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EXHIBIT 4.1
EXECUTION COPY
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CWALT, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK GRANADA LLC,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2007
----------------------------------
ALTERNATIVE LOAN TRUST 2007-HY2
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-HY2
============================
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
Page
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ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.01. Defined
Terms......................................................................7
SECTION 1.02. Certain Interpretative
Principles.................................................39
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage
Loans......................................................40
SECTION 2.02. Acceptance by Trustee of the Mortgage
Loans.......................................47
SECTION 2.03. Representations, Warranties and Covenants of the
Sellers and Master
Servicer..........................................................................51
SECTION 2.04. Representations and Warranties of the Depositor as
to the Mortgage Loans..........54
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions...................54
SECTION 2.06. Execution and Delivery of
Certificates............................................55
SECTION 2.07. REMIC
Matters.....................................................................55
SECTION 2.08. Covenants of the Master
Servicer..................................................55
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01. Master Servicer to Service Mortgage
Loans.........................................56
SECTION 3.02. Subservicing; Enforcement of the Obligations of
Subservicers......................57
SECTION 3.03. Rights of the Depositor and the Trustee in Respect
of the Master Servicer.........57
SECTION 3.04. Trustee to Act as Master
Servicer.................................................58
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate
Account; Distribution
Account...........................................................................58
SECTION 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts...............62
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage
Loans.............................................................................63
SECTION 3.08. Permitted Withdrawals from the Certificate Account
and the Distribution
Account...........................................................................63
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance
Policies..........................................................................65
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.........................66
SECTION 3.11. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage
Loans.............................................................................67
i
<PAGE>
SECTION 3.12. Trustee to Cooperate; Release of Mortgage
Files...................................71
SECTION 3.13. Documents, Records and Funds in Possession of
Master Servicer to be Held
for the
Trustee...................................................................71
SECTION 3.14. Servicing
Compensation............................................................72
SECTION 3.15. Access to Certain
Documentation...................................................72
SECTION 3.16. Annual Statement as to
Compliance.................................................73
SECTION 3.17. Errors and Omissions Insurance; Fidelity
Bonds....................................73
SECTION 3.18. Notification of
Adjustments.......................................................74
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
SECTION 4.01.
Advances..........................................................................75
SECTION 4.02. Priorities of
Distribution........................................................76
SECTION 4.03.
[Reserved]........................................................................79
SECTION 4.04. Allocation of Realized
Losses.....................................................79
SECTION 4.05. Cross-Collateralization; Adjustments to Available
Funds...........................80
SECTION 4.06. Monthly Statements to
Certificateholders..........................................81
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The
Certificates..................................................................82
SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of
Certificates......................................................................82
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.................................87
SECTION 5.04. Persons Deemed
Owners.............................................................87
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.........................87
SECTION 5.06. Maintenance of Office or
Agency...................................................88
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the
Master Servicer...................89
SECTION 6.02. Merger or Consolidation of the Depositor or the
Master Servicer...................89
SECTION 6.03. Limitation on Liability of the Depositor, the
Sellers, the Master
Servicer and
Others...............................................................89
SECTION 6.04. Limitation on Resignation of Master
Servicer......................................90
ARTICLE VII
DEFAULT
SECTION 7.01. Events of
Default.................................................................91
SECTION 7.02. Trustee to Act; Appointment of
Successor..........................................93
SECTION 7.03. Notification to
Certificateholders................................................94
ii
<PAGE>
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of
Trustee.................................................................95
SECTION 8.02. Certain Matters Affecting the
Trustee.............................................96
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.............................97
SECTION 8.04. Trustee May Own
Certificates......................................................97
SECTION 8.05. Trustee's Fees and
Expenses.......................................................97
SECTION 8.06. Eligibility Requirements for
Trustee..............................................98
SECTION 8.07. Resignation and Removal of
Trustee................................................98
SECTION 8.08. Successor
Trustee.................................................................99
SECTION 8.09. Merger or Consolidation of
Trustee...............................................100
SECTION 8.10. Appointment of Co-Trustee or Separate
Trustee....................................100
SECTION 8.11. Tax
Matters......................................................................102
SECTION 8.12. Monitoring of Significance
Percentage............................................103
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all
Mortgage Loans...................104
SECTION 9.02. Final Distribution on the
Certificates...........................................104
SECTION 9.03. Additional Termination
Requirements..............................................105
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01.
Amendment.......................................................................107
SECTION 10.02. Recordation of Agreement;
Counterparts..........................................108
SECTION 10.03. Governing
Law...................................................................109
SECTION 10.04. Intention of
Parties............................................................109
SECTION 10.05.
Notices.........................................................................110
SECTION 10.06. Severability of
Provisions......................................................111
SECTION 10.07.
Assignment......................................................................112
SECTION 10.08. Limitation on Rights of
Certificateholders......................................112
SECTION 10.09. Inspection and Audit
Rights.....................................................113
SECTION 10.10. Certificates Nonassessable and Fully
Paid.......................................113
SECTION 10.11.
[Reserved]......................................................................113
SECTION 10.12. Protection of
Assets............................................................113
ARTICLE XI
EXCHANGE ACT REPORTING
SECTION 11.01. Filing
Obligations...............................................................114
SECTION 11.02. Form 10-D
Filings................................................................114
SECTION 11.03. Form 8-K
Filings.................................................................115
SECTION 11.04. Form 10-K
Filings................................................................115
iii
<PAGE>
SECTION 11.05. Sarbanes-Oxley
Certification.....................................................116
SECTION 11.06. Form 15
Filing...................................................................116
SECTION 11.07. Report on Assessment of Compliance and
Attestation...............................117
SECTION 11.08. Use of Subservicers and
Subcontractors...........................................118
SECTION 11.09.
Amendments.......................................................................119
SECTION 11.10. Reconciliation of
Accounts.......................................................119
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
SCHEDULES
<S> <C>
Schedule I: Mortgage Loan
Schedule.............................................................S-I-1
Schedule II-A: Representations and Warranties of
Countrywide...................................S-II-A-1
Schedule II-B: Representations and Warranties of Park
Granada..................................S-II-B-1
Schedule II-C: Representations and Warranties of Park
Monaco...................................S-II-C-1
Schedule II-D: Representations and Warranties of Park
Sienna...................................S-II-D-1
Schedule III-A: Representations and Warranties of Countrywide as
to all of the
Mortgage
Loans.................................................................S-III-A-1
Schedule III-B: Representations and Warranties of Countrywide as
to the
Countrywide Mortgage
Loans.....................................................S-III-B-1
Schedule III-C: Representations and Warranties of Park Granada
as to the
Park Granada Mortgage
Loans....................................................S-III-C-1
Schedule III-D: Representations and Warranties of Park Monaco as
to the
Park Monaco Mortgage
Loans.....................................................S-III-D-1
Schedule III-E: Representations and Warranties of Park Sienna as
to the
Park Sienna Mortgage
Loans.....................................................S-III-E-1
Schedule IV: Representations and Warranties of the Master
Servicer.............................S-IV-1
Schedule V: Principal Balances Schedule [if
applicable]........................................S-V-1
Schedule VI: Form of Monthly Master Servicer
Report............................................S-VI-1
EXHIBITS
Exhibit A: Form of Senior Certificate (excluding Notional Amount
Certificates)..................A-1
Exhibit B: Form of Subordinated
Certificate.....................................................B-1
Exhibit C: Form of Class A-R
Certificate........................................................C-1
Exhibit D: Form of Notional Amount
Certificate..................................................D-1
Exhibit E: Form of Reverse of
Certificates......................................................E-1
Exhibit F-1: Form of Initial Certification of Trustee (Initial
Mortgage Loans)....................F-1
Exhibit F-2: Form of Initial Certification of Trustee
(Supplemental Mortgage Loans)...............F-2
Exhibit G-1: Form of Delay Delivery Certification of Trustee
(Initial Mortgage Loans).............G-1
Exhibit G-2: Form of Delay Delivery Certification of Trustee
(Supplemental Mortgage Loans)........G-2
Exhibit H-1: Form of Final Certification of Trustee (Initial
Mortgage Loans)......................H-1
Exhibit H-2: Form of Final Certification of Trustee
(Supplemental Mortgage Loans).................H-2
Exhibit I: Form of Transfer
Affidavit...........................................................I-1
Exhibit J-1: Form of Transferor Certificate
(Residual)............................................J-1
Exhibit J-2: Form of Transferor Certificate
(Private).............................................J-2
Exhibit K: Form of Investment Letter [Non-Rule
144A]............................................K-1
Exhibit L: Form of Rule 144A
Letter.............................................................L-1
Exhibit M: Form of Request for Release (for
Trustee)............................................M-1
Exhibit N: Form of Request for Release (Mortgage Loan) Paid in
Full, Repurchased and
Replaced)............................................................................N-1
v
<PAGE>
Exhibit O: Glossary of Terms for Standard & Poor's LEVELS(R)
Version 5.7,
Appendix
E...........................................................................O-1
Exhibit P: Form of Supplemental Transfer
Agreement..............................................P-1
Exhibit Q Form of Monthly
Statement............................................................Q-1
Exhibit R-1 Form of Performance Certification
(Subservicer)......................................R-1
Exhibit R-2 Form of Performance Certification
(Trustee)..........................................R-2
Exhibit S Form of Servicing Criteria to be Addressed in
Assessment of
Compliance
Statement.................................................................S-1
Exhibit T List of Item 1119
Parties............................................................T-1
Exhibit U Form of Sarbanes-Oxley Certification (Replacement
Master Servicer)...................U-1
</TABLE>
vi
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of January 1,
2007, among
CWALT, INC., a Delaware corporation, as depositor (the
"Depositor"),
COUNTRYWIDE HOME LOANS, INC. ("Countrywide"), a New York
corporation, as a
seller (a "Seller"), PARK GRANADA LLC ("Park Granada"), a
Delaware limited
liability company, as a seller (a "Seller"), PARK MONACO INC.
("Park Monaco"),
a Delaware corporation, as a seller (a "Seller"), PARK SIENNA
LLC ("Park
Sienna"), a Delaware limited liability company, as a seller (a
"Seller"),
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership, as master
servicer (the "Master Servicer"), and THE BANK OF NEW YORK, a
banking
corporation organized under the laws of the State of New York,
as trustee (the
"Trustee").
WITNESSETH THAT
In consideration of the mutual agreements contained in this
Agreement,
the parties to this Agreement agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to
the Trustee in return for the Certificates. For federal income
tax purposes,
the Trust Fund (other than the Pre-Funding Account and the
Capitalized
Interest Account) will consist of two real estate mortgage
investment conduits
(each a "REMIC" or, in the alternative, the "Lower Tier REMIC"
and the "Master
REMIC," respectively). Each Certificate, other than the Class
A-R
Certificates, will represent ownership of one or more regular
interests in the
Master REMIC for purposes of the REMIC Provisions. The Class A-R
Certificates
represent ownership of the sole class of residual interest in
the Lower Tier
REMIC and the Master REMIC. The Master REMIC will hold as assets
the several
classes of uncertificated Lower Tier REMIC Interests (other than
the LT-A-R
Interest). The Lower Tier REMIC will hold as assets all property
of the Trust
Fund (other than the Pre-Funding Account and the Capitalized
Interest
Account). Each Lower Tier REMIC Interest (other than the LT-A-R
Interest) is
hereby designated as a regular interest in the Lower Tier REMIC.
The latest
possible maturity date of all REMIC regular interests created in
this
Agreement shall be the Latest Possible Maturity Date.
The following table set forth characteristics of the Interests
in the
Lower Tier REMIC:
<TABLE>
<CAPTION>
Initial Corresponding
The Lower Tier REMIC Interests Principal Balance Interest Rate
Loan Group
--------------------------------------- -----------------
------------- -------------
<S> <C> <C> <C>
LT-A-1................................. (1) (2) 1
LT-B-1................................. (1) (2) 1
LT-C-1................................. (1) (2) 1
LT-A-2................................. (1) (2) 2
LT-B-2................................. (1) (2) 2
LT-C-2................................. (1) (2) 2
LT-A-R................................. (3) (3) N/A
</TABLE>
---------------
(1) Each "LT-A" Lower Tier REMIC Interest will have an Initial
Principal
Balance equal to 0.9% of the Subordinated Portion of its
Corresponding
Loan Group. Each "LT-B" Lower
<PAGE>
Tier REMIC Interest will have an Initial Principal Balance equal
to 0.1%
of the Subordinated Portion of its Corresponding Loan Group.
Each "LT-C"
Lower Tier REMIC Interest will have an Initial Principal Balance
equal
to the excess of the aggregate Stated Principal Balance of the
Mortgage
Loans of its Corresponding Loan Group over the initial
aggregate
principal balances of the "LT-A" and "LT-B" Lower Tier REMIC
Interests
corresponding to such Loan Group.
(2) This Lower Tier REMIC Interest will have an Interest Rate
equal to the
weighted average of the Adjusted Net Mortgage Rates of the
Mortgage
Loans in the Corresponding Loan Group.
(3) The LT-A-R Interest is the sole class of residual interest
in the Lower
Tier REMIC. It has no principal balance and pays no principal
or
interest.
On each Distribution Date, the Available Funds shall be
distributed with
respect to the Lower Tier REMIC Interests in the following
manner:
(1) Interest. Interest is to be distributed with respect to each
Lower
Tier REMIC Interest at the rate, or according to the formulas,
described
above;
(2) Principal, if no Cross-Over Situation Exists. If no
Cross-Over
Situation exists with respect to any Class of Lower Tier REMIC
Interests,
Principal Amounts arising with respect to each Loan Group will
be allocated:
first to cause the Loan Group's corresponding "LT-A" and "LT-B"
Lower Tier
REMIC Interests to equal, respectively, 0.9% of the Subordinated
Portion and
0.1% of the Subordinated Portion; and second to the Loan Group's
corresponding
"LT-C" Lower Tier REMIC Interest;
(3) Principal, if a Cross-Over Situation Exists. If a
Cross-Over
Situation exists with respect to the "LT-A" and "LT-B" Lower
Tier REMIC
Interests:
(a) If the Calculation Rate in respect of the outstanding "LT-A"
and
"LT-B" Lower Tier REMIC Interests is less than the
Subordinate
Pass-Through Rate, then Principal Relocation Payments will be
made
proportionately to the outstanding "LT-A" Lower Tier REMIC
Interests
prior to any other principal distributions from each such Loan
Group.
(b) If the Calculation Rate in respect of the outstanding "LT-A"
and
"LT-B" Lower Tier REMIC Interests is greater than the
Subordinate
Pass-Through Rate, Principal Relocation Payments will be made to
the
outstanding "LT-B" Lower Tier REMIC Interests prior to any
other
principal distributions from each such Loan Group.
In each case, Principal Relocation Payments will be made so as
to cause
the Calculation Rate in respect of the outstanding "LT-A" and
"LT-B" Lower
Tier REMIC Interests to equal the Subordinate Pass-Through Rate.
With respect
to each Loan Group, if (and to the extent that) the sum of (a)
the principal
payments comprising the Principal Remittance Amount received
during the Due
Period and (b) the Realized Losses incurred during such Due
Period is
insufficient to make the necessary reductions of principal on
the "LT-A" and
"LT-B" Lower Tier REMIC Interests, then interest will be added
to the Loan
Group's "LT-C" Lower Tier REMIC Interest.
(c) Unless required to achieve the Calculation Rate, the
outstanding
aggregate "LT-A" and "LT-B" Lower Tier REMIC Interests for both
Loan
Groups will not be reduced
2
<PAGE>
below 1 percent of the excess of (i) the aggregate outstanding
Stated
Principal Balances of the Mortgage Loans in both Loan Groups as
of the
end of any Due Period (reduced by Principal Prepayments received
after
the Due Period that are to to be distributed on the Disribution
Date
related to the Due Period) over (ii) the aggregate Class
Certificate
Balance of the Senior Certificates for both Loan Groups as of
the
related Distribution Date (after taking into account
distributions of
principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c)
prevents the
distribution of principal to the "LT-A" and "LT-B" Lower Tier
REMIC Interests
of a Loan Group, and if the Loan Group's "LT-C" Lower Tier REMIC
Interest has
already been reduced to zero, then the excess principal from
that Loan Group
will be paid to the "LT-C" Lower Tier REMIC Interests of the
other Loan Groups
the aggregate "LT-A" and "LT-B" Lower Tier REMIC Interests of
which are less
than one percent of the Subordinated Portion. If the Loan Group
corresponding
to the "LT-C" Lower Tier REMIC Interest that receives such
payment has a
Weighted Average Adjusted Net Mortgage Rate below the Weighted
Average
Adjusted Net Mortgage Rate of the Loan Group making the payment,
then the
payment will be treated by the Lower Tier REMIC as a Realized
Loss.
Conversely, if a Loan Group corresponding to the "LT-C" Lower
Tier REMIC
Interest that receives such payment has a Weighted Average
Adjusted Net
Mortgage Rate above the Weighted Average Adjusted Net Mortgage
Rate of the
Loan Group making the payment, then the payment will be treated
by the Lower
Tier REMIC as a reimbursement for prior Realized Losses.
The following table sets forth characteristics of the
Certificates,
together with minimum denominations and integral multiples in
excess thereof
in which such Classes shall be issued (except that one
Certificate of each
Class of Certificates may be issuable in a different amount and,
in addition,
one Residual Certificate representing the Tax Matters Person
Certificate may
be issued in a different amount for each class of REMIC
Interest):
<TABLE>
<CAPTION>
==================================================================================================
Integral
Initial Class Pass-Through Multiples
Class Certificate Rate Minimum in Excess of
Designation Balance (per annum) Denomination Minimum
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class 1-A $367,128,000 (1) $25,000.00 $1.00
--------------------------------------------------------------------------------------------------
Class 2-A $117,725,000 (2) $25,000.00 $1.00
--------------------------------------------------------------------------------------------------
Class A-R $100 (1) (3) (3)
--------------------------------------------------------------------------------------------------
Class M $12,963,000 (4) $25,000.00 $1.00
--------------------------------------------------------------------------------------------------
Class B-1 $6,741,000 (4) $25,000.00 $1.00
--------------------------------------------------------------------------------------------------
Class B-2 $4,148,000 (4) $25,000.00 $1.00
--------------------------------------------------------------------------------------------------
Class B-3 $4,408,000 (4) $100,000.00 $1.00
--------------------------------------------------------------------------------------------------
Class B-4 $3,111,000 (4) $100,000.00 $1.00
--------------------------------------------------------------------------------------------------
Class B-5 $2,334,732 (4) $100,000.00 $1.00
==================================================================================================
</TABLE>
------------------------------------------
(1) For the Interest Accrual Period for any Distribution Date,
the
Pass-Through Rate for the Class 1-A and Class A-R Certificates
will be a
per annum rate equal to the Weighted Average Adjusted Net
Mortgage Rate
of the Group 1 Mortgage Loans. The Pass-
3
<PAGE>
Through Rate for the Class 1-A and Class A-R Certificates for
the
Interest Accrual Period related to the first Distribution Date
will be
6.189366% per annum.
(2) For the Interest Accrual Period for any Distribution Date,
the
Pass-Through Rate for the Class 2-A Certificates will be a per
annum
rate equal to the Weighted Average Adjusted Net Mortgage Rate of
the
Group 2 Mortgage Loans. The Pass-Through Rate for the Class
2-A
Certificates for the Interest Accrual Period related to the
first
Distribution Date will be 6.230194% per annum.
(3) The Class A-R Certificate will be issued as two separate
certificates,
one with an initial Certificate Balance of $99.99 and the Tax
Matters
Person Certificate with an initial Certificate Balance of
$.01.
