as Trustee hereunder or as
      successor to the Master Servicer hereunder), the Trustee shall be
      incompetent or unqualified to perform such act or acts, in which event
      such rights, powers, duties and obligations (including the holding of
      title to the Trust Fund or any portion thereof in any such jurisdiction)
      shall be exercised and performed singly by such separate trustee or
      co-trustee, but solely at the direction of the Trustee;

            (2) No trustee hereunder shall be held personally liable by reason
      of any act or omission of any other trustee hereunder; and

            (3) The Trustee may at any time accept the resignation of or
      remove any separate trustee or co-trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of

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its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

         Section 8.11 Tax Matters.

         It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC created pursuant
to the Preliminary Statement qualifies as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Trustee covenants and agrees that it shall
act as agent (and the Trustee is hereby appointed to act as agent) on behalf of
the Trust Fund and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Returns (Form 1066 or any successor form adopted
by the Internal Revenue Service) and prepare and file or cause to be prepared
and filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each REMIC created hereunder containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the Holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for the Trust Fund; (c) make or cause
to be made elections, on behalf of each REMIC created hereunder to be treated as
a REMIC on the federal tax return of each such REMIC for its first taxable year
(and, if necessary, under applicable state law); (d) prepare and forward, or
cause to be prepared and forwarded, to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Class A-R Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non-Permitted Transferee is the
record holder of an interest (the reasonable cost of computing and furnishing
such information may be charged to the Person liable for such tax); (f) to the
extent that they are under its control conduct the affairs of the Trust Fund at
all times that any Certificates are outstanding so as to maintain the status of
each REMIC created hereunder as a REMIC under the REMIC Provisions; (g) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of any REMIC created hereunder; (h)
pay, from the sources specified in the third paragraph of this Section 8.11, the
amount of any federal, state and local taxes, including prohibited transaction
taxes as described below, imposed on any REMIC created hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable (but
such obligation shall not prevent the Trustee or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee from withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings); (i) sign or cause to be signed federal, state
or local income tax or information returns; (j) maintain records relating to

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each REMIC created hereunder, including but not limited to the income, expenses,
assets and liabilities of each such REMIC, and the fair market value and
adjusted basis of the Trust Fund property determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and (k) as and when necessary and
appropriate, represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC created hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of the
Trust Fund, and otherwise act on behalf of any REMIC created hereunder in
relation to any tax matter involving any such REMIC.

         In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans (and, to the extent not part of the
aforementioned, the information referred to in paragraphs (1), (2), (3) and (4)
of Section 4.05(d)). Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or data
that the Trustee may, from time to time, request in order to enable the Trustee
to perform its duties as set forth herein. The Depositor hereby indemnifies the
Trustee for any losses, liabilities, damages, claims or expenses of the Trustee
arising from any errors or miscalculations of the Trustee that result from any
failure of the Depositor to provide, or to cause to be provided, accurate
information or data to the Trustee on a timely basis.

         In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in section 860G(c) of
the Code, on any contribution to the Trust Fund after the startup day pursuant
to section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon the
Trust Fund pursuant to sections 23153 and 24872 of the California Revenue and
Taxation Code if not paid as otherwise provided for herein, such tax shall be
paid by (i) the Trustee, if any such other tax arises out of or results from a
breach by the Trustee of any of its obligations under this Agreement, (ii) (x)
the Master Servicer, in the case of any such minimum tax, and (y) any party
hereto (other than the Trustee) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or (iii) in all other cases, or in the event that any liable
party here fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be paid first with amounts otherwise to be distributed
to the Class A-R Certificateholders, and second with amounts otherwise to be
distributed to all other Certificateholders in the same manner as if such tax
were a Realized Loss that occurred ratably within each Loan Group.
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Class A-R Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class A-R
Certificates (and, if necessary, second, from the Holders of all other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.

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         The Trustee shall treat the Carryover Reserve Fund and the Swap Trust,
including the Swap Account, as outside reserve funds within the meaning of
Treasury Regulation 1.860G-2(h), neither of which is an asset of any REMIC
created hereunder. The Carryover Reserve Fund shall be treated as owned by the
Class C Certificateholders and the Swap Trust, including the Swap Account shall
be treated as owned by the Class C Certificateholders. The rights of the Holders
of each Class of Certificates (other than the Class P and Class A-R
Certificates) to receive payments from, and the deemed obligations of such
Holders to make payments to, the Carryover Reserve Fund or the Swap Trust,
including the Swap Account, shall be treated as rights and obligations with
respect to notional principal contracts written by the Holders of the Class C
Certificates in respect of any Net Rate Carryover distributed pursuant to
Sections 4.04(c)(4), and (ii) the Swap Counterparty in respect of any Net Rate
Carryover funded by the Swap Contract and in respect of any residual payments
from such Swap Contract received by the Class C Certificates. Thus, the
Certificates (other than the Class P and Class A-R Certificates), shall be
treated as representing ownership of Master REMIC regular interests coupled with
contractual rights and obligations within the meaning of Treasury Regulation
1.860G-2(i). For purposes of determining the issue price of the various Master
REMIC regular interests, the Trustee shall assume that the Swap Contract has a
value of $2,094,000. Any differences in the distributions to a Certificate
holder (positive or negative) that would result from the application of the
Strip REMIC Cap rather than the applicable Net Rate Cap shall be treated by the
Trustee as reconciled among the Certificates by swap payments made pursuant to
notional principal contracts entered into among the Certificateholders.

         The Trustee shall treat the entitlement to Credit Comeback Excess
Amounts as owned by the Holders of the Class C Certificates and not as an asset
of, or interest in, any REMIC created hereunder. Further, the Trustee shall
treat any payments of Credit Comeback Excess Amounts to Persons other than the
Holders of the Class C Certificates as payments made by the Holders of the Class
C Certificates pursuant to a credit enhancement contract under Treasury
Regulation 1.860G-2(c). The Trustee shall also treat any amount payable to a
Class C Certificate with respect to the STR-C-OC Interest as deposited into the
Carryover Reserve Fund. To the extent the amount payable with respect to the
Swap Contract exceeds the amount payable with respect to the Class C
Certificates, the Trustee, for federal income tax purposes, shall treat such
excess as Realized Losses from Mortgage Loans and to the extent such Realized
Losses (if they had occurred) would be allocated to a Certificateholder, the
Trustee shall treat such amount as first payable to the Certificateholder as
principal and as then payable by the Certificateholder with respect to a
notional principal contract.

         Section 8.12 [Reserved].

         Section 8.13 Access to Records of the Trustee.

         The Trustee shall afford the Sellers, the Depositor, the Master
Servicer, the NIM Insurer and each Certificate Owner upon reasonable notice
during normal business hours access to all records maintained by the Trustee in
respect of its duties under this Agreement and access to officers of the Trustee
responsible for performing its duties. Upon request, the Trustee shall furnish
the Depositor, the Master Servicer, the NIM Insurer and any requesting
Certificate Owner with its most recent financial statements. The Trustee shall
cooperate fully with the Sellers, the Master Servicer, the Depositor, the NIM
Insurer and the Certificate Owner for review

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and copying any books, documents, or records requested with respect to the
Trustee's duties under this Agreement. The Sellers, the Depositor, the Master
Servicer and the Certificate Owner shall not have any responsibility or
liability for any action for failure to act by the Trustee and are not
obligated to supervise the performance of the Trustee under this Agreement or
otherwise.

         Section 8.14 Suits for Enforcement.

         If an Event of Default or other material default by the Master Servicer
or the Depositor under this Agreement occurs and is continuing, at the direction
of the Certificateholders holding not less than 51% of the Voting Rights or the
NIM Insurer, the Trustee shall proceed to protect and enforce its rights and the
rights of the Certificateholders or the NIM Insurer under this Agreement by a
suit, action, or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this Agreement or
in aid of the execution of any power granted in this Agreement or for the
enforcement of any other legal, equitable, or other remedy, as the Trustee,
being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee, the NIM
Insurer and the Certificateholders.

                                 ARTICLE IX.
                                  TERMINATION

         Section 9.01 Termination upon Liquidation or Repurchase of all
                 Mortgage Loans.

         Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Sellers and the Trustee created hereby shall terminate upon the earlier of (a)
the purchase by the Master Servicer or NIM Insurer (the party exercising such
purchase option, the "Terminator") of all of the Mortgage Loans (and REO
Properties) remaining in the Trust Fund at the price equal to the sum of (i)
100% of the Stated Principal Balance of each Mortgage Loan in the Trust Fund
(other than in respect of an REO Property), (ii) accrued interest thereon at the
applicable Mortgage Rate (or, if such repurchase is effected by the Master
Servicer, at the applicable Net Mortgage Rate), (iii) the appraised value of any
REO Property in the Trust Fund (up to the Stated Principal Balance of the
related Mortgage Loan), such appraisal to be conducted by an appraiser mutually
agreed upon by the Terminator and the Trustee, (iv) any remaining unpaid costs
and damages incurred by the Trust Fund that arises out of an actual violation of
any predatory or abusive lending law or regulation and (v) if the Terminator is
the NIM Insurer, any unreimbursed Servicing Advances, and the principal portion
of any unreimbursed Advances, made on the Mortgage Loans prior to the exercise
of such repurchase and (b) the later of (i) the maturity or other liquidation
(or any Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the disposition of all REO Property and (ii) the distribution to
related Certificateholders of all amounts required to be distributed to them
pursuant to this Agreement, as applicable. In no event shall the trusts created
hereby continue beyond the earlier of (i) the expiration of 21 years from the
death of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James's, living on the date
hereof and (ii) the Latest Possible Maturity Date.

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         The right to purchase all Mortgage Loans and REO Properties by the
Terminator pursuant to clause (a) of the immediately preceding paragraph shall
be conditioned upon (1) the Stated Principal Balance of the Mortgage Loans, at
the time of any such repurchase, aggregating ten percent (10%) or less of the
sum of the aggregate Cut-off Date Principal Balance of the Initial Mortgage
Loans and the Pre-Funded Amount and (2) unless the NIM Insurer otherwise
consents, the purchase price for such Mortgage Loans and REO Properties shall
result in a final distribution on any NIM Insurer guaranteed notes that is
sufficient (x) to pay such notes in full and (y) to pay any amounts due and
payable to the NIM Insurer pursuant to the indenture related to such notes.

         The NIM Insurer's right to purchase all Mortgage Loans and REO
Properties shall be further conditioned upon the written consent of the Master
Servicer.

         The Swap Trust shall terminate on the earliest of (i) the Swap Contract
Termination Date, (ii) the reduction of the aggregate Certificate Principal
Balance of the Interest-Bearing Certificates to zero and (iii) the termination
of this Agreement.

         Section 9.02 Final Distribution on the Certificates.

         If on any Determination Date, (i) the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
related Certificateholder or (ii) the Trustee determines that a Class of
Certificates shall be retired after a final distribution on such Class, the
Trustee shall notify the related Certificateholders within five (5) Business
Days after such Determination Date that the final distribution in retirement of
such Class of Certificates is scheduled to be made on the immediately following
Distribution Date. Any final distribution made pursuant to the immediately
preceding sentence will be made only upon presentation and surrender of the
related Certificates at the Corporate Trust Office of the Trustee. If the
Terminator elects to terminate pursuant to clause (a) of Section 9.01, at least
20 days prior to the date notice is to be mailed to the affected
Certificateholders, such electing party shall notify the Depositor and the
Trustee of the date such electing party intends to terminate and of the
applicable repurchase price of the related Mortgage Loans and REO Properties.

         Notice of any termination, specifying the Distribution Date on which
related Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to related Certificateholders mailed not earlier than the 10th day and no
later than the 15th day of the month immediately preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date upon
which final distribution on related Certificates will be made upon presentation
and surrender of such Certificates at the office therein designated, (b) the
amount of such final distribution, (c) the location of the office or agency at
which such presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of such Certificates at the
office therein specified. The Terminator will give such notice to each Rating
Agency at the time such notice is given to the affected Certificateholders.

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         In the event such notice is given, the Master Servicer shall cause all
funds in the Certificate Account to be remitted to the Trustee for deposit in
the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit and the receipt by the Trustee of a
Request for File Release therefor, the Trustee shall promptly release to the
Master Servicer the Mortgage Files for the Mortgage Loans.

         Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each affected Class the amounts
allocable to such Certificates held in the Distribution Account (and, if
applicable, the Carryover Reserve Fund) in the order and priority set forth in
Section 4.04 hereof on the final Distribution Date and in proportion to their
respective Percentage Interests. Notwithstanding the reduction of the
Certificate Principal Balance of any Class of Certificates to zero, such Class
will be outstanding hereunder (solely for the purpose of receiving distributions
(if any) to which it may be entitled pursuant to the terms of this Agreement and
not for any other purpose) until the termination of the respective obligations
and responsibilities of the Depositor, each Seller, the Master Servicer and the
Trustee hereunder in accordance with Article IX.

         In the event that any affected Certificateholders shall not surrender
related Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their related
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all related Certificates shall not have been surrendered for
cancellation, the Class A-R Certificates shall be entitled to all unclaimed
funds and other assets that remain subject hereto.

         Section 9.03 Additional Termination Requirements.

(a) In the event the Terminator exercises its purchase option, the Trust Fund
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been supplied with an Opinion of Counsel, at the expense
of the Terminator, to the effect that the failure of the Trust Fund to comply
with the requirements of this Section 9.03 will not (i) result in the imposition
of taxes on "prohibited transactions" of a REMIC, or (ii) cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding:

                           (1) The Master Servicer shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the Trust Fund's final
Tax Return pursuant to Treasury Regulation Section 1.860F-1. The Master
Servicer shall prepare a plan of complete liquidation and shall otherwise
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of Counsel
delivered to the Trustee and the Depositor obtained at the expense of the
Terminator;

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                           (2) During such 90-day liquidation period, and at or
prior to the time of making the final payment on the Certificates, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust
Fund to the Terminator for cash; and

                           (3) At the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R Certificateholders all cash on hand
(other than cash retained to meet claims) related to such Class of
Certificates, and the Trust Fund shall terminate at that time.

         (b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Master Servicer to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders. The Trustee shall attach a statement to the final federal
income tax return for each of any REMIC created hereunder stating that
pursuant to Treasury Regulation Section 1.860F-1, the first day of the 90-day
liquidation period for each the REMIC was the date on which the Trustee sold
the assets of the Trust Fund to the Terminator.

         (c) The Trustee as agent for each REMIC created hereunder hereby
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Master Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1), and together with the Holders of the Class
A-R Certificates agree to take such other action in connection therewith as
may be reasonably requested by the Terminator.

                                  ARTICLE X.

                           MISCELLANEOUS PROVISIONS

         Section 10.01 Amendment.

