EXHIBIT 99.1
The Pooling and Servicing Agreement
EXECUTION COPY
========================
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 October 1, 2006
-----------------------------------
ALTERNATIVE LOAN TRUST 2006-J7
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-J7
========================
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Table of Contents
Page
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ARTICLE I DEFINITIONS
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SECTION 1.01.
Defined
Terms.........................................................................................I-1
SECTION 1.02.
Certain Interpretive
Principles......................................................................I-38
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
SECTION 2.01.
Conveyance of Mortgage
Loans.........................................................................II-1
SECTION 2.02.
Acceptance by Trustee of the Mortgage
Loans..........................................................II-7
SECTION 2.03.
Representations, Warranties and Covenants of the Sellers and
Master
Servicer.......................II-10
SECTION 2.04.
Representations and Warranties of the Depositor as to the Mortgage
Loans............................II-12
SECTION 2.05.
Delivery of Opinion of Counsel in Connection with
Substitutions.....................................II-13
SECTION 2.06.
Execution and Delivery of
Certificates..............................................................II-13
SECTION 2.07.
REMIC
Matters.......................................................................................II-13
SECTION 2.08.
Covenants of the Master
Servicer....................................................................II-13
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01.
Master Servicer to Service Mortgage
Loans...........................................................III-1
SECTION 3.02.
Subservicing; Enforcement of the Obligations of
Subservicers........................................III-2
SECTION 3.03.
Rights of the Depositor and the Trustee in Respect of the Master
Servicer...........................III-2
SECTION 3.04.
Trustee to Act as Master
Servicer...................................................................III-2
SECTION 3.05.
Collection of Mortgage Loan Payments; Certificate Account;
Distribution Account; the
Pre-funding Account the Capitalized Interest Account; the Carryover
Shortfall Reserve Fund;
the ES Grantor Trust; the Principal Reserve
Fund....................................................III-3
SECTION 3.06.
Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.................................III-7
SECTION 3.07.
Access to Certain Documentation and Information Regarding the
Mortgage Loans........................III-8
SECTION 3.08.
Permitted Withdrawals from the Certificate Account, the
Distribution Account, the Carryover
Shortfall Reserve Fund, the ES Grantor Trust and the Principal
Reserve Fund.........................III-8
SECTION 3.09.
Maintenance of Hazard Insurance; Maintenance of Primary Insurance
Policies.........................III-10
SECTION 3.10.
Enforcement of Due-on-Sale Clauses; Assumption
Agreements..........................................III-11
SECTION 3.11.
Realization Upon Defaulted Mortgage Loans; Repurchase of Certain
Mortgage Loans....................III-12
SECTION 3.12.
Trustee to Cooperate; Release of Mortgage
Files....................................................III-15
SECTION 3.13.
Documents, Records and Funds in Possession of Master Servicer to be
Held for the Trustee...........III-16
SECTION 3.14.
Servicing
Compensation.............................................................................III-16
SECTION 3.15.
Access to Certain
Documentation....................................................................III-17
SECTION 3.16.
Annual Statement as to
Compliance..................................................................III-17
SECTION 3.17.
Errors and Omissions Insurance; Fidelity
Bonds.....................................................III-18
SECTION 3.18.
Notification of
Adjustments........................................................................III-18
SECTION 3.19.
Prepayment
Charges.................................................................................III-18
i
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ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
SECTION 4.01.
Advances.............................................................................................IV-1
SECTION 4.02.
Priorities of
Distribution...........................................................................IV-2
SECTION 4.03.
Allocation of Net Deferred
Interest..................................................................IV-9
SECTION 4.04.
Allocation of Realized
Losses........................................................................IV-9
SECTION 4.05.
Determination of Pass-Through Rates for COFI
Certificates...........................................IV-10
SECTION 4.06.
Monthly Statements to
Certificateholders............................................................IV-10
SECTION 4.07.
Determination of Pass-Through Rates for COFI
Certificates...........................................IV-11
SECTION 4.08.
Determination of Pass-Through Rates for LIBOR
Certificates..........................................IV-12
ARTICLE V THE CERTIFICATES
SECTION 5.01.
The
Certificates......................................................................................V-1
SECTION 5.02.
Certificate Register; Registration of Transfer and Exchange of
Certificates...........................V-1
SECTION 5.03.
Mutilated, Destroyed, Lost or Stolen
Certificates.....................................................V-6
SECTION 5.04.
Persons Deemed
Owners.................................................................................V-6
SECTION 5.05.
Access to List of Certificateholders' Names and
Addresses.............................................V-6
SECTION 5.06.
Maintenance of Office or
Agency.......................................................................V-6
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01.
Respective Liabilities of the Depositor and the Master
Servicer......................................VI-1
SECTION 6.02.
Merger or Consolidation of the Depositor or the Master
Servicer......................................VI-1
SECTION 6.03.
Limitation on Liability of the Depositor, the Sellers, the Master
Servicer and Others................VI-1
SECTION 6.04.
Limitation on Resignation of Master
Servicer.........................................................VI-2
ARTICLE VII DEFAULT
SECTION 7.01.
Events of
Default...................................................................................VII-1
SECTION 7.02.
Trustee to Act; Appointment of
Successor............................................................VII-3
SECTION 7.03.
Notification to
Certificateholders..................................................................VII-4
ARTICLE VIII CONCERNING THE TRUSTEE
SECTION 8.01.