(4) The Pass-Through Rate for each Class of Subordinated
Certificates for
each Interest Accrual Period for any Distribution Date will be a
per
annum rate equal to the Subordinate Pass-Through Rate. The
Pass-Through
Rate for the Subordinated Certificates for the Interest Accrual
Period
for the first Distribution Date is 6.199279% per annum.
It is not intended that the Class A-R Certificates be entitled
to any
cash flows pursuant to this Agreement except as provided in
Sections
4.02(a)(1)(ii) and 4.02(a)(1)(iv)(y) hereunder, (that is, the
Class A-R
Certificates' entitlement to $100 plus interest thereon in the
waterfall).
4
<PAGE>
Set forth below are designations of Classes or Components of
Certificates to the categories used in this Agreement:
<TABLE>
<CAPTION>
<S> <C>
Accretion Directed
Certificates........................ None.
Accrual Certificates................ None.
Accrual Components.................. None.
Book-Entry Certificates............. All Classes of Certificates
other than the Physical Certificates.
COFI Certificates................... None.
Component Certificates.............. None.
Components.......................... None.
Delay Certificates.................. All interest-bearing
Classes of Certificates other than the Non-Delay
Certificates, if any.
ERISA-Restricted
Certificates........................ The Residual Certificates
and the Private Certificates; and any
Certificate that does not have or no longer has a rating of at
least
BBB- or its equivalent from at least one Rating Agency.
Group 1
Senior Certificates................. Class 1-A and Class A-R
Certificates.
Group 2
Senior Certificates................. Class 2-A Certificates.
LIBOR Certificates.................. None.
Non-Delay Certificates.............. None.
Notional Amount
Certificates........................ None.
Notional Components................. None.
Offered Certificates................ All Classes of Certificates
other than the Private Certificates.
Physical Certificates............... Private Certificates and
the Residual Certificates.
5
<PAGE>
Planned Principal Classes........... None.
Planned Principal
Components.......................... None.
Private Certificates................ Class B-3, Class B-4 and
Class B-5 Certificates.
Rating Agencies..................... S&P and Moody's.
Regular Certificates................ All Classes of
Certificates, other than the Residual Certificates.
Residual Certificates............... Class A-R Certificates.
Senior Certificate Group............ Group 1 Senior Certificates
and Group 2 Senior Certificates, as
applicable.
Senior Certificates................. Class 1-A, Class 2-A and
Class A-R Certificates.
Subordinated Certificates .......... Class M, Class B-1, Class
B-2, Class B-3, Class B-4 and Class B-5
Certificates.
Underwriter......................... Countrywide Securities
Corporation.
</TABLE>
With respect to any of the foregoing designations as to which
the
corresponding reference is "None," all defined terms and
provisions in this
Agreement relating solely to such designations shall be of no
force or effect,
and any calculations in this Agreement incorporating references
to such
designations shall be interpreted without reference to such
designations and
amounts. Defined terms and provisions in this Agreement relating
to
statistical rating agencies not designated above as Rating
Agencies shall be
of no force or effect.
If the aggregate Stated Principal Balance of the Initial
Mortgage Loans
on the Closing Date is equal to or greater than the aggregate
Class
Certificate Balance of the Certificates as of such date, all
references herein
to "Aggregate Supplemental Purchase Amount", "Aggregate
Supplemental Transfer
Amount", "Capitalized Interest Account", "Capitalized Interest
Requirement",
"Funding Period", "Funding Period Distribution Date",
"Pre-Funded Amount",
"Remaining Pre-Funded Amount", "Supplemental Cut-off Date",
"Pre-Funding
Account", "Supplemental Mortgage Loan", "Supplemental Transfer
Agreement" and
"Supplemental Transfer Date" shall be of no force or effect and
all provisions
herein related thereto shall similarly be of no force or
effect.
6
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.
Whenever used in this Agreement, the following words and
phrases, unless the
context otherwise requires, shall have the following
meanings:
Account: Any Escrow Account, the Certificate Account, the
Distribution
Account, the Pre-Funding Account, the Capitalized Interest
Account or any
other account related to the Trust Fund or the Mortgage
Loans.
Accretion Directed Certificates: As specified in the
Preliminary
Statement.
Accretion Direction Rule: Not applicable.
Accrual Amount: Not applicable.
Accrual Certificates: As specified in the Preliminary
Statement.
Accrual Components: As specified in the Preliminary
Statement.
Accrual Termination Date: Not applicable.
Additional Designated Information: As defined in Section
11.02.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any
time, the
per annum rate equal to the Mortgage Rate less the Master
Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time,
the per annum rate equal to the Mortgage Rate less the Expense
Fee Rate.
Adjustment Date: A date specified in each Mortgage Note as a
date on
which the Mortgage Rate on the related Mortgage Loan will be
adjusted.
Advance: As to a Loan Group, the payment required to be made by
the
Master Servicer with respect to any Distribution Date pursuant
to Section
4.01, the amount of any such payment being equal to the
aggregate of payments
of principal and interest (net of the Master Servicing Fee) on
the Mortgage
Loans in such Loan Group 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, together with an amount equivalent to
interest on each
Mortgage Loan as to which the related Mortgaged Property is an
REO Property
net of any net income with respect to such REO Property, less
the aggregate
amount of any such delinquent payments that the Master Servicer
has determined
would constitute a Nonrecoverable Advance if advanced.
Aggregate Subordinated Percentage: As to any Distribution Date,
the
fraction, expressed as a percentage, the numerator of which is
equal to the
aggregate Class Certificate Balance of the
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<PAGE>
Subordinated Certificates immediately prior to such Distribution
Date and the
denominator of which is the aggregate Stated Principal Balance
of all the
Mortgage Loans as of the Due Date in the month preceding the
month of such
Distribution Date (after giving effect to Principal Prepayments
received in
the Prepayment Period related to such Due Date).
Aggregate Supplemental Purchase Amount: With respect to any
Supplemental
Transfer Date, the "Aggregate Supplemental Purchase Amount"
identified in the
related Supplemental Transfer Agreement, which shall be an
estimate of the
aggregate Stated Principal Balances of the Supplemental Mortgage
Loans
identified in such Supplemental Transfer Agreement.
Aggregate Supplemental Transfer Amount: With respect to any
Supplemental
Transfer Date, the aggregate Stated Principal Balance as of the
related
Supplemental Cut-off Date of the Supplemental Mortgage Loans
conveyed on such
Supplemental Transfer Date, as listed on the revised Mortgage
Loan Schedule
delivered pursuant to Section 2.01(f); provided, however, that
such amount
shall not exceed the amount on deposit in the Pre-Funding
Account.
Agreement: This Pooling and Servicing Agreement and all
amendments or
supplements this Pooling and Servicing Agreement.
Allocable Share: As to any Distribution Date, any Loan Group and
any
Class of Certificates, the ratio that the amount calculated with
respect to
such Distribution Date (A) with respect to the Senior
Certificates of the
related Senior Certificate Group, pursuant to clause (i) of the
definition of
Class Optimal Interest Distribution Amount (without giving
effect to any
reduction of such amount pursuant to Section 4.02(d)) and (B)
with respect to
the Subordinated Certificates, pursuant to the definition of
Assumed Interest
Amount for such Class or after a Senior Termination Date
pursuant to clause
(i) of the definition of Class Optimal Interest Distribution
Amount (without
giving effect to any reduction of such amount pursuant to
Section 4.02(d))
bears to the aggregate amount calculated with respect to such
Distribution
Date for each such related Class of Certificates pursuant to
clause (i) of the
definition of Class Optimal Interest Distribution Amount
(without giving
effect to any reduction of such amounts pursuant to Section
4.02(d)) or the
definition of Assumed Interest Amount for such Loan Group and
Class, as
applicable.
Amount Held for Future Distribution: As to any Distribution Date
and
Mortgage Loans in a Loan Group, the aggregate amount held in the
Certificate
Account at the close of business on the related Determination
Date on account
of (i) Principal Prepayments received after the related
Prepayment Period and
Liquidation Proceeds and Subsequent Recoveries received in the
month of such
Distribution Date relating to that Loan Group and (ii) all
Scheduled Payments
due after the related Due Date relating to that Loan Group.
Applicable Credit Support Percentage: As defined in Section
4.02(e).
Appraised Value: With respect to a Mortgage Loan other than
a
Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged
Property based upon the appraisal made at the time of the
origination of such
Mortgage Loan and (b) the sales price of the Mortgaged Property
at the time of
the origination of such Mortgage Loan. With respect to a
Refinancing Mortgage
Loan other than a Streamlined Documentation Mortgage Loan, the
value of the
Mortgaged
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<PAGE>
Property based upon the appraisal made at the time of the
origination of such
Refinancing Mortgage Loan. With respect to a Streamlined
Documentation
Mortgage Loan, (a) if the loan-to-value ratio with respect to
the Original
Mortgage Loan at the time of the origination thereof was 80% or
less and the
loan amount of the new mortgage loan is $650,000 or less, the
value of the
Mortgaged Property based upon the appraisal made at the time of
the
origination of the Original Mortgage Loan and (b) if the
loan-to-value ratio
with respect to the Original Mortgage Loan at the time of the
origination
thereof was greater than 80% or the loan amount of the new
mortgage loan is
greater than $650,000, the value of the Mortgaged Property based
upon the
appraisal (which may be a drive-by appraisal) made at the time
of the
origination of such Streamlined Documentation Mortgage Loan.
Assumed Interest Amount: With respect to any Distribution Date,
any
Class of Subordinated Certificates and any Loan Group, one
month's interest
accrued during the related Interest Accrual Period at the
Pass-Through Rate on
the related Subordinated Portion immediately prior to that
Distribution Date.
Available Funds: As to any Distribution Date and each Loan
Group, the
sum of (a) the aggregate amount held in the Certificate Account
at the close
of business on the related Determination Date in respect of the
related
Mortgage Loans pursuant to Section 3.05(b) net of the related
Amount Held for
Future Distribution and net of amounts permitted to be withdrawn
from the
Certificate Account pursuant to clauses (i) - (viii), inclusive,
of Section
3.08(a) in respect of the Mortgage Loans in that Loan Group and
amounts
permitted to be withdrawn from the Distribution Account pursuant
to clauses
(i) - (v), inclusive, of Section 3.08(b) in respect of the
Mortgage Loans in
that Loan Group, (b) the amount of the related Advance, (c) in
connection with
Defective Mortgage Loans in such Loan Group, as applicable, the
aggregate of
the Purchase Prices and Substitution Adjustment Amounts
deposited on the
related Distribution Account Deposit Date, (d) on each Funding
Period
Distribution Date, the portion of the Capitalized Interest
Requirement for
such Distribution Date allocable to such Loan Group, if any, (e)
on the last
Funding Period Distribution Date, the portion of the Remaining
Pre-Funded
Amount allocable to such Loan Group and (f) the Transfer Payment
Received for
such Loan Group less the Transfer Payment Made for such Loan
Group; provided,
however, that on a Senior Termination Date, Available Funds with
respect to
the Loan Group relating to the remaining Senior Certificate
Group shall
include the Available Funds from the other Loan Groups after all
distributions
are made on the Senior Certificates of the other Senior
Certificate Groups and
on any Distribution Date thereafter, Available Funds shall be
calculated based
on all the Mortgage Loans in the Mortgage Pool, as opposed to
the Mortgage
Loans in the related Loan Group.
Bankruptcy Code: Title 11 of the United States Code, as
amended.
Benefit Plan Opinion: As defined in Section 5.02(b).
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a
day on which banking institutions in the City of New York, New
York, or the
States of California or Texas 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.
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<PAGE>
Calculation Rate: For each Distribution Date, in the case of the
"LT-A"
and "LT-B" Lower Tier REMIC Interests, the product of (i) 10 and
(ii) the
weighted average rate of the outstanding "LT-A" and "LT-B" Lower
Tier REMIC
Interests, treating each "LT-A" Lower Tier REMIC Interest as
having an
interest rate of 0.00%.
Capitalized Interest Account: The separate Eligible Account
designated
as such and created and maintained by the Trustee pursuant to
Section 3.05(h)
hereof. The Capitalized Interest Account shall be treated as an
"outside
reserve fund" under applicable Treasury regulations and shall
not be part of
any REMIC. Except as provided in Section 3.05(h) hereof, any
investment
earnings on the amounts on deposit in the Capitalized Interest
Account shall
be treated as owned by the Depositor and will be taxable to the
Depositor.
Capitalized Interest Deposit: $78.82.
Capitalized Interest Release Amount: With respect to any
Supplemental
Transfer Date, the amount specified as the "Capitalized Interest
Release
Amount" in the related Supplemental Transfer Agreement.
Capitalized Interest Requirement: With respect to each Funding
Period
Distribution Date, the excess, if any, of (a) the sum of (1) the
amount
calculated pursuant to clause (i) of the definition of Class
Optimal Interest
Distribution Amount for each Class of Certificates for such
Distribution Date,
plus (2) the Trustee Fee, over (b) with respect to each Mortgage
Loan, 1/12 of
the product of the related Adjusted Mortgage Rate and the
related Stated
Principal Balance as of the related Due Date (prior to giving
effect to any
Scheduled Payment due on such Mortgage Loan on such Due
Date).
Certificate: Any one of the Certificates executed by the Trustee
in
substantially the forms attached this Agreement as exhibits.
Certificate Account: The separate Eligible Account or Accounts
created
and maintained by the Master Servicer pursuant to Section 3.05
with a
depository institution, initially Countrywide Bank, N.A., in the
name of the
Master Servicer for the benefit of the Trustee on behalf of
Certificateholders
and designated "Countrywide Home Loans Servicing LP in trust for
the
registered holders of Alternative Loan Trust 2007-HY2, Mortgage
Pass-Through
Certificates Series 2007-HY2."
Certificate Balance: With respect to any Certificate, other than
a
Notional Amount Certificate, at any date, the maximum dollar
amount of
principal to which the Holder thereof is then entitled under
this Agreement,
such amount being equal to the Denomination of that Certificate
(A) plus any
increase in the Certificate Balance of such Certificate pursuant
to Section
4.02 due to the receipt of Subsequent Recoveries (B) minus the
sum of (i) all
distributions of principal previously made with respect to that
Certificate
and (ii) all Realized Losses allocated to that Certificate and,
in the case of
any Subordinated Certificates, all other reductions in
Certificate Balance
previously allocated to that Certificate pursuant to Section
4.04 without
duplication. The Notional Amount Certificates have no
Certificate Balances.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
who is the beneficial owner of such Book-Entry Certificate. For
the purposes
of this Agreement, in order
10
<PAGE>
for a Certificate Owner to enforce any of its rights under this
Agreement, it
shall first have to provide evidence of its beneficial ownership
interest in a
Certificate that is reasonably satisfactory to the Trustee, the
Depositor,
and/or the Master Servicer, as applicable.
Certificate Register: The register maintained pursuant to
Section 5.02.
Certificateholder or Holder: The person in whose name a
Certificate is
registered in the Certificate Register, 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 Percentage Interest evidenced
thereby shall not
be taken into account in determining whether the requisite
amount of
Percentage Interests necessary to effect such consent has been
obtained;
provided, however, that if any such Person (including the
Depositor) owns 100%
of the Percentage Interests evidenced by a Class of
Certificates, such
Certificates shall be deemed to be Outstanding for purposes of
any provision
of this Agreement (other than the second sentence of Section
10.01) that
requires the consent of the Holders of Certificates of a
particular Class as a
condition to the taking of any action under this Agreement. 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.
Class: All Certificates bearing the same class designation as
set forth
in the Preliminary Statement.
Class Certificate Balance: With respect to any Class and as to
any date
of determination, the aggregate of the Certificate Balances of
all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and Class,
the
amount by which the amount described in clause (i) of the
definition of Class
Optimal Interest Distribution Amount for such Class exceeds the
amount of
interest actually distributed on such Class on such Distribution
Date pursuant
to such clause (i).
Class Optimal Interest Distribution Amount: With respect to
any
Distribution Date and interest-bearing Class, the sum of (i) one
month's
interest accrued during the related Interest Accrual Period at
the
Pass-Through Rate for such Class on the related Class
Certificate Balance or
Notional Amount, as applicable, as of the last day of the
related Interest
Accrual Period, subject to reduction as provided in Section
4.02(d) and (ii)
any Class Unpaid Interest Amounts for such Class.
Class Subordination Percentage: With respect to any Distribution
Date
and each Class of Subordinated Certificates, the quotient
(expressed as a
percentage) of (a) the Class Certificate Balance of such Class
of Certificates
immediately prior to such Distribution Date divided by (b) the
aggregate of
the Class Certificate Balances of all Classes of Certificates
immediately
prior to such Distribution Date.
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<PAGE>
Class Unpaid Interest Amounts: As to any Distribution Date and
Class of
interest-bearing Certificates, the amount by which the aggregate
Class
Interest Shortfalls for such Class on prior Distribution Dates
exceeds the
amount distributed on such Class on prior Distribution Dates
pursuant to
clause (ii) of the definition of Class Optimal Interest
Distribution Amount.
Closing Date: January 31, 2007.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
COFI: The Monthly Weighted Average Cost of Funds Index for the
Eleventh
District Savings Institutions published by the Federal Home Loan
Bank of San
Francisco.
COFI Certificates: As specified in the Preliminary
Statement.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: As to any Distribution Date and Loan
Group, an
amount equal to one-half of the Master Servicing Fee for the
related Loan
Group for such Distribution Date.
Component: As specified in the Preliminary Statement.
Component Notional Amount: Not applicable.
Component Rate: Not applicable.
Coop Shares: Shares issued by a Cooperative Corporation.
Cooperative Corporation: The entity that holds title (fee or
an
acceptable leasehold estate) to the real property and
improvements
constituting the Cooperative Property and which governs the
Cooperative
Property, which Cooperative Corporation must qualify as a
Cooperative Housing
Corporation under section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and
a
Proprietary Lease.
Cooperative Property: The real property and improvements owned
by the
Cooperative Corporation, including the allocation of individual
dwelling units
to the holders of the Coop Shares of the Cooperative
Corporation.
Cooperative Unit: A single family dwelling located in a
Cooperative
Property.
Corporate Trust Office: The designated office of the Trustee in
the
State of New York at which 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, Floor 4W,
New York, New York 10286 (Attn: Mortgage-Backed Securities
Group, Alternative
Loan Trust 2007-HY2), facsimile no. (212) 815-3986, and which is
the address
to which notices to and correspondence with the Trustee should
be directed.
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<PAGE>
Countrywide: Countrywide Home Loans, Inc., a New York
corporation and
its successors and assigns, in its capacity as the seller of the
Countrywide
Mortgage Loans to the Depositor.
Countrywide Mortgage Loans: The Mortgage Loans identified as
such on the
Mortgage Loan Schedule for which Countrywide is the applicable
Seller.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a
Texas
limited partnership and its successors and assigns.
Covered Certificates: Not applicable.
Cross-Over Situation: For any Distribution Date and for each
Loan Group
(after taking into account principal distributions on such
Distribution Date)
with respect to the Class A and Class B Lower Tier REMIC
Interests, a
situation in which the Class A and Class B Interests
corresponding to any Loan
Group are in the aggregate less than 1% of the Subordinated
Portion of the
Loan Group to which they correspond.
Cut-off Date: In the case of any Initial Mortgage Loan, the
Initial
Cut-off Date, and in the case of any Supplemental Mortgage Loan,
the related
Supplemental Cut-off Date.