         This Agreement may be amended from time to time by the Depositor, the
Master Servicer, the Sellers and the Trustee with the consent of the NIM
Insurer, without the consent of any of the Certificateholders (i) to cure any
ambiguity, (ii) to correct or supplement any provisions herein, (iii) to
conform this Agreement to the Prospectus Supplement or the Prospectus, (iv) to
modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement to comply with any rules or regulations
promulgated by the Securities and Exchange Commission from time to time, or
(v) to make such other provisions with respect to matters or questions arising
under this Agreement, as shall not be inconsistent with any other provisions
herein if such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any
Certificateholder; provided that any such amendment shall be

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deemed not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal
of the respective ratings then assigned to the Certificates, it being
understood and agreed that any such letter in and of itself will not represent
a determination as to the materiality of any such amendment and will represent
a determination only as to the credit issues affecting any such rating. Any
amendment described above made solely to conform this Agreement to the
Prospectus or the Prospectus Supplement shall be deemed not to adversely
affect in any material respect the interests of the Certificateholders.
Notwithstanding the foregoing, no amendment that significantly changes the
permitted activities of the trust created by this Agreement may be made
without the consent of Certificateholders representing not less than 51% of
the Voting Rights of each Class of Certificates affected by such amendment.
Each party to this Agreement hereby agrees that it will cooperate with each
other party in amending this Agreement pursuant to clause (iv) above.

         The Trustee, the Depositor, the Master Servicer and the Sellers with
the consent of the NIM Insurer may also at any time and from time to time amend
this Agreement, without the consent of the Certificateholders, to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
or appropriate to maintain the qualification of the Trust Fund as a REMIC under
the Code or to avoid or minimize the risk of the imposition of any tax on the
Trust Fund pursuant to the Code that would be a claim against the Trust Fund at
any time prior to the final redemption of the Certificates, provided that the
Trustee has been provided an Opinion of Counsel, which opinion shall be an
expense of the party requesting such opinion but in any case shall not be an
expense of the Trustee, to the effect that such action is necessary or
appropriate to maintain such qualification or to avoid or minimize the risk of
the imposition of such a tax.

         This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Sellers and the Trustee with the consent of the NIM
Insurer and the Holders of each Class of Certificates affected thereby
evidencing not less than 51% of the Voting Rights of such Class for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing 66%
or more of the Voting Rights of such Class, or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
outstanding.

         Notwithstanding any contrary provision of this Agreement, no amendment
shall adversely affect in any material respect the Swap Counterparty without at
least ten Business Days' prior notice to the Swap Counterparty and without the
prior written consent of the Swap Counterparty, which consent shall not be
unreasonably withheld. CHL shall provide the Swap Counterparty with prior
written notice of any proposed material amendment of this Agreement.

         Notwithstanding any contrary provision of this Agreement, the Trustee
and the NIM Insurer shall not consent to any amendment to this Agreement
unless each shall have first received an Opinion of Counsel satisfactory to
the Trustee and the NIM Insurer, which opinion shall be an expense of the
party requesting such amendment but in any case shall not be an expense of the
Trustee or the NIM Insurer, to the effect that such amendment will not cause
the imposition of any tax on the Trust Fund or the Certificateholders or cause
any REMIC formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding.

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         Promptly after the execution of any amendment to this Agreement, the
Trustee shall furnish written notification of the substance of such amendment
to the Swap Counterparty, to each Certificateholder (if the consent of
Certificateholders is required) and each Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, reasonably satisfactory to
the Trustee and the NIM Insurer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.

         Section 10.02 Recordation of Agreement; Counterparts.

         This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

         Section 10.03 Governing Law.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

         Section 10.04 Intention of Parties.

         (a) It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute
sale thereof to the Trustee. It is, further, not the intention of the parties
that such conveyance be deemed a pledge thereof by the Depositor to the
Trustee. However, in the event

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that, notwithstanding the intent of the parties, such assets are held to be
the property of the Depositor, or if for any other reason this Agreement or
any Subsequent Transfer Agreement is held or deemed to create a security
interest in such assets, then (i) this Agreement shall be deemed to be a
security agreement (within the meaning of the Uniform Commercial Code of the
State of New York) with respect to all such assets and security interests and
(ii) the conveyance provided for in this Agreement and any Subsequent Transfer
Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, for the benefit of
the Certificateholders and the Swap Counterparty, of a security interest in
all of the assets that constitute the Trust Fund, whether now owned or
hereafter acquired.

         The Depositor for the benefit of the Certificateholders, the NIM
Insurer and the Swap Counterparty shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the assets of the Trust
Fund, such security interest would be deemed to be a perfected security interest
of first priority under applicable law and will be maintained as such throughout
the term of the Agreement. The Depositor shall arrange for filing any Uniform
Commercial Code continuation statements in connection with any security interest
granted or assigned to the Trustee for the benefit of the Certificateholders and
the Swap Counterparty.

         (b) The Depositor hereby represents that:

                  (i) This Agreement creates a valid and continuing security
         interest (as defined in the Uniform Commercial Code as enacted in the
         State of New York (the "NY UCC")) in the Mortgage Notes in favor of
         the Trustee, which security interest is prior to all other liens, and
         is enforceable as such as against creditors of and purchasers from
         the Depositor.

                  (ii) The Mortgage Notes constitute "instruments" within the
         meaning of the NY UCC.

                  (iii) Immediately prior to the assignment of each Mortgage
         Loan to the Trustee, the Depositor owns and has good and marketable
         title to such Mortgage Loan free and clear of any lien, claim or
         encumbrance of any Person.

                  (iv) The Depositor has received all consents and approvals
         required by the terms of the Mortgage Loans to the sale of the
         Mortgage Loans hereunder to the Trustee.

                  (v) All original executed copies of each Mortgage Note that
         are required to be delivered to the Trustee pursuant to Section 2.01
         have been delivered to the Trustee.

                  (vi) Other than the security interest granted to the Trustee
         pursuant to this Agreement, the Depositor has not pledged, assigned,
         sold, granted a security interest in, or otherwise conveyed any of
         the Mortgage Loans. The Depositor has not authorized the filing of
         and is not aware of any financing statements against the Depositor
         that include a description of collateral covering the Mortgage Loans
         other than any financing statement relating to the security interest
         granted to the

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         Trustee hereunder or that has been terminated. The Depositor is not
         aware of any judgment or tax lien filings against the Depositor.

         (c) The Master Servicer shall take such action as is reasonably
necessary to maintain the perfection and priority of the security interest of
the Trustee in the Mortgage Loans; provided, however, that the obligation to
deliver the Mortgage File to the Trustee pursuant to Section 2.01 shall be
solely the Depositor's obligation and the Master Servicer shall not be
responsible for the safekeeping of the Mortgage Files by the Trustee.

         (d) It is understood and agreed that the representations and
warranties set forth in subsection (b) above shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor or the Trustee
of a breach of any of the foregoing representations and warranties set forth
in subsection (b) above, which breach materially and adversely affects the
interest of the Certificateholders, the party discovering such breach shall
give prompt written notice to the others and to each Rating Agency.

         Section 10.05 Notices.

         (a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency and the Swap Counterparty with respect to each of the
following of which it has actual knowledge:

                  (1) Any material change or amendment to this Agreement;

                  (2) The occurrence of any Event of Default that has not been
         cured;

                  (3) The resignation or termination of the Master Servicer or
         the Trustee and the appointment of any successor;

                  (4) The repurchase or substitution of Mortgage Loans
         pursuant to Sections 2.02, 2.03, 2.04 and 3.12; and

                  (5) The final payment to Certificateholders.

         (b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:

                  (1) Each report to Certificateholders described in Section
         4.05;

                  (2) Each annual statement as to compliance described in
         Section 3.17; and

                  (3) Each annual independent public accountants' servicing
         report described in Section 11.07.

         (c) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the
Depositor, CWABS, Inc., 4500 Park Granada, Calabasas,

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California 91302, facsimile number: (818) 225-4053, Attention: David A.
Spector, or such other address as may be hereafter furnished to the Sellers,
the Master Servicer and the Trustee by the Depositor in writing; (ii) in the
case of CHL, Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas,
California 91302, facsimile number (818) 225-4053, Attention: David A.
Spector, or such other address as may be hereafter furnished to the Depositor,
the Master Servicer and the Trustee by the Sellers in writing; (iii) in the
case of Park Monaco, Park Monaco Inc., 4500 Park Granada, Calabasas,
California 91302, facsimile number (818) 225-4028, Attention: Paul Liu, or
such other address as may be hereafter furnished to the Depositor, the Master
Servicer and the Trustee by the Sellers in writing; (iv) in the case of Park
Sienna, Park Sienna LLC, 4500 Park Granada, Calabasas, California 91302,
facsimile number (818) 225-4028, Attention: Paul Liu, or such other address as
may be hereafter furnished to the Depositor, the Master Servicer and the
Trustee by the Sellers in writing; (v) in the case of the Master Servicer,
Countrywide Home Loans Servicing LP, 7105 Corporate Drive, Plano, Texas 75024,
facsimile number (805) 520-5623, Attention: Mark Wong or such other address as
may be hereafter furnished to the Depositor, the Sellers and the Trustee by
the Master Servicer in writing; (vi) in the case of the Trustee, The Bank of
New York, 101 Barclay Street, New York, New York 10286, Attention: Corporate
Trust MBS Administration, CWABS, Series 2006-7, or such other address as the
Trustee may hereafter furnish to the parties hereto; (vii) in the case of the
Rating Agencies, (x) Moody's Investors Service, Inc., Attention: ABS
Monitoring Department, 99 Church Street, Sixth Floor, New York, New York
10007, and (y) Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Attention: Mortgage Surveillance Group, 55 Water
Street, 41st Floor, New York, New York 10041; and (viii) in the case of the
Swap Counterparty, Barclays Bank PLC, 5 The North Colonnade, Canary Wharf,
London E14 4BB, England, Attention: Swaps Documentation, facsimile number
0207-773-6857/6858, or such other address as may be hereafter furnished by the
Swap Counterparty. Notices to Certificateholders shall be deemed given when
mailed, first postage prepaid, to their respective addresses appearing in the
Certificate Register.

         Section 10.06 Severability of Provisions.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

         Section 10.07 Assignment.

         Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.

         Section 10.08 Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition

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or winding up of the Trust Fund, or otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than
25% of the Voting Rights shall also have made written request to the Trustee
to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to
any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 10.08, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

         Section 10.09 Inspection and Audit Rights.

         The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, any Seller, the NIM Insurer or the
Trustee during the Master Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Master Servicer
relating to the Mortgage Loans, to make copies and extracts therefrom, to
cause such books to be audited by independent certified public accountants
selected by the Depositor, a Seller, the NIM Insurer or the Trustee and to
discuss its affairs, finances and accounts relating to the Mortgage Loans with
its officers, employees and independent public accountants (and by this
provision the Master Servicer hereby authorizes such accountants to discuss
with such representative such affairs, finances and accounts), all at such
reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor, any Seller,
the NIM Insurer or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall
be borne by the Master Servicer.

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         Section 10.10 Certificates Nonassessable and Fully Paid.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

         Section 10.11 Rights of NIM Insurer.

         (a) The rights of the NIM Insurer under this Agreement shall exist
only so long as either:

                  (1) the notes certain payments on which are guaranteed by
         the NIM Insurer remain outstanding or

                  (2) the NIM Insurer is owed amounts paid by it with respect
         to that guaranty.

         (b) The rights of the NIM Insurer under this Agreement are
exercisable by the NIM Insurer only so long as no default by the NIM Insurer
under its guaranty of certain payments under notes backed or secured by the
Class C or Class P Certificates has occurred and is continuing. If the NIM
Insurer is the subject of any insolvency proceeding, the rights of the NIM
Insurer under this Agreement will be exercisable by the NIM Insurer only so
long as:

                  (1) the obligations of the NIM Insurer under its guaranty of
         notes backed or secured by the Class C or Class P Certificates have
         not been disavowed and

                  (2) CHL and the Trustee have received reasonable assurances
         that the NIM Insurer will be able to satisfy its obligations under
         its guaranty of notes backed or secured by the Class C or Class P
         Certificates.

         (c) The NIM Insurer is a third party beneficiary of this Agreement to
the same extent as if it were a party to this Agreement and may enforce any of
those rights under this Agreement.

         (d) A copy of any documents of any nature required by this Agreement
to be delivered by the Trustee, or to the Trustee or the Rating Agencies,
shall in each case at the same time also be delivered to the NIM Insurer. Any
notices required to be given by the Trustee, or to the Trustee or the Rating
Agencies, shall in each case at the same time also be given to the NIM
Insurer. If the Trustee receives a notice or document that is required
hereunder to be delivered to the NIM Insurer, and if such notice or document
does not indicate that a copy thereof has been previously sent to the NIM
Insurer, the Trustee shall send the NIM Insurer a copy of such notice or
document. If such document is an Opinion of Counsel, the NIM Insurer shall be
an addressee thereof or such Opinion of Counsel shall contain language
permitting the NIM Insurer to rely thereon as if the NIM Insurer were an
addressee thereof.

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         (e) Anything in this Agreement that is conditioned on not resulting
in the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies shall also be conditioned on not resulting
in the downgrading or withdrawal of the ratings then assigned by the Rating
Agencies to the notes backed or secured by the Class C or Class P Certificates
(without giving effect to any policy or guaranty provided by the NIM Insurer).

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                                 ARTICLE XI.
                            EXCHANGE ACT REPORTING

         Section 11.01 Filing Obligations.

         The Master Servicer, the Trustee and each Seller shall reasonably
cooperate with the Depositor in connection with the satisfaction of the
Depositor's reporting requirements under the Exchange Act with respect to the
Trust Fund. In addition to the information specified below, if so requested by
the Depositor for the purpose of satisfying its reporting obligation under the
Exchange Act, the Master Servicer, the Trustee and each Seller shall (and the
Master Servicer shall cause each Subservicer to) provide the Depositor with (a)
such information which is available to such Person without unreasonable effort
or expense and within such timeframe as may be reasonably requested by the
Depositor to comply with the Depositor's reporting obligations under the
Exchange Act and (b) to the extent such Person is a party (and the Depositor is
not a party) to any agreement or amendment required to be filed, copies of such
agreement or amendment in EDGAR-compatible form.

         Section 11.02 Form 10-D Filings.

         (a) In accordance with the Exchange Act, the Trustee shall prepare
for filing and file within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act) with the Commission with respect
to the Trust Fund, a Form 10-D with copies of the Monthly Statement and, to
the extent delivered to the Trustee, no later than 10 days following the
Distribution Date, such other information identified by the Depositor or the
Master Servicer, in writing, to be filed with the Commission (such other
information, the "Additional Designated Information"). If the Depositor or
Master Servicer directs that any Additional Designated Information is to be
filed with any Form 10-D, the Depositor or Master Servicer, as the case may
be, shall specify the Item on Form 10-D to which such information is
responsive and, with respect to any Exhibit to be filed on Form 10-D, the
Exhibit number. Any information to be filed on Form 10-D shall be delivered to
the Trustee in EDGAR-compatible form or as otherwise agreed upon by the
Trustee and the Depositor or the Master Servicer, as the case may be, at the
Depositor's expense, and any necessary conversion to EDGAR-compatible format
will be at the Depositor's expense. At the reasonable request of, and in
accordance with the reasonable directions of, the Depositor or the Master
Servicer, subject to the two preceding sentences, the Trustee shall prepare
for filing and file an amendment to any Form 10-D previously filed with the
Commission with respect to the Trust Fund. The Master Servicer shall sign the
Form 10-D filed on behalf of the Trust Fund.