Duties of
Trustee..................................................................................VIII-1
SECTION 8.02.
Certain Matters Affecting the
Trustee..............................................................VIII-2
SECTION 8.03.
Trustee Not Liable for Certificates or Mortgage
Loans..............................................VIII-3
SECTION 8.04.
Trustee May Own
Certificates.......................................................................VIII-3
SECTION 8.05.
Trustee's Fees and
Expenses........................................................................VIII-3
SECTION 8.06.
Eligibility Requirements for
Trustee...............................................................VIII-3
SECTION 8.07.
Resignation and Removal of
Trustee.................................................................VIII-4
SECTION 8.08.
Successor
Trustee..................................................................................VIII-5
SECTION 8.09.
Merger or Consolidation of
Trustee.................................................................VIII-5
SECTION 8.10.
Appointment of Co-Trustee or Separate
Trustee......................................................VIII-5
SECTION 8.11.
Tax
Matters........................................................................................VIII-7
SECTION 8.12.
Monitoring of Significance
Percentage..............................................................VIII-8
ARTICLE IX TERMINATION
SECTION 9.01.
Termination upon Liquidation or Purchase of all Mortgage
Loans.......................................IX-1
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SECTION 9.02.
Final Distribution on the
Certificates...............................................................IX-1
SECTION 9.03.
Additional Termination
Requirements..................................................................IX-2
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION 10.01.
Amendment.............................................................................................X-1
SECTION 10.02.
Recordation of Agreement;
Counterparts................................................................X-2
SECTION 10.03.
Governing
Law.........................................................................................X-2
SECTION 10.04.
Intention of
Parties..................................................................................X-2
SECTION 10.05.
Notices...............................................................................................X-4
SECTION 10.06.
Severability of
Provisions............................................................................X-5
SECTION 10.07.
Assignment............................................................................................X-5
SECTION 10.08.
Limitation on Rights of
Certificateholders............................................................X-5
SECTION 10.09.
Inspection and Audit
Rights...........................................................................X-6
SECTION 10.10.
Certificates Nonassessable and Fully
Paid.............................................................X-6
SECTION 10.11.
[Reserved]............................................................................................X-6
SECTION 10.12.
Protection of
Assets..................................................................................X-6
ARTICLE XI EXCHANGE ACT REPORTING
SECTION 11.01.
Filing
Obligations...................................................................................XI-1
SECTION 11.02. Form
10-D
Filings....................................................................................XI-1
SECTION 11.03. Form
8-K
Filings.....................................................................................XI-2
SECTION 11.04. Form
10-K
Filings....................................................................................XI-2
SECTION 11.05.
Sarbanes-Oxley
Certification.........................................................................XI-3
SECTION 11.06. Form
15
Filing.......................................................................................XI-3
SECTION 11.07.
Report on Assessment of Compliance and
Attestation...................................................XI-3
SECTION 11.08. Use
of Subservicers and
Subcontractors...............................................................XI-4
SECTION 11.09.
Amendments...........................................................................................XI-5
SECTION 11.10.
Reconciliation of
Accounts...........................................................................XI-6
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SCHEDULES
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
Inc....................................................S-II-C-1
Schedule II-D Representations and
Warranties of Park Sienna
LLC....................................................S-II-D-1
Schedule III-A:
Representations and Warranties of Countrywide as to 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 Inc.
as to the Park Monaco Inc. Mortgage
Loans...........................................................S-III-D-1
Schedule III-E
Representations and Warranties of Park Sienna LLC
as to the Park Sienna LLC Mortgage
Loans............................................................S-III-E-1
Schedule IV: Representations
and Warranties of the Master
Servicer..................................................S-IV-1
Schedule V: Principal
Balance Schedules (if
applicable).............................................................S-V-1
Schedule VI: Form of Monthly
Master Servicer
Report.................................................................S-VI-I
Schedule VII: Schedule of Available
Exchanges of Depositable Certificates for Exchangeable
Certificates.............S-VII-I
EXHIBITS
Exhibit A:
Form of Senior Certificate (excluding Notional Amount
Certificates).....................................A-1
Exhibit B:
Form of Subordinated
Certificate........................................................................B-1
Exhibit C-1: Form
of Class A-R
Certificate.........................................................................C-1-1
Exhibit C-2: Form
of Class P
Certificate...........................................................................C-2-1
Exhibit C-3:
[Reserved]............................................................................................C-3-1
Exhibit C-4: Form
of Exchangeable
Certificates.....................................................................C-4-1
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-1-1
Exhibit F-2: Form
of Initial Certification of Trustee (Supplemental Mortgage
Loans)................................................................................................F-2-1
Exhibit G-1: Form
of Delay Delivery Certification of Trustee (Initial Mortgage
Loans)................................................................................................G-1-1
Exhibit G-2: Form