Cut-off Date Pool Principal Balance: An amount equal to the sum
of (x)
the Initial Cut-off Date Pool Principal Balance plus (y) the
Pre-Funded
Amount, if any.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated
Principal Balance thereof as of the close of business on the
Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction
by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became
final and
non-appealable, except such a reduction resulting from a
Deficient Valuation
or any reduction that results in a permanent forgiveness of
principal.
Defective Mortgage Loan: Any Mortgage Loan that is required to
be
repurchased pursuant to Section 2.02 or 2.03.
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 the 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 which
is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary
Statement.
Delay Delivery Certification: As defined in Section 2.02(a).
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<PAGE>
Delay Delivery Mortgage Loans: The Mortgage Loans for which all
or a
portion of a related Mortgage File is not delivered to Trustee
on the Closing
Date. The number of Delay Delivery Mortgage Loans in either Loan
Group
conveyed on the Closing Date shall not exceed 50% of the
aggregate number of
Initial Mortgage Loans in such Loan Group, and the number of
Delay Delivery
Mortgage Loans in either Loan Group conveyed on any Supplemental
Transfer Date
shall not exceed 90% of the Supplemental Mortgage Loans in such
Loan Group
conveyed on that Supplemental Transfer Date. To the extent that
Countrywide
Servicing 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 Servicing shall
hold such
files as Master Servicer hereunder, as agent and in trust for
the Trustee.
Deleted Mortgage Loan: As defined in Section 2.03(c).
Denomination: With respect to each Certificate, the amount set
forth on
the face of that Certificate as the "Initial Certificate Balance
of this
Certificate" or the "Initial Notional Amount of this
Certificate" or, if
neither of the foregoing, the Percentage Interest appearing on
the face
thereof.
Depositor: CWALT, 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., as 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 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: As to any Distribution Date, the 22nd day of
each
month or, if such 22nd day is not a Business Day, the preceding
Business Day;
provided, however, that if such 22nd day or such Business Day,
whichever is
applicable, is less than two Business Days prior to the related
Distribution
Date, the Determination Date shall be the first Business Day
that is two
Business Days preceding such Distribution Date.
Distribution Account: The separate Eligible Account created
and
maintained by the Trustee pursuant to Section 3.05(d) 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 Alternative Loan
Trust 2007-HY2,
Mortgage Pass-Through Certificates, Series 2007-HY2." 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,
12:30
p.m. Pacific time on the Business Day immediately preceding such
Distribution
Date.
Distribution Date: The 25th day of each calendar month, or if
such 25th
day is not a Business Day, the next succeeding Business Day,
commencing in
February 2007.
14
<PAGE>
Due Date: With respect to a Mortgage Loan, the date on which
the
Scheduled Payments are due on that Mortgage Loan. With respect
to any
Distribution Date, the first day of the month in which that
Distribution Date
occurs.
Due Period: With respect to any Distribution Date, the period
beginning
on the second day of the calendar month preceding the month in
which such
Distribution Date occurs and ending on the first day of the
calendar 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
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)
have the
highest short-term ratings of Moody's or Fitch and one of the
two highest
short-term ratings of S&P, if S&P is a Rating Agency 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 (a) the trust department of a federal
or state
chartered depository institution or (b) a trust company, acting
in its
fiduciary capacity or (iv) any other account acceptable to each
Rating Agency.
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 3.11.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
an
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and
maintained pursuant to Section 3.06(a).
Event of Default: As defined in Section 7.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any Liquidation Proceeds of
such Mortgage
Loan received in the calendar month in which such Mortgage Loan
became a
Liquidated Mortgage Loan plus any Subsequent Recoveries received
with respect
to such Mortgage Loan, net of any amounts previously reimbursed
to the Master
Servicer as Nonrecoverable Advance(s) with respect to such
Mortgage Loan
pursuant to Section 3.08(a)(iii), exceeds (i) the unpaid
principal balance of
such Liquidated
15
<PAGE>
Mortgage Loan as of the Due Date in the month in which such
Mortgage Loan
became a Liquidated Mortgage Loan plus (ii) accrued interest at
the Mortgage
Rate from the Due Date as to which interest was last paid or
advanced (and not
reimbursed) to Certificateholders up to the Due Date applicable
to the
Distribution Date immediately following the calendar month
during which such
liquidation occurred.
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: As to each Mortgage Loan and any date of
determination, the sum of (a) the related Master Servicing Fee
Rate, (b) the
Trustee Fee Rate and (c) with respect to any Lender PMI Mortgage
Loan, the
related mortgage insurance premium rate.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FHLMC: 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 to the
Federal Home Loan Mortgage Corporation.
Final Certification: As defined in Section 2.02(a).
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act
of 1989.
Fitch: Fitch, Inc., or any successor thereto. If Fitch is
designated as
a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b)
the address for notices to Fitch shall be Fitch, Inc., One State
Street Plaza,
New York, New York 10004, Attention: Residential Mortgage
Surveillance Group,
or such other address as Fitch may hereafter furnish to the
Depositor and the
Master Servicer.
FNMA: 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 to
the Federal
National Mortgage Association.
Form 10-D Disclosure Item: With respect to any Person, any
material
litigation or governmental proceedings pending (a) against such
Person, or (b)
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) any
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.
16
<PAGE>
Funding Period: The period from the Closing Date until the
earliest of
(i) the date on which the amount on deposit in the Pre-Funding
Account is less
than $150,000, (ii) an Event of Default occurs or (iii) February
16, 2007.
Funding Period Distribution Date: Each Distribution Date during
the
Funding Period and, if the Funding Period ends after the
Distribution Date in
a month, the immediately succeeding Distribution Date.
Gross Margin: With respect to each Mortgage Loan, the fixed
percentage
set forth in the related Mortgage Note that is added to the
Mortgage Index on
each Adjustment Date in accordance with the terms of the related
Mortgage Note
used to determine the Mortgage Rate for such Mortgage Loan.
Group 1 Senior Certificates: As specified in the Preliminary
Statement.
Group 1 Weighted Average Component Rate: Not applicable.
Group 2 Senior Certificates: As specified in the Preliminary
Statement.
Group 2 Weighted Average Component Rate: Not applicable.
Indirect Participant: A broker, dealer, bank or other
financial
institution or other Person that clears through or maintains a
custodial
relationship with a Depository Participant.
Initial Certification: As defined in Section 2.02(a).
Initial Cut-off Date: For each Initial Mortgage Loan, the later
of
January 1, 2007 and the date of origination for that Mortgage
Loan.
Initial Cut-off Date Pool Principal Balance:
$518,544,191.75.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trust
Fund on the
Closing Date pursuant to this Agreement as identified on the
Mortgage Loan
Schedule delivered to the Trustee on the Closing 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, including any replacement policy or policies
for any
Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to
any
Insurance Policy, in each case other than any amount included in
such
Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other
insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to any Distribution Date,
the
calendar month prior to the month of such Distribution Date.
17
<PAGE>
Item 1119 Party: The Depositor, any Seller, the Master Servicer,
the
Trustee, any Subservicer, any originator identified in the
Prospectus
Supplement and any other material transaction party, as
identified in Exhibit
T 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.
Lender PMI Mortgage Loan: Certain Mortgage Loans as to which the
lender
(rather than the Mortgagor) acquires the Primary Insurance
Policy and charges
the related Mortgagor an interest premium.
LIBOR Certificates: As specified in the Preliminary
Statement.
Limited Exchange Act Reporting Obligations: The obligations of
the
Master Servicer under Section 3.16(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 (including any REO Property) that was
liquidated in
the calendar month preceding the month of such Distribution Date
and as to
which the Master Servicer has determined (in accordance with
this Agreement)
that it has received all amounts it expects to receive in
connection with the
liquidation of such Mortgage Loan, including the final
disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in
connection with the partial or complete liquidation of defaulted
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, less the sum of related unreimbursed Master Servicing
Fees,
Servicing Advances and Advances.
Loan Group: Either of Loan Group 1 or Loan Group 2, as
applicable.
Loan Group 1: All Mortgage Loans identified as Loan Group 1
Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Loan Group 2
Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group Characteristics: With respect to the Mortgage Loans
in each
Loan Group as of the Cut-off Date, the characteristics set forth
in the fifth
bullet point under "The Mortgage Pool--Conveyance of
Supplemental Mortgage
Loans" set forth on page S-30 of the Prospectus Supplement.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as to
any
date of determination, the fraction (expressed as a percentage)
the numerator
of which is the principal
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balance of the related Mortgage Loan at that date of
determination and the
denominator of which is the Appraised Value of the related
Mortgaged Property.
Lost Mortgage Note: Any Mortgage Note the original of which
was
permanently lost or destroyed and has not been replaced.
Maintenance: With respect to any Cooperative Unit, the rent paid
by the
Mortgagor to the Cooperative Corporation pursuant to the
Proprietary Lease.
Majority in Interest: As to any Class of Regular Certificates,
the
Holders of Certificates of such Class evidencing, in the
aggregate, at least
51% of the Percentage Interests evidenced by all Certificates of
such Class.
Master Servicer: Countrywide Servicing, and its successors and
assigns,
in its capacity as master servicer hereunder and, if a successor
master
servicer is appointed under this Agreement, such successor.
Master Servicer Advance Date: As to any Distribution Date, 12:30
p.m.
Pacific time on the Business Day immediately preceding such
Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any
Distribution
Date, an amount payable out of each full payment of interest
received on such
Mortgage Loan and equal to one-twelfth of the Master Servicing
Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan
as of the Due
Date in the month of such Distribution Date (prior to giving
effect to any
Scheduled Payments due on such Mortgage Loan on such Due Date),
subject to
reduction as provided in Section 3.14.
Master Servicing Fee Rate: With respect to each Mortgage Loan
and Due
Date, the amount set forth in the Mortgage Loan Schedule for
such Due Date.
Maximum Mortgage Rate: With respect to each Mortgage Loan,
the
percentage set forth in the related Mortgage Note as the maximum
Mortgage Rate
thereunder.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware,
or any
successor to Mortgage Electronic Registration Systems, Inc.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the
MERS(R) System.
MERS(R) System: The system of recording transfers of
mortgages
electronically maintained by MERS.
MIN: The mortgage identification number for any MERS Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan, the
greater
of (a) the Gross Margin set forth in the related Mortgage Note
and (b) the
percentage set forth in the related Mortgage Note as the minimum
Mortgage Rate
thereunder.
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<PAGE>
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 4.06.
Moody's: Moody's Investors Service, Inc., or any successor
thereto. If
Moody's is designated as a Rating Agency in the Preliminary
Statement, for
purposes of Section 10.05(b) the address for notices to Moody's
shall be
Moody's Investors Service, Inc., 99 Church Street, New York, New
York 10007,
Attention: Residential Pass-Through Monitoring, or such other
address as
Moody's may hereafter furnish to the Depositor or the Master
Servicer.
Mortgage: The mortgage, deed of trust or other instrument
creating a
first lien on an estate in fee simple or leasehold interest in
real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
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 Index: As to each Mortgage Loan, the index from time to
time in
effect for adjustment of the Mortgage Rate as set forth as such
on the related
Mortgage Note.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to time
amended by the Master Servicer to reflect the addition of
Substitute Mortgage
Loans, the addition of any Supplemental Mortgage Loans pursuant
to the
provisions of this Agreement and any Supplemental Transfer
Agreement, and the
deletion of Deleted Mortgage Loans pursuant to the provisions of
this
Agreement) transferred to the Trustee as part of the Trust Fund
and from time
to time subject to this Agreement, attached to this Agreement as
Schedule I,
setting forth the following information with respect to each
Mortgage Loan by
Loan Group:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the
Mortgaged
Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off
Date;
(viii) the Loan-to-Value Ratio at origination;
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<PAGE>
(ix) a code indicating whether the residential dwelling at
the
time of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is
either
(a) a detached or attached single family dwelling, (b) a
dwelling
in a de minimis PUD, (c) a condominium unit or PUD (other than
a
de minimis PUD), (d) a two- to four-unit residential property
or
(e) a Cooperative Unit;
(xi) the Mortgage Rate in effect as of the Cut-off Date;
(xii) the Master Servicing Fee Rate both before and after
the
initial Adjustment Date for each Mortgage Loan;
(xiii) a code indicating whether the Mortgage Loan is a Lender
PMI
Mortgage Loan and, in the case of any Lender PMI Mortgage Loan,
a
percentage representing the amount of the related interest
premium
charged to the borrower;
(xiv) the purpose for the Mortgage Loan;
(xv) the type of documentation program pursuant to which the
Mortgage Loan was originated;
(xvi) the direct servicer of such Mortgage Loan as of the
Cut-off
Date;
(xvii) a code indicating whether the Mortgage Loan is a MERS
Mortgage Loan;
(xviii) a code indicating whether the Mortgage Loan is a
Countrywide Mortgage Loan, a Park Granada Mortgage Loan, a
Park
Monaco Mortgage Loan or a Park Sienna Mortgage Loan; and
(xix) with respect to each Mortgage Loan, the Gross Margin,
the
Mortgage Index, the Maximum Mortgage Rate, the Minimum
Mortgage
Rate, the Periodic Rate Cap and the first Adjustment Date for
such
Mortgage Loan.
Such schedule shall also set forth the total of the amounts
described
under (iv) and (v) above for all of the Mortgage Loans and for
each Loan
Group. Countrywide shall update the Mortgage Loan Schedule in
connection with
each Supplemental Transfer Agreement within a reasonable period
of time after
delivery to it of the Schedule of Supplemental Mortgage Loans
attached to the
related Supplemental Transfer Agreement as Schedule A
thereto.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to
the Trustee pursuant to the provisions of this Agreement and any
Supplemental
Transfer Agreement as from time to time are held as a 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.
Mortgage Note: The original executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
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<PAGE>
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note from
time to time, net of any interest premium charged by the
mortgagee to obtain
or maintain any Primary Insurance Policy.
Mortgaged Property: The underlying property securing a Mortgage
Loan,
which, with respect to a Cooperative Loan, is the related Coop
Shares and
Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
National Cost of Funds Index: The National Monthly Median Cost
of Funds
Ratio to SAIF-Insured Institutions published by the Office of
Thrift
Supervision.
Net Prepayment Interest Shortfalls: As to any Distribution Date
and Loan
Group, the amount by which the aggregate of the Prepayment
Interest Shortfalls
for such Loan Group for such Distribution Date exceeds an amount
equal to the
sum of (a) the Compensating Interest for such Loan Group and
Distribution Date
and (b) the excess, if any, of the Compensating Interest for the
other Loan
Group for that Distribution Date over the Prepayment Interest
Shortfalls for
such other Loan Group for such Distribution Date.
Non-Delay Certificates: As specified in the Preliminary
Statement.
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 be ultimately recoverable by the
Master Servicer
from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Notional Amount: Not applicable.
Notional Amount Certificates: As specified in the Preliminary
Statement.
Notional Component: As specified in the Preliminary
Statement.
Offered Certificates: As specified in the Preliminary
Statement.
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.
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<PAGE>
Opinion of Counsel: A written opinion of counsel, who may be
counsel for
the Depositor, a Seller or the Master Servicer, including
in-house counsel,
reasonably acceptable to the Trustee; provided, however, that
with respect to
the interpretation or application of the REMIC Provisions, such
counsel must
(i) in fact be independent of the Depositor, a Seller and the
Master Servicer,
(ii) not have any direct financial interest in the Depositor, a
Seller or the
Master Servicer or in any affiliate thereof, and (iii) not be
connected with
the Depositor, a Seller 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 created under
this
Agreement in connection with the purchase of the Mortgage Loans
pursuant to
Section 9.01.
Original Applicable Credit Support Percentage: With respect to
each of
the following Classes of Subordinated Certificates, the
corresponding
percentage described below, as of the Closing Date:
Class M 6.50%
Class B-1 4.00%
Class B-2 2.70%
Class B-3 1.90%
Class B-4 1.05%
Class B-5 0.45%
Original Mortgage Loan: The mortgage loan refinanced in
connection with
the origination of a Refinancing Mortgage Loan.
Original Subordinate Principal Balance: On or prior to a
Senior
Termination Date, the Subordinated Percentage for a Loan Group
of the
aggregate Stated Principal Balance of the Mortgage Loans in such
Loan Group,
in each case as of the Cut-off Date or, if such date is after a
Senior
Termination Date, the aggregate Class Certificate Balance of the
Subordinated
Certificates as of the Closing Date.
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 Due Date, a Mortgage Loan
with a
Stated Principal Balance greater than zero, which was not the
subject of a
Principal Prepayment in Full prior to the end of the Prepayment
Period related
to such Due Date and which did not become a Liquidated Mortgage
Loan prior to
such Due Date.
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<PAGE>
Overcollateralized Group: As defined in Section 4.05.
Ownership Interest: As to any Residual Certificate, any
ownership
interest in such Certificate including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect,
legal or beneficial.
Park Granada: Park Granada LLC, a Delaware limited liability
company,
and its successors and assigns, in its capacity as the seller of
the Park
Granada Mortgage Loans to the Depositor.
Park Granada Mortgage Loans: The Mortgage Loans identified as
such on
the Mortgage Loan Schedule for which Park Granada is the
applicable Seller.
Park Monaco: Park Monaco Inc., a Delaware corporation, and
its
successors and assigns, in its capacity as the seller of the
Park Monaco
Mortgage Loans to the Depositor.
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, in its capacity as the seller of the
Park Sienna
Mortgage Loans to the Depositor.
Park Sienna Mortgage Loans: The Mortgage Loans identified as
such on the
Mortgage Loan Schedule for which Park Sienna is the applicable
Seller.
Pass-Through Rate: For any interest-bearing Class of
Certificates, the
per annum rate set forth or calculated in the manner described
in the
Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage
interest
evidenced thereby in distributions required to be made on the
related Class,
such percentage interest being set forth on the face thereof or
equal to the
percentage obtained by dividing the Denomination of such
Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Performance Certification: As defined in Section 11.05.
Periodic Rate Cap: With respect to each Mortgage Loan and any
Adjustment
Date therefor, the fixed percentage set forth in the related
Mortgage Note,
which is the maximum amount by which the Mortgage Rate for such
Mortgage Loan
may increase or decrease (without regard to the Maximum Mortgage
Rate or the
Minimum Mortgage Rate) on such Adjustment Date from the Mortgage
Rate in
effect immediately prior to such Adjustment Date.
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;
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<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 will not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by each 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 will not result in
the
downgrading or withdrawal of the ratings then assigned to
the
Certificates by each 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 Rating Agency for such securities,
or
such lower ratings as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates
by
either 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) units of a taxable money-market portfolio having the
highest
rating assigned by each Rating Agency (except if Fitch is a
Rating
Agency and has not rated the portfolio, the highest rating
assigned by Moody's) and restricted to obligations issued or
guaranteed by the United States of America or entities whose
obligations are backed by the full faith and credit of the
United
States of America and repurchase agreements collateralized by
such
obligations; and
(vii) such other relatively risk free investments 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 either Rating Agency, as
evidenced
by a signed writing delivered by each Rating Agency
provided, that no such instrument shall be a Permitted
Investment if such
instrument evidences the right to receive interest only payments
with respect
to the obligations underlying such instrument.
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
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<PAGE>
the Code) which 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 Residual 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 created or organized in or under
the laws of the
United States, any State thereof or the District of Columbia, or
an estate or
trust 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 the authority to control all substantial decisions
of the trust
unless such Person has furnished the transferor and the Trustee
with a duly
completed Internal Revenue Service Form W-8ECI or any applicable
successor
form, and (vii) any other Person so designated by the Depositor
based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in
a Residual
Certificate to such Person may cause any REMIC created under
this Agreement to
fail to qualify as a REMIC at any time that the 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, joint
venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificate: As specified in the Preliminary
Statement.