         (b) No later than each Distribution Date, each of the Master Servicer
and the Trustee shall notify (and the Master Servicer shall cause any
Subservicer to notify) the Depositor and the Master Servicer of any Form 10-D
Disclosure Item, together with a description of any such Form 10-D Disclosure
Item in form and substance reasonably acceptable to the Depositor. In addition
to such information as the Master Servicer and the Trustee are obligated to
provide pursuant to other provisions of this Agreement, if so requested by the
Depositor, each of the Master Servicer and the Trustee shall provide such
information which is available to the Master Servicer and the Trustee, as
applicable, without unreasonable effort or expense regarding the performance
or servicing of the Mortgage Loans (in the case of the Trustee, based on the

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information provided by the Master Servicer) as is reasonably required to
facilitate preparation of distribution reports in accordance with Item 1121 of
Regulation AB. Such information shall be provided concurrently with the
Remittance Reports in the case of the Master Servicer and the Monthly
Statement in the case of the Trustee, commencing with the first such report
due not less than five Business Days following such request.

         (c) The Trustee shall not have any responsibility to file any items
(other than those generated by it) that have not been received in a format
suitable (or readily convertible into a format suitable) for electronic filing
via the EDGAR system and shall not have any responsibility to convert any such
items to such format (other than those items generated by it or that are
readily convertible to such format). The Trustee shall have no liability to
the Certificateholders, the Trust Fund, the Master Servicer, the Depositor or
the NIM Insurer with respect to any failure to properly prepare or file any of
Form 10-D to the extent that such failure is not the result of any negligence,
bad faith or willful misconduct on its part.

         Section 11.03 Form 8-K Filings.

         The Master Servicer shall prepare and file on behalf of the Trust Fund
any Form 8-K required by the Exchange Act. Each Form 8-K must be signed by the
Master Servicer. Each of the Master Servicer (and the Master Servicer shall
cause any Subservicer to promptly notify) and the Trustee shall promptly notify
the Depositor and the Master Servicer (if the notifying party is not the Master
Servicer), but in no event later than one (1) Business Day after its occurrence,
of any Reportable Event of which it has actual knowledge. Each Person shall be
deemed to have actual knowledge of any such event to the extent that it relates
to such Person or any action or failure to act by such Person. Concurrently with
any Subsequent Transfer, CHL shall notify the Depositor and the Master Servicer,
if any material pool characteristic of the actual asset pool at the time of
issuance of the Certificates differs by 5% or more (other than as a result of
the pool assets converting into cash in accordance with their terms) from the
description of the asset pool in the Prospectus Supplement.

         Section 11.04 Form 10-K Filings.

         Prior to March 30th of each year, commencing in 2007 (or such earlier
date as may be required by the Exchange Act), the Depositor shall prepare and
file on behalf of the Trust Fund a Form 10-K, in form and substance as required
by the Exchange Act. A senior officer in charge of the servicing function of the
Master Servicer shall sign each Form 10-K filed on behalf of the Trust Fund.
Such Form 10-K shall include as exhibits each (i) annual compliance statement
described under Section 3.17, (ii) annual report on assessments of compliance
with servicing criteria described under Section 11.07 and (iii) accountant's
report described under Section 11.07. Each Form 10-K shall also include any
Sarbanes-Oxley Certification required to be included therewith, as described in
Section 11.05.

         If the Item 1119 Parties listed on Exhibit Z have changed since the
Closing Date, no later than March 1 of each year, the Master Servicer shall
provide each of the Master Servicer (and the Master Servicer shall provide any
Subservicer) and the Trustee with an updated Exhibit Z setting forth the Item
1119 Parties. No later than March 15 of each year, commencing in 2007, the
Master Servicer and the Trustee shall notify (and the Master Servicer shall
cause any

                                     162
<PAGE>

Subservicer to notify) the Depositor and the Master Servicer of any Form 10-K
Disclosure Item, together with a description of any such Form 10-K Disclosure
Item in form and substance reasonably acceptable to the Depositor.
Additionally, each of the Master Servicer and the Trustee shall provide, and
shall cause each Reporting Subcontractor retained by the Master Servicer or
the Trustee, as applicable, and in the case of the Master Servicer shall cause
each Subservicer, to provide, the following information no later than March 15
of each year in which a Form 10-K is required to be filed on behalf of the
Trust Fund: (i) if such Person's report on assessment of compliance with
servicing criteria described under Section 11.07 or related registered public
accounting firm attestation report described under Section 11.07 identifies
any material instance of noncompliance, notification of such instance of
noncompliance and (ii) if any such Person's report on assessment of compliance
with servicing criteria or related registered public accounting firm
attestation report is not provided to be filed as an exhibit to such Form
10-K, information detailing the explanation why such report is not included.

         Section 11.05 Sarbanes-Oxley Certification.

         Each Form 10-K shall include a certification (the "Sarbanes-Oxley
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act
(pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and the rules and
regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2007, the Master Servicer and the Trustee shall (unless
such person is the Certifying Person), and the Master Servicer shall cause each
Subservicer and each Reporting Subcontractor and the Trustee shall cause each
Reporting Subcontractor to, provide to the Person who signs the Sarbanes-Oxley
Certification (the "Certifying Person") a certification (each, a "Performance
Certification"), in the form attached hereto as Exhibit X-1 (in the case of a
Subservicer or any Reporting Subcontractor of the Master Servicer or a
Subservicer) and Exhibit X-2 (in the case of the Trustee or any Reporting
Subcontractor of the Trustee), on which the Certifying Person, the entity for
which the Certifying Person acts as an officer, and such entity's officers,
directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The senior officer in charge of
the servicing function of the Master Servicer shall serve as the Certifying
Person on behalf of the Trust Fund. Neither the Master Servicer nor the
Depositor will request delivery of a certification under this clause unless the
Depositor is required under the Exchange Act to file an annual report on Form
10-K with respect to the Trust Fund. In the event that prior to the filing date
of the Form 10-K in March of each year, the Trustee or the Depositor has actual
knowledge of information material to the Sarbanes-Oxley Certification, the
Trustee or the Depositor, as the case may be, shall promptly notify the Master
Servicer and the Depositor. The respective parties hereto agree to cooperate
with all reasonable requests made by any Certifying Person or Certification
Party in connection with such Person's attempt to conduct any due diligence that
such Person reasonably believes to be appropriate in order to allow it to
deliver any Sarbanes-Oxley Certification or portion thereof with respect to the
Trust Fund.

         Section 11.06 Form 15 Filing.

         Prior to January 30 of the first year in which the Depositor is able to
do so under applicable law, the Depositor shall file a Form 15 relating to the
automatic suspension of reporting in respect of the Trust Fund under the
Exchange Act.

                                     163
<PAGE>

         Section 11.07 Report on Assessment of Compliance and Attestation.

         (a) On or before March 15 of each calendar year, commencing in 2007:

                  (1) Each of the Master Servicer and the Trustee shall
         deliver to the Depositor and the Master Servicer a report (in form
         and substance reasonably satisfactory to the Depositor) regarding the
         Master Servicer's or the Trustee's, as applicable, assessment of
         compliance with the Servicing Criteria during the immediately
         preceding calendar year, as required under Rules 13a-18 and 15d-18 of
         the Exchange Act and Item 1122 of Regulation AB. Such report shall be
         signed by an authorized officer of such Person and shall address each
         of the Servicing Criteria specified on a certification substantially
         in the form of Exhibit W hereto delivered to the Depositor
         concurrently with the execution of this Agreement. To the extent any
         of the Servicing Criteria are not applicable to such Person, with
         respect to asset-backed securities transactions taken as a whole
         involving such Person and that are backed by the same asset type
         backing the Certificates, such report shall include such a statement
         to that effect. The Depositor and the Master Servicer, and each of
         their respective officers and directors shall be entitled to rely on
         upon each such servicing criteria assessment.

                  (2) Each of the Master Servicer and the Trustee shall
         deliver to the Depositor and the Master Servicer a report of a
         registered public accounting firm reasonably acceptable to the
         Depositor that attests to, and reports on, the assessment of
         compliance made by Master Servicer or the Trustee, as applicable, and
         delivered pursuant to the preceding paragraphs. Such attestation
         shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
         Regulation S-X under the Securities Act and the Exchange Act,
         including, without limitation that in the event that an overall
         opinion cannot be expressed, such registered public accounting firm
         shall state in such report why it was unable to express such an
         opinion. Such report must be available for general use and not
         contain restricted use language. To the extent any of the Servicing
         Criteria are not applicable to such Person, with respect to
         asset-backed securities transactions taken as a whole involving such
         Person and that are backed by the same asset type backing the
         Certificates, such report shall include such a statement that that
         effect.

                  (3) The Master Servicer shall cause each Subservicer and
         each Reporting Subcontractor to deliver to the Depositor an
         assessment of compliance and accountant's attestation as and when
         provided in paragraphs (a) and (b) of this Section 11.07.

                  (4) The Trustee shall cause each Reporting Subcontractor to
         deliver to the Depositor and the Master Servicer an assessment of
         compliance and accountant's attestation as and when provided in
         paragraphs (a) and (b) of this Section.

                  (5) The Master Servicer and the Trustee shall execute (and
         the Master Servicer shall cause each Subservicer to execute, and the
         Master Servicer and the Trustee shall cause each Reporting
         Subcontractor to execute) a reliance certificate to enable the
         Certification Parties to rely upon each (i) annual compliance
         statement provided pursuant to Section 3.17, (ii) annual report on
         assessments of compliance with servicing criteria

                                     164
<PAGE>

         provided pursuant to this Section 11.07 and (iii) accountant's report
         provided pursuant to this Section 11.07 and shall include a
         certification that each such annual compliance statement or report
         discloses any deficiencies or defaults described to the registered
         public accountants of such Person to enable such accountants to
         render the certificates provided for in this Section 11.07.

         (b) In the event the Master Servicer, any Subservicer, the Trustee or
Reporting Subcontractor is terminated or resigns during the term of this
Agreement, such Person shall provide documents and information required by
this Section 11.07 with respect to the period of time it was subject to this
Agreement or provided services with respect to the Trust Fund, the
Certificates or the Mortgage Loans.

         (c) Each assessment of compliance provided by a Subservicer pursuant
to Section 11.07(a)(3) shall address each of the Servicing Criteria specified
on a certification substantially in the form of Exhibit W hereto delivered to
the Depositor concurrently with the execution of this Agreement or, in the
case of a Subservicer subsequently appointed as such, on or prior to the date
of such appointment. An assessment of compliance provided by a Subcontractor
pursuant to Section 11.07(a)(3) or (4) need not address any elements of the
Servicing Criteria other than those specified by the Master Servicer or the
Trustee, as applicable, pursuant to Section 11.07(a)(1).

         Section 11.08 Use of Subservicers and Subcontractors.

         (a) The Master Servicer shall cause any Subservicer used by the
Master Servicer (or by any Subservicer) for the benefit of the Depositor to
comply with the provisions of Section 3.17 and this Article XI to the same
extent as if such Subservicer were the Master Servicer (except with respect to
the Master Servicer's duties with respect to preparing and filing any Exchange
Act Reports or as the Certifying Person). The Master Servicer shall be
responsible for obtaining from each Subservicer and delivering to the
Depositor any servicer compliance statement required to be delivered by such
Subservicer under Section 3.17, any assessment of compliance and attestation
required to be delivered by such Subservicer under Section 11.07 and any
certification required to be delivered to the Certifying Person under Section
11.05 as and when required to be delivered. As a condition to the succession
to any Subservicer as subservicer under this Agreement by any Person (i) into
which such Subservicer may be merged or consolidated, or (ii) which may be
appointed as a successor to any Subservicer, the Master Servicer shall provide
to the Depositor, at least 15 calendar days prior to the effective date of
such succession or appointment, (x) written notice to the Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K.

         (b) It shall not be necessary for the Master Servicer, any
Subservicer or the Trustee to seek the consent of the Depositor or any other
party hereto to the utilization of any Subcontractor. The Master Servicer or
the Trustee, as applicable, shall promptly upon request provide to the
Depositor (or any designee of the Depositor, such as the Master Servicer or
administrator) a written description (in form and substance satisfactory to
the Depositor) of the role and function of each Subcontractor utilized by such
Person (or in the case of the Master

                                     165
<PAGE>

Servicer, any Subservicer), specifying (i) the identity of each such
Subcontractor, (ii) which (if any) of such Subcontractors are "participating
in the servicing function" within the meaning of Item 1122 of Regulation AB,
and (iii) which elements of the Servicing Criteria will be addressed in
assessments of compliance provided by each Subcontractor identified pursuant
to clause (ii) of this paragraph.

         As a condition to the utilization of any Subcontractor determined to
be a Reporting Subcontractor, the Master Servicer or the Trustee, as
applicable, shall cause any such Subcontractor used by such Person (or in the
case of the Master Servicer, any Subservicer) for the benefit of the Depositor
to comply with the provisions of Sections 11.07 and 11.09 of this Agreement to
the same extent as if such Subcontractor were the Master Servicer (except with
respect to the Master Servicer's duties with respect to preparing and filing
any Exchange Act Reports or as the Certifying Person) or the Trustee, as
applicable. The Master Servicer or the Trustee, as applicable, shall be
responsible for obtaining from each Subcontractor and delivering to the
Depositor and the Master Servicer, any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section 11.05
and Section 11.07, in each case as and when required to be delivered.

         Section 11.09 Amendments.

         In the event the parties to this Agreement desire to further clarify
or amend any provision of this Article XI, this Agreement shall be amended to
reflect the new agreement between the parties covering matters in this Article
XI pursuant to Section 10.01, which amendment shall not require any Opinion of
Counsel or Rating Agency confirmations or the consent of any Certificateholder
or the NIM Insurer.

         If, during the period that the Depositor is required to file Exchange
Act Reports with respect to the Trust Fund, the Master Servicer is no longer
an Affiliate of the Depositor, the Depositor shall assume the obligations and
responsibilities of the Master Servicer in this Article XI with respect to the
preparation and filing of the Exchange Act Reports and/or acting as the
Certifying Person, if the Depositor has received indemnity from such successor
Master Servicer satisfactory to the Depositor, and such Master Servicer has
agreed to provide a Sarbanes-Oxley Certification to the Depositor
substantially in the form of Exhibit AA and the certifications referred to in
Section 11.07.

         Section 11.10 Reconciliation of Accounts.

         Any reconciliation of Accounts performed by any party hereto, or any
Subservicer or Subcontractor shall be prepared no later than 45 calendar days
after the bank statement cut-off date.

                                     166
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.

                                        CWABS, INC.,
                                               as Depositor

                                        By: /s/ Ruben Avilez
                                            -----------------------------------
                                            Name:  Ruben Avilez
                                            Title: Vice President

                                        COUNTRYWIDE HOME LOANS, INC.,
                                               as a Seller

                                        By: /s/ Ruben Avilez
                                            -----------------------------------
                                            Name:  Ruben Avilez
                                            Title: Senior Vice President

                                        PARK MONACO INC.,
                                               as a Seller

                                        By: /s/ Ruben Avilez
                                            -----------------------------------
                                            Name:  Ruben Avilez
                                            Title: Vice President

                                        PARK SIENNA LLC,
                                               as a Seller

                                        By: /s/ Ruben Avilez
                                            -----------------------------------
                                            Name:  Ruben Avilez
                                            Title: Assistant Vice President

<PAGE>

                                        COUNTRYWIDE HOME LOANS SERVICING LP,
                                               as Master Servicer

                                        By:  COUNTRYWIDE GP, INC.