of Delay Delivery Certification of Trustee (Supplemental
Mortgage
Loans).......................................................................................G-2-1
Exhibit H-1: Form
of Final Certification of Trustee (Initial Mortgage
Loans).......................................H-1-1
Exhibit H-2: Form
of Final Certification of Trustee (Supplemental Mortgage
Loans)................................................................................................H-2-1
Exhibit I:
Form of Transfer
Affidavit..............................................................................I-1
Exhibit J-1: Form
of Transferor Certificate
(Residual).............................................................J-1-1
Exhibit J-2: Form
of Transferor Certificate
(Private)..............................................................J-2-1
Exhibit K:
Form of Investment Letter [Non-Rule
144A]...............................................................K-1
Exhibit L-1: Form
of Rule 144A
Letter..............................................................................L-1-1
Exhibit L-2: Form
of ERISA Letter (Covered
Certificates)...........................................................L-2-1
Exhibit M:
Form of Request for Release (for
Trustee)...............................................................M-1
Exhibit N:
Form of Request for Release of Documents (Mortgage Loan - Paid
in Full, Repurchased and
Replaced)......................................................................N-1
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Exhibit O:
[Reserved]..............................................................................................O-1
Exhibit P:
Form of Supplemental Transfer
Agreement.................................................................P-1
Exhibit Q:
Standard & Poor's LEVELS(R) Version 5.7 Glossary Revised,
Appendix
E..............................................................................................Q-1
Exhibit R:
[Reserved]..............................................................................................R-1
Exhibit S-1:
[Reserved]............................................................................................S-1-1
Exhibit S-2:
[Reserved]............................................................................................S-2-1
Exhibit T:
Form of Officer's Certificate with respect to
Prepayments...............................................T-1
Exhibit U:
Monthly
Report..........................................................................................U-1
Exhibit V-1: Form
of Performance Certification
(Subservicer).......................................................V-1-1
Exhibit V-2: Form
of Performance Certification
(Trustee)...........................................................V-2-1
Exhibit W:
Form of Servicing Criteria to be Addressed in Assessment of
Compliance
Statement...............................................................................................W-1
Exhibit X:
List of Item 1119
Parties...............................................................................X-1
Exhibit Y:
Form of Sarbanes-Oxley Certification (Replacement of
Master
Servicer)........................................................................................Y-1
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THIS POOLING AND SERVICING AGREEMENT, dated as of October 1,
2006,
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 herein contained, the
parties hereto 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, separate chains of real
estate mortgage
investment conduits ("REMICs").
The
first chain of REMICs will relate solely to Loan Group 1 and
consist
of two REMICs (the "Group 1 Lower Tier REMIC" and the "Group 1
Master REMIC,"
respectively). Each Group 1 Certificate, other than the Class
1-A-R
Certificate, will represent ownership of one or more regular
interests in the
Group 1 Master REMIC for purposes of the REMIC Provisions. The
Class 1-A-R
Certificate will represent ownership of the sole class of residual
interest in
the Group 1 Lower Tier REMIC and the Group 1 Master REMIC. The
Group 1 Master
REMIC will hold as assets the several classes of uncertificated
Group 1 Lower
Tier REMIC Interests (other than the Class G1-LTR-A-R Interest).
The Group 1
Lower Tier REMIC will hold as assets all property of the Trust Fund
relating
to Group 1 (other than the Pre-funding Account and the Capitalized
Interest
Account). Each Group 1 Lower Tier REMIC Interest (other than the
Class
G1-LTR-A-R Interest) is hereby designated as a regular interest in
the Group 1
Lower Tier REMIC. The latest possible maturity date of all REMIC
regular
interests created herein shall be the Latest Possible Maturity
Date.
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The
following table sets forth characteristics of the Group 1
Master
REMIC Certificates, together with the minimum denominations and
integral
multiples in excess thereof in which such Classes shall be issuable
(except
one Residual Certificate representing the Tax Matters Person
Certificate may
be issued in a different amount):
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Pass-Through
Initial Class
Rate
Minimum
Integral Multiples in
Class Designation Certificate Balance
(per annum)
Denomination Excess of
Minimum
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Class 1-A-1
$
79,091,000.00
6.25%
$25,000.00 $1.00
Class 1-A-2
$
50,168,000.00
6.25%
$25,000.00 $1.00
Class 1-A-3
$
3,061,000.00
6.25%
$1,000.00 $1.00
Class 1-A-4A-8 (1)(2) $
4,791,000.00
5.50%
$25,000.00 $1.00
Class 1-A-4B-8 (1)
$ 4,791,000.00 (3)
0.25%
$25,000.00(4)
$1.00(4)
Class 1-A-4C-8 (1)
$ 4,791,000.00 (3)
0.25%
$25,000.00(4)
$1.00(4)
Class 1-A-4D-8 (1)
$ 4,791,000.00 (3)
0.25%
$25,000.00(4)
$1.00(4)
Class 1-A-4A-9 (1)(2) $
11,015,000.00
5.50%
$25,000.00
$1.00
Class 1-A-4B-9 (1)
$ 11,015,000.00 (3) 0.25%
$25,000.00(4)
$1.00(4)
Class 1-A-4C-9 (1)
$ 11,015,000.00 (3) 0.25%
$25,000.00(4)
$1.00(4)
Class 1-A-4D-9 (1)
$ 11,015,000.00 (3) 0.25%
$25,000.00(4)
$1.00(4)
Class 1-X
$ 151,692,330.00(3) (5)
$25,000.00(4)
$1.00(4)
Class 1-PO
$
130,861.00
(6)
$25,000.00 $1.00
Class 1-A-R(7)
$
100.00 6.25%
(8)
(8)
Class 1-M
$
4,268,000.00
6.25%
$25,000.00 $1.00
Class 1-B-1
$
1,976,000.00
6.25%
$25,000.00 $1.00
Class 1-B-2
$
1,185,500.00
6.25%
$25,000.00 $1.00
Class 1-B-3
$
948,500.00 6.25%
$100,000.00 $1.00
Class 1-B-4
$
790,500.00 6.25%
$100,000.00 $1.00
Class 1-B-5
$
632,324.90 6.25%
$100,000.00 $1.00
Class 1-P
$
100.00(8) 0.00%(9)
(9)
(9)
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(1) This Class of
Group 1 Master REMIC regular interest will be
uncertificated and will be held by the ES Grantor Trust. The ES
Grantor
Trust will initially issue the Class 1-A-4 Certificate, which
will
represent all the interests in the Class 1-A-4A-8, Class 1-A-4B-8,
Class
1-A-4C-8, Class 1-A-4D-8, Class 1-A-4A-9, Class 1-A-4B-9, Class
1-A-4C-9
and
Class 1-A-4D-9 Group 1 Master REMIC regular interests.