Planned Balance: With respect to any Planned Principal Class or
Planned
Principal Component and any Distribution Date appearing in
Schedule V, the
amount appearing opposite such Distribution Date for such
Class.
Planned Principal Classes: As specified in the Preliminary
Statement.
Planned Principal Components: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any date of determination,
the
aggregate of the Stated Principal Balances of the Outstanding
Mortgage Loans
as of such date plus the amount on deposit in the Pre-Funding
Account as of
such date, exclusive of any investment income therein.
Pre-Funded Amount: The amount deposited in the Pre-Funding
Account on
the Closing Date, which shall equal $14,641.13, of which
$3,477.55 shall be
allocable to Loan Group 1 and $11,163.58 shall be allocable to
Loan Group 2.
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
26
<PAGE>
Certificateholders and designated "The Bank of New York, in
trust for
registered holders of Alternative Loan Trust 2007-HY2, Mortgage
Pass-Through
Certificates, Series 2007-HY2." 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 shall be
for the
account of the Depositor.
Prepayment Interest Excess: As to any Principal Prepayment
received by
the Master Servicer from the first day through the fifteenth day
of any
calendar month (other than the calendar month in which the
Initial Cut-off
Date occurs), all amounts paid by the related Mortgagor in
respect of interest
on such Principal Prepayment. All Prepayment Interest Excess
shall be paid to
the Master Servicer as additional master servicing
compensation.
Prepayment Interest Shortfall: As to any Distribution Date, any
Mortgage
Loan and any Principal Prepayment received during the portion of
the related
Prepayment Period in the prior calendar month, the amount, if
any, by which
one month's interest at the related Mortgage Rate, net of the
related Master
Servicing Fee Rate, on such Principal Prepayment exceeds the
amount of
interest paid in connection with such Principal Prepayment.
Prepayment Period: As to any Distribution Date and the related
Due Date,
the period from the 16th day of the calendar month immediately
preceding the
month in which the Distribution Date occurs (or, in the case of
the first
Distribution Date, from January 1, 2007) through the 15th day of
the calendar
month in which the Distribution Date occurs.
Prepayment Shift Percentage: Not applicable.
Primary Insurance Policy: Each policy of primary mortgage
guaranty
insurance or any replacement policy therefor with respect to any
Mortgage
Loan.
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 Amount: As to any Distribution Date and any Loan
Group, an
amount equal to (1) the sum of (a) the principal portion of each
Scheduled
Payment (without giving effect to any reductions thereof caused
by any Debt
Service Reductions or Deficient Valuations) due on each Mortgage
Loan (other
than a Liquidated Mortgage Loan) in such Loan Group on the
related Due Date,
(b) the principal portion of the Purchase Price of each Mortgage
Loan in such
Loan Group that was repurchased by the applicable Seller or
purchased by the
Master Servicer pursuant to this Agreement as of such
Distribution Date, (c)
the Substitution Adjustment Amount in connection with any
Deleted Mortgage
Loan in such Loan Group received with respect to such
Distribution Date, (d)
any Insurance Proceeds or Liquidation Proceeds allocable to
recoveries of
principal of Mortgage Loans in such Loan Group that are not yet
Liquidated
Mortgage Loans received during the calendar month preceding the
month of such
Distribution Date, (e) with respect to each Mortgage Loan in a
Loan Group that
became a Liquidated Mortgage Loan during the calendar month
preceding the
month of such Distribution Date, the amount of the
Liquidation
27
<PAGE>
Proceeds allocable to principal received during the calendar
month preceding
the month of such Distribution Date with respect to such
Mortgage Loan, (f)
all Principal Prepayments for such Loan Group received during
the related
Prepayment Period, (g) any Subsequent Recoveries on the Mortgage
Loans in such
Loan Group received during the calendar month preceding the
month of such
Distribution Date, (h) on the last Funding Period Distribution
Date, the
portion of the Remaining Pre-Funded Amount allocable to that
Loan Group, and
(i) the principal portion of any Transfer Payment Received for
such Loan
Group, minus (2) the principal portion of any Transfer Payment
Made for such
Loan Group and Distribution Date in accordance with Section
4.05.
Principal Prepayment: Any payment of principal by a Mortgagor on
a
Mortgage Loan that is received in advance of its scheduled Due
Date and is not
accompanied by an amount 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 Prepayment in Full: Any Principal Prepayment made by
a
Mortgagor of the entire principal balance of a Mortgage
Loan.
Principal Relocation Payment: A payment from any Loan Group to a
Lower
Tier REMIC Regular Interest other than a Regular Interest
corresponding to
that Loan Group as provided in the Preliminary Statement.
Principal Relocation
Payments from a Loan Group shall be made of the amounts in
respect of
principal from the Mortgage Loans of the Loan Group and shall
include a
proportionate allocation of the Realized Losses from the
Mortgage Loans of the
Loan Group.
Private Certificate: As specified in the Preliminary
Statement.
Pro Rata Share: As to any Distribution Date, the Subordinated
Principal
Distribution Amount and any Class of Subordinated Certificates,
the portion of
the Subordinated Principal Distribution Amount allocable to such
Class, equal
to the product of the Subordinated Principal Distribution Amount
on such
Distribution Date and a fraction, the numerator of which is the
related Class
Certificate Balance thereof and the denominator of which is the
aggregate of
the Class Certificate Balances of the Subordinated
Certificates.
Pro Rata Subordinated Percentage: As to any Distribution Date
and Loan
Group, 100% minus the related Senior Percentage for such
Distribution Date.
Proprietary Lease: With respect to any Cooperative Unit, a lease
or
occupancy agreement between a Cooperative Corporation and a
holder of related
Coop Shares.
Prospectus: The prospectus dated November 14, 2006 generally
relating to
mortgage-pass through certificates to be sold by the
Depositor.
Prospectus Supplement: The Prospectus Supplement dated January
29, 2007
relating to the Offered Certificates.
PUD: Planned unit development.
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Purchase Price: With respect to any Mortgage Loan required to
be
purchased by a Seller pursuant to Section 2.02 or 2.03 of this
Agreement or
purchased at the option of the Master Servicer pursuant to
Section 3.11, an
amount equal to the sum of (i) 100% of the unpaid principal
balance of the
Mortgage Loan on the date of such purchase, (ii) accrued
interest thereon at
the applicable Mortgage Rate (or at the applicable Adjusted
Mortgage Rate if
(x) the purchaser is the Master Servicer or (y) if the purchaser
is
Countrywide and Countrywide is an affiliate of the Master
Servicer) from the
date through which interest was last paid by the Mortgagor to
the Due Date in
the month in which the Purchase Price is to be distributed
to
Certificateholders and (iii) costs and damages incurred by the
Trust Fund in
connection with a repurchase pursuant to Section 2.03 of this
Agreement that
arises out of a violation of any predatory or abusive lending
law with respect
to the related Mortgage Loan.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified
as such under the laws of the state of its principal place of
business and
each state having jurisdiction over such insurer in connection
with the
insurance policy issued by such insurer, duly authorized and
licensed in such
states to transact a mortgage guaranty insurance business in
such states and
to write the insurance provided by the insurance policy issued
by it, approved
as a FNMA-approved mortgage insurer and having a claims paying
ability rating
of at least "AA" or equivalent rating by a nationally recognized
statistical
rating organization. Any replacement insurer with respect to a
Mortgage Loan
must have at least as high a claims paying ability rating as the
insurer it
replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary
Statement. If any such organization or a successor is no longer
in existence,
"Rating Agency" shall be such nationally recognized statistical
rating
organization, or other comparable Person, identified as a
"Rating Agency"
under the Underwriter Exemption, as is designated by the
Depositor, notice of
which designation shall be given to the Trustee. References in
this Agreement
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 the Liquidated Mortgage Loan as of the date of such
liquidation,
plus (ii) interest at the Adjusted Net Mortgage Rate from the
Due Date as to
which interest was last paid or advanced (and not reimbursed)
to
Certificateholders 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 from time to time, minus (iii) the
Liquidation
Proceeds, if any, received during the month in which such
liquidation
occurred, to the extent applied as recoveries of interest at the
Adjusted Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan.
With respect
to each Mortgage Loan that has become the subject of a Deficient
Valuation, if
the principal amount due under the related Mortgage Note has
been reduced, the
difference between the principal balance of the Mortgage Loan
outstanding
immediately prior to such Deficient Valuation and the principal
balance of the
Mortgage Loan as reduced by the Deficient Valuation.
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<PAGE>
To the extent the Master Servicer receives Subsequent Recoveries
with
respect to any Mortgage Loan, the amount of Realized Losses with
respect to
that Mortgage Loan will be reduced by the amount of those
Subsequent
Recoveries.
Recognition Agreement: With respect to any Cooperative Loan,
an
agreement between the Cooperative Corporation and the originator
of such
Mortgage Loan which establishes the rights of such originator in
the
Cooperative Property.
Record Date: With respect to any Distribution Date, the close
of
business on the last Business Day of the month preceding the
month in which
such Distribution Date occurs.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary
Statement.
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.
Relief Act: The Servicemembers Civil Relief Act.
Relief Act Reductions: With respect to any Distribution Date and
any
Mortgage Loan as to which there has been a reduction in the
amount of interest
collectible thereon for the most recently ended calendar month
as a result of
the application of the Relief Act or any similar law, the
amount, if any, by
which (i) interest collectible on such Mortgage Loan for the
most recently
ended calendar month is less than (ii) interest accrued thereon
for such month
pursuant to the Mortgage Note.
Remaining Pre-Funded Amount: With respect to the last Funding
Period
Distribution Date, the amount on deposit in the Pre-Funding
Account on such
date (exclusive of any investment earnings included
therein).
REMIC: A "real estate mortgage investment conduit" within the
meaning of
section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final
regulation,
revenue ruling, revenue procedure or other official announcement
or
interpretation relating to REMICs and the REMIC Provisions
issued after the
Closing Date.
REMIC Provisions: Provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at
sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and
related provisions,
and regulations promulgated thereunder, as the foregoing may be
in effect from
time to time as well as provisions of applicable state laws.
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<PAGE>
REO Property: A Mortgaged Property acquired by the Trust Fund
through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Reportable Event: Any event required to be reported on Form 8-K,
and in
any event, the following:
(a) entry into a definitive agreement related to the Trust
Fund,
the Certificates or the Mortgage Loans, or an amendment to a
Transaction
Document, even if the Depositor is not a party to such agreement
(e.g., a
servicing agreement with a servicer contemplated by Item
1108(a)(3) of
Regulation AB);
(b) termination of a Transaction Document (other than by
expiration of the agreement on its stated termination date or as
a result of
all parties completing their obligations under such agreement),
even if the
Depositor is not a party to such agreement (e.g., a servicing
agreement with a
servicer contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to the Master Servicer only, if the Master
Servicer becomes aware of any bankruptcy or receivership with
respect to
Countrywide, the Depositor, the Master Servicer, any
Subservicer, the Trustee,
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) the resignation, removal, replacement, substitution of
the
Master Servicer, any Subservicer or the Trustee;
(f) 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
(g) 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
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<PAGE>
Reporting Subcontractor shall refer only to the Subcontractor of
such Person
and shall not refer to Subcontractors generally.
Request for Release: The Request for Release submitted by the
Master
Servicer to the Trustee, substantially in the form of Exhibits M
and N to this
Agreement, as appropriate.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy that is required to be maintained from time to
time under
this Agreement.
Residual Certificates: As specified in the Preliminary
Statement.
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.
Restricted Classes: As defined in Section 4.02(e).
Sarbanes-Oxley Certification: As defined in Section 11.05.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due
on any Due Date allocable to principal and/or interest on such
Mortgage Loan
which, unless otherwise specified in this Agreement, shall give
effect to any
related Debt Service Reduction and any Deficient Valuation that
affects the
amount of the monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Seller: Countrywide, Park Granada, Park Monaco or Park Sienna,
as
applicable.
Senior Certificate Group: As specified in the Preliminary
Statement.
Senior Certificates: As specified in the Preliminary
Statement.
Senior Credit Support Depletion Date: The date on which the
Class
Certificate Balance of each Class of Subordinated Certificates
has been
reduced to zero.
Senior Percentage: As to any Senior Certificate Group and
Distribution
Date, the percentage equivalent of a fraction the numerator of
which is the
aggregate of the Class Certificate Balances of each Class of
Senior
Certificates of such Senior Certificate Group (other than the
Notional Amount
Certificates) immediately prior to such Distribution Date and
the denominator
of which is the aggregate Stated Principal Balance of Mortgage
Loans in the
related Loan Group as of the Due Date in the month preceding the
month of such
Distribution Date (after giving effect to Principal Prepayments
received in
the Prepayment Period related to such Due Date); provided,
however, that on
any Distribution Date after a Senior Termination Date, the
Senior Percentage
for the Senior Certificates of the remaining Senior Certificate
Group is the
percentage equivalent of a fraction, the numerator of which is
the aggregate
of the Class Certificate Balances of each such Class of Senior
Certificates
(other than the Notional Amount
32
<PAGE>
Certificates) immediately prior to such Distribution Date and
the denominator
of which is the aggregate of the Class Certificate Balances of
all Classes of
Certificates (other than the Notional Amount Certificates)
immediately prior
to such Distribution Date. In no event will any Senior
Percentage be greater
than 100%.
Senior Prepayment Percentage: As to a Senior Certificate Group
and any
Distribution Date during the ten years beginning on the first
Distribution
Date, 100%. The related Senior Prepayment Percentage for any
Senior
Certificate Group and Distribution Date occurring on or after
the tenth
anniversary of the first Distribution Date will, except as
provided in this
Agreement, be as follows: for any Distribution Date in the first
year
thereafter, the related Senior Percentage plus 70% of the
related Subordinated
Percentage for such Distribution Date; for any Distribution Date
in the second
year thereafter, the related Senior Percentage plus 60% of the
related
Subordinated Percentage for such Distribution Date; for any
Distribution Date
in the third year thereafter, the related Senior Percentage plus
40% of the
related Subordinated Percentage for such Distribution Date; for
any
Distribution Date in the fourth year thereafter, the related
Senior Percentage
plus 20% of the related Subordinated Percentage for such
Distribution Date;
and for any Distribution Date thereafter, the related Senior
Percentage for
such Distribution Date; provided, however, that if on any
Distribution Date
the related Senior Percentage exceeds the Senior Percentage of
such Senior
Certificate Group as of the Closing Date, then the Senior
Prepayment
Percentage for each Senior Certificate Group for such
Distribution Date will
equal 100%. Notwithstanding the foregoing, no decrease in the
related Senior
Prepayment Percentage will occur unless both of the Senior Step
Down
Conditions are satisfied with respect to all Loan Groups.
Notwithstanding the
foregoing, if the Two Times Test is satisfied on a Distribution
Date, the
Senior Prepayment Percentage for each Senior Certificate Group
will equal (x)
if such Distribution Date is on or prior to the Distribution
Date in January
2010, the related Senior Percentage for such Distribution Date
plus 50% of the
related Subordinated Percentage for that Distribution Date and
(y) if such
Distribution Date is after the Distribution Date in January
2010, the related
Senior Percentage.
Senior Principal Distribution Amount: As to any Distribution
Date and
Loan Group, the sum of (i) the related Senior Percentage of all
amounts
described in clauses (a) through (d) of the definition of
"Principal Amount"
with respect to that Loan Group for such Distribution Date, (ii)
with respect
to any Mortgage Loan in that Loan Group that became a Liquidated
Mortgage Loan
during the calendar month preceding the month of such
Distribution Date, the
lesser of (x) the related Senior Percentage of the Stated
Principal Balance of
such Mortgage Loan as of the Due Date in the month preceding the
month of that
Distribution Date and (y) the related Senior Prepayment
Percentage of the
amount of the Liquidation Proceeds allocable to principal
received on the
Mortgage Loan, (iii) the related Senior Prepayment Percentage of
the amounts
described in clauses (f) and (g) of the definition of "Principal
Amount" with
respect to that Loan Group for such Distribution Date; (iv) on
the last
Funding Period Distribution Date, the portion of the Remaining
Pre-Funded
Amount allocable to that Loan Group; and (v) the principal
portion of any
Transfer Payment Received for that Loan Group and Distribution
Date; provided,
however, on any Distribution Date after a Senior Termination
Date, the Senior
Principal Distribution Amount will be calculated pursuant to the
above formula
based on all the Mortgage Loans, as opposed to the Mortgage
Loans in a Loan
Group.
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<PAGE>
Senior Step Down Conditions: On or prior to a Senior Termination
Date,
with respect to the Mortgage Loans in a Loan Group and after a
Senior
Termination Date, with respect to all Mortgage Loans: (i) the
aggregate Stated
Principal Balance of such Mortgage Loans delinquent 60 days or
more (including
Mortgage Loans in foreclosure, REO Property and Mortgage Loans,
the Mortgagors
of which are in bankruptcy) (averaged over the preceding six
month period),
does not equal or exceed 50% of (1) on or prior to a Senior
Termination Date,
the Subordinated Percentage for such Loan Group of the aggregate
Stated
Principal Balance of the Mortgage Loans in such Loan Group or
(2) after a
Senior Termination Date, the aggregate Class Certificate Balance
of the
Subordinated Certificates on the Distribution Date and (ii)
cumulative
Realized Losses on such Mortgage Loans do not exceed: (a)
commencing with the
Distribution Date on the tenth anniversary of the first
Distribution Date, 30%
of the Original Subordinate Principal Balance, (b) commencing
with the
Distribution Date on the eleventh anniversary of the first
Distribution Date,
35% of the Original Subordinate Principal Balance, (c)
commencing with the
Distribution Date on the twelfth anniversary of the first
Distribution Date,
40% of the Original Subordinate Principal Balance, (d)
commencing the
Distribution Date on the thirteenth anniversary of the first
Distribution
Date, 45% of the Original Subordinate Principal Balance and (e)
commencing
with the Distribution Date on the fourteenth anniversary of the
first
Distribution Date, 50% of the Original Subordinate Principal
Balance.
Senior Termination Date: For each Senior Certificate Group,
the
Distribution Date on which the aggregate Class Certificate
Balance of the
related Classes of Senior Certificates have been reduced to
zero.
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, including, but not limited to, the
cost of (i)
the preservation, restoration and protection of a Mortgaged
Property, (ii) any
expenses reimbursable to the Master Servicer pursuant to Section
3.11 and any
enforcement or judicial proceedings, including foreclosures,
(iii) the
management and liquidation of any REO Property and (iv)
compliance with the
obligations under Section 3.09.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d)
of Regulation AB.
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.
S&P: Standard & Poor's Ratings Services, a division of
The McGraw-Hill
Companies, Inc. If S&P is designated as a Rating Agency in
the Preliminary
Statement, for purposes of Section 10.05(b) the address for
notices to S&P
shall be Standard & Poor's Ratings Services, 55 Water
Street, New York, New
York 10041, Attention: Mortgage Surveillance Monitoring, or such
other address
as S&P may hereafter furnish to the Depositor and the Master
Servicer.
Startup Day: The Closing Date.
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<PAGE>
Stated Principal Balance: As to any Mortgage Loan and Due Date,
the
unpaid principal balance of such Mortgage Loan as of such Due
Date as
specified in the amortization schedule at the time relating
thereto (before
any adjustment to such amortization schedule by reason of any
moratorium or
similar waiver or grace period), minus the sum of (i) the
payment of principal
due on such Due Date, irrespective of any delinquency in payment
by the
related Mortgagor, (ii) Liquidation Proceeds allocable to
principal (other
than with respect to any Liquidated Mortgage Loan) received in
the prior
calendar month, (iii) Principal Prepayments received through the
last day of
the related Prepayment Period and (iv) 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.