                                        By: /s/ Ruben Avilez
                                            -----------------------------------
                                            Name:  Ruben Avilez
                                            Title: Senior Vice President

                                        THE BANK OF NEW YORK,
                                        as Trustee

                                        By: /s/ Michael Cerchio
                                            -----------------------------------
                                            Name:  Michael Cerchio
                                            Title: Assistant Treasurer

<PAGE>

                                        THE BANK OF NEW YORK
                                        (solely with respect to its obligations
                                        under Section 4.01(d))

                                        By: /s/ Paul Connolly
                                            -----------------------------------
                                            Name:  Paul Connolly
                                            Title: Vice President

<PAGE>

STATE OF CALIFORNIA      )
                         )    ss.:
COUNTY OF LOS ANGELES    )

         On this 28th day of June, 2006, before me, a notary public in and for
said State, appeared Darren Bigby, personally known to me on the basis of
satisfactory evidence to be a Senior Vice President of Countrywide Home Loans,
Inc., one of the corporations that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation and
acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                     /s/ Glenda Daniel
                                            -----------------------------------
                                                       Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA      )
                         )    ss.:
COUNTY OF LOS ANGELES    )

         On this 28th day of June, 2006, before me, a notary public in and for
said State, appeared Darren Bigby, personally known to me on the basis of
satisfactory evidence to be a Senior Vice President of Countrywide GP, Inc.,
the parent company of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such limited partnership and
acknowledged to me that such limited partnership executed the within
instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                     /s/ Glenda Daniel
                                            -----------------------------------
                                                       Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA      )
                         )    ss.:
COUNTY OF LOS ANGELES    )

         On this 28th day of June, 2006, before me, a notary public in and for
said State, appeared Darren Bigby, personally known to me on the basis of
satisfactory evidence to be a Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such corporation and acknowledged to
me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

                                                     /s/ Glenda Daniel
                                            -----------------------------------
                                                       Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA      )
                         )    ss.:
COUNTY OF LOS ANGELES    )

         On this 28th day of June, 2006, before me, a notary public in and for
said State, appeared Darren Bigby, personally known to me on the basis of
satisfactory evidence to be a Vice President of Park Monaco Inc., one of the
corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such corporation and acknowledged to
me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                     /s/ Glenda Daniel
                                            -----------------------------------
                                                       Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA      )
                         )    ss.:
COUNTY OF LOS ANGELES    )

         On this 28th day of June, 2006, before me, a notary public in and for
said State, appeared Darren Bigby, personally known to me on the basis of
satisfactory evidence to be an Assistant Vice President of Park Sienna LLC,
one of the entities that executed the within instrument, and also known to me
to be the person who executed it on behalf of such entity and acknowledged to
me that such entity executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                     /s/ Glenda Daniel
                                            -----------------------------------
                                                       Notary Public

[Notarial Seal]

<PAGE>

 STATE OF NEW YORK       )
                         )    ss.:
COUNTY OF NEW YORK       )

         On this 28th day of June, 2006 before me, a notary public in and for
said State, appeared Michael Cerchio, personally known to me on the basis of
satisfactory evidence to be an Assistant Treasurer of The Bank of New York, a
New York banking corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation,
and acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                     /s/ Kathryn Hall
                                            -----------------------------------
                                                       Notary Public

[Notarial Seal]

<PAGE>

STATE OF NEW YORK        )
                         )    ss.:
COUNTY OF NEW YORK       )

         On this 28th day of June, 2006 before me, a notary public in and for
said State, appeared Paul Connolly, personally known to me on the basis of
satisfactory evidence to be a Vice President of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known
to me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                     /s/ Kathryn Hall
                                            -----------------------------------
                                                       Notary Public

[Notarial Seal]

<PAGE>

                                                                   Exhibits A-1
                                                                   through A-15

                         [Exhibits A-1 through A-15 are
                 photocopies of such Certificates as delivered.]

                     [See appropriate documents delivered at
                                   closing.]

                                       A-1

<PAGE>

                                                                      Exhibit B

                            Exhibit B is a photocopy
                           of the Class P Certificates
                                  as delivered.

                [See appropriate document delivered at closing.]

                                      B-1

<PAGE>

                                                                      Exhibit C

                            Exhibit C is a photocopy
                           of the Class C Certificates
                                  as delivered.

                [See appropriate document delivered at closing.]

                                       C-1

<PAGE>

                                                                      Exhibit D

                            Exhibit D is a photocopy
                          of the Class A-R Certificate
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                       D-1

<PAGE>

                                                                      Exhibit E

                            Exhibit E is a photocopy
                      of the Tax Matters Person Certificate
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                       E-1

<PAGE>

                                                            Exhibit F-1 and F-2

             [Exhibits F-1 and F-2 are schedules of Mortgage Loans]

         [Delivered to Trustee at closing and on file with the Trustee.]

                                       F-1

<PAGE>

                                   EXHIBIT G-1

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Sellers]

[Master Servicer]

               Re: CWABS Asset-Backed Certificates, Series 2006-7
                   ----------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of June 1, 2006 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home
Loans Servicing LP, as Master Servicer, and the undersigned, as Trustee, the
undersigned, as Trustee, hereby certifies that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed in the attached list of exceptions) the Trustee has received:

         (i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of ______________,
without recourse", or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note; and

         (ii) a duly executed assignment of the Mortgage or a copy of such
assignment, in either case in the form permitted by Section 2.01 of the Pooling
and Servicing Agreement.

         Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.

                                      G-1-1

<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

                                                     The Bank of New York,
                                                            as Trustee

                                                    By:
                                                       ------------------------
                                                       Name:
                                                       Title:

                                      G-1-2

<PAGE>

                                   EXHIBIT G-2

                    FORM OF INTERIM CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Sellers]

[Master Servicer]

                  Re:  CWABS Asset-Backed Certificates, Series 2006-7
                       ----------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of June 1, 2006 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc.,
as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, and the undersigned, as Trustee, the undersigned, as
Trustee, hereby certifies that [, with respect to the Subsequent Mortgage Loans
delivered in connection with the Subsequent Transfer Agreement, dated as of
__________ (the "Subsequent Transfer Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller and The Bank of New York, as Trustee],
except as listed in the following paragraph, as to each [Initial Mortgage
Loan][Subsequent Mortgage Loan] listed in the [Mortgage Loan Schedule][Loan
Number and Borrower Identification Mortgage Loan Schedule] (other than any
[Mortgage Loan][Loan Number and Borrower Identification Mortgage Loan Schedule]
paid in full or listed on the attached list of exceptions) the Trustee has
received:

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

         (ii) the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan]
that is not a MERS Mortgage Loan, the original recorded Mortgage or a copy of
such Mortgage, with recording information, and in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] that is a MERS Mortgage Loan, the
original Mortgage or a copy of such Mortgage, with recording information, noting
thereon the presence of the MIN of the [Initial Mortgage Loan][Subsequent
Mortgage Loan] and language indicating that the [Initial Mortgage
Loan][Subsequent Mortgage Loan] is a MOM Loan if the [Initial Mortgage

                                      G-2-1

Loan][Subsequent Mortgage Loan] is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;

         (iii) the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Asset-Backed Certificates, Series 2006-7, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of June 1, 2006, without recourse" or a copy of
such assignment, with recording information, or, in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] with respect to property located in the
State of California that is not a MERS Mortgage Loan, a duly executed assignment
of the Mortgage in blank (each such assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which such assignment relates);

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

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

         (vi) the original or duplicate original lender's title policy or a copy
of lender's title policy or a printout of the electronic equivalent and all
riders thereto or, in the event such original title policy has not been received
from the insurer, any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company, with the original policy of title insurance to be delivered
within one year of the Closing Date.

         In the event that in connection with any [Initial Mortgage
Loan][Subsequent Mortgage Loan] that is not a MERS Mortgage Loan the applicable
Seller cannot deliver the original recorded Mortgage or all interim recorded
assignments of the Mortgage satisfying the requirements of clause (ii), (iii) or
(iv), as applicable, the Trustee has received, in lieu thereof, a true and
complete copy of such Mortgage and/or such assignment or assignments of the
Mortgage, as applicable, each certified by the applicable Seller, the applicable
title company, escrow agent or attorney, or the originator of such [Initial
Mortgage Loan][Subsequent Mortgage Loan], as the case may be, to be a true and
complete copy of the original Mortgage or assignment of Mortgage submitted for
recording.

         Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
[Initial Mortgage Loan][Subsequent Mortgage Loan], and (ii) the information set
forth in items (i), (iv), (v), (vi), (viii), (ix) and (xv) of the definition of
the "Mortgage Loan Schedule" in Section 1.01 of the Pooling and Servicing
Agreement accurately reflects information set forth in the Mortgage File.

                                      G-2-2

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.

                                      G-2-3

<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

                                        The Bank of New York,
                                               as Trustee

                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                     G-2-4
<PAGE>

                                   EXHIBIT G-3

                      FORM OF DELAY DELIVERY CERTIFICATION

                                     [Date]

[Depositor]

[Sellers]

[Master Servicer]

                  Re:  CWABS Asset-Backed Certificates, Series 2006-7
                       ----------------------------------------------

Gentlemen:

         [Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the Pooling and Servicing Agreement dated as of June 1, 2006
(the "Pooling and Servicing Agreement") among CWABS, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, and the undersigned, as Trustee.] The undersigned hereby certifies
that [, with respect to the Subsequent Mortgage Loans delivered in connection
with the Subsequent Transfer Agreement, dated as of __________ (the "Subsequent
Transfer Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller
and The Bank of New York, as Trustee,] as to each Delay Delivery Mortgage Loan
listed on the Schedule A attached hereto (other than any [Initial Mortgage
Loan][Subsequent Mortgage Loan] paid in full or listed on Schedule B attached
hereto) the Trustee has received:

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

         (2) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Asset-Backed Certificates, Series 2006-7, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of June 1, 2006, without recourse" or a copy of
such assignment, with recording information, or, in the case

                                     G-3-1
<PAGE>

of each [Initial Mortgage Loan][Subsequent Mortgage Loan] with respect to
property located in the State of California that is not a MERS Mortgage Loan, a
duly executed assignment of the Mortgage in blank (each such assignment, when
duly and validly completed, to be in recordable form and sufficient to effect
the assignment of and transfer to the assignee thereof, under the Mortgage to
which such assignment relates).

         Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any such
[Initial Mortgage Loan][Subsequent Mortgage Loan].

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

                                        The Bank of New York,
                                               as Trustee

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                     G-3-2
<PAGE>

                                   EXHIBIT G-4

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE
                           (SUBSEQUENT MORTGAGE LOANS)

                                     [Date]

[Depositor]

[Sellers]

[Master Servicer]

                  Re:  CWABS Asset-Backed Certificates, Series 2006-7
                       ----------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the Pooling and Servicing Agreement
dated as of June 1, 2006 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc.,
as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, and the undersigned, as Trustee, the undersigned hereby
certifies that, as to each Subsequent Mortgage Loan listed in the Loan Number
and Borrower Identification Mortgage Loan Schedule (other than any Subsequent
Mortgage Loan paid in full or listed in the attached list of exceptions) the
Trustee has received:

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

         (2) a duly executed assignment of the Mortgage or a copy of such
assignment with recording information, in either case in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement.

         Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Subsequent Mortgage
Loans identified on the Loan Number and Borrower Identification

                                     G-4-1
<PAGE>

 Mortgage Loan
Schedule or (ii) the collectibility, insurability, effectiveness or suitability
of any such Subsequent Mortgage Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

                                        The Bank of New York,
                                               as Trustee

                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                     G-4-2
<PAGE>

                                    EXHIBIT H

                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Master Servicer]

[Sellers]

                  Re:    CWABS Asset-Backed Certificates, Series 2006-7
                         ----------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of June 1, 2006 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home
Loans Servicing LP, as Master Servicer, and the undersigned, as Trustee, the
undersigned, as Trustee, hereby certifies that[, with respect to the
Subsequent Mortgage Loans delivered in connection with the Subsequent Transfer
Agreement, dated as of __________ (the "Subsequent Transfer Agreement") among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller and The Bank of New
York, as Trustee,] as to each [Initial Mortgage Loan][Subsequent Mortgage
Loan] listed in the [Mortgage Loan Schedule][Loan Number and Borrower
Identification Mortgage Loan Schedule] (other than any [Initial Mortgage
Loan][Subsequent Mortgage Loan] paid in full or listed on the attached
Document Exception Report) the Trustee has received:

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

         (ii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage or a
copy of such Mortgage, with recording information, and in the case of each
[Initial Mortgage Loan][Subsequent Mortgage Loan] that is a MERS Mortgage
Loan, the original Mortgage or a copy of such Mortgage, with recording
information, noting the presence of the MIN of the [Initial Mortgage
Loan][Subsequent Mortgage Loan] and language indicating that the [Initial
Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan if the [Initial
Mortgage Loan][Subsequent

                                      H-1
<PAGE>

Mortgage Loan] is a MOM Loan, with evidence of recording indicated thereon, or a
copy of the Mortgage certified by the public recording office in which such
Mortgage has been recorded];

         (iii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Asset-Backed Certificates, Series 2006-7, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of June 1, 2006, without recourse" or a copy of
such assignment, with recording information, or, in the case of each [Initial
Mortgage Loan][Subsequent Mortgage Loan] with respect to property located in the
State of California that is not a MERS Mortgage Loan, a duly executed assignment
of the Mortgage in blank (each such assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of and transfer
to the assignee thereof, under the Mortgage to which such assignment relates);

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

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

         (vi) the original or duplicate original lender's title policy or a copy
of lender's title policy or a printout of the electronic equivalent and all
riders thereto or any one of an original title binder, an original preliminary
title report or an original title commitment, or a copy thereof certified by the
title company.

         If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.

         Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (ix) and (xv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any such
[Initial Mortgage Loan][Subsequent Mortgage Loan].

                                      H-2
<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

                                        The Bank of New York,
                                               as Trustee

                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

<PAGE>

                                    EXHIBIT I

                TRANSFER AFFIDAVIT FOR THE CLASS A-R CERTIFICATES

STATE OF                 )
                         )    ss.:
COUNTY OF                )

         The undersigned, being first duly sworn, deposes and says as follows:

         1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated as
of June 1, 2006 (the "Agreement"), by and among CWABS, Inc., as depositor (the
"Depositor"), Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, and The Bank of New York, as Trustee. Capitalized terms used,
but not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed
to such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.

         2. The Transferee is not an employee benefit plan that is subject to
Title I of ERISA or to section 4975 of the Internal Revenue Code of 1986, nor is
it acting on behalf of or with plan assets of any such plan. The Transferee is,
as of the date hereof, and will be, as of the date of the Transfer, a Permitted
Transferee. The Transferee will endeavor to remain a Permitted Transferee for so
long as it retains its Ownership Interest in the Certificate. The Transferee is
acquiring its Ownership Interest in the Certificate for its own account.

         3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.