(2) Principal payable
to the Class 1-A-4A Interests and Realized Losses (and
increases in Principal Balances attributable to Subsequent
Recoveries)
allocable to the Class 1-A-4A Interests shall be payable and
allocable
sequentially to the Class 1-A-4A-8 and Class 1-A-4A-9 Interests
until
their principal
balances are reduced to zero.
3) This Class of
Certificates will be Notional Amount Certificates, will
have
no Class Certificate Balance and will bear interest on its
Notional
Amount.
(4) Minimum
denomination is based on the Notional Amount of such Class.
2
<PAGE>
(5) The Pass-Through
Rate for the Class 1-X Certificates for the Interest
Accrual Period for any Distribution Date will be equal to the
excess of
(a)
the Weighted Average Adjusted Net Mortgage Rate of the
Non-Discount
Mortgage Loans in Loan Group 1, over (b) 6.25%. The Pass-Through
Rate for
the
Class 1-X Certificates for the Interest Accrual Period for the
first
Distribution Date is 0.53766% per annum.
(6) The Class 1-PO
Certificates are Principal Only Certificates and will not
receive any distributions of interest.
(7) The Class 1-A-R
Certificates represent the sole Class of residual
interest in the Group 1 Master REMIC.
(8) The Class A-R
Certificate shall 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
$0.01.
(9) The Class 1-P
Certificates will also have a notional amount equal to the
aggregate Stated Principal Balance of the Initial Mortgage Loans in
Loan
Group 1 with a Prepayment Charge in Loan Group 1. The Class 1-P
Certificates are issuable in minimum notional amounts equal to a
20%
Percentage Interest and any
amount in excess thereof. For federal income
tax
purposes, the Class 1-P Certificates will be entitled to 100% of
all
the
amounts payable with respect to the Class G1-LTR-1-P Group 1
Lower
Tier
REMIC Interest.
3
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The
following table specifies the class designation, interest rate,
and
principal amount for each class of Group 1 Lower Tier REMIC
Interests:
==============================================================================
Group 1 Lower
Corresponding
Tier REMIC
Initial
Interest
Group 1 Master
Interest Designation Principal
Balance Rate
REMIC Certificate
------------------------------------------------------------------------------
G1-LTR- 1-A-1
$
79,091,000.00 6.25% Class 1-A-1
G1-LTR- 1-A-2
$
50,168,000.00 6.25% Class 1-A-2
G1-LTR- 1-A-3
$
3,061,000.00 6.25% Class 1-A-3
G1-LTR- 1-A-4-8
$
4,791,000.00 6.25% Class
1-A-4A-8,
Class 1-A-4B-8,
Class 1-A-4C-8,
Class 1-A-4D-8 (1)
G1-LTR- 1-A-4-9
$
11,015,000.00 6.25% Class
1-A-4A-9,
Class 1-A-4B-9,
Class 1-A-4C-9,
Class 1-A-4D-9 (2)
G1-LTR- 1-X
(3)
(4) Class
1-X
G1-LTR- 1-PO
$
130,861.00 (5) Class
1-PO
G1-LTR-$100
$
100.00
6.25% Class 1-A-R
G1-LTR- 1-M
$
4,268,000.00 6.25% Class 1-M
G1-LTR- 1-B-1
$
1,976,000.00 6.25% Class 1-B-1
G1-LTR- 1-B-2
$
1,185,500.00 6.25% Class 1-B-2
G1-LTR- 1-B-3
$
948,500.00
6.25% Class 1-B-3
G1-LTR- 1-B-4
$
790,500.00
6.25% Class 1-B-4
G1-LTR- 1-B-5
$
632,324.90
6.25% Class 1-B-5
G1-LTR- 1-P
$
100.00
(4)(6)
Class 1-P
G1-LTR- 1-A-R
(7)
(7) N/A
------------------------------------------------------------------------------
(1) For each Distribution Date, each Class 1-A-4B-8, Class 1-A-4C-8
and Class
1-A-4D-8 Group 1 Master REMIC Interest is entitled to a portion of
the
interest payable on the Class G1-LTR-1-A-4-8 Group 1 Lower Tier
REMIC
Interest. Specifically, for each Distribution Date, each Class
1-A-4B-8, Class
1-A-4C-8 and Class 1-A-4D-8 Group 1 Master REMIC Interest is
entitled to the
interest payable on the Class G1-LTR-1-A-4-8 Group 1 Lower Tier
REMIC Interest
at a per annum rate equal to 0.25%.