Streamlined Documentation Mortgage Loan: Any Mortgage Loan
originated
pursuant to Countrywide Home Loan Inc.'s Streamlined Loan
Documentation
Program then in effect. For the purposes of this Agreement, a
Mortgagor is
eligible for a mortgage pursuant to Countrywide's Streamlined
Loan
Documentation Program if that Mortgagor is refinancing an
existing mortgage
loan that was originated or acquired by Countrywide where, among
other things,
the mortgage loan has not been more than 30 days delinquent in
payment during
the previous twelve month period.
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 Pass-Through Rate: For the Interest Accrual Period
related
to each Distribution Date, a per annum rate equal to (1) the sum
of the
following for each Loan Group: the product of (x) the Weighted
Average
Adjusted Net Mortgage Rate of the related Mortgage Loans and (y)
the related
Subordinated Portion immediately prior to that Distribution
Date, divided by
(2) the aggregate Class Certificate Balance of the Subordinated
Certificates
immediately prior to that Distribution Date.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Percentage: As to any Loan Group and Distribution
Date on
or prior to a Senior Termination Date, 100% minus the Senior
Percentage for
such Distribution Date for the Senior Certificate Group relating
to such Loan
Group. As to any Distribution Date after a Senior Termination
Date, 100% minus
the Senior Percentage for such Distribution Date.
Subordinated Portion: For any Distribution Date and Loan Group,
an
amount equal to the aggregate Stated Principal Balance of the
Mortgage Loans
in that Loan Group as of the Due Date in the month prior to the
month of such
Distribution Date (after giving effect to Principal Prepayments
in the
Prepayment Period related to that prior Due Date), minus the
aggregate Class
Certificate Balance of the related Senior Certificates
immediately prior to
such Distribution Date.
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<PAGE>
Subordinated Prepayment Percentage: As to any Distribution Date
and Loan
Group, 100% minus the related Senior Prepayment Percentage for
such
Distribution Date.
Subordinated Principal Distribution Amount: With respect to
any
Distribution Date and Loan Group, an amount equal to the excess
of (A) the
sum, not less than zero, of the sum of (i) the Subordinated
Percentage of all
amounts described in clauses (a) through (d) of the definition
of "Principal
Amount" for that Loan Group and that Distribution Date, (ii)
with respect to
each Mortgage Loan in that Loan Group that became a Liquidated
Mortgage Loan
during the calendar month preceding the month of such
Distribution Date, the
Liquidation Proceeds allocated to principal received with
respect thereto
remaining after application thereof pursuant to clause (ii) of
the definition
of "Senior Principal Distribution Amount", up to the
Subordinated Percentage
for such Loan Group of the Stated Principal Balance of that
Mortgage Loan, and
(iii) the sum of the Subordinated Prepayment Percentage for that
Loan Group of
all amounts described in clauses (f) and (g) of the definition
of "Principal
Amount" for such Loan Group and Distribution Date over (B) the
principal
portion of any Transfer Payments Made for such Loan Group;
provided, however,
that on any Distribution Date after a Senior Termination Date,
the
Subordinated Principal Distribution Amount will not be
calculated by Loan
Group but will equal the amount calculated pursuant to the
formula set forth
above based on the applicable Subordinated Percentage and
Subordinated
Prepayment Percentage for the Subordinated Certificates for such
Distribution
Date with respect to all of the Mortgage Loans as opposed to the
Mortgage
Loans only in the related Loan Group.
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)
specifically
related to such Liquidated Mortgage Loan.
Subservicer: Any person to whom the Master Servicer has
contracted for
the servicing of all or a portion of the Mortgage Loans pursuant
to Section
3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted by the
applicable
Seller for a Deleted Mortgage Loan which must, on the date of
such
substitution, as confirmed in a Request for Release,
substantially in the form
of Exhibit M, (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 more than 10% less than the Stated
Principal Balance
of the Deleted Mortgage Loan; (ii) be accruing interest at a
rate no lower
than and not more than 1% per annum higher than, that of the
Deleted Mortgage
Loan; (iii) have a Loan-to-Value Ratio no higher than that of
the Deleted
Mortgage Loan; (iv) have a remaining term to maturity no greater
than (and not
more than one year less than that of) the Deleted Mortgage Loan;
(v) have a
Maximum Mortgage Rate not more than 1% per annum higher or lower
than, that of
the Deleted Mortgage Loan; (vi) have a Minimum Mortgage Rate
specified in its
related mortgage note not more than 1% per annum higher or lower
than the
Minimum Mortgage Rate of the Deleted Mortgage Loan; (vii) have
the same
Mortgage Index, Mortgage Index reset period and Periodic Rate
Cap as the
Deleted Mortgage Loan and a Gross Margin not more than 1% per
annum higher or
lower than that of the Deleted Mortgage Loan; (viii) not be a
Cooperative Loan
unless the Deleted Mortgage Loan was a Cooperative Loan; and
(ix) comply with
each representation and warranty set forth in Section 2.03.
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<PAGE>
Substitution Adjustment Amount: The meaning ascribed to such
term
pursuant to Section 2.03.
Supplemental Cut-off Date: With respect to any Supplemental
Mortgage
Loan, the later of (i) the date of origination of such Mortgage
Loan and (ii)
the first day of the month in which the related Supplemental
Transfer Date
occurs.
Supplemental Mortgage Loan: Any Mortgage Loan other than an
Initial
Mortgage Loan conveyed to the Trust Fund pursuant to Section
2.01 hereof and
to a Supplemental Transfer Agreement, which Mortgage Loan shall
be listed on
the revised Mortgage Loan Schedule delivered pursuant to this
Agreement and on
Schedule A to such Supplemental Transfer Agreement. When used
with respect to
a single Supplemental Transfer Date, Supplemental Mortgage Loan
shall mean a
Supplemental Mortgage Loan conveyed to the Trust Fund on that
Supplemental
Transfer Date.
Supplemental Transfer Agreement: A Supplemental Transfer
Agreement
substantially in the form of Exhibit P hereto, executed and
delivered by the
related Seller or Sellers, the Master Servicer, the Depositor
and the Trustee
as provided in Section 2.01 hereof.
Supplemental Transfer Date: For any Supplemental Transfer
Agreement, the
date the related Supplemental Mortgage Loans are transferred to
the Trust Fund
pursuant to the related Supplemental Transfer Agreement.
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, the Tax Matters
Person shall be
the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with
a
Denomination of $0.01.
Transaction Documents: This 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 Residual Certificate.
Transfer Payment Made: As defined in Section 4.05.
Transfer Payment Received: As defined in Section 4.05.
Trust Fund: The corpus of the trust created under this
Agreement
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 of the Mortgage
Loans; (ii) the
Certificate Account, the Distribution Account, the Pre-Funding
Account, the
Capitalized Interest Account, and all amounts deposited therein
pursuant to
the applicable provisions of this Agreement; (iii) property that
secured a
Mortgage Loan and has been acquired by foreclosure, deed-in-lieu
of
foreclosure or otherwise; and (iv) all proceeds of the
conversion, voluntary
or involuntary, of any of the foregoing.
37
<PAGE>
Trustee: The Bank of New York and its successors and, if a
successor
trustee is appointed under this Agreement, such successor.
Trustee Advance Rate: With respect to any Advance made by the
Trustee
pursuant to Section 4.01(b), 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 Pool Stated Principal
Balance as of
the Due Date in the calendar month preceding the month in which
such
Distribution Date occurs (after giving effect to Principal
Prepayments
received in the Prepayment Period related to such Due Date).
Trustee Fee Rate: With respect to each Mortgage Loan, 0.009% per
annum.
Two Times Test: As to any Distribution Date, if (i) the
Aggregate
Subordinated Percentage is at least 200% of the Aggregate
Subordinated
Percentage as of the Closing Date, (ii) clause (i) of the Senior
Step Down
Conditions is satisfied and (iii) the cumulative Realized Losses
on all the
Mortgage Loans do not exceed (x) with respect to any
Distribution Date on or
prior to January 2010, 20% of the aggregate Class Certificate
Balance of the
Subordinated Certificates as of the Closing Date or (y) with
respect to any
Distribution Date after January 2010, 30% of the aggregate Class
Certificate
Balance of the Subordinated Certificates as of the Closing
Date.
Undercollateralized Group: As defined in Section 4.05.
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.
Voting Rights: The portion of the voting rights of all of
the
Certificates which is allocated to any Certificate. As of any
date of
determination, (a) 1% of all Voting Rights shall be allocated to
each Class of
Notional Amount Certificates, if any (such Voting Rights to be
allocated among
the holders of Certificates of each such Class in accordance
with their
respective Percentage Interests), and (b) the remaining Voting
Rights (or 100%
of the Voting Rights if there is no Class of Notional Amount
Certificates)
shall be allocated among Holders of the remaining Classes of
Certificates in
proportion to the Certificate Balances of their respective
Certificates on
such date.
Weighted Average Adjusted Net Mortgage Rate: For each Loan Group
and any
Distribution Date, the average of the Adjusted Net Mortgage Rate
of each
Mortgage Loan in that Loan Group, weighted on the basis of its
Stated
Principal Balance as of the Due Date in the month preceding the
month of such
Distribution Date (after giving effect to Principal Prepayments
in the
Prepayment Period related to that Due Date).
Weighted Average Roll Date: Not applicable.
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SECTION 1.02. Certain Interpretative Principles.
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; (g) references to any Person include that
Person's
permitted successors and assigns; and (h) a Mortgage Loan is "30
days
delinquent" if any Scheduled Payment has not been received by
the close of
business on the day immediately preceding the Due Date on which
the next
Scheduled Payment is due. Similarly for "60 days delinquent,"
"90 days
delinquent" and so on.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans
(a) Each Seller, concurrently with the execution and delivery of
this
Agreement, hereby sells, transfers, assigns, sets over and
otherwise conveys
to the Depositor, without recourse, all its respective right,
title and
interest in and to the related Initial Mortgage Loans, including
all interest
and principal received or receivable by such Seller, on or with
respect to the
applicable Initial Mortgage Loans after the Initial Cut-off Date
and all
interest and principal payments on the related Initial Mortgage
Loans received
prior to the Initial Cut-off Date in respect of installments of
interest and
principal due thereafter, but not including payments of
principal and interest
due and payable on such Initial Mortgage Loans on or before the
Initial
Cut-off Date. On or prior to the Closing Date, Countrywide shall
deliver to
the Depositor or, at the Depositor's direction, to the Trustee
or other
designee of the Depositor, the Mortgage File for each Mortgage
Loan listed in
the Mortgage Loan Schedule (except that, in the case of the
Delay Delivery
Mortgage Loans (which may include Countrywide Mortgage Loans,
Park Granada
Mortgage Loans, Park Monaco Mortgage Loans and Park Sienna
Mortgage Loans),
such delivery may take place within thirty (30) days following
the Closing
Date or twenty (20) days following the applicable Supplemental
Transfer Date,
as applicable). Such delivery of the Mortgage Files shall be
made against
payment by the Depositor of the purchase price, previously
agreed to by the
Sellers and Depositor, for the Mortgage Loans. With respect to
any Initial
Mortgage Loan that does not have a first payment date on or
before the Due
Date in the month of the first Distribution Date or any
Supplemental Mortgage
Loan that does not have a first payment date on or before the
Due Date in the
month after the related Supplemental Transfer Date, Countrywide
shall deposit
into the Distribution Account on or before the Distribution
Account Deposit
Date relating to the first applicable Distribution Date, an
amount equal to
one month's interest at the related Adjusted Mortgage Rate on
the Cut-off Date
Principal Balance of such Mortgage Loan.
(b) Immediately upon the conveyance of the Initial Mortgage
Loans
referred to in clause (a), the Depositor sells, transfers,
assigns, sets over
and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and
interest of the
Depositor in and to the Trust Fund together with the Depositor's
right to
require each Seller to cure any breach of a representation or
warranty made in
this Agreement by such Seller or to repurchase or substitute for
any affected
Mortgage Loan in accordance herewith.
(c) In connection with the transfer and assignment set forth in
clause
(b) above, the Depositor has delivered or caused to be delivered
to the
Trustee (or, in the case of the Delay Delivery Mortgage Loans
that are Initial
Mortgage Loans, will deliver or cause to be delivered to the
Trustee within
thirty (30) days following the Closing Date and in the case of
the Delay
Delivery Mortgage Loans that are Supplemental Mortgage Loans,
will deliver or
cause to be delivered to the Trustee within twenty (20) days
following the
applicable Supplemental Transfer Date) for the benefit of
the
Certificateholders the following documents or instruments with
respect to each
Mortgage Loan so assigned:
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(i) (A) 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 showing 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
(B) with respect to any Lost Mortgage Note, a lost note
affidavit from Countrywide stating that the original Mortgage
Note
was lost or destroyed, together with a copy of such Mortgage
Note;
(ii) except as provided below and for each Mortgage Loan
that is not a MERS Mortgage Loan, the original recorded
Mortgage
or a copy of such Mortgage, with recording information, (or,
in
the case of a Mortgage for which the related Mortgaged Property
is
located in the Commonwealth of Puerto Rico, a true copy of
the
Mortgage certified as such by the applicable notary) 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 Loans and either language
indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
MOM
Loan or if the Mortgage Loan was not a MOM Loan at
origination,
the original Mortgage and the assignment thereof to MERS,
with
evidence of recording indicated thereon, or a copy of the
Mortgage
certified by the public recording office in which such
Mortgage
has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage or
a
copy of such assignment, with recording information, (which may
be
included in a blanket assignment or assignments), together
with,
except as provided below, all interim recorded assignments of
such
mortgage 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
the
assignment relates); provided that, if the related Mortgage
has
not been returned from the applicable public recording
office,
such assignment of the Mortgage may exclude the information to
be
provided by the recording office; provided, further, that
such
assignment of Mortgage need not be delivered in the case of
a
Mortgage for which the related Mortgaged Property is located
in
the Commonwealth of Puerto Rico;
(iv) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any;
(v) except as provided below, the original or a copy of
lender's title policy or a printout of the electronic
equivalent
and all riders thereto; and
(vi) in the case of a Cooperative Loan, the originals of the
following documents or instruments:
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(A) The Coop Shares, together with a stock power in
blank;
(B) The executed Security Agreement;
(C) The executed Proprietary Lease;
(D) The executed Recognition Agreement;
(E) The executed UCC-1 financing statement with
evidence of recording thereon which have been filed in all
places required to perfect the applicable Seller's interest
in the Coop Shares and the Proprietary Lease; and
(F) The executed UCC-3 financing statements or other
appropriate UCC financing statements required by state law,
evidencing a complete and unbroken line from the mortgagee
to the Trustee with evidence of recording thereon (or in a
form suitable for recordation).
In addition, in connection with the assignment of any MERS
Mortgage
Loan, each Seller agrees that it will cause, at the Trustee's
expense, the
MERS(R) System to indicate that the Mortgage Loans sold by such
Seller to the
Depositor have been assigned by that Seller to the Trustee in
accordance with
this Agreement (and any Supplemental Transfer Agreement, as
applicable) 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 the information required by the MERS(R)
System to identify
the series of the Certificates issued in connection with such
Mortgage Loans.
Each Seller further agrees that it will not, and will not permit
the Master
Servicer to, and the Master Servicer agrees that it will not,
alter the
information referenced in this paragraph with respect to any
Mortgage Loan
sold by such Seller to the Depositor 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 the Depositor cannot deliver (a) the original
recorded
Mortgage or a copy of such mortgage, with recording information,
or (b) all
interim recorded assignments or a copy of such assignments, with
recording
information, or (c) the lender's title policy or a copy of
lender's title
policy (together with all riders thereto) satisfying the
requirements of
clause (ii), (iii) or (v) above, respectively, concurrently with
the execution
and delivery of this Agreement because such document or
documents have not
been returned from the applicable public recording office in the
case of
clause (ii) or (iii) above, or because the title policy has not
been delivered
to either the Master Servicer or the Depositor by the applicable
title insurer
in the case of clause (v) above, the Depositor shall promptly
deliver to the
Trustee, in the case of clause (ii) or (iii) above, such
original Mortgage or
a copy of such mortgage, with recording information, or such
interim
assignment or a copy of such assignments, with recording
information, as the
case may be, with evidence of recording indicated thereon upon
receipt thereof
from the public recording office, or a copy thereof, certified,
if
appropriate, by the relevant recording office, but in no event
shall any such
delivery of the original Mortgage and each such interim
assignment or a copy
thereof, certified, if appropriate, by the relevant recording
office, be made
later than one year following
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the Closing Date, or, in the case of clause (v) above, no later
than 120 days
following the Closing Date; provided, however, in the event the
Depositor is
unable to deliver by such date each Mortgage and each such
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 such
interim assignment,
because the related Mortgage has not been returned by the
appropriate
recording office, the Depositor shall deliver such documents to
the Trustee as
promptly as possible upon receipt thereof and, in any event,
within 720 days
following the Closing Date. The Depositor shall forward or cause
to be
forwarded to the Trustee (a) from time to time additional
original documents
evidencing an assumption or modification of a Mortgage Loan and
(b) any other
documents required to be delivered by the Depositor or the
Master Servicer to
the Trustee. In the event that the original Mortgage is not
delivered and in
connection with the payment in full of the related Mortgage Loan
and the
public recording office requires the presentation of a "lost
instruments
affidavit and indemnity" or any equivalent document, because
only a copy of
the Mortgage can be delivered with the instrument of
satisfaction or
reconveyance, the Master Servicer shall execute and deliver or
cause to be
executed and delivered such a document to the public recording
office. In the
case where a public recording office retains the original
recorded Mortgage or
in the case where a Mortgage is lost after recordation in a
public recording
office, Countrywide shall deliver to the Trustee a copy of such
Mortgage
certified by such public recording office to be a true and
complete copy of
the original recorded Mortgage.
As promptly as practicable subsequent to such transfer and
assignment,
and in any event, within one hundred twenty (120) days after
such transfer and
assignment, the Trustee shall (A) as the assignee thereof, affix
the following
language to each assignment of Mortgage: "CWALT Series 2007-HY2,
The Bank of
New York as trustee", (B) cause such assignment to be in proper
form for
recording in the appropriate public office for real property
records and (C)
cause to be delivered for recording in the appropriate public
office for real
property records the assignments of the Mortgages to the
Trustee, except that
(i) with respect to any assignments of Mortgage as to which the
Trustee has
not received the information required to prepare such assignment
in recordable
form, the Trustee's obligation to do so and to deliver the same
for such
recording shall be as soon as practicable after receipt of such
information
and in any event within thirty (30) days after receipt thereof
and (ii) the
Trustee need not cause to be recorded any assignment which
relates to a
Mortgage Loan, the Mortgaged Property and Mortgage File relating
to which are
located in any jurisdiction (including Puerto Rico) under the
laws of which
the recordation of such assignment 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 Countrywide to the Trustee
within 90
days of the Closing Date (which opinion may be in the form of a
"survey"
opinion and is not required to be delivered by counsel admitted
to practice
law in the jurisdiction as to which such legal opinion
applies).
In the case of Mortgage Loans that have been prepaid in full as
of the
Closing Date, the Depositor, in lieu of delivering the above
documents to the
Trustee, will deposit in the Certificate Account the portion of
such payment
that is required to be deposited in the Certificate Account
pursuant to
Section 3.05.