         4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)

                                      I-1

<PAGE>

         5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.

         6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J-1 to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.

         7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Class A-R Certificates.

         8. The Transferee's taxpayer identification number is _____.

         9. The Transferee is a U.S. Person as defined in Code section
7701(a)(30).

         10. The Transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the Transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
Transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.

         11. The Transferee has provided financial statements or other
financial information requested by the Transferor in connection with the
transfer of the Class A-R Certificates to permit the Transferor to assess the
financial capability of the Transferee to pay such taxes.

                                      * * *

                                      I-2

<PAGE>

         IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____ day of _____________, 20__.

                                        [NAME OF TRANSFEREE]

                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

[Corporate Seal]

ATTEST:

-------------------------
[Assistant] Secretary

         Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ____________ of the Transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the Transferee.

         Subscribed and sworn before me this ____ day of _______, 20__.

                                        -------------------------------------
                                                         NOTARY PUBLIC
                                        My Commission expires the ___ day of
                                                         , 20__.

                                      I-3
<PAGE>

                               Certain Definitions

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

         "Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause any REMIC formed hereunder to fail to
qualify as a REMIC at any time that any Certificates are Outstanding. The terms
"United States," "State" and "International Organization" shall have the
meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.

         "Person": Any individual, corporation, limited liability company,
partnership, joint venture, bank, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.

         "Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.

         "Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.

                                      I-4

<PAGE>

                        Section 5.02(c) of the Agreement

         (c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:

                  (1) Each Person holding or acquiring any Ownership Interest in
         a Class A-R Certificate shall be a Permitted Transferee and shall
         promptly notify the Trustee of any change or impending change in its
         status as a Permitted Transferee.

                  (2) Except in connection with (i) the registration of the Tax
         Matters Person Certificate in the name of the Trustee or (ii) any
         registration in the name of, or transfer of a Class A-R Certificate to,
         an affiliate of the Depositor (either directly or through a nominee) in
         connection with the initial issuance of the Certificates, no Ownership
         Interest in a Class A-R Certificate may be registered on the Closing
         Date or thereafter transferred, and the Trustee shall not register the
         Transfer of any Class A-R Certificate, unless the Trustee shall have
         been furnished with an affidavit (a "Transfer Affidavit") of the
         initial owner or the proposed transferee in the form attached hereto as
         Exhibit I.

                  (3) Each Person holding or acquiring any Ownership Interest in
         a Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit
         from any other Person to whom such Person attempts to Transfer its
         Ownership Interest in a Class A-R Certificate, (B) to obtain a Transfer
         Affidavit from any Person for whom such Person is acting as nominee,
         trustee or agent in connection with any Transfer of a Class A-R
         Certificate and (C) not to Transfer its Ownership Interest in a Class
         A-R Certificate, or to cause the Transfer of an Ownership Interest in a
         Class A-R Certificate to any other Person, if it has actual knowledge
         that such Person is not a Permitted Transferee.

                  (4) Any attempted or purported Transfer of any Ownership
         Interest in a Class A-R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Class A-R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class A-R
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Class A-R Certificate that is in fact
         not permitted by Section 5.02(b) and this Section 5.02(c) or for making
         any payments due on such Certificate to the Holder thereof or taking
         any other action with respect to such Holder under the provisions of
         this Agreement so long as the Transfer was registered after receipt of
         the related Transfer Affidavit and Transferor Certificate. The Trustee
         shall be entitled but not obligated to recover from any Holder of a
         Class A-R Certificate that was in fact not a Permitted Transferee at
         the time it became a Holder or, at such subsequent time as it became
         other than a Permitted Transferee, all payments made on such Class A-R
         Certificate at and after either such time. Any such payments so
         recovered by the Trustee shall be paid and delivered by the Trustee to
         the last preceding Permitted Transferee of such Certificate.

                                      I-5

<PAGE>

                  (5) The Master Servicer shall use its best efforts to make
         available, upon receipt of written request from the Trustee, all
         information necessary to compute any tax imposed under section 860E(e)
         of the Code as a result of a Transfer of an Ownership Interest in a
         Class A-R Certificate to any Holder who is not a Permitted Transferee.

                  The restrictions on Transfers of a Class A-R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the Sellers or
the Master Servicer to the effect that the elimination of such restrictions will
not cause any constituent REMIC of any REMIC formed hereunder to fail to qualify
as a REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any ownership Interest in a Class A-R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class A-R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class A-R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.

                                      I-6

<PAGE>

                                   EXHIBIT J-1

            FORM OF TRANSFEROR CERTIFICATE FOR CLASS A-R CERTIFICATES

                                      Date:

CWABS, Inc.
as Depositor
4500 Park Granada
Calabasas, California  91302

The Bank of New York
as Trustee
101 Barclay Street
New York, New York  10286

                  Re:      CWABS, Inc. Asset Backed
                           Certificates, Series 2006-7
                           ---------------------------

Ladies and Gentlemen:

         In connection with our disposition of the Class A-R Certificates, we
certify that we have no knowledge that the Transferee is not a Permitted
Transferee. All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement dated as of
June 1, 2006, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee.

                                        Very truly yours,

                                        ----------------------------------------
                                        Name of Transferor

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                     J-1-1

<PAGE>

                                   EXHIBIT J-2

                       FORM OF TRANSFEROR CERTIFICATE FOR
                              PRIVATE CERTIFICATES

                                      Date:

CWABS, Inc.,
    as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
    as Trustee
101 Barclay Street
New York, New York  10286

            Re:   CWABS, Inc. Asset-Backed Certificates,
                  Series 2006-7, Class [   ]

Ladies and Gentlemen:

         In connection with our disposition of the above-captioned Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of June 1,
2006, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide
Home Loans Servicing LP, as Master Servicer, and The Bank of New York, as
Trustee.

                                        Very truly yours,

                                        ---------------------------------------
                                        Name of Transferor

                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

                                      J-2-1
<PAGE>

                                    EXHIBIT K

                    FORM OF INVESTMENT LETTER (NON-RULE 144A)

                                      Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay St., 8W
New York, New York  10286

                  Re:    CWABS, Inc. Asset-Backed Certificates,
                         Series 2006-7, Class [   ]

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, or using the assets of any such plan or arrangement to
effect such acquisition or (ii) if the Certificates have been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we are
acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, and (g) we will not sell, transfer or otherwise dispose of any

                                      K-7
<PAGE>

Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement.

         All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
June 1, 2006, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee.

                                          Very truly yours,

                                          --------------------------------------
                                          Name of Transferee

                                          By:
                                               ---------------------------------
                                                 Authorized Officer

                                      K-2

<PAGE>

                                    EXHIBIT L

                            FORM OF RULE 144A LETTER

                                      Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York  10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2006-7, Class [   ]

Ladies and Gentlemen:

         In connection with our acquisition of the above-captioned Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, or using the assets of any such plan or arrangement to
effect such acquisition or (ii) if the Certificates have been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we have
not, nor has anyone acting on our behalf offered, transferred, pledged, sold or
otherwise disposed of the Certificates, any interest in the Certificates or any
other similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the

                                      L-1

<PAGE>
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates,
(f) we are a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.

         All capitalized terms used herein but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement dated as of
June 1, 2006, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee.

                                          Very truly yours,

                                          --------------------------------------
                                          Name of Transferee

                                          By:
                                               ---------------------------------
                                                 Authorized Officer

                                      L-2

<PAGE>

                              ANNEX 1 TO EXHIBIT L

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

           As indicated below, the undersigned is the President, Chief Financial
              Officer, Senior Vice President or other executive officer of the
              Buyer.

           In connection with purchases by the Buyer, the Buyer is a "qualified
              institutional buyer" as that term is defined in Rule 144A under
              the Securities Act of 1933, as amended ("Rule 144A") because (i)
              the Buyer owned and/or invested on a discretionary basis either at
              least $100,000,000 in securities or, if Buyer is a dealer, Buyer
              must own and/or invest on a discretionary basis at least
              $10,000,000 in securities (except for the excluded securities
              referred to below) as of the end of the Buyer's most recent fiscal
              year (such amount being calculated in accordance with Rule 144A
              and (ii) the Buyer satisfies the criteria in the category marked
              below.

              ___   Corporation, etc. The Buyer is a corporation (other than a
                    bank, savings and loan association or similar institution),
                    Massachusetts or similar business trust, partnership, or
                    charitable organization described in Section 501(c)(3) of
                    the Internal Revenue Code of 1986, as amended.

              ___   Bank. The Buyer (a) is a national bank or banking
                    institution organized under the laws of any State, territory
                    or the District of Columbia, the business of which is
                    substantially confined to banking and is supervised by the
                    State or territorial banking commission or similar official
                    or is a foreign bank or equivalent institution, and (b) has
                    an audited net worth of at least $25,000,000 as demonstrated
                    in its latest annual financial statements, a copy of which
                    is attached hereto.

              ___   Savings and Loan. The Buyer (a) is a savings and loan
                    association, building and loan association, cooperative
                    bank, homestead association or similar institution, which is
                    supervised and examined by a State or Federal authority
                    having supervision over any such institutions or is a
                    foreign savings and loan association or equivalent
                    institution and (b) has an audited net worth of at least
                    $25,000,000 as demonstrated in its latest annual financial
                    statements, a copy of which is attached hereto.

              ___   Broker-dealer. The Buyer is a dealer registered pursuant
                    to Section 15 of the Securities Exchange Act of 1934.

              ___   Insurance Company. The Buyer is an insurance company whose
                    primary and predominant business activity is the writing of
                    insurance or the reinsuring of

                                      L-3

<PAGE>

                    risks underwritten by insurance companies and which is
                    subject to supervision by the insurance commissioner or a
                    similar official or agency of a State, territory or the
                    District of Columbia.

              ___   State or Local Plan. The Buyer is a plan established and
                    maintained by a State, its political subdivisions, or any
                    agency or instrumentality of the State or its political
                    subdivisions, for the benefit of its employees.

              ___   ERISA Plan. The Buyer is an employee benefit plan within the
                    meaning of Title I of the Employee Retirement Income
                    Security Act of 1974.

              ___   Investment Advisor. The Buyer is an investment advisor
                    registered under the Investment Advisors Act of 1940.

              ___   Small Business Investment Company. Buyer is a small business
                    investment company licensed by the U.S. Small Business
                    Administration under Section 301(c) or (d) of the Small
                    Business Investment Act of 1958.

              ___   Business Development Company. Buyer is a business
                    development company as defined in Section 202(a)(22) of the
                    Investment Advisors Act of 1940.

          The term "securities" as used herein does not include (i) securities
              of issuers that are affiliated with the Buyer, (ii) securities
              that are part of an unsold allotment to or subscription by the
              Buyer, if the Buyer is a dealer, (iii) securities issued or
              guaranteed by the U.S. or any instrumentality thereof, (iv) bank
              deposit notes and certificates of deposit, (v) loan
              participations, (vi) repurchase agreements, (vii) securities owned
              but subject to a repurchase agreement and (viii) currency,
              interest rate and commodity swaps.

          For purposes of determining the aggregate amount of securities owned
              and/or invested on a discretionary basis by the Buyer, the Buyer
              used the cost of such securities to the Buyer and did not include
              any of the securities referred to in the preceding paragraph,
              except (i) where the Buyer reports its securities holdings in its
              financial statements on the basis of their market value, and (ii)
              no current information with respect to the cost of those
              securities has been published. If clause (ii) in the preceding
              sentence applies, the securities may be valued at market. Further,
              in determining such aggregate amount, the Buyer may have included
              securities owned by subsidiaries of the Buyer, but only if such
              subsidiaries are consolidated with the Buyer in its financial
              statements prepared in accordance with generally accepted
              accounting principles and if the investments of such subsidiaries
              are managed under the Buyer's direction. However, such securities
              were not included if the Buyer is a majority-owned, consolidated
              subsidiary of another enterprise and the Buyer is not itself a
              reporting company under the Securities Exchange Act of 1934, as
              amended.

          The Buyer acknowledges that it is familiar with Rule 144A and
              understands that the seller to it and other parties related to the
              Certificates are relying and will continue to rely on the
              statements made herein because one or more sales to the Buyer may
              be in reliance on Rule 144A.

                                      L-4
<PAGE>

          Until the date of purchase of the Rule 144A Securities, the Buyer will
              notify each of the parties to which this certification is made of
              any changes in the information and conclusions herein. Until such
              notice is given, the Buyer's purchase of the Certificates will
              constitute a reaffirmation of this certification as of the date of
              such purchase. In addition, if the Buyer is a bank or savings and
              loan is provided above, the Buyer agrees that it will furnish to
              such parties updated annual financial statements promptly after
              they become available.

                                             -----------------------------------
                                                     Print Name of Buyer

                                             By:
                                                 -------------------------------
                                                  Name:
                                                  Title:

                                             Date:
                                                   -----------------------------

                                      L-5

<PAGE>
                                                            ANNEX 2 TO EXHIBIT L
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That are Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

              1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

     In connection with purchases by Buyer, the Buyer is a "qualified
              institutional buyer" as defined in SEC Rule 144A because (i) the
              Buyer is an investment company registered under the Investment
              Company Act of 1940, as amended and (ii) as marked below, the
              Buyer alone, or the Buyer's Family of Investment Companies, owned
              at least $100,000,000 in securities (other than the excluded
              securities referred to below) as of the end of the Buyer's most
              recent fiscal year. For purposes of determining the amount of
              securities owned by the Buyer or the Buyer's Family of Investment
              Companies, the cost of such securities was used, except (i) where
              the Buyer or the Buyer's Family of Investment Companies reports
              its securities holdings in its financial statements on the basis
              of their market value, and (ii) no current information with
              respect to the cost of those securities has been published. If
              clause (ii) in the preceding sentence applies, the securities may
              be valued at market.

     ___     The Buyer owned $ in securities (other than the excluded
             securities referred to below) as of the end of the Buyer's most
             recent fiscal year (such amount being calculated in accordance
             with Rule 144A).

     ___     The Buyer is part of a Family of Investment Companies which
             owned in the aggregate $ in securities (other than the excluded
             securities referred to below) as of the end of the Buyer's most
             recent fiscal year (such amount being calculated in accordance
             with Rule 144A).

     The term "Family of Investment Companies" as used herein means two or more
         registered investment companies (or series thereof) that have the same
         investment adviser or investment advisers that are affiliated (by
         virtue of being majority owned subsidiaries of the same parent or
         because one investment adviser is a majority owned subsidiary of the
         other).

     The term "securities" as used herein does not include (i) securities of
         issuers that are affiliated with the Buyer or are part of the Buyer's
         Family of Investment Companies, (ii) securities issued or guaranteed by
         the U.S. or any instrumentality thereof, (iii) bank deposit notes and
         certificates of deposit, (iv) loan participations, (v) repurchase

                                      L-6

<PAGE>

         agreements, (vi) securities owned but subject to a repurchase agreement
         and (vii) currency, interest rate and commodity swaps.

     The Buyer is familiar with Rule 144A and under-stands that the parties
         listed in the Rule 144A Transferee Certificate to which this
         certification relates are relying and will continue to rely on the
         statements made herein because one or more sales to the Buyer will be
         in reliance on Rule 144A. In addition, the Buyer will only purchase for
         the Buyer's own account.