(2) For each Distribution Date, each Class 1-A-4B-9, Class 1-A-4C-9
and Class
1-A-4D-9 Group 1 Master REMIC Interest is entitled to a portion of
the
interest payable on the Class G1-LTR-1-A-4-9 Group 1 Lower Tier
REMIC
Interest. Specifically, for each Distribution Date, each Class
1-A-4B-9, Class
1-A-4C-9 and Class 1-A-4D-9 Group 1 Master REMIC Interest is
entitled to the
interest payable on the Class G1-LTR-1-A-4-9 Group 1 Lower Tier
REMIC Interest
at a per annum rate equal to 0.25%.
(3) This Class of Group 1 Lower Tier REMIC Interest pays no
principal.
(4) The G1-LTR-1-X Group 1 Lower Tier REMIC Interest is entitled to
receive on
each Distribution Date a specified portion of the interest payable
on each
Group 1 Non-Discount Mortgage Loan equal to all of the interest
payable on
such mortgage loan in excess of an Adjusted Net Mortgage Rate of
6.25%.
(5) This Class of Group 1 Lower Tier REMIC Interest pays no
interest.
4
<PAGE>
(6) For each Distribution Date, the Class G1-LTR- 1-P Group 1 Lower
Tier REMIC
Interest is entitled to all Prepayment Charges collected with
respect to the
Group 1 Mortgage Loans.
(7) The Class G1-LTR-1-A-R Group 1 Lower Tier REMIC Interest
represents the
sole Class of residual interest in the Group 1 Lower Tier REMIC
Interest.
On each Distribution Date, the Loan Group 1 Available Funds shall
be
distributed with respect to the Group 1 Lower Tier REMIC Interests
in the
following manner:
(1) Interest is to be distributed with respect to each Group 1
Lower Tier REMIC Interest at the rate, or according to the
formulas, described
above; and
(2) Principal is to be distributed with respect to each Group 1
Lower Tier REMIC Interest in the same manner and in the same amount
as
principal is distributed with respect to each Group 1 Lower Tier
REMIC
Interest's Corresponding Class or Classes of Certificates.
On each Distribution Date, Realized Losses (and increases in
Principal Balances attributable to Subsequent Recoveries) shall be
allocated
among the Group 1 Lower Tier REMIC Interests in the same manner
that Realized
Losses (and increases in Class Certificate Balances attributable to
Subsequent
Recoveries) are allocated among each Group 1 Lower Tier REMIC
Interest's
Corresponding Class or Classes of Certificates.
The foregoing REMIC structure is intended to cause all of the cash
from the
Group 1 Mortgage Loans to flow through to the Group 1 Master REMIC
as cash
flow on a REMIC regular interest, without creating any
shortfall-actual or
potential (other than for credit losses) to any REMIC regular
interest.
5
<PAGE>
The
second chain of REMICs will relate solely to Loan Group 2 and
will
consist of two REMICs (the "Group 2 Lower Tier REMIC" and the
"Group 2 Master
REMIC," respectively). Each Group 2 Certificate, other than the
Class 2-A-R
Certificates, will represent ownership of one or more regular
interests in the
Group 2 Master REMIC for purposes of the REMIC Provisions. The
Class 2-A-R
Certificates will represent ownership of the sole class of residual
interest
in the Group 2 Lower Tier REMIC and the Group 2 Master REMIC. The
Group 2
Master REMIC will hold as assets the several classes of
uncertificated Group 2
Lower Tier REMIC Interests (other than the Class G2-LTR-A-R
Interest). The
Group 2 Lower Tier REMIC will hold as assets all property of the
Trust Fund
relating to Group 2. Each Group 2 Lower Tier REMIC Interest (other
than the
Class G2-LTR-A-R Interest) is hereby designated as a regular
interest in the
Group 2 Lower Tier REMIC .
The
following table sets forth characteristics of the Group 2
Master
REMIC Certificates, together with the minimum denominations and
integral
multiples in excess thereof in which such Classes shall be issuable
(except
that one Residual Certificate representing the Tax Matters Person
Certificate
may be issued in a different amount):
<TABLE>
<CAPTION>
=========================================================================================================
Pass-Through
Initial Class
Rate
Minimum
Integral Multiples in
Class Designation Certificate Balance
(per
annum)
Denomination
Excess of Minimum
---------------------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
<C>
Class 2-A-1
$
132,377,000.00 (1)
$25,000.00
$1.00
Class 2-A-2
$
33,094,000.00 (1)
$25,000.00
$1.00
Class 2-X-1
$ 164,471,000.00(1) 0.600%
$25,000.00(2)
$1.00(2)
Class 2-X-2A
$ 164,471,000.00(3) (4)
$25,000.00(2)
$1.00(2)
Class 2-X-2B
$ 30,352,992.00(3)
(5)
$25,000.00
$1.00
Class 2-A-R(6)
$
100.00 (7)
(8)
(8)
Class 2-M-1
$
5,874,000.00 (9)
$25,000.00
$1.00
Class 2-M-2
$
5,385,000.00 (9)
$25,000.00
$1.00
Class 2-M-3
$
1,958,000.00 (9)
$25,000.00
$1.00
Class 2-M-4
$
1,958,000.00 (9)
$25,000.00
$1.00
Class 2-M-5
$
1,958,000.00 (9)
$25,000.00
$1.00
Class 2-M-6
$
1,468,000.00 (9)
$25,000.00
$1.00
Class 2-M-7
$
979,000.00 (9)
$25,000.00
$1.00
Class 2-M-8
$
979,000.00 (9)
$25,000.00
$1.00
Class 2-M-9
$
1,468,000.00 (9)
$25,000.00
$1.00
Class 2-M-10
$
3,035,000.00 (9)
$25,000.00
$1.00
Class 2-M-11
$
1,174,000.00 (9)
$25,000.00
$1.00
Class 2-B-1
$
979,000.00 (9)
$100,000.00
$1.00
Class 2-B-2
$
587,000.00 (9)
$100,000.00
$1.00
Class 2-B-3
$
2,550,992.92 (9)
$100,000.00
$1.00
Class 2-P
$
100.00(9) 0.00%(10)
(10)
(10)
=========================================================================================================
</TABLE>
------------------------------------------
(1) The Pass-Through
Rate for the Class 2-A-1 and Class 2-A-2 Certificates
for
the Interest Accrual Period for any Distribution Date will be a
per
annum rate equal to the lesser of (1) COFI plus 1.500% and (2)
the
related Net Rate Cap. The Pass-Through Rate for the Interest
Accrual
Period for the first Distribution Date is 5.777%.