Notwithstanding anything to the contrary in this Agreement,
within
thirty (30) days after the Closing Date with respect to the
Initial Mortgage
Loans, Countrywide (on its own behalf and on behalf of Park
Granada, Park
Monaco and Park Sienna) shall either (i) deliver to the
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Depositor, or at the Depositor's direction, to the Trustee or
other designee
of the Depositor the Mortgage File as required pursuant to this
Section 2.01
for each Delay Delivery Mortgage Loan or (ii) either (A)
substitute a
Substitute Mortgage Loan for the Delay Delivery Mortgage Loan or
(B)
repurchase the Delay Delivery Mortgage Loan, which substitution
or repurchase
shall be accomplished in the manner and subject to the
conditions set forth in
Section 2.03 (treating each Delay Delivery Mortgage Loan as a
Deleted Mortgage
Loan for purposes of such Section 2.03); provided, however, that
if
Countrywide fails to deliver a Mortgage File for any Delay
Delivery Mortgage
Loan within the thirty (30) day period provided in the prior
sentence,
Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco and
Park Sienna) shall use its best reasonable efforts to effect a
substitution,
rather than a repurchase of, such Deleted Mortgage Loan and
provided further
that 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 Countrywide (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna) shall have five (5)
Business Days to
cure such failure to deliver. At the end of such thirty (30) day
period the
Trustee shall send a Delay Delivery Certification for the Delay
Delivery
Mortgage Loans delivered during such thirty (30) day period in
accordance with
the provisions of Section 2.02.
Notwithstanding anything to the contrary in this Agreement,
within
twenty (20) days after a Supplemental Transfer Date with respect
to all of the
Supplemental Mortgage Loans sold to the Depositor on such
Supplemental
Transfer Date, Countrywide (on its own behalf and on behalf of
Park Granada,
Park Monaco and Park Sienna) shall either (i) deliver to the
Depositor, or at
the Depositor's direction, to the Trustee or other designee of
the Depositor
the Mortgage File as required pursuant to this Section 2.01 for
each Delay
Delivery Mortgage Loan or (ii) (A) substitute a Substitute
Mortgage Loan for
the Delay Delivery Mortgage Loan or (B) repurchase the Delay
Delivery Mortgage
Loan, which substitution or repurchase shall be accomplished in
the manner and
subject to the conditions set forth in Section 2.03 (treating
each Delay
Delivery Mortgage Loan as a Deleted Mortgage Loan for purposes
of such Section
2.03); provided, however, that if Countrywide fails to deliver a
Mortgage File
for any Delay Delivery Mortgage Loan within the twenty (20) day
period
provided in the prior sentence, Countrywide (on its own behalf
and on behalf
of Park Granada, Park Monaco and Park Sienna) shall use its best
reasonable
efforts to effect a substitution, rather than a repurchase of,
such Deleted
Mortgage Loan and provided further that 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
Countrywide
(on its own behalf and on behalf of Park Granada, Park Monaco
and Park Sienna)
shall have five (5) Business Days to cure such failure to
deliver. At the end
of such twenty (20) day period the Trustee shall send a Delay
Delivery
Certification for the Delay Delivery Mortgage Loans delivered
during such
twenty (20) day period in accordance with the provisions of
Section 2.02.
(d) Subject to the execution and delivery of the related
Supplemental
Transfer Agreement as provided in Section 2.01(e) hereof 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 Supplemental
Transfer Date, with respect to each Supplemental Mortgage Loan
sold by such
Seller to the Depositor, all the right, title and interest of
that Seller in
and to the Supplemental Mortgage Loans sold by it identified in
such
Supplemental Transfer Agreement, including all interest and
principal received
and receivable by such Seller on or with
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respect to the related Supplemental Mortgage Loans on and after
the related
Supplemental 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 related Seller, other than principal and interest due on
such Supplemental
Mortgage Loans prior to the related Supplemental Cut-off
Date.
Immediately upon the conveyance of the Supplemental 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 all of
the Supplemental Mortgage Loans.
Each Seller has entered into this Agreement in consideration for
the
purchase of the Mortgage Loans sold by such Seller to the
Depositor and has
agreed to take the actions specified herein. The Depositor,
concurrently with
the execution and delivery of this Agreement, hereby sells,
transfers, assigns
and otherwise conveys to the Trustee for the use and benefit of
the
Certificateholders, without recourse, all right title and
interest in the
portion of the Trust Fund not otherwise conveyed to the Trust
Fund pursuant to
Sections 2.01(a) or (b).
(e) Upon five (5) Business Days written notice to the Trustee,
the
Depositor, the Master Servicer (if the Master Servicer is not a
Seller) and
the Rating Agencies, on any other Business Day during the
Funding Period
designated by Countrywide, Park Granada, Park Monaco and Park
Sienna, if
applicable, the Depositor and the Trustee shall complete,
execute and deliver
a Supplemental Transfer Agreement so long as no Rating Agency
has provided
notice that the execution and delivery of such Supplemental
Transfer Agreement
will result in a reduction or withdrawal of the any ratings
assigned to the
Certificates. After the execution and delivery of such
Supplemental Transfer
Agreement, on the Supplemental Transfer Date, the Trustee shall
set aside in
the Pre-Funding Account an amount equal to the Aggregate
Supplemental Purchase
Amount.
The transfer of Supplemental Mortgage Loans and the other
property and
rights relating to them on a Supplemental Transfer Date is
subject to the
satisfaction of each of the following conditions:
(i) each Supplemental Mortgage Loan conveyed on such
Supplemental
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 Supplemental Mortgage Loan, the obligation under
Section
2.03(c) of this Agreement of Countrywide, Park Granada, Park
Monaco
and Park Sienna, if applicable, to cure, repurchase or replace
such
Supplemental Mortgage Loan shall constitute the sole remedy
against
such Seller respecting such breach available to
Certificateholders,
the Depositor or the Trustee;
(ii) the Trustee, the Underwriter and the Rating Agencies
are
provided with an Opinion of Counsel or Opinions of Counsel
with
respect to the tax treatment of the Trust Fund, to be delivered
as
provided pursuant to Section 2.01(f);
(iii) the Rating Agencies and the Underwriter are provided with
an
Opinion of Counsel or Opinions of Counsel with respect to
the
validity of the conveyance of the Supplemental
45
<PAGE>
Mortgage Loans conveyed on such Supplemental Transfer Date, to
be
delivered as provided pursuant to Section 2.01(f);
(iv) the execution and delivery of such Supplemental
Transfer
Agreement or conveyance of the related Supplemental Mortgage
Loans
does not result in a reduction or withdrawal of any ratings
assigned to the Certificates by the Rating Agencies;
(v) the Supplemental Mortgage Loans conveyed on such
Supplemental
Transfer Date were selected in a manner reasonably believed not
to
be adverse to the interests of the Certificateholders;
(vi) following the conveyance of the Supplemental Mortgage Loans
on
such Supplemental Transfer Date to the Trust Fund, the
characteristics of the Mortgage Loans will comply with the
Loan
Group Characteristics (including the permitted variances
listed
therein); provided, that for the purpose of making these
calculations, the characteristics for any Initial Mortgage
Loan
made will be taken as of the Initial Cut-off Date and the
characteristics for any Supplemental Mortgage Loan will be taken
as
of the related Supplemental Cut-off Date;
(vii) none of the Sellers or the Depositor shall be insolvent
or
shall be rendered insolvent as a result of such transfer;
and
(viii) the Depositor shall have delivered to the Trustee an
Officer's
Certificate confirming the satisfaction of each of these
conditions
precedent.
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 seven Business Days after each Supplemental Transfer
Date,
upon (1) delivery to the Trustee by the Depositor or Countrywide
of the
Opinions of Counsel referred to in Sections 2.01(e)(ii) and
(iii), (2)
delivery to the Trustee by Countrywide of a revised Mortgage
Loan Schedule
reflecting the Supplemental Mortgage Loans conveyed on such
Supplemental
Transfer Date and (3) 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 to each
Seller the
portion of the Aggregate Supplemental Transfer Amount used to
purchase
Supplemental Mortgage Loans from such Seller from those funds
that were set
aside in the Pre-Funding Account pursuant to Section 2.01(e),
and the Trustee
shall withdraw from the Capitalized Interest Account the
Capitalized Interest
Release Amount for such Supplemental Transfer Date and
distribute such amount
to the order of Countrywide. The positive difference, if any,
between the
Aggregate Supplemental Transfer Amount and the Aggregate
Supplemental Purchase
Amount shall be reinvested by the Trustee in the Pre-Funding
Account.
(g) 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.
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Within thirty days after the final Supplemental 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 Supplemental
Mortgage Loans conveyed on such Supplemental Transfer Date
conform to the
characteristics in Section 2.01(e)(vi).
(h) Neither the Depositor nor the Trust will acquire or hold
any
Mortgage Loan that would violate the representations made by
Countrywide set
forth in clauses (49) and (50) of Schedule III-A hereto.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt of the documents identified
in the
Initial Certification in the form annexed hereto as Exhibit F-1
(an "Initial
Certification") 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 as are included in the
Trust Fund, in
trust for the exclusive use and benefit of all present and
future
Certificateholders. The Trustee acknowledges that it will
maintain possession
of the Mortgage Notes in the State of California, unless
otherwise permitted
by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date to
the
Depositor, the Master Servicer and Countrywide (on its own
behalf and on
behalf of Park Granada, Park Monaco and Park Sienna) an Initial
Certification
in the form annexed to this Agreement as Exhibit F-1. Based on
its review and
examination, and only as to the documents identified in such
Initial
Certification, the Trustee acknowledges that such documents
appear regular on
their face and relate to the Initial Mortgage Loans. The Trustee
shall be
under no duty or obligation to inspect, review or examine said
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.
On or about the thirtieth (30th) day after the Closing Date, the
Trustee
shall deliver to the Depositor, the Master Servicer and
Countrywide (on its
own behalf and on behalf of Park Granada, Park Monaco and Park
Sienna) a Delay
Delivery Certification with respect to the Initial Mortgage
Loans in the form
annexed hereto as Exhibit G-1 (a "Delay Delivery
Certification"), with any
applicable exceptions noted thereon.
Not later than 90 days after the Closing Date, the Trustee shall
deliver
to the Depositor, the Master Servicer and Countrywide (on its
own behalf and
on behalf of Park Granada, Park Monaco and Park Sienna) a Final
Certification
with respect to the Initial Mortgage Loans in the form annexed
hereto as
Exhibit H-1 (a "Final Certification"), with any applicable
exceptions noted
thereon.
If, in the course of such review, the Trustee finds any
document
constituting a part of a Mortgage File that does not meet the
requirements of
Section 2.01, the Trustee shall list such as an exception in the
Final
Certification; provided, however that the Trustee shall not make
any
determination as to whether (i) any endorsement is 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
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(ii) any assignment is in recordable form or is sufficient to
effect the
assignment of and transfer to the assignee thereof under the
mortgage to which
the assignment relates. Countrywide (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna) shall promptly correct or
cure such
defect within 90 days from the date it was so notified of such
defect and, if
Countrywide does not correct or cure such defect within such
period,
Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco and
Park Sienna) shall either (a) substitute for the related
Mortgage Loan a
Substitute 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 Mortgage Loan from the Trustee within 90 days from
the date
Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco and
Park Sienna) was notified of such defect in writing at the
Purchase Price of
such Mortgage Loan; provided, however, that in no event shall
such
substitution or purchase occur more than 540 days from the
Closing Date,
except that if the substitution or purchase of a Mortgage Loan
pursuant to
this provision is required by reason of a delay in delivery of
any documents
by the appropriate recording office, and there is a dispute
between either the
Master Servicer or Countrywide (on its own behalf and on behalf
of Park
Granada, Park Monaco and Park Sienna) and the Trustee over the
location or
status of the recorded document, then such substitution or
purchase shall
occur within 720 days from the Closing Date. The Trustee shall
deliver written
notice to each Rating Agency within 270 days from the Closing
Date indicating
each Mortgage Loan (a) that has not been returned by the
appropriate recording
office or (b) as to which there is a dispute as to location or
status of such
Mortgage Loan. Such notice shall be delivered every 90 days
thereafter until
the related Mortgage Loan is returned to the Trustee. Any such
substitution
pursuant to (a) above or purchase 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, if any, and any substitution pursuant to (a) above
shall not be
effected prior to the additional delivery to the Trustee of a
Request for
Release substantially in the form of Exhibit N. No substitution
is permitted
to be made in any calendar month after the Determination Date
for such month.
The Purchase Price for any such Mortgage Loan shall be deposited
by
Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco and
Park Sienna) in the Certificate Account on or prior to the
Distribution
Account Deposit Date for the Distribution Date in the month
following the
month of repurchase and, upon receipt of such deposit and
certification with
respect thereto in the form of Exhibit N hereto, the Trustee
shall release the
related Mortgage File to Countrywide (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna) and shall execute and
deliver at
Countrywide's (on its own behalf and on behalf of Park Granada,
Park Monaco
and Park Sienna) request such instruments of transfer or
assignment prepared
by Countrywide, in each case without recourse, as shall be
necessary to vest
in Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco
and Park Sienna), or its designee, the Trustee's interest in any
Mortgage Loan
released pursuant hereto. If pursuant to the foregoing
provisions Countrywide
(on its own behalf and on behalf of Park Granada, Park Monaco
and Park Sienna)
repurchases an Initial Mortgage Loan that is a MERS Mortgage
Loan, the Master
Servicer shall either (i) cause MERS to execute and deliver an
assignment of
the Mortgage in recordable form to transfer the Mortgage from
MERS to
Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco and
Park Sienna) or its designee and shall cause such Mortgage to be
removed from
registration on the MERS(R) System in accordance with MERS'
rules and
regulations or (ii) cause MERS to designate on the MERS(R)
System Countrywide
(on its own behalf and on behalf of Park
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<PAGE>
Granada, Park Monaco and Park Sienna) or its designee as the
beneficial holder
of such Mortgage Loan.
(b) Upon delivery of the Supplemental Mortgage Loans pursuant to
a
Supplemental Transfer Agreement, the Trustee shall acknowledge
receipt of the
documents identified in any Supplemental Certification in the
form annexed
hereto as Exhibit F-2 and declare that it will hold such
documents and the
other documents delivered to it constituting the Mortgage Files,
and that it
will hold such other assets as are included in the Trust Fund,
in trust for
the exclusive use and benefit of all present and future
Certificateholders.
The Trustee acknowledges that it will maintain possession of the
Mortgage
Notes in the State of California, unless otherwise permitted by
the Rating
Agencies.
The Trustee agrees to execute and deliver on the Supplemental
Transfer
Date to the Depositor, the Master Servicer and Countrywide (on
its own behalf
and on behalf of Park Granada, Park Monaco and Park Sienna) a
Supplemental
Certification in the form annexed hereto as Exhibit F-2. Based
on its review
and examination, and only as to the documents identified in such
Supplemental
Certification, the Trustee shall acknowledge that such documents
appear
regular on their face and relate to such Supplemental Mortgage
Loan. The
Trustee shall be under no duty or obligation to inspect, review
or examine
said 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.
On or about the twentieth (20th) day after the Supplemental
Transfer
Date, the Trustee shall deliver to the Depositor, the Master
Servicer and
Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco and
Park Sienna) a Delay Delivery Certification with respect to the
Supplemental
Mortgage Loans in the form annexed hereto as Exhibit G-2, with
any applicable
exceptions noted thereon.
Not later than 90 days after the final Supplemental Transfer
Date, the
Trustee shall deliver to the Depositor, the Master Servicer and
Countrywide
(on its own behalf and on behalf of Park Granada, Park Monaco
and Park Sienna)
a Final Certification with respect to the Supplemental Mortgage
Loans in the
form annexed hereto as Exhibit H-2, with any applicable
exceptions noted
thereon.
(c) If, in the course of such review of the Mortgage Files
relating to
the Supplemental Mortgage Loans, the Trustee finds any document
constituting a
part of a Mortgage File which does not meet the requirements of
Section 2.01,
the Trustee shall list such as an exception in the Final
Certification;
provided, however that the Trustee shall not make any
determination as to
whether (i) any endorsement is 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 (ii) any assignment is in recordable
form or is
sufficient to effect the assignment of and transfer to the
assignee thereof
under the mortgage to which the assignment relates. Countrywide
(on its own
behalf and on behalf of Park Granada, Park Monaco and Park
Sienna) shall
promptly correct or cure such defect within 90 days from the
date it was so
notified of such defect and, if Countrywide does not correct or
cure such
defect within such period, Countrywide (on its own behalf and on
behalf of
Park Granada, Park Monaco and Park Sienna) shall either (a)
substitute for the
related
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<PAGE>
Mortgage Loan a Substitute 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 Mortgage Loan from the Trustee within
90 days from
the date Countrywide (on its own behalf and on behalf of Park
Granada, Park
Monaco and Park Sienna) was notified of such defect in writing
at the Purchase
Price of such Mortgage Loan; provided, however, that in no event
shall such
substitution or purchase occur more than 540 days from the
Closing Date,
except that if the substitution or purchase of a Mortgage Loan
pursuant to
this provision is required by reason of a delay in delivery of
any documents
by the appropriate recording office, and there is a dispute
between either the
Master Servicer or Countrywide (on its own behalf and on behalf
of Park
Granada, Park Monaco and Park Sienna) and the Trustee over the
location or
status of the recorded document, then such substitution or
purchase shall
occur within 720 days from the Closing Date. The Trustee shall
deliver written
notice to each Rating Agency within 270 days from the Closing
Date indicating
each Mortgage Loan (a) which has not been returned by the
appropriate
recording office or (b) as to which there is a dispute as to
location or
status of such Mortgage Loan. Such notice shall be delivered
every 90 days
thereafter until the related Mortgage Loan is returned to the
Trustee. Any
such substitution pursuant to (a) above or purchase 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, if any, and any
substitution pursuant
to (a) above shall not be effected prior to the additional
delivery to the
Trustee of a Request for Release substantially in the form of
Exhibit N. No
substitution is permitted to be made in any calendar month after
the
Determination Date for such month. The Purchase Price for any
such Mortgage
Loan shall be deposited by Countrywide (on its own behalf and on
behalf of
Park Granada, Park Monaco and Park Sienna) in the Certificate
Account on or
prior to the Distribution Account Deposit Date for the
Distribution Date in
the month following the month of repurchase and, upon receipt of
such deposit
and certification with respect thereto in the form of Exhibit N
hereto, the
Trustee shall release the related Mortgage File to Countrywide
(on its own
behalf and on behalf of Park Granada, Park Monaco and Park
Sienna) and shall
execute and deliver at Countrywide's (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna) request such instruments
of transfer or
assignment prepared by Countrywide, in each case without
recourse, as shall be
necessary to vest in Countrywide (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna), or a designee, the
Trustee's interest
in any Mortgage Loan released pursuant hereto. If pursuant to
the foregoing
provisions Countrywide (on its own behalf and on behalf of Park
Granada, Park
Monaco and Park Sienna) repurchases a Supplemental Mortgage Loan
that is a
MERS Mortgage Loan, the Master Servicer shall either (i) cause
MERS to execute
and deliver an assignment of the Mortgage in recordable form to
transfer the
Mortgage from MERS to Countrywide (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna) and shall cause such
Mortgage to be
removed from registration on the MERS(R) System in accordance
with MERS' rules
and regulations or (ii) cause MERS to designate on the MERS(R)
System
Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco and
Park Sienna) or its designee as the beneficial holder of such
Mortgage Loan..
(d) The Trustee shall retain possession and custody of each
Mortgage
File in accordance with and subject to the terms and conditions
set forth in
this Agreement. The Master Servicer shall promptly deliver to
the Trustee,
upon the execution or receipt thereof, the originals of such
other documents
or instruments constituting the Mortgage File as come into the
possession of
the Master Servicer from time to time.