     Until the date of purchase of the Certificates, the undersigned will notify
         the parties listed in the Rule 144A Transferee Certificate to which
         this certification relates of any changes in the information and
         conclusions herein. Until such notice is given, the Buyer's purchase of
         the Certificates will constitute a reaffirmation of this certification
         by the undersigned as of the date of such purchase.

                                  ----------------------------------------------
                                            Print Name of Buyer or Adviser

                                  By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                  IF AN ADVISER:

                                  ----------------------------------------------
                                                 Print Name of Buyer

                                  Date:
                                        ----------------------------------------

                                      L-7

<PAGE>

                                    EXHIBIT M

                      FORM OF REQUEST FOR DOCUMENT RELEASE

Loan Information

         Name of Mortgagor:
                                         ---------------------------------------

         Master Servicer
         Loan No.:
                                         ---------------------------------------

Trustee

         Name:
                                         ---------------------------------------

         Address:
                                         ---------------------------------------

         Trustee
         Mortgage File No.:
                                         ---------------------------------------

         The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2006-7, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Document Release shall have the meanings given them in the Pooling
and Servicing Agreement dated as of June 1, 2006 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide
Home Loans Servicing LP, as Master Servicer, and The Bank of New York, as
Trustee.

(  )     Mortgage Note dated ___________, ____, in the original principal
         sum of $________, made by __________________, payable to, or endorsed
         to the order of, the Trustee.

(  )     Mortgage recorded on _________________ as instrument no. _____________
         in the County Recorder's Office of the County of ________________,
         State of _______________ in book/reel/docket _______________ of
         official records at page/image _____________.

(  )     Deed of Trust recorded on _________________ as instrument no. ________
         in the County Recorder's Office of the County of ________________,
         State of _______________ in book/reel/docket _______________ of
         official records at page/image _____________.

(  )     Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
         _________________ as instrument no. __________ in the County Recorder's
         Office

                                      M-1

<PAGE>

         of the County of __________, State of _______________ in
         book/reel/docket _______________ of official records at page/image
         _____________.

(  )     Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.

(  )     ----------------------------------------------

(  )     ----------------------------------------------

(  )     ----------------------------------------------

(  )     ----------------------------------------------

         The undersigned Master Servicer hereby acknowledges and agrees as
follows:

                  (1) The Master Servicer shall hold and retain possession of
         the Documents in trust for the benefit of the Trust Fund, solely for
         the purposes provided in the Pooling and Servicing Agreement.

                  (2) The Master Servicer shall not cause or knowingly permit
         the Documents to become subject to, or encumbered by, any claim, liens,
         security interest, charges, writs of attachment or other impositions
         nor shall the Master Servicer assert or seek to assert any claims or
         rights of setoff to or against the Documents or any proceeds thereof.

                  (3) The Master Servicer shall return each and every Document
         previously requested from the Mortgage File to the Trustee when the
         need therefor no longer exists, unless the Mortgage Loan relating to
         the Documents has been liquidated and the proceeds thereof have been
         remitted to the Certificate Account and except as expressly provided in
         the Pooling and Servicing Agreement.

                  (4) The Documents and any proceeds thereof, including any
         proceeds of proceeds, coming into the possession or control of the
         Master Servicer shall at all times be earmarked for the account of the
         Trust Fund, and the Master Servicer shall keep the Documents and any
         proceeds separate and distinct from all other property in the Master
         Servicer's possession, custody or control.

                                        [Master Servicer]

                                        By
                                               ---------------------------------

                                        Its
                                               ---------------------------------

                                        Date: _________________, ____

                                      M-2

<PAGE>

                                    EXHIBIT N

                        FORM OF REQUEST FOR FILE RELEASE

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                           ASSET-BACKED CERTIFICATES,
                                  Series 2006-7

__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE PURCHASE PRICE FOR
SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE MORTGAGE LOANS HAVE BEEN LIQUIDATED AND
THE RELATED [INSURANCE PROCEEDS] [LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED
PURSUANT TO SECTION 3.13 OF THE POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT
MORTGAGE LOAN HAS BEEN DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN
ACCORDANCE WITH THE CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE
POOLING AND SERVICING AGREEMENT.]

LOAN NUMBER:_______________                 BORROWER'S NAME:_____________

COUNTY:____________________

[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]

I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

____________                                         _____________________
                                                     DATED:____________

/ /                                                  VICE PRESIDENT
/ /                                                  ASSISTANT VICE PRESIDENT

                                      N-1

<PAGE>

                                                                       Exhibit O

                            Exhibit O is a photocopy
                           of the Depository Agreement
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      0-1

<PAGE>

                                    EXHIBIT P

                      FORM OF SUBSEQUENT TRANSFER AGREEMENT

         SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 200[_] (this
"Subsequent Transfer Agreement"), among CWABS, INC., a Delaware corporation,
as depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York
corporation, in its capacity as a seller under the Pooling and Servicing
Agreement referred to below ("CHL"), PARK MONACO INC., a Delaware corporation,
in its capacity as a seller under the Pooling and Servicing Agreement ("Park
Monaco"), PARK SIENNA LLC, a Delaware limited liability company, in its
capacity as a seller under the Pooling and Servicing Agreement ("Park Sienna"
and, together with CHL and Park Monaco, the "Sellers") and The Bank of New
York, a New York banking corporation, as trustee (the "Trustee");

         WHEREAS, the Depositor, CHL, Park Monaco, Park Sienna, the Trustee
and Countrywide Home Loans Servicing LP, as Master Servicer have entered in
the Pooling and Servicing Agreement, dated as of June 1, 2006 (the "Pooling
and Servicing Agreement"), relating to the CWABS, Inc. Asset-Backed
Certificates, Series 2006-7 (capitalized terms not otherwise defined herein
are used as defined in the Pooling and Servicing Agreement);

         WHEREAS, Section 2.01(b) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer
Agreement in accordance with the terms and conditions of the Pooling and
Servicing Agreement;

         NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration the receipt and adequacy of which are hereby
acknowledged the parties hereto agree as follows:

         (a) The "Subsequent Transfer Date" with respect to this Subsequent
Transfer Agreement shall be ________ __, 200[_].

         (b) The "Subsequent Transfer Date Purchase Amount" with respect to
this Subsequent Transfer Agreement shall be $_______________.

         (c) The Subsequent Mortgage Loans conveyed on the Subsequent Transfer
Date shall be subject to the terms and conditions of the Pooling and Servicing
Agreement.

         (d) Annex I hereto sets forth a list of the Mortgage Loans which are
Delay Delivery Mortgage Loans.

         (e) In case any provision of this Subsequent Transfer Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions or obligations shall not in any way be affected or
impaired thereby.

         (f) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.

                                      P-1

<PAGE>

         (g) This Subsequent Transfer Agreement shall be governed by, and shall
be construed and enforced in accordance with the laws of the State of New York.

         (h) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.

                                       P-2

<PAGE>

         IN WITNESS WHEREOF, the parties to this Subsequent Transfer Agreement
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.

                                        CWABS, INC.,
                                           as Depositor

                                        By: __________________________________
                                            Name:
                                            Title:

                                        COUNTRYWIDE HOME LOANS, INC.,
                                            as a Seller

                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

                                        PARK MONACO INC.,
                                            as a Seller

                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

                                        PARK SIENNA LLC,
                                            as a Seller

                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

                                      P-3

<PAGE>

                                        THE BANK OF NEW YORK,
                                            not in its individual capacity,
                                            but solely as Trustee

                                        By:
                                            -----------------------------------
                                            Name:
                                            Title:

<PAGE>

                                                                        Annex I

     Mortgage Loans for which All or a Portion of a Related Mortgage File is
    not Delivered to the Trustee on or prior to the Subsequent Transfer Date

                                      P-5

<PAGE>

                                    EXHIBIT Q

                                   [RESERVED]

                                      Q-1

<PAGE>

                                    EXHIBIT R

                                   [RESERVED]

                                      R-1

<PAGE>

                                   EXHIBIT S-1

                                   [RESERVED]

                                      S-1-1

<PAGE>

                                   EXHIBIT S-2

                                   [RESERVED]

                                      S-2-1

<PAGE>

                                    EXHIBIT T

                OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS

                           ASSET-BACKED CERTIFICATES,
                                  Series 2006-7

                                            [Date]

Via Facsimile

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York  10286

Dear Sir or Madam:

         Reference is made to the Pooling and Servicing Agreement, dated as of
June 1, 2006, (the "Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, and The Bank of New York, as Trustee. Capitalized terms used
herein shall have the meanings ascribed to such terms in the Pooling and
Servicing Agreement.

         __________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:

         With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:

         1. A Principal Prepayment in full or in part was received during the
related Prepayment Period;

         2. Any Prepayment Charge due under the terms of the Mortgage Note
with respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;

         3. As to each Mortgage Loan set forth on the attached schedule for
which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:

                    (i) the Master Servicer's determination that such
         waiver would maximize recovery of Liquidation Proceeds for such
         Mortgage Loan, taking into account the value of such Prepayment Charge,
         or

                                      T-1
<PAGE>

                    (ii)(A) the enforceability thereof is limited (1) by
         bankruptcy, insolvency, moratorium, receivership, or other similar law
         relating to creditors' rights generally or (2) due to acceleration in
         connection with a foreclosure or other involuntary payment, or (B) the
         enforceability is otherwise limited or prohibited by applicable law;
         and

         4. We certify that all amounts due in connection with the waiver of a
Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Master Servicer pursuant to Section 3.20 of the Pooling and
Servicing Agreement, have been or will be so deposited.

                                             COUNTRYWIDE HOME LOANS, INC.,
                                               as Master Servicer

                                             By: /s/ Ruben Avilez
                                                 -------------------------------
                                                 Name:  Ruben Avilez
                                                 Title: Vice President

                                      T-2

<PAGE>

         SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
                      DURING THE RELATED PREPAYMENT PERIOD

     Loan Number             Clause 2:  Yes/No         Clause 3:  (i) or (ii)
--------------------    ------------------------      ------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

                                      T-3

<PAGE>

                                    EXHIBIT U

                              FORM OF SWAP CONTRACT

                      [See document delivered at closing.]

                                      U-1

<PAGE>

                                   EXHIBIT V-1

                   FORM OF SWAP CONTRACT ASSIGNMENT AGREEMENT

                      [See document delivered at closing.]

                                      V-1-1

<PAGE>

                                   EXHIBIT V-2

                 FORM OF SWAP CONTRACT ADMINISTRATION AGREEMENT

                      [See document delivered at closing.]

                                      V-2-1

<PAGE>

                                    EXHIBIT W

                                MONTHLY STATEMENT

<PAGE>

<TABLE>
<CAPTION>

             THE                                                                                      Distribution Date:  __/__/__
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                            Certificateholder Monthly Distribution Summary
-----------------------------------------------------------------------------------------------------------------------------------
                             Certificate             Pass                                               Current          Cumulative
                    Class        Rate     Beginning  Through    Principal      Interest      Total      Realized  Ending   Realized
Class    Cusip   Description     Type      Balance   Rate (%)  Distribution  Distribution Distribution  Losses    Balance  Losses
-----------------------------------------------------------------------------------------------------------------------------------
<S>      <C>     <C>         <C>          <C>        <C>       <C>           <C>          <C>           <C>      <C>      <C>

Totals
------------------------------------- ---------------------------------------------------------------------------------------------

                                                              W-2

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

             THE                                                                                      Distribution Date:  __/__/__
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                                       Principal Distribution Detail
-----------------------------------------------------------------------------------------------------------------------------------
                            Certificate             Pass                                               Current           Cumulative
                   Class        Rate     Beginning  Through    Principal      Interest      Total      Realized  Ending   Realized
Class   Cusip   Description     Type      Balance   Rate (%)  Distribution  Distribution Distribution  Losses    Balance  Losses
-----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>     <C>         <C>          <C>        <C>       <C>           <C>          <C>           <C>      <C>      <C>

Totals
------------------------------------- ---------------------------------------------------------------------------------------------
</TABLE>

                                                              W-3

<PAGE>

<TABLE>
<CAPTION>

             THE                                                                                      Distribution Date:  __/__/__
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                                         Interest Distribution Detail
-----------------------------------------------------------------------------------------------------------------------------------
            Beginning       Pass                     Interest       Total     Net Rate                    Interest        Net Rate
          Certificate    Through     Current     Carryforward    Interest    Carryover    Interest    Carryforward       Carryover
Class           Cusip    Rate (%)    Interest          Amount         Due         Paid        Paid     After Dist.     After Dist.
-----------------------------------------------------------------------------------------------------------------------------------
<S>       <C>            <C>         <C>          <C>            <C>         <C>          <C>          <C>             <C>

Totals
------------------------------------- ---------------------------------------------------------------------------------------------

                                                              W-4

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

             THE                                                                                      Distribution Date:  __/__/__
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                                       Current Payment Information
                                                           Factors per $1,000
-----------------------------------------------------------------------------------------------------------------------------------
                           Original          Beginning                                                 Ending            Pass
                        Certificate        Certificate           Principal          Interest      Certificate         Through
Class        Cusip          Balance            Balance        Distribution      Distribution          Balance        Rate (%)
-----------------------------------------------------------------------------------------------------------------------------------
<S>          <C>       <C>                 <C>                <C>               <C>               <C>                <C>

Totals
-----------------------------------------------------------------------------------------------------------------------------------

                                                                    W-5

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

Pool Level Data

Distribution Date                                                                                                     __/__/____
Cut-off Date                                                                                                            __/__/__
Record Date                                                                                                             __/__/__
Determination Date                                                                                                      __/__/__
LIBOR Determination Date                                                                                                __/__/__
Accrual Period 30/360                            Begin                                                                  __/__/__
                                                 End                                                                    __/__/__
Number of Days in 30/360 Accrual Period                                                                                       __

Accrual Period Actual Days                       Begin                                                                  __/__/__
                                                 End                                                                    __/__/__
Number of Days in Actual Accrual Period                                                                                       __

-----------------------------------------------------------------------------------------------------------------------------------
                                                   Additional Interest Rate Details
-----------------------------------------------------------------------------------------------------------------------------------

                      Libor Rate
                      [____] Net Rate Cap
                      [____] Net Rate Cap
                      [____] Net Rate Cap

-----------------------------------------------------------------------------------------------------------------------------------
                                                         Prefunding Detail
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                           <C>                               <C>
                                                              Group [_]                     Group [_]                         Total
                                                              ---------                     ---------                         -----
                      Target Funding Balance
                      Initial Funded Balance
                      Initial Unfunded Balance

                      Initial Unfunded Amounts are passed through as Principal.