(2) Minimum
denomination is based on the Notional Amount of such Class
6
<PAGE>
(3) The Class 2-X-2A
and Class 2-X-2B Certificates initially will have no
Class Certificate Balances and will bear interest on the
Component
Notional Amounts of their respective Notional Amount Components.
Solely
for
federal income tax purposes: (i) the Class 2-X-2A Certificates
will
have
a notional balance equal to the sum of the principal balances
in
respect of the Class G2-LTR-SR and Class G2-LTR-X-1 Accrual
Interests and
(ii)
the Class 2-X-2B Certificates will have a notional balance equal
to
the
sum of the principal balances in respect of the Class G2-LTR-SB
and
Class G2-LTR-X-2 Accrual Interests.
(4) The Pass-Through
Rate Class 2-X-2A-IO Component for the Interest Accrual
Period related to any Distribution Date will be a per annum rate
equal
to,
the excess, if any, of (x) the Weighted Average Adjusted Net
Mortgage
Rate
for the Group 2 Mortgage Loans minus 0.600%, over (y) the
Weighted
Average Pass-Through Rate of the Class 2-A-1 and Class 2-A-2
Certificates
and
the Class 2-X-2A-PO Component for the related Interest Accrual
Period. The Pass-Through Rate for the Class 2-X-2A-IO Components
for the
Interest Accrual Period for the first Distribution Date will be
0.61564%
per
annum.
For
federal income tax purposes, for each Interest Accrual Period for
any
Distribution Date, the Class 2-X-2A Certificates are entitled a
specified
portion of the interest on the Class G2-LTR-SR and Class
G2-LTR-X-1
Accrual Interests equal to the excess of (a) the Net Rate Cap over
(b)
the
product of two and the weighted average interest rate of the
Class
G2-LTR-SR and Class G2-LTR-X-1 Accrual Interests with each
Interest
(other than the Class GT-LTR-X-1 Accrual Interest) subject to a cap
equal
to
the Pass-Through Rate of the corresponding Certificate Class plus
.60%
and
the Class G2-LTR-X-1 Accrual Interest subject to a cap of 0.00%.
The
amounts so calculated shall be a rate sufficient to entitle the
Class
2-X-2A Certificates to all interest accrued on the Class G2-LTR-SR
and
Class G2-LTR-X-1 Accrual Interests less the interest accrued on the
Class
2-A-1A and Class 2-A-2 Certificates.
(5) The Pass-Through
Rate for the Class 2-X-2B-IO Component for the Interest
Accrual Period related to any Distribution Date will be a per annum
rate
equal to the excess, if any, of (x) the Weighted Average Adjusted
Net
Mortgage Rate for the Group 2 Mortgage Loans over (y) the
Weighted
Average Pass-Through Rate of the Group 2 Subordinate
Certificates
(calculated on the basis of a 360-day year divided into twelve
30-day
months) and the Class 2-X-2B-PO Component for the related
Interest
Accrual Period. The Pass-Through Rate for the Class 2-X-2B-IO
Component
for
the Interest Accrual Period for the first Distribution Date will
be
2.47630% per annum.
For
federal income tax purposes, for each Interest Accrual Period for
any
Distribution Date, the Class 2-X-2B Certificates are entitled a
specified
portion of the interest on the Class G2-LTR-SB and Class
G2-LTR-X-2
Accrual Interests equal to the excess of (a) the Net Rate Cap over
(b)
the
product of two and the weighted average interest rate of the
Class
Class G2-LTR-SB and Class G2-LTR-X-2 Accrual Interests with each
Interest
(other than the Class GT-LTR-X-2 Accrual Interest) subject to a cap
equal
to
the Pass-Through Rate of the corresponding Certificate Class and
the
Class G2-LTR-X-2 Accrual Interest subject to a cap of 0.00%. The
amounts
so
calculated shall be a rate sufficient to entitle the Class
2-X-2B
Certificates to all interest accrued on the Class G2-LTR-SB and
Class
G2-LTR-X-2 Accrual Interests less the interest accrued on the Class
2-M
and
Class 2-B Certificates.
(6) The Class 2-A-R
Certificates represent the sole Class of residual
interest in the Group 2 Master REMIC.