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<PAGE>
(e) It is understood and agreed that the respective obligations
of each
Seller to substitute for or to purchase any Mortgage Loan sold
to the
Depositor by it which does not meet the requirements of Section
2.01 above
shall constitute the sole remedy respecting such defect
available to the
Trustee, the Depositor and any Certificateholder against that
Seller.
SECTION 2.03. Representations, Warranties and Covenants of the
Sellers
and Master Servicer.
(a) Countrywide hereby makes the representations and warranties
set
forth in (i) Schedule II-A, Schedule II-B, Schedule II-C and
Schedule II-D
hereto, and by this reference incorporated herein, to the
Depositor, the
Master Servicer and the Trustee, as of the Closing Date, (ii)
Schedule III-A
hereto, and by this reference incorporated herein, to the
Depositor, the
Master Servicer and the Trustee, as of the Closing Date, or if
so specified
therein, as of the Initial Cut-off Date with respect to all of
the Initial
Mortgage Loans and as of the related Supplemental Cut-off Date
with respect to
all of the Supplemental Mortgage Loans, and (iii) Schedule III-B
hereto, and
by this reference incorporated herein, to the Depositor, the
Master Servicer
and the Trustee, as of the Closing Date, or if so specified
therein, as of the
Initial Cut-off Date with respect to the Initial Mortgage Loans
that are
Countrywide Mortgage Loans and as of the related Supplemental
Cut-off Date
with respect to the Supplemental Mortgage Loans that are
Countrywide Mortgage
Loans. Park Granada hereby makes the representations and
warranties set forth
in (i) Schedule II-B hereto, and by this reference incorporated
herein, to the
Depositor, the Master Servicer and the Trustee, as of the
Closing Date and
(ii) Schedule III-C hereto, and by this reference incorporated
herein, to the
Depositor, the Master Servicer and the Trustee, as of the
Closing Date, or if
so specified therein, as of the Initial Cut-off Date with
respect to the
Initial Mortgage Loans that are Park Granada Mortgage Loans and
as of the
related Supplemental Cut-off Date with respect to the
Supplemental Mortgage
Loans that are Park Granada Mortgage Loans. Park Monaco hereby
makes the
representations and warranties set forth in (i) Schedule II-C
hereto, and by
this reference incorporated herein, to the Depositor, the Master
Servicer and
the Trustee, as of the Closing Date and (ii) Schedule III-D
hereto, and by
this reference incorporated herein, to the Depositor, the Master
Servicer and
the Trustee, as of the Closing Date, or if so specified therein,
as of the
Initial Cut-off Date with respect to the Initial Mortgage Loans
that are Park
Monaco Mortgage Loans and as of the related Supplemental Cut-off
Date with
respect to the Supplemental Mortgage Loans that are Park Monaco
Mortgage
Loans. Park Sienna hereby makes the representations and
warranties set forth
in (i) Schedule II-D hereto, and by this reference incorporated
herein, to the
Depositor, the Master Servicer and the Trustee, as of the
Closing Date and
(ii) Schedule III-E hereto, and by this reference incorporated
herein, to the
Depositor, the Master Servicer and the Trustee, as of the
Closing Date, or if
so specified therein, as of the Initial Cut-off Date with
respect to the
Initial Mortgage Loans that are Park Sienna Mortgage Loans and
as of the
related Supplemental Cut-off Date with respect to the
Supplemental Mortgage
Loans that are Park Sienna Mortgage Loans.
(b) The Master Servicer hereby makes the representations and
warranties
set forth in Schedule IV hereto, and by this reference
incorporated herein, to
the Depositor and the Trustee, as of the Closing Date.
(c) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty with respect to a Mortgage Loan made
pursuant to
Section 2.03(a) or a breach of a
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<PAGE>
representation or warranty with respect to a Supplemental
Mortgage Loan under
Section 2.01(e)(i) that materially and adversely affects the
interests of the
Certificateholders in that Mortgage Loan, the party discovering
such breach
shall give prompt notice thereof to the other parties. Each
Seller hereby
covenants that within 90 days of the earlier of its discovery or
its receipt
of written notice from any party of a breach of any
representation or warranty
with respect to a Mortgage Loan sold by it pursuant to Section
2.03(a) and
with respect to a breach of a representation and warranty with
respect to a
Supplemental Mortgage Loan sold by it under Section 2.01(e)(i)
which
materially and adversely affects the interests of the
Certificateholders in
that 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
Substitute 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, however, that any such substitution pursuant to
(i) above
shall not be effected prior to the delivery to the Trustee of
the Opinion of
Counsel required by Section 2.05, if any, and any such
substitution pursuant
to (i) above shall not be effected prior to the additional
delivery to the
Trustee of a Request for Release substantially in the form of
Exhibit N and
the Mortgage File for any such Substitute Mortgage Loan. The
Seller
repurchasing a Mortgage Loan pursuant to this Section 2.03(c)
shall promptly
reimburse the Master Servicer and the Trustee for any expenses
reasonably
incurred by the Master Servicer or the Trustee in respect of
enforcing the
remedies for such breach. With respect to the representations
and warranties
described in this Section which are made to the best of a
Seller's knowledge,
if it is discovered by either the Depositor, a Seller 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 or the interests of the Certificateholders therein,
notwithstanding that
Seller'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 any
representation set
forth in clause (51) of Schedule III-A or clause (8) of Schedule
IV may be
deemed to materially and adversely affect the Certificateholders
if (i)
Freddie Mac is a Certificate Owner, (ii) Freddie Mac is the
party asserting
the existence of the breach and (iii) Freddie Mac and the
Sellers so agree.
With respect to any Substitute Mortgage Loan or Loans sold to
the
Depositor by a Seller, Countrywide (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna) shall deliver to the
Trustee for the
benefit of the Certificateholders the Mortgage Note, the
Mortgage, the related
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 is
permitted to be made
in any calendar month after the Determination Date for such
month. Scheduled
Payments due with respect to Substitute Mortgage Loans in the
month of
substitution shall not be part of the Trust Fund and will be
retained by the
related Seller on the next succeeding Distribution Date. For the
month of
substitution, distributions to Certificateholders will include
the monthly
payment due on any Deleted Mortgage Loan for such month and
thereafter that
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
Substitute Mortgage
Loan or Loans and the Master Servicer shall deliver the amended
Mortgage Loan
Schedule to the Trustee. Upon
52
<PAGE>
such substitution, the Substitute Mortgage Loan or Loans shall
be subject to
the terms of this Agreement in all respects, and the related
Seller shall be
deemed to have made with respect to such Substitute Mortgage
Loan or Loans, as
of the date of substitution, the representations and warranties
made pursuant
to Section 2.03(a) 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 the Mortgage
File held for
the benefit of the Certificateholders relating to such Deleted
Mortgage Loan
to the related Seller and shall execute and deliver at such
Seller's direction
such instruments of transfer or assignment prepared by
Countrywide (on its own
behalf and on behalf of Park Granada, Park Monaco and Park
Sienna), in each
case without recourse, as shall be necessary to vest title in
that Seller, or
its designee, the Trustee's interest in any Deleted Mortgage
Loan substituted
for pursuant to this Section 2.03.
For any month in which a Seller substitutes one or more
Substitute
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 Substitute Mortgage Loans sold to the Depositor by that
Seller as of the
date of substitution is less than the aggregate Stated Principal
Balance of
all Deleted Mortgage Loans repurchased by that Seller (after
application of
the scheduled principal portion of the monthly payments due in
the month of
substitution). The amount of such shortage (the "Substitution
Adjustment
Amount") plus an amount equal to the aggregate of any
unreimbursed Advances
with respect to such Deleted Mortgage Loans shall be deposited
in the
Certificate Account by Countrywide (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna) on or before the
Distribution Account
Deposit Date for the Distribution Date in the month succeeding
the calendar
month 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 or before the Distribution Account Deposit
Date for the
Distribution Date in the month following the month during which
that Seller
became obligated hereunder 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 and receipt of a Request for
Release in the
form of Exhibit N hereto, the Trustee shall release the related
Mortgage File
held for the benefit of the Certificateholders to such Person,
and the Trustee
shall execute and deliver at such Person's direction such
instruments of
transfer or assignment prepared by such Person, in each case
without recourse,
as shall be necessary to transfer title from the Trustee. It is
understood and
agreed that the obligation under this Agreement of any Person to
cure,
repurchase or replace any Mortgage Loan as to which a breach has
occurred and
is continuing shall constitute the sole remedy against such
Persons respecting
such breach available to Certificateholders, the Depositor or
the Trustee on
their behalf.
The representations and warranties made pursuant to this Section
2.03
shall survive delivery of the respective Mortgage Files to the
Trustee for the
benefit of the Certificateholders.
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<PAGE>
SECTION 2.04. Representations and Warranties of the Depositor as
to the
Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with
respect
to each Initial Mortgage Loan as of the date of this Agreement
or such other
date set forth in this Agreement that as of the Closing Date,
and following
the transfer of the Initial Mortgage Loans to it by each Seller,
the Depositor
had good title to the Initial Mortgage Loans and the related
Mortgage Notes
were subject to no offsets, defenses or counterclaims.
The Depositor hereby assigns, transfers and conveys to the
Trustee all
of its rights with respect to the Mortgage Loans including,
without
limitation, the representations and warranties of each Seller
made pursuant to
Section 2.03(a), together with all rights of the Depositor to
require a Seller
to cure any breach thereof or to repurchase or substitute for
any affected
Mortgage Loan in accordance with this Agreement.
It is understood and agreed that the representations and
warranties set
forth in this Section 2.04 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 this
Section 2.04
(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.
SECTION 2.05. Delivery of Opinion of Counsel in Connection
with
Substitutions.
(a) Notwithstanding any contrary provision of this Agreement,
no
substitution pursuant to Section 2.02 or Section 2.03 shall be
made more than
90 days after the Closing Date unless Countrywide delivers to
the Trustee 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 substitution 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 created under this Agreement to fail to
qualify as a
REMIC at any time that any Certificates are outstanding.
Upon discovery by the Depositor, a 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 (5)
Business Days of
discovery) give written notice thereof to the other parties. In
connection
therewith, the Trustee shall require Countrywide (on its own
behalf and on
behalf of Park Granada, Park Monaco and Park Sienna) at its
option, to either
(i) substitute, if the conditions in Section 2.03(c) with
respect to
substitutions are satisfied, a Substitute 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 made pursuant to Section 2.03. The
Trustee shall
reconvey to Countrywide the Mortgage Loan to be released
pursuant to this
Section 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.
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<PAGE>
SECTION 2.06. Execution 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 and
delivered to or upon the order of the Depositor, the
Certificates in
authorized denominations evidencing directly or indirectly 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. REMIC Matters.
The Preliminary Statement sets forth the designations and
"latest
possible maturity date" for federal income tax purposes of all
interests
created hereby. The "Startup Day" for purposes of the REMIC
Provisions shall
be the Closing Date. The "tax matters person" with respect to
each REMIC
hereunder shall be the Trustee and the Trustee shall hold the
Tax Matters
Person Certificate. Each REMIC's fiscal year shall be the
calendar year.
SECTION 2.08. Covenants of the Master Servicer.
The Master Servicer 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 such
information,
certificate, statement or report not misleading.
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<PAGE>
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 the
terms of this
Agreement and customary and usual standards of practice of
prudent mortgage
loan servicers. 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, subject to the
terms of this
Agreement (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
and other Liquidation Proceeds (which for the purpose of this
Section 3.01
includes any Subsequent Recoveries) and (iv) to effectuate
foreclosure or
other conversion of the ownership of the Mortgaged Property
securing any
Mortgage Loan; provided that the Master Servicer shall not take
any action
that is inconsistent with or prejudices the interests of the
Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and
interests of the
Depositor, the Trustee and the Certificateholders under this
Agreement. The
Master Servicer shall represent and protect the interests of the
Trust Fund in
the same manner as it protects its own interests 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
Mortgage Loan which would cause any REMIC created under this
Agreement to fail
to qualify as a REMIC or result in the imposition of any tax
under section
860F(a) or section 860G(d) of the Code. 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 either or both of them as are necessary or appropriate to
enable the Master
Servicer to service and administer the Mortgage Loans to the
extent that the
Master Servicer is not permitted to execute and deliver such
documents
pursuant to the preceding sentence. 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.
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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. The 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 Balances of the related Mortgage Loans,
notwithstanding
that the terms of such Mortgage Loans so permit.
SECTION 3.02. Subservicing; Enforcement of the Obligations
of
Subservicers.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage
Loan by a Subservicer pursuant to a subservicing agreement;
provided, however,
that 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 under
this Agreement.
Unless the context otherwise requires, references in this
Agreement to actions
taken or to be taken by the Master Servicer in servicing the
Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf
of the Master
Servicer. Notwithstanding the provisions of any subservicing
agreement, any of
the provisions of this Agreement relating to agreements or
arrangements
between the Master Servicer and a Subservicer or reference to
actions taken
through a Subservicer or otherwise, the Master Servicer shall
remain obligated
and liable to the Depositor, the Trustee and the
Certificateholders for the
servicing and administration of the Mortgage Loans in accordance
with the
provisions of this Agreement without diminution of such
obligation or
liability by virtue of such subservicing agreements or
arrangements or by
virtue of indemnification from the Subservicer and to the same
extent and
under the same terms and conditions as if the Master Servicer
alone were
servicing and administering the Mortgage Loans. 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 and the Trustee in Respect
of the
Master Servicer.
The Depositor may, but is not obligated to, enforce the
obligations of
the Master Servicer hereunder and may, but is not obligated to,
perform, or
cause a designee to perform, any defaulted obligation of the
Master Servicer
hereunder and in connection with any such defaulted obligation
to exercise the
related rights of the Master Servicer hereunder; provided that
the Master
Servicer shall not be relieved of any of its obligations
hereunder by virtue
of such performance by the Depositor or its designee. Neither
the Trustee nor
the Depositor shall have any responsibility or liability for any
action or
failure to act by the Master Servicer nor shall the
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Trustee or the Depositor be obligated to supervise the
performance of the
Master Servicer under this Agreement or otherwise.
SECTION 3.04. Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no
longer be
the Master Servicer hereunder (including by reason of an Event
of Default or
termination by the Depositor), the Trustee or its successor
shall then 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 3.09 or any acts or
omissions of the
predecessor Master Servicer under this Agreement), (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, but not limited to, repurchases or substitutions of
Mortgage Loans
pursuant to Section 2.02 or 2.03, (iv) responsible for expenses
of the Master
Servicer pursuant to Section 2.03 or (v) deemed to have made
any
representations and warranties of the Master Servicer under this
Agreement).
Any such assumption shall be subject to Section 7.02. 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 its
successor shall succeed to any rights and obligations of the
Master Servicer
under each subservicing agreement.
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 or
substitute subservicing
agreement and the Mortgage Loans then being serviced thereunder
and an
accounting of amounts collected or held by it and otherwise use
its best
efforts to effect the orderly and efficient transfer of the
substitute
subservicing agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate
Account;
Distribution Account; Pre-Funding Account; Capitalized Interest
Account.
(a) The Master Servicer shall make reasonable efforts in
accordance with
the customary and usual standards of practice of prudent
mortgage servicers 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 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 180
days; provided, however, that the Master Servicer cannot extend
the maturity
of any such Mortgage Loan past the date on which the final
payment is due on
the latest maturing Mortgage Loan as of the Cut-off Date. In the
event of any
such arrangement, the Master Servicer shall make Advances on the
related
Mortgage Loan in accordance with the provisions of Section 4.01
during the
scheduled period in accordance with the amortization schedule of
such Mortgage
Loan without modification thereof by reason of such
arrangements. 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
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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
no later than two Business Days after receipt (or, if the
current long-term
credit rating of Countrywide Home Loans, Inc. is reduced below
"A-" by S&P or
"A3" by Moody's, the Master Servicer shall deposit or cause to
be deposited on
a daily basis within one Business Day of receipt), except as
otherwise
specifically provided in this Agreement, 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:
(i) all payments on account of principal on the Mortgage
Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans,
net
of the related Master Servicing Fee, any lender paid
mortgage
insurance premiums and any Prepayment Interest Excess;
(iii) all Insurance Proceeds, Subsequent Recoveries and
Liquidation
Proceeds, other than proceeds to be applied to the restoration
or
repair of a Mortgaged Property or released to the Mortgagor
in
accordance with the Master Servicer's normal servicing
procedures;
(iv) any amount required to be deposited by the Master
Servicer
pursuant to Section 3.05(e) in connection with any losses on
Permitted Investments;
(v) any amounts required to be deposited by the Master
Servicer
pursuant to Section 3.09(c) and in respect of net monthly
rental
income from REO Property pursuant to Section 3.11;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to
Section
4.01; and
(viii) any other amounts required to be deposited under this
Agreement.
In addition, with respect to any Mortgage Loan that is subject
to a
buydown agreement, on each Due Date for such Mortgage Loan, in
addition to the
monthly payment remitted by the Mortgagor, the Master Servicer
shall cause
funds to be deposited into the Certificate Account in an amount
required to
cause an amount of interest to be paid with respect to such
Mortgage Loan
equal to the amount of interest that has accrued on such
Mortgage Loan from
the preceding Due Date at the Mortgage Rate net of the related
Master
Servicing Fee.
The foregoing requirements for remittance by the Master Servicer
shall
be exclusive, it being understood and agreed that, without
limiting the
generality of the foregoing, payments in the nature of
prepayment penalties,
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
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amount not required to be remitted, it may at any time withdraw
or direct the
institution maintaining the Certificate Account to withdraw such
amount from the
Certificate Account, any provision in this Agreement to the
contrary
notwithstanding. Such withdrawal or direction may be
accomplished by delivering
written notice thereof to the Trustee or such other institution
maintaining the
Certificate Account which 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.
(c) [Reserved].
(d) 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 in the
Distribution
Account the following:
(i) the aggregate amount remitted by the Master Servicer to
the
Trustee pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Master Servicer pursuant to
Section
3.05(e) in connection with any losses on Permitted Investments;
and
(iii) any other amounts deposited hereunder which are required
to be
deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount
not
required to be remitted, it may at any time direct the Trustee
to withdraw
such amount from the Distribution Account, any provision in this
Agreement to
the contrary notwithstanding. Such direction may be accomplished
by delivering
an Officer's Certificate to the Trustee which 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.
(e) Each institution at which the Certificate Account, the
Pre-Funding
Account, the Capitalized Interest Account or the Distribution
Account is
maintained shall invest the funds in such account as directed in
writing by
the Master Servicer in Permitted Investments, which shall mature
not later
than (i) in the case of the Certificate Account, the Pre-Funding
Account or
the Capitalized Interest 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 account,
then such Permitted Investment shall mature not later than the
Business Day
next preceding such Distribution Account Deposit Date) and (ii)
in the case of
the Distribution Account, the Business Day next preceding the
Distribution
Date (except that if such Permitted Investment is an obligation
of the
institution that maintains such fund or account, then such
Permitted
Investment shall mature not later than such Distribution Date)
and, 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. All income and gain
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net of any losses realized from any such investment of funds on
deposit in the
Certificate Account or the Distribution Account shall be for the
benefit of
the Master Servicer as servicing compensation and shall be
remitted to it
monthly as provided in this Agreement. The amount of any
realized losses in
the Certificate Account or the Distribution Account incurred in
any such
account in respect of any such investments shall promptly be
deposited by the
Master Servicer in the Certificate Account or paid to the
Trustee for deposit
into the Distribution Account, as applicable. The amount of any
losses in the
Pre-Funding Account or the Capitalized Interest Account incurred
in respect of
any such investments shall promptly be deposited by the
Depositor in the
Pre-Funding Account or the Capitalized Interest Account, as
applicable. All
income or gain (net of any losses) realized from any such
investment of funds
on deposit in the Capitalized Interest Account shall be credited
to the
Capitalized Interest Account. The Trustee in its fiduciary
capacity 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
Pre-Funding
Account, the Capitalized Interest Account or the Distribution
Account and made
in accordance with this Section 3.05.