                                                                         W-6

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                      Original Mortgage Details

-----------------------------------------------------------------------------------------------------------------------------------

<S>                                                                        <C>              <C>
                                                                           Group [_]        Group [_]
                                                                           ---------        ---------
                      Original Aggregate Loan Count
                      Original Stated Principal Balance
                      Original Weighted Average Mortgage Rate
                      Original Weighted Average Net Mortgage Rate
                      Original Weighted Average Remaining Term

-----------------------------------------------------------------------------------------------------------------------------------
                                                          Collateral Detail
-----------------------------------------------------------------------------------------------------------------------------------

                                                                           Group [_]        Group [_]          Total
                                                                           ---------        ---------          -----

                      Cut-Off Date Balance of Pool

                      Beginning Aggregate Loan Count
                      Loans Paid Off or otherwise removed pursuant to the PSA
                      Ending Aggregate Loan Count

                      Beginning Pool Stated Principal Balance
                      Scheduled Principal
                      Unscheduled Principal
                      Realized Principal Losses
                      Ending Pool Stated Principal Balance

                      Beginning Weighted Average Mortgage Rate
                      Beginning Weighted Average Net Mortgage Rate

                      Beginning Weighted Average Remaining Term to Maturity
                      Ending Weighted Average Remaining Term to Maturity

                                                                W-7

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

-----------------------------------------------------------------------------------------------------------------------------------
                                                     Servicer Remittance Summary
-----------------------------------------------------------------------------------------------------------------------------------

                      Interest Remittance Amount

<S>                                                                                 <C>                   <C>              <C>
                                                                                     Group [_]            Group [_]        Total
                                                                                     ---------            ---------        -----

                      Scheduled Interest less Servicing Fees
                      Compensating Interest
                      Liquidation Interest Proceeds
                      Less:  Non-Recoverable Interest Advances
                      Total Interest Remittance Amount

                      Principal Remittance Amount

                                                                                     Group [_]            Group [_]        Total
                                                                                     ---------            ---------        -----

                      Scheduled Principal
                      Curtailment Principal
                      Paid in Full Principal
                      Repurchased Principal
                      Liquidation Principal
                      Substitution Shortfall Principal
                      Subsequent Recoveries
                      Less:  Non-Recoverable Principal Advances relating to
                      Principal
                      Total Principal Remittance Amount

                      Total Principal and Interest Remittance

                                                                       W-8

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

-----------------------------------------------------------------------------------------------------------------------------------
                                                         Distributable Amounts
-----------------------------------------------------------------------------------------------------------------------------------

                      Principal Distribution Amount
<S>                   <C>                                                             <C>               <C>                <C>
                                                                                       Group [_]         Group [_]         Total
                                                                                       ---------         ---------         -----

                      Principal Remittance Amount
                      Extra Principal Distribution Amount
                      Transfer from Prefunding Account Month 1
                      Principal Distribution Amount

                      Interest Funds

                                                                                       Group [_]         Group [_]         Total
                                                                                       ---------         ---------         -----

                      Interest Remittance
                      Less:  Trustee Fee
                      Interest Funds

-----------------------------------------------------------------------------------------------------------------------------------
                                                              Servicer Advances
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                       Group [_]         Group [_]         Total
                                                                                       ---------         ---------         -----

                      Principal Advances
                      Interest Advances
                      Reimbursement for Principal & Interest Advances
                      Reimbursement for Nonrecoverable Advances
                      Total Advances

                                                               W-9
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

-----------------------------------------------------------------------------------------------------------------------------------
                                                          Fees of the Trust
-----------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                                                             <C>              <C>                <C>
                                                                                      Group [_]        Group [_]          Total
                                                                                      ---------        ---------          -----

                      Gross Master Servicing Fee
                      Net Master Servicing Fee
                      Trustee Fee
                      Total Net Loan Fees

-----------------------------------------------------------------------------------------------------------------------------------
                                                      Mortgage Prepayment Details
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                      Group [_]        Group [_]          Total
                                                                                      ---------        ---------          -----

                      Principal Balance of Loans Paid in Full
                      Prepayment Interest Excess
                      Prepayment Interest Shortfall
                      Compensating Interest
                      Non-Supported Prepayment Interest Shortfall
                      Prepayment Charges
                      CPR %
                      SMM %

-----------------------------------------------------------------------------------------------------------------------------------
                                                          Loan Substitution
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                      Group [_]        Group [_]          Total
                                                                                      ---------        ---------          -----

                      Aggregate Stated of Principal Balances Removed
                      Aggregate Stated of Principal Balance Added
                      Aggregate Principal Substitution Shortfall Amount

                                                                          W-10

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

-----------------------------------------------------------------------------------------------------------------------------------
                                                          Trust Accounts
-----------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                                                             <C>              <C>                <C>
                      Certificate Account

                                                                                      Group [_]        Group [_]           Total

                      Beginning Balance

Deposits              Principal Remittance
                      Interest Remittance
                      Prepayment Charges
                      Total Deposits

Withdrawals           To the Master Servicer, any unpaid or unreimbursed Amounts
                      To the Seller, any unpaid or unreimbursed Amounts To the
                      Depositor, any unpaid or reimbursed Amounts To Terminate
                      the Account To the Distribution Account

                      Ending  Balance

                      Distribution Account

                      Beginning Balance

Deposits              From the Certificate Account
                      Investment Income
                      Total Deposit

Withdrawals           To the trustee, the Trustee Fee
                      Payment of Prepayment Penalties to P Classes
                      Principal and Interest Payments
                      To Terminate the Distribution Account
                      Total Withdrawals

                      Ending Balance
</TABLE>

                                                                          W-11
<PAGE>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                CWABS, Inc.
New York, NY  10286                CWABS Asset-Backed Certificates Trust 200_-_
                                                  Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                      Carryover Reserve Account

                      Beginning Balance

Deposits              [Class [__] Corridor Contract]
                      [________] Excess Cashflow, to pay shortfalls
                      [________] Excess Cashflow, to pay shortfalls

Withdrawals           [From [__] Corridor, to the [__] Class]
                      [From [__] Corridor, to the [__] Class]
                      [Reinvestment Income from [__] Corridor, to Class [__]

                      Ending Balance

                      NRC Payments to Classes are Detailed in the Interest
                      Summary

                      Principal Reserve Account

Deposits              Beginning Principal Reserve Balance
                      Deposits

Withdrawals           To Classes [__], [__], & AR
                      Ending Principal Reserve Balance

                                                      W-12
<PAGE>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                CWABS, Inc.
New York, NY  10286                CWABS Asset-Backed Certificates Trust 200_-_
                                                  Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                      Credit Comeback Excess Account

Deposits              Beginning Balance
                      Credit Comeback Excess Amount

Withdrawals           To the [__] Classes
                      To the [__] Class, to restore Overcollateralization
                      To the [__] Classes, to cover Unpaid Realized Losses
                      To the [__] Class, interest income and leftover amounts
                      Ending Balance

                      Supplemental Prefunding Account

                      Beginning Balance
                      Deposits
                      Withdrawals
                      Ending Balance

                                                      W-13
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

-----------------------------------------------------------------------------------------------------------------------------------
                                                          Loan Status
-----------------------------------------------------------------------------------------------------------------------------------

             Delinquency Information

----------------------------------------------------------------------------------------------------------------------------------
<S>         <C>     <C>                 <C>         <C>     <C>                 <C>         <C>     <C>                 <C>
                       30-59 Days                               60-89 Days                               90+ Days
----------------------------------------------------------------------------------------------------------------------------------
            Count   Count %   Balance   Balance %   Count   Count %   Balance   Balance %   Count   Count %   Balance   Balance %
----------------------------------------------------------------------------------------------------------------------------------
Group [_]
Group [_]

 Total
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
<S>         <C>     <C>                 <C>         <C>     <C>                 <C>         <C>     <C>                 <C>
                       Foreclosure                              Bankruptcy                                 REO
----------------------------------------------------------------------------------------------------------------------------------
            Count   Count %   Balance   Balance %   Count   Count %   Balance   Balance %   Count   Count %   Balance   Balance %
----------------------------------------------------------------------------------------------------------------------------------
Group [_]
Group [_]

 Total

----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                               W-14
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

-----------------------------------------------------------------------------------------------------------------------------------
                                                          Realized Loss Detail
-----------------------------------------------------------------------------------------------------------------------------------
                      <S>                <C>                 <C>                      <C>            <C>           <C>
                                                                                      Group [_]       Group [_]          Total

                      Current Period Realized Losses
                      Cumulative Realized Losses
                      Total Liquidated Loan Balance
                      Total Liquidated Proceeds
                      Subsequent Recoveries

                      Group               Loan ID            Liquidation Balance       Liquidation Proceeds        Realized Loss
                      -----               -------            -------------------       --------------------        -------------

                      Group [_]

                      Group [_]
</TABLE>

                                                               W-15
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                      <S>                                                                 <C>            <C>             <C>
                      Overcollateralization Details

                                                                                          Group [_]      Group [_]       Total
                                                                                          ---------      ---------       -----

                      OC Amount Beginning
                      OC Floor
                      OC Target Amount
                      OC Deficiency Amount Beginning
                      Excess Cashflow
                      Credit Comeback Excess Cashflow
                      Extra Principal Distribution Amount
                      OC Amount Ending
                      OC Deficiency Amount Ending
                      Ending Group Certificate Balances

                      Trigger Events

                                                                                          Group [_]      Group [_]
                                                                                          ---------      ---------

                      Rolling Sixty-Day Delinq Rate
                      Passing Delinquency Test?
                      Cumulative Loss Rate
                      Passing Cumulative Loss Test?
                      Trigger Event
                      Stepdown Date
</TABLE>

                                                               W-16
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                      <S>                                                                 <C>            <C>
                      Subordination

                      Credit Support                                                      Original       Current
                      --------------                                                      --------       -------

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
</TABLE>

                                                                  W-17
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                      <S>                                                                 <C>            <C>
                      Credit Support                                                      Original       Current
                      --------------                                                      --------       -------

                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage

                      Class [__]
                      Class [__] Percentage
</TABLE>

                                                                 W-18
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                                              Group [_]

-----------------------------------------------------------------------------------------------------------------------------------
                                                        Number              Percent          Principal             Percent
               Update Face                            of Items             of Items            Balance          of Balance
-----------------------------------------------------------------------------------------------------------------------------------
              <S>                       <C>           <C>                  <C>               <C>                <C>
                     0.00    -           25,000.00
                25,000.00    -           50,000.00
                50,000.00    -           75,000.00
                75,000.00    -          100,000.00
               100,000.00    -          125,000.00
               125,000.00    -          150,000.00
               150,000.00    -          175,000.00
               175,000.00    -          200,000.00
               200,000.00    -          225,000.00
               225,000.00    -          250,000.00
               250,000.00    -          275,000.00
               275,000.00    -          300,000.00
               300,000.00    -          325,000.00
               325,000.00    -          350,000.00
               350,000.00    -          375,000.00
               375,000.00    -          400,000.00
               400,000.00    -          425,000.00
               425,000.00    -          450,000.00
               450,000.00    -          475,000.00
               475,000.00    -          500,000.00
               500,000.00    -          525,000.00
               525,000.00    -          550,000.00
               550,000.00    -          575,000.00
               575,000.00    -          600,000.00
               600,000.00    -          625,000.00
               625,000.00    -          650,000.00
               650,000.00    -          675,000.00
               675,000.00    -          700,000.00
               700,000.00    -          725,000.00
               725,000.00    -          750,000.00
               750,000.00    -          775,000.00
               775,000.00    -          800,000.00
                        >               800,000.00
      ---------------------------------------------------------------------------------------------------------------------
                                  Wgt Ave / Total:
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                               W-19
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                                              Group [_]

-----------------------------------------------------------------------------------------------------------------------------------
                                                        Number              Percent          Principal             Percent
               Update Face                            of Items             of Items            Balance          of Balance
-----------------------------------------------------------------------------------------------------------------------------------
                <S>                       <C>         <C>                  <C>               <C>                <C>
                      0.00    -           25,000.00
                 25,000.00    -           50,000.00
                 50,000.00    -           75,000.00
                 75,000.00    -          100,000.00
                100,000.00    -          125,000.00
                125,000.00    -          150,000.00
                150,000.00    -          175,000.00
                175,000.00    -          200,000.00
                200,000.00    -          225,000.00
                225,000.00    -          250,000.00
                250,000.00    -          275,000.00
                275,000.00    -          300,000.00
                300,000.00    -          325,000.00
                325,000.00    -          350,000.00
                350,000.00    -          375,000.00
                375,000.00    -          400,000.00
                400,000.00    -          425,000.00
                425,000.00    -          450,000.00
                450,000.00    -          475,000.00
                475,000.00    -          500,000.00
                500,000.00    -          525,000.00
                525,000.00    -          550,000.00
                550,000.00    -          575,000.00
                575,000.00    -          600,000.00
                600,000.00    -          625,000.00
                625,000.00    -          650,000.00
                650,000.00    -          675,000.00
                675,000.00    -          700,000.00
                700,000.00    -          725,000.00
                725,000.00    -          750,000.00
                750,000.00    -          775,000.00
                775,000.00    -          800,000.00
                         >               800,000.00
     ----------------------------------------------------------------------------------------------------------------------
                                   Wgt Ave / Total:
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                 W-20
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                                              Group [_]

-----------------------------------------------------------------------------------------------------------------------------------
                                                        Number              Percent          Principal             Percent
               Issuance Coupon                        of Items             of Items            Balance          of Balance
-----------------------------------------------------------------------------------------------------------------------------------
               <S>                       <C>          <C>                  <C>                <C>               <C>
                < =    -                 5.0
                5.0    -                 5.5
                5.5    -                 6.0
                6.0    -                 6.5
                6.5    -                 7.0
                7.0    -                 7.5
                7.5    -                 8.0
                8.0    -                 8.5
                8.5    -                 9.0
                9.0    -                 9.5
                9.5    -                10.0
               10.0    -                10.5
               10.5    -                11.0
               11.0    -                11.5
               11.5    -                12.0
               12.0    -                12.5
                  >                     12.5
     ----------------------------------------------------------------------------------------------------------------------
                            Wgt Ave / Total:

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                  W-21
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                                              Group [_]

-----------------------------------------------------------------------------------------------------------------------------------
                                                        Number              Percent          Principal             Percent
               Issuance Coupon                        of Items             of Items            Balance          of Balance
-----------------------------------------------------------------------------------------------------------------------------------
              <S>                       <C>           <C>                  <C>               <C>                <C>
               < =                      5.0
               5.0    -                 5.5
               5.5    -                 6.0
               6.0    -                 6.5
               6.5    -                 7.0
               7.0    -                 7.5
               7.5    -                 8.0
               8.0    -                 8.5
               8.5    -                 9.0
               9.0    -                 9.5
               9.5    -                10.0
              10.0    -                10.5
              10.5    -                11.0
              11.0    -                11.5
              11.5    -                12.0
              12.0    -                12.5
                 >                     12.5
     -------------------------------------------------------------------------------------------------------------------

                            Wgt Ave / Total:

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                               W-22
<PAGE>

<TABLE>
<CAPTION>

             THE
           BANK OF
             NEW
            YORK

101 Barclay St., 8W                                          CWABS, Inc.
New York, NY  10286                          CWABS Asset-Backed Certificates Trust 200_-_
                                                            Series 200_-_
Officer:     [______]
             [______]
Associate:   [______]
             [______]

                                                              Group [_]

-----------------------------------------------------------------------------------------------------------------------------------
                                                        Number              Percent          Principal             Percent
               Update Term                            of Items             of Items            Balance          of Balance
-----------------------------------------------------------------------------------------------------------------------------------
              <S>                       <C>           <C>                  <C>               <C>                <C>
              < =                      120
              120    -                 180
              180    -                 300
              300    -                 360
                >                      360
       ------------------------------------------------------------------------------------------------------------------
                          Wgt Ave / Total:

-----------------------------------------------------------------------------------------------------------------------------------

                                                              Group [_]

-----------------------------------------------------------------------------------------------------------------------------------
                                                        Number              Percent          Principal             Percent
               Update Term                            of Items             of Items            Balance          of Balance
-----------------------------------------------------------------------------------------------------------------------------------
              < =                      120
              120    -                 180
              180    -                 300
              300    -                 360
                >                      360
       ------------------------------------------------------------------------------------------------------------------
                          Wgt Ave / Total:

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                               W-23
<PAGE>

                                   EXHIBIT X-1

                        FORM OF PERFORMANCE CERTIFICATION
                                  (Subservicer)

                         [On file with the Trustee].