(7) The Pass-Through
Rate of the Class 2-A-R Certificates for the Interest
Accrual Period related to each Distribution Date will be a per
annum rate
equal to the Weighted Average Adjusted Net Mortgage
7
<PAGE>
Rate of the Mortgage Loans
in Loan Group 2. The Pass-Through Rate for the
Class 2-A-R Certificates for the Interest Accrual Period related to
the
first Distribution Date is 6.99264% per annum.
(8) The Class 2-A-R
Certificate shall 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
$0.01.
(9) Each Class of
LIBOR Certificates will bear interest during each Interest
Accrual Period at a per
annum rate equal to the lesser of (i) One-Month
LIBOR, plus the applicable Pass-Through Margin for such Class, and
(ii)
the
related Net Rate Cap.
(10) The Class 2-P Certificates will also have a notional amount
equal to the
aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2
with
a Prepayment Charge. The Class 2-P Certificates are issuable in
minimum notional amounts equal to a 20% Percentage Interest and
any
amount in excess thereof. For federal income tax purposes, the
Class 2-P
Certificates will be entitled to 100% of all the amounts payable
with
respect to the Class G2-LTR-2-P Group 2 Lower Tier REMIC
Interest.
8
<PAGE>
The following table
specifies the Class designation, interest rate, and
principal amount for each Class of G2 Lower Tier REMIC
Interest:
--------------------------------------------------------------------------------
G2 Lower Tier
Initial Principal
Interest
Corresponding Group 2
REMIC Interest
Balance
Rate
Master REMIC Certificate
--------------------------------------------------------------------------------
G2-LTR-SR-2-A-1
(1)
(3)
Class 2-A-1, Class 2-X-1 (6)
G2-LTR-SR-2-A-2
(1)
(3)
Class 2-A-2, Class 2-X-1 (6)
G2-LTR-X-1 Accrual (1)
(3)
N/A
G2-LTR-$100
$100
(3)
Class 2-A-R
G2-LTR-SB-M-1
(2)
(3)
Class 2-M-1
G2-LTR-SB-M-2
(2)
(3)
Class 2-M-2
G2-LTR-SB-M-3
(2)
(3)
Class 2-M-3
G2-LTR-SB-M-4
(2)
(3)
Class 2-M-4
G2-LTR-SB-M-5
(2)
(3)
Class 2-M-5
G2-LTR-SB-M-6
(2)
(3)
Class 2-M-6
G2-LTR- SB-M-7
(2)
(3)
Class 2-M-7
G2-LTR- SB-M-8
(2)
(3)
Class 2-M-8
G2-LTR- SB-M-9
(2)
(3)
Class 2-M-9
G2-LTR- SB-M-10
(2)
(3)
Class 2-M-10
G2-LTR- SB-M-11
(2)
(3)
Class 2-M-11
G2-LTR- SB-B-1
(2)
(3)
Class 2-B-1
G2-LTR- SB-B-2
(2)
(3)
Class 2-B-2
G2-LTR- SB-B-3
(2)
(3)
Class 2-B-3
G2-LTR- X-2 Accrual (2)
(3)
N/A
G2-LTR-2-P
$100.00
(4)
Class 2-P
G2-LTR-2-A-R
(5)
(5)
N/A
--------------------------------------------------------------------------------
===============================================================================
(1) Each Class
G2-LTR-SR Interest has a principal balance that is initially
equal to 50% of its Corresponding Certificate Class issued by the
Group 2
Master REMIC. The Class G2-LTR-X-1 Accrual Interest has a
principal
balance that is initially equal to the aggregate of the initial
principal
balances of the Class G2-LTR-SR Interests.
(2) Each Class
G2-LTR-SB Interest has a principal balance that is initially
equal to 50% of its Corresponding Certificate Class issued by the
Master
REMIC. The Class G2-LTR-X-2 Accrual Interest has a principal
balance that
is
initially equal to the aggregate of the initial principal balances
of
the
Class G2-LTR-SB Interests.
(3) The interest rate
with respect to any Distribution Date (and the related
Interest Accrual Period) for this G2-LTR REMIC Interest is a per
annum
rate
equal to the Net Rate Cap.
(4) The Class
G2-LTR-2-P Interest is entitled all Prepayment Charges paid on
the
Mortgage Loans and all Master Servicer Prepayment Charge
Amounts.
9
<PAGE>
(5) The Class
G2-LTR-2-A-R Interest is the sole Class of residual interest in
the
G2-LTR REMIC. It pays no interest or principal.
(6) For each Interest
Accrual Period for any Distribution Date, the Class
2-X-1 Certificates are entitled a specified portion of the
interest
payable on this Class G2-LTR-SR Interest at a rate equal to 1.20%
per
annum.
On
each Distribution Date, the Available Funds payable with respect
to
the Mortgage Loans and all prepayment charges and Master Servicer
Prepayment
Charge Amounts for such Distribution Date shall be distributed with
respect to
the G2-LTR REMIC Interests in the following manner:
(1)
Interest. Interest is to be distributed with respect to each
G2-LTR
REMIC Interest at the rate, or according to the formulas, described
above; and
(2)
Principal. Principal payments, both scheduled and prepaid,
Realized
Losses, Subsequent Recoveries and interest accruing on the Mortgage
Loans will
be allocated (a) to each Class G2-LTR-SR and G2-LTR-SB Interest so
as to
maintain its size relative to its Corresponding Certificate Class
(that is,
50%) with any excess payments of principal, Realized Losses,
Subsequent
Recoveries and interest accruing on the Mortgage Loans being
allocated (b) to
(i) the Class G2-LTR -X-1 Accrual Interest so as to cause the
principal
balance of the Class G2-LTR -X-1 Accrual Interest to have a
principal balance
equal to (A) the aggregate principal balance of the Class G2-LTR
-SR Interests
plus (B) 100% of the Net Deferred Interest allocated to the Class
2-X-2A-PO
Component of the Class 2-X-2A Certificates and, if any, 100% of the
Net
Deferred Interest allocated to the Class 2-X-1 Certificates and
(ii) the Class
G2-LTR-X-2-Accrual Interest so as to cause the principal balance of
the Class
G2-LTR -X-2 Accrual Interest to have a principal balance equal to
(A) the
principal balance of the Class G2-LTR-SB Interests plus (B) 100% of
the Net
Deferred Interest allocated to the Class 2-X-2B PO Component of the
Class
2-X-2B Certificates.
(3)
Any Prepayment Charges paid on the Mortgage Loans and any
Master
Servicer Prepayment Charge Amounts will be allocated to the Class
G2-LTR-2-P
Interest.
The foregoing REMIC structure is intended to cause all of the cash
from the
Group 2 Mortgage Loans to flow through to the Group 2 Master REMIC
as cash
flow on a REMIC regular interest, without creating any
shortfall-actual or
potential (other than for credit losses) to any REMIC regular
interest.
10
<PAGE>
Set forth below are designations of Classes or Components of
Certificates and other defined terms to the categories used
herein:
<TABLE>
<CAPTION>
<S>
<C>
Accretion Directed Certificates.................. None.
Accretion Directed Components.................... None.
Accrual Certificates............................. None.
Accrual Components............................... None.
Book-Entry Certificates.......................... All Classes of Certificates
other than the Physical Certificates.
COFI Certificates................................ Class 2-A-1 and Class 2-A-2
Certificates.
Combined Certificates............................ None.
Component Certificates........................... Class 2-X-2A and Class
2-X-2B Certificates.
For purposes of calculating distributions of principal and/or
interest,
each Class of Component Certificates will be comprised of
multiple
payment components having the Designations, Initial Component
Principal
Balances and Component Notional Amounts, as applicable, and
Pass-Through Rates set forth below:
Initial
Component Closing Date
Principal Component
Pass-Through
Designation
Balance
Notional Amount Rate
-----------
-------
--------------- ----
Class 2-X-2A-IO
N/A
$165,471,000 (1)
Class 2-X-2B-IO
N/A
$ 30,352,992 (2)
Class 2-X-2A-PO
$0
N/A
0%
Class 2-X-2A-PO
$0
N/A
0%
(1) For the Interest Accrual Period for each Distribution Date, a
per
annum rate equal to the excess, if any, of (x) the Weighted
Average
Adjusted Net Mortgage Rate for the Group 2 Mortgage Loans weighted
on
the basis of the Stated Principal Balances thereof as of the Due
Date
in the prior calendar month (after giving effect to Prepayments
received in the Prepayment Period related to such prior Due Date)
minus
0.600%, over (y) the weighted average Pass-Through Rate of the
COFI
Certificates and the Class 2-X-2A-PO Component.
(2) For the Interest Accrual Period for each Distribution Date, a
per
annum rate equal to the excess, if any of (x) the Weighted
Average
Adjusted Net Mortgage Rate for the Group 2 Mortgage Loans weighted
on
the basis of the Stated Principal Balances thereof as of the Due
Date
in the preceding
calendar month (after giving effect to Prepayments
received in the Prepayment Period related to such prior Due Date)
over
(y) the weighted average Pass-Through Rate of the LIBOR
Certificates
(calculated on the basis of a 360-day year divided into twelve
30-day
months) and the Class 2-X-2B-PO Component for the related
Interest
Accrual Period.
11
<PAGE>
Components....................................... The Notional Amount
Components and Principal
Only Components. The
Components are not
separately transferable
from the related Class of
Certificates.
Delay Certificates............................... All interest-bearing Classes
of Certificates other than the Non-Delay
Certificates, if any.
Depositable Certificates......................... Class 1-A-1, Class 1-A-2,
Class 1-A-3 and Class 1-A-4 Certificates.
ERISA-Restricted Certificates.................... The Group 2 Certificates
(other than the Class 2-A-1 and Class 2-X Certificates)
Residual Certificates and Private Certificates; and any Certificate
of
a Class that ceases to satisfy the applicable rating requirement
under
the Underwriter's Exemption.
Exchangeable Certificates........................ Class 1-A-5, Class 1-A-6,
Class 1-A-7, Class 1-A-8, Class 1-A-9, Class 1-A-10,
Class 1-A-11, Class 1-A-12 and Class 1-A-13 Certificates.
Floating Rate Certificates....................... The COFI Certificates and
the LIBOR Certificates.
Group 1 Certificates............................. Group 1 Senior Certificates
and the Group 1 Subordinated Certificates.
Group 1 Senior Certificates...................... Class 1-A-1, Class 1-A-2,
Class 1-A-3, Class 1-A-4, Class 1-A-5, Class 1-A-6,
Class 1-A-7, Class 1-A-8, Class 1-A-9, Class 1-A-10, Class
1-A-11,
Class 1-A-12, Class 1-A-13, Class 1-X, Class 1-PO and Class
1-A-R
Certificates.
Group 1 Subordinated Certificates................ Class 1-M, Class 1-B-1,
Class 1-B-2, Class 1-B-3, Class 