(f) The Master Servicer shall give notice to the Trustee, each
Seller,
each Rating Agency and the Depositor of any proposed change of
the location of
the Certificate Account prior to any change thereof. The Trustee
shall give
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 Capitalized Interest Account or the Pre-Funding Account
prior to any
change thereof.
(g) The Trustee shall establish and maintain, on behalf of
the
Certificateholders, the Pre-Funding Account. On the Closing
Date, Countrywide
shall remit the Pre-Funded Amount to the Trustee for deposit in
the
Pre-Funding Account. On each Supplemental Transfer Date, upon
satisfaction of
the conditions for such Supplemental Transfer Date set forth in
Section
2.01(e), with respect to the related Supplemental Transfer
Agreement, the
Trustee shall pay to each Seller selling Supplemental Mortgage
Loans to the
Depositor on such Supplemental Transfer Date the portion of the
Aggregate
Supplemental Transfer Amount held in escrow pursuant to Section
2.01(e) as
payment of the purchase price for the Supplemental Mortgage
Loans sold by such
Seller. If at any time the Depositor becomes aware that the
Cut-off Date
Stated Principal Balance of Supplemental Mortgage Loans
reflected on any
Supplemental Transfer Agreement exceeds the actual Cut-off Date
Stated
Principal Balance of the relevant Supplemental Mortgage Loans,
the Depositor
may so notify the Trustee and the Trustee shall redeposit into
the Pre-Funding
Account the excess reported to it by the Depositor.
If any funds remain in the Pre-Funding Account at the end of the
Funding
Period, to the extent that they represent earnings on the
amounts originally
deposited into the Pre-Funding Account, the Trustee shall
distribute them to
the order of the Depositor. The remaining funds shall be
transferred to the
Distribution Account to be included as part of principal
distributions to the
Classes of Senior Certificates, to the extent of the Remaining
Pre-Funded
Amount, as applicable.
(h) The Trustee shall establish and maintain, on behalf of
the
Certificateholders, the Capitalized Interest Account. On the
Closing Date,
Countrywide shall remit the Capitalized Interest Deposit to the
Trustee for
deposit in the Capitalized Interest Account. On each
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Distribution Account Deposit Date related to a Funding Period
Distribution
Date, the Trustee shall transfer from the Capitalized Interest
Account to the
Distribution Account an amount equal to the Capitalized Interest
Requirement
(which, to the extent required, may include investment earnings
on amounts on
deposit therein) for the related Distribution Date.
On each Supplemental Transfer Date, upon satisfaction of the
conditions
for such Supplemental Transfer Date set forth in Section
2.01(e), the Trustee
shall withdraw from the Capitalized Interest Account the
Capitalized Interest
Release Amount for such Supplemental Transfer Date and
distribute such amount
to the order of Countrywide pursuant to Section 2.01(e).
If any funds remain in the Capitalized Interest Account at the
end of
the Distribution Account Deposit Date for the last Funding
Period Distribution
Date, the Trustee shall distribute any such remaining funds to
the order of
Countrywide on the last Funding Period Distribution Date.
SECTION 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow
Accounts.
(a) To the extent required by the related Mortgage Note and
not
violative of current law, the Master Servicer shall establish
and maintain one
or more accounts (each, an "Escrow Account") and deposit and
retain in such
accounts 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 in
this Agreement
shall require the Master Servicer to compel a Mortgagor to
establish an Escrow
Account in violation of applicable law.
(b) 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 (with respect to taxes and assessments
and insurance
premiums) and 3.09 (with respect to hazard insurance), to refund
to any
Mortgagors any sums 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. The Escrow
Accounts shall not be a part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to
in
Section 3.06(a) that are not timely paid by the Mortgagors on
the date when
the tax, premium or other cost for which such payment is
intended is due, but
the Master Servicer shall be required so to advance only to the
extent that
such advances, in the good faith judgment of the Master Servicer
will be
recoverable by the Master Servicer out of Insurance Proceeds,
Liquidation
Proceeds or otherwise.
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SECTION 3.07. Access to Certain Documentation and Information
Regarding
the Mortgage Loans.
The Master Servicer shall afford each Seller, the Depositor and
the
Trustee reasonable access to all records and documentation
regarding the
Mortgage Loans and all accounts, insurance information 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 office
designated by the Master Servicer.
Upon reasonable advance notice in writing, the Master Servicer
will
provide to each Certificateholder and/or Certificate Owner which
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 and/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 and/or
Certificate Owner for actual expenses incurred by the Master
Servicer in
providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate Account
and the
Distribution Account.
(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
retained by the Master Servicer), the servicing compensation
to
which it is entitled pursuant to Section 3.14 and to pay to
the
Master Servicer, as additional servicing compensation, earnings
on
or investment income with respect to funds in or credited to
the
Certificate Account;
(ii) to reimburse each of the Master Servicer and the Trustee
for
unreimbursed Advances made by it, such right of
reimbursement
pursuant to this subclause (ii) being limited to amounts
received
on the Mortgage Loan(s) in respect of which any such Advance
was
made;
(iii) to reimburse each of the Master Servicer and the Trustee
for
any Nonrecoverable Advance previously made by it;
(iv) to reimburse the Master Servicer for Insured Expenses from
the
related Insurance Proceeds;
(v) to reimburse the Master Servicer for (a) unreimbursed
Servicing
Advances, the Master Servicer's right to reimbursement pursuant
to
this clause (a) with respect to any Mortgage Loan being limited
to
amounts received on such Mortgage Loan(s) that represent
late
recoveries of the payments for which such advances were made
pursuant to Section 3.01 or Section 3.06 and (b) for unpaid
Master
Servicing Fees as provided in Section 3.11;
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(vi) to pay to the purchaser, with respect to each Mortgage Loan
or
property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received
on
such Mortgage Loan after the date of such purchase;
(vii) to reimburse the Sellers, the Master Servicer or the
Depositor
for expenses incurred by any of them and reimbursable pursuant
to
Section 6.03;
(viii) to withdraw any amount deposited in the Certificate
Account
and not required to be deposited in the Certificate Account;
(ix) on or prior to the Distribution Account Deposit Date,
to
withdraw an amount equal to the related Available Funds and the
pro
rata portion of the Trustee Fee for such Distribution Date
(based
on the aggregate Stated Principal Balance of the Mortgage Loans
in
each Loan Group) and remit such amount to the Trustee for
deposit
in the Distribution Account; and
(x) to clear and terminate the Certificate Account upon
termination
of this Agreement pursuant to Section 9.01.
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 such
subclauses (i), (ii),
(iv), (v) and (vi). Prior to making any withdrawal from the
Certificate
Account pursuant to subclause (iii), 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
Loans(s), and
their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account for
distributions to 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 withhold pursuant to the third paragraph of
Section 8.11).
In addition, the Trustee may from time to time make withdrawals
from the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution
Date;
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to
funds
in the Distribution Account;
(iii) to withdraw and return to the Master Servicer 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(b) 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;
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(v) to reimburse the Trustee for any Nonrecoverable Advance
previously made by the Trustee pursuant to Section 4.01(b)
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)(iii) hereof; and
(vi) to clear and terminate the Distribution Account upon
termination
of the Agreement pursuant to Section 9.01.
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary
Insurance Policies.
(a) 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 or (ii) the greater of (y) the
outstanding
principal balance of the Mortgage Loan and (z) 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. Each such policy of
standard hazard
insurance shall contain, or have an accompanying endorsement
that contains, a
standard mortgagee clause. 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 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 the proceeds of liquidation of the
Mortgage Loan
or Subsequent Recoveries to the extent permitted by Section
3.08. 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 least
of (i) the outstanding principal balance of the related Mortgage
Loan, (ii)
the replacement value of the improvements which are part of such
Mortgaged
Property, and (iii) the maximum amount of such insurance
available for the
related Mortgaged Property under the national flood insurance
program.
(b) The Master Servicer shall not take any action which would
result in
non-coverage under any applicable Primary Insurance Policy of
any loss which,
but for the actions of the Master Servicer, would have been
covered
thereunder. The Master Servicer shall not cancel or refuse to
renew any such
Primary Insurance Policy that is in effect at the date of the
initial issuance
of the Certificates and is required to be kept in force
hereunder unless the
replacement Primary Insurance Policy for such canceled or
non-renewed policy
is maintained with a Qualified Insurer.
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Except with respect to any Lender PMI Mortgage Loans, the
Master
Servicer shall not be required to maintain any Primary Insurance
Policy (i)
with respect to any Mortgage Loan with a Loan-to-Value Ratio
less than or
equal to 80% as of any date of determination or, based on a new
appraisal, the
principal balance of such Mortgage Loan represents 80% or less
of the new
appraised value or (ii) if maintaining such Primary Insurance
Policy is
prohibited by applicable law. With respect to the Lender PMI
Mortgage Loans,
the Master Servicer shall maintain the Primary Insurance Policy
for the life
of such Mortgage Loans, unless otherwise provided for in the
related Mortgage
Note or prohibited by law.
The Master Servicer agrees to effect the timely payment of the
premiums
on each Primary Insurance Policy, and such costs not otherwise
recoverable
shall be recoverable by the Master Servicer from the related
proceeds of
liquidation and Subsequent Recoveries.
(c) 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 Certificateholders, claims to the insurer under any Primary
Insurance
Policies and, in this regard, to take such reasonable action as
shall be
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.
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section, when any
property
subject to a Mortgage has been 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 3.10(b), to take or
enter into an
assumption and modification agreement from or with the person to
whom such
property has been or is about to be conveyed, pursuant to which
such person
becomes liable under the Mortgage Note and, unless prohibited by
applicable
state law, the Mortgagor remains liable thereon, provided that
the Mortgage
Loan shall continue to be covered (if so covered before the
Master Servicer
enters such agreement) by the applicable Required Insurance
Policies. The
Master Servicer, subject to Section 3.10(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.
Notwithstanding the
foregoing, the Master Servicer shall not be deemed to be in
default under
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this Section by reason of any transfer or assumption which the
Master Servicer
reasonably believes it is restricted by law from preventing, for
any reason
whatsoever.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale
clause to the extent set forth in Section 3.10(a), 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 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.
Together with
each such substitution, assumption or other agreement or
instrument delivered
to the Trustee for execution by it, the Master Servicer shall
deliver an
Officer's Certificate signed by a Servicing Officer stating that
the
requirements of this subsection have been met in connection
therewith. 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 3.11. Realization Upon Defaulted Mortgage Loans;
Repurchase of
Certain Mortgage Loans.
(a) 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 any 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 meet the requirements of the insurer under any
Required
Insurance Policy; provided, however, 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 the proceeds of
liquidation of
the Mortgage Loan and Subsequent Recoveries (respecting which it
shall have
priority for purposes of withdrawals from the Certificate
Account). The Master
Servicer shall be responsible for all other costs and expenses
incurred by it
in any such proceedings; provided, however, that it shall be
entitled to
reimbursement thereof from the
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proceeds of liquidation of the Mortgage Loan and Subsequent
Recoveries with
respect to the related Mortgaged Property, as provided in the
definition of
Liquidation Proceeds. If the Master Servicer has knowledge that
a Mortgaged
Property which 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 listed in the Expenditure Plan for the Hazardous Substance
Clean Up Bond
Act of 1984 or other 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 its 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 the Pooling and Servicing
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
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
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 required by sections 1445 and 6050J of the Code with
respect to
foreclosures and abandonments, the tax reporting required by
section 6050H of
the Code with respect to the receipt of mortgage interest from
individuals and
any tax reporting required by section 6050P of the Code with
respect to the
cancellation of indebtedness by certain financial entities, by
preparing such
tax and information returns as may be required, in the form
required, and
delivering the same to the Trustee for filing.
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
thereof, but in no event later than three years after its
acquisition by the
Trust Fund. In that event, the Trustee shall have been supplied
with an
Opinion of Counsel to the effect that the holding by the Trust
Fund of such
Mortgaged Property subsequent to a three-year period, if
applicable, will not
result in the imposition of taxes on "prohibited transactions"
of any REMIC
hereunder as defined in section 860F of the Code or cause any
REMIC hereunder
to fail to qualify as a REMIC at any time that any Certificates
are
outstanding, and that the Trust Fund may continue to hold such
Mortgaged
Property (subject to any conditions contained in such Opinion of
Counsel)
after the expiration of such three-year period. Notwithstanding
any other
provision of this Agreement, no Mortgaged Property acquired by
the Trust Fund
shall be rented (or allowed to continue to be rented) or
otherwise used for
the production of income by or on behalf of the Trust Fund in
such a manner or
pursuant to any
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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 any REMIC hereunder 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.
In the event of a default on a Mortgage Loan one or more of
whose
obligor is not a United States Person, as that term is defined
in section
7701(a)(30) of the Code, in connection with any foreclosure or
acquisition of
a deed in lieu of foreclosure (together, "foreclosure") in
respect of such
Mortgage Loan, the Master Servicer will cause compliance with
the provisions
of Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto)
necessary to assure that no withholding tax obligation arises
with respect to
the proceeds of such foreclosure except to the extent, if any,
that proceeds
of such foreclosure are required to be remitted to the obligors
on such
Mortgage Loan.
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
REO
Properties, 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 Master Servicing Fees, Advances and
Servicing Advances,
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 net income received during any calendar month is
in excess of
the amount attributable to amortizing principal and accrued
interest at the
related Mortgage Rate on the related Mortgage Loan for such
calendar month,
such excess shall be considered to be a partial prepayment of
principal of the
related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as
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 Master Servicing Fees; second, to
reimburse the Master
Servicer or the Trustee for any unreimbursed Advances; third, to
reimburse the
Certificate Account for any Nonrecoverable Advances (or portions
thereof) that
were previously withdrawn by the Master Servicer or the Trustee
pursuant to
Section 3.08(a)(iii) that related to such Mortgage Loan; fourth,
to accrued
and unpaid interest (to the extent no Advance has been made for
such amount or
any such Advance has been reimbursed) on the Mortgage Loan or
related REO
Property, at the Adjusted Net Mortgage Rate to the Due Date
occurring in the
month in which such amounts are required to be distributed; and
fifth, as a
recovery of principal of the Mortgage Loan. Excess Proceeds, if
any, from the
liquidation of a Liquidated Mortgage Loan will be retained by
the Master
Servicer as additional servicing compensation pursuant to
Section 3.14.
The Master Servicer, in its sole discretion, shall have the
right to
purchase for its own account from the Trust Fund any Mortgage
Loan which is
151 days or more delinquent at a price
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equal to the Purchase Price; provided, however, that the Master
Servicer may
only exercise this right on or before the next to the last day
of the calendar
month in which such Mortgage Loan became 151 days delinquent
(such month, the
"Eligible Repurchase Month"); provided further, that any such
Mortgage Loan
which becomes current but thereafter becomes delinquent may be
purchased by
the Master Servicer pursuant to this Section in any ensuing
Eligible
Repurchase Month. The Purchase Price for any Mortgage Loan
purchased under
this Section 3.11 shall be deposited in the Certificate Account
and the
Trustee, upon receipt of a certificate from the Master Servicer
in the form of
Exhibit N to this Agreement, 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.
(b) Countrywide may agree to a modification of any Mortgage Loan
(the
"Modified Mortgage Loan") if (i) the modification is in lieu of
a refinancing,
(ii) the Mortgage Rate on the Modified Mortgage Loan is
approximately a
prevailing market rate for newly-originated mortgage loans
having similar
terms and (iii) Countrywide purchases the Modified Mortgage Loan
from the
Trust Fund as described below. 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 Countrywide 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
Countrywide. 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.
Countrywide shall pay to the Master Servicer, and the Master
Servicer
shall deposit the Purchase Price for any Modified Mortgage Loan
in 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 Countrywide 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 Countrywide any
Modified Mortgage
Loan previously transferred and assigned pursuant to this
Agreement.
Countrywide 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 (b), any holding of a Modified Mortgage Loan by the
Trust Fund or
any purchase of a Modified Mortgage Loan by Countrywide (but
such obligation
shall not prevent Countrywide or any other appropriate Person
from in good
faith contesting any such tax in appropriate proceedings and
shall not prevent
Countrywide from withholding payment of such tax, if permitted
by law, pending
the outcome of such proceedings).
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Countrywide 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 Countrywide.
SECTION 3.12. 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
immediately
notify the Trustee by delivering, or causing to be delivered a
Request for
Release substantially in the form of Exhibit N. Upon receipt of
such request,
the Trustee shall promptly release the related Mortgage File to
the Master
Servicer, and the Trustee shall at the Master Servicer's
direction execute and
deliver to the Master Servicer the request for reconveyance,
deed of
reconveyance or release or satisfaction of mortgage or such
instrument
releasing the lien of the Mortgage in each case provided by the
Master
Servicer, together with the Mortgage Note with written evidence
of
cancellation thereon. The Master Servicer is authorized to cause
the removal
from the registration on the MERS System of such Mortgage and to
execute and
deliver, on behalf of the Trustee and the Certificateholders or
any of them,
any and all instruments of satisfaction or cancellation or of
partial or full
release. Expenses incurred in connection with any instrument of
satisfaction
or deed of reconveyance shall be chargeable to the related
Mortgagor. 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
Release in the
form of Exhibit M signed by a Servicing Officer, release the
Mortgage File 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 Release in the form
of Exhibit N,
signed by a Servicing Officer.
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.
SECTION 3.13. 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
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account fully to the Trustee for any funds received by the
Master Servicer or
which 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 and
any 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 Trustee and shall be and remain the sole and
exclusive property
of the Trustee, 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,
Distribution Account or any Escrow Account, 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 setoff against any Mortgage File
or any funds
collected on, or in connection with, a Mortgage Loan, except,
however, that
the Master Servicer shall be entitled to set off against and
deduct from any
such funds any amounts that are properly due and payable to the
Master
Servicer under this Agreement.
SECTION 3.14. Servicing Compensation.
As compensation for its activities hereunder, the Master
Servicer shall
be entitled to retain or withdraw from the Certificate Account
an amount equal
to the Master Servicing Fee; provided, that the aggregate Master
Servicing Fee
with respect to any Distribution Date shall be reduced (i) by an
amount equal
to the aggregate of the Prepayment Interest Shortfalls on all of
the Mortgage
Loans, if any, with respect to such Distribution Date, but not
to exceed the
Compensating Interest for such Distribution Date, and (ii) with
respect to the
first Distribution Date, an amount equal to any amount to be
deposited into
the Distribution Account by the Depositor pursuant to Section
2.01(a) and not
so deposited.
Additional servicing compensation in the form of Excess
Proceeds,
Prepayment Interest Excess, prepayment penalties, assumption
fees, late
payment charges 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. The Master Servicer shall be required to pay all expenses
incurred by it
in connection with its master servicing activities hereunder
(including
payment of any premiums for hazard insurance and any Primary
Insurance Policy
and maintenance of the other forms of insurance coverage
required by this
Agreement) and shall not be entitled to reimbursement therefor
except as
specifically provided in this Agreement.
SECTION 3.15. Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and
to
comparable regulatory authorities supervising Certificateholders
or
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
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