                                    X-1-1

<PAGE>

                                   EXHIBIT X-2

                        FORM OF PERFORMANCE CERTIFICATION
                                    (Trustee)

                         [On file with the Trustee].

                                    X-2-1

<PAGE>

                                    EXHIBIT Y

                                     FORM OF
                      SERVICING CRITERIA TO BE ADDRESSED IN
                       ASSESSMENT OF COMPLIANCE STATEMENT

         The assessment of compliance to be delivered by [the Master Servicer]
[Trustee] [Name of Subservicer] shall address, at a minimum, the criteria
identified as below as "Applicable Servicing Criteria":

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                   Servicing Criteria                                    Applicable Servicing
                                                                                              Criteria
--------------------------------------------------------------------------------------------------------------
     Reference                           Criteria
--------------------------------------------------------------------------------------------------------------
<S>                  <C>                                                                <C>
--------------------           General Servicing Considerations                          ---------------------
1122(d)(1)(i)        Policies and procedures are instituted to monitor any
                     performance or other triggers and events of default in
                     accordance with the transaction agreements.
--------------------                                                                     ---------------------
1122(d)(1)(ii)       If any material servicing activities are outsourced to
                     third parties, policies and procedures are instituted to
                     monitor the third party's performance and compliance with
                     such servicing activities.
--------------------                                                                     ---------------------
1122(d)(1)(iii)      Any requirements in the transaction agreements to maintain
                     a back-up servicer for the mortgage loans are maintained.
--------------------                                                                     ---------------------
1122(d)(1)(iv)       A fidelity bond and errors and omissions policy is in
                     effect on the party participating in the servicing function
                     throughout the reporting period in the amount of coverage
                     required by and otherwise in accordance with the terms of
                     the transaction agreements.
--------------------                                                                     ---------------------
                                Cash Collection and Administration
--------------------                                                                     ---------------------
1122(d)(2)(i)        Payments on mortgage loans are deposited into the
                     appropriate custodial bank accounts and related bank
                     clearing accounts no more than two business days following
                     receipt, or such other number of days specified in the
                     transaction agreements.
--------------------                                                                     ---------------------
1122(d)(2)(ii)       Disbursements made via wire transfer on behalf of an
                     obligor or to an investor are made only by authorized
                     personnel.
--------------------                                                                     ---------------------
1122(d)(2)(iii)      Advances of funds or guarantees regarding collections, cash
                     flows or distributions, and any interest or other fees
                     charged for such advances, are made, reviewed and approved
                     as specified in the transaction agreements.
--------------------                                                                     ---------------------
                     The related accounts for the transaction, such as cash
                     reserve accounts or accounts established as a form of
                     overcollateralization, are separately maintained (e.g.,
                     with respect to commingling of cash) as set forth in the
1122(d)(2)(iv)       transaction agreements.
--------------------                                                                     ---------------------
1122(d)(2)(v)        Each custodial account is maintained at a federally insured
                     depository institution as set forth in the transaction
                     agreements. For purposes of this criterion, "federally
                     insured depository institution" with respect to a foreign
                     financial institution means a foreign financial institution
                     that meets the requirements of Rule 13k-1(b)(1) of the
                     Securities Exchange Act.
--------------------                                                                     ---------------------
1122(d)(2)(vi)       Unissued checks are safeguarded so as to prevent
                     unauthorized access.
--------------------                                                                     ---------------------
</TABLE>

                                     Y-1
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                   Servicing Criteria                                    Applicable Servicing
                                                                                              Criteria
--------------------------------------------------------------------------------------------------------------
     Reference                           Criteria
--------------------------------------------------------------------------------------------------------------
<S>                  <C>                                                                <C>
1122(d)(2)(vii)      Reconciliations are prepared on a monthly basis for all
                     asset-backed securities related bank accounts, including
                     custodial accounts and related bank clearing accounts.
                     These reconciliations are (A) mathematically accurate; (B)
                     prepared within 30 calendar days after the bank statement
                     cutoff date, or such other number of days specified in the
                     transaction agreements; (C) reviewed and approved by
                     someone other than the person who prepared the
                     reconciliation; and (D) contain explanations for
                     reconciling items. These reconciling items are resolved
                     within 90 calendar days of their original identification,
                     or such other number of days specified in the transaction
                     agreements.
--------------------                                                                     ---------------------
                               Investor Remittances and Reporting
--------------------                                                                     ---------------------
1122(d)(3)(i)        Reports to investors, including those to be filed with the
                     Commission, are maintained in accordance with the
                     transaction agreements and applicable Commission
                     requirements. Specifically, such reports (A) are prepared
                     in accordance with timeframes and other terms set forth in
                     the transaction agreements; (B) provide information
                     calculated in accordance with the terms specified in the
                     transaction agreements; (C) are filed with the Commission
                     as required by its rules and regulations; and (D) agree
                     with investors' or the trustee's records as to the total
                     unpaid principal balance and number of mortgage loans
                     serviced by the Servicer.
--------------------                                                                     ---------------------
1122(d)(3)(ii)       Amounts due to investors are allocated and remitted in
                     accordance with timeframes, distribution priority and other
                     terms set forth in the transaction agreements.
--------------------                                                                     ---------------------
                     Disbursements made to an investor are posted within two
                     business days to the Servicer's investor records, or such
1122(d)(3)(iii) days other number of specified in the transaction agreements.
--------------------                                                                     ---------------------
                     Amounts remitted to investors per the investor reports
                     agree with cancelled checks, or other form of payment, or
1122(d)(3)(iv)       custodial bank statements.
--------------------                                                                     ---------------------
                                        Pool Asset Administration
--------------------                                                                     ---------------------
1122(d)(4)(i)        Collateral or security on mortgage loans is maintained as
                     required by the transaction agreements or related mortgage
                     loan documents.
--------------------                                                                     ---------------------
                     Mortgage loan and related documents are safeguarded as required
1122(d)(4)(ii)       by the transaction agreements
--------------------                                                                     ---------------------
1122(d)(4)(iii)      Any additions, removals or substitutions to the asset pool
                     are made, reviewed and approved in accordance with any
                     conditions or requirements in the transaction agreements.
--------------------                                                                     ---------------------
1122(d)(4)(iv)       Payments on mortgage loans, including any payoffs, made in
                     accordance with the related mortgage loan documents are
                     posted to the Servicer's obligor records maintained no more
                     than two business days after receipt, or such other number
                     of days specified in the transaction agreements, and
                     allocated to principal, interest or other items (e.g.,
                     escrow) in accordance with the related mortgage loan
                     documents.
--------------------                                                                     ---------------------
1122(d)(4)(v)        The Servicer's records regarding the mortgage loans agree
                     with the Servicer's records with respect to an obligor's
                     unpaid principal balance.
--------------------                                                                     ---------------------
1122(d)(4)(vi)       Changes with respect to the terms or status of an obligor's
                     mortgage loans (e.g., loan modifications or re-agings) are
                     made, reviewed and approved by authorized personnel in
                     accordance with the transaction agreements and related pool
                     asset documents.
--------------------                                                                     ---------------------
1122(d)(4)(vii)      Loss mitigation or recovery actions (e.g., forbearance
                     plans, modifications and deeds in lieu of foreclosure,
                     foreclosures and repossessions, as applicable) are
                     initiated, conducted and concluded in accordance with the
                     timeframes or other requirements established by the
                     transaction agreements.
--------------------                                                                     ---------------------
</TABLE>

                                                Y-2

<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                   Servicing Criteria                                    Applicable Servicing
                                                                                              Criteria
--------------------------------------------------------------------------------------------------------------
     Reference                           Criteria
--------------------------------------------------------------------------------------------------------------
<S>                  <C>                                                                <C>
1122(d)(4)(viii)     Records documenting collection efforts are maintained
                     during the period a mortgage loan is delinquent in
                     accordance with the transaction agreements. Such records
                     are maintained on at least a monthly basis, or such other
                     period specified in the transaction agreements, and
                     describe the entity's activities in monitoring delinquent
                     mortgage loans including, for example, phone calls, letters
                     and payment rescheduling plans in cases where delinquency
                     is deemed temporary (e.g., illness or unemployment).
--------------------                                                                     ---------------------
1122(d)(4)(ix)       Adjustments to interest rates or rates of return for
                     mortgage loans with variable rates are computed based on
                     the related mortgage loan documents.
--------------------                                                                     ---------------------
1122(d)(4)(x)        Regarding any funds held in trust for an obligor (such as
                     escrow accounts): (A) such funds are analyzed, in
                     accordance with the obligor's mortgage loan documents, on
                     at least an annual basis, or such other period specified in
                     the transaction agreements; (B) interest on such funds is
                     paid, or credited, to obligors in accordance with
                     applicable mortgage loan documents and state laws; and (C)
                     such funds are returned to the obligor within 30 calendar
                     days of full repayment of the related mortgage loans, or
                     such other number of days specified in the transaction
                     agreements.
--------------------                                                                     ---------------------
1122(d)(4)(xi)       Payments made on behalf of an obligor (such as tax or
                     insurance payments) are made on or before the related
                     penalty or expiration dates, as indicated on the
                     appropriate bills or notices for such payments, provided
                     that such support has been received by the servicer at
                     least 30 calendar days prior to these dates, or such other
                     number of days specified in the transaction agreements.
--------------------                                                                     ---------------------
1122(d)(4)(xii)      Any late payment penalties in connection with any payment
                     to be made on behalf of an obligor are paid from the
                     servicer's funds and not charged to the obligor, unless the
                     late payment was due to the obligor's error or omission.
--------------------                                                                     ---------------------
                     Disbursements made on behalf of an obligor are posted
                     within two business days to the obligor's records
                     maintained by the servicer, or such other number of days
1122(d)(4)(xiii)     specified in the transaction agreements.
--------------------                                                                     ---------------------
1122(d)(4)(xiv)      Delinquencies, charge-offs and uncollectible accounts are
                     recognized and recorded in accordance with the transaction
                     agreements.
--------------------                                                                     ---------------------
                     Any external enhancement or other support, identified in
                     Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
1122(d)(4)(xv)       is maintained as set forth in the transaction agreements.
--------------------                                                                     ---------------------
--------------------------------------------------------------------------------------------------------------
</TABLE>

                                [NAME OF MASTER SERVICER] [NAME OF TRUSTEE]
                                [NAME OF SUBSERVICER]

                                Date:  _________________________

                                By:      ________________________________
                                Name:
                                Title:

                                     Y-3
<PAGE>

                                    EXHIBIT Z

                       [FORM OF] LIST OF ITEM 1119 PARTIES

                           ASSET BACKED CERTIFICATES,
                                 Series 200_-__

                                           [Date]

-------------------------------------------------------------------------------
Party                              Contact Information
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

                                       Z-1

<PAGE>

                                      AA-1

                                   EXHIBIT AA

                                     FORM OF
                          SARBANES-OXLEY CERTIFICATION
                          (Replacement Master Servicer)

                             (On file with Trustee)

                                     AA-1
<PAGE>

                                   SCHEDULE I

            PREPAYMENT CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY

        [Delivered to Trustee at closing and on file with the Trustee.]

                                       S-I-1

<PAGE>

                                    SCHEDULE II

                               COLLATERAL SCHEDULE

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                Applicable
Characteristic                                                    Section      Loan Group 1   Loan Group 2
-----------------------------------------------------------------------------------------------------------
<S>                                                            <C>               <C>           <C>
Single-Family Detached Dwellings                               2.03(b)(32)       76.48%        73.09%
-----------------------------------------------------------------------------------------------------------
Two- to Four-Family Dwellings                                  2.03(b)(32)        2.82%        2.26%
-----------------------------------------------------------------------------------------------------------
Low-Rise Condominium Units                                     2.03(b)(32)        5.89%        6.23%
-----------------------------------------------------------------------------------------------------------
High-Rise Condominium Units                                    2.03(b)(32)        0.40%        0.67%
-----------------------------------------------------------------------------------------------------------
Manufactured Housing                                           2.03(b)(32)        0.00%        0.15%
-----------------------------------------------------------------------------------------------------------
PUDs                                                           2.03(b)(32)       14.41%        17.60%
-----------------------------------------------------------------------------------------------------------
Earliest Origination Date                                      2.03(b)(33)      7/28/2004    4/25/2002
-----------------------------------------------------------------------------------------------------------
Prepayment Penalty                                             2.03(b)(35)       69.27%        74.42%
-----------------------------------------------------------------------------------------------------------
Investor Properties                                            2.03(b)(36)        2.65%        0.93%
-----------------------------------------------------------------------------------------------------------
Primary Residences                                             2.03(b)(36)       96.11%        98.40%
-----------------------------------------------------------------------------------------------------------
Lowest Current Mortgage Rate                                   2.03(b)(48)       4.750%        5.500%
-----------------------------------------------------------------------------------------------------------
Highest Current Mortgage Rate                                  2.03(b)(48)       15.125%      14.625%
-----------------------------------------------------------------------------------------------------------
Weighted Average Current Mortgage Rate                         2.03(b)(48)       8.462%        8.379%
-----------------------------------------------------------------------------------------------------------
Lowest Gross Margin                                            2.03(b)(51)       1.520%        1.125%
-----------------------------------------------------------------------------------------------------------
Highest Gross Margin                                           2.03(b)(51)       12.850%      12.400%
-----------------------------------------------------------------------------------------------------------
Weighted Average Gross Margin                                  2.03(b)(51)       6.795%        6.860%
-----------------------------------------------------------------------------------------------------------
Date on or before which each Initial Mortgage Loan has a
Due Date                                                       2.03(b)(52)      8/1/2006      8/1/2006
-----------------------------------------------------------------------------------------------------------
First Lien                                                     2.03(b)(79)       97.01%        95.18%
-----------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                 Adjustable Rate Mortgage
                                     Loans (other than
                                 Two-Year, Three-Year and      Two-Year      Three-Year         Five-Year
 Adjustment Date    Applicable   Five-Year Hybrid Mortgage      Hybrid      Hybrid Mortgage       Hybrid
                     Section              Loans)            Mortgage Loans     Loans         Mortgage Loans
------------------------------------------------------------------------------------------------------------
<S>                <C>                  <C>                    <C>             <C>               <C>
   Latest Next
 Adjustment Date   2.03(b)(34)          10/25/2006             4/30/2008       4/13/2009         5/16/2011
------------------------------------------------------------------------------------------------------------
</TABLE>

                                        S-II-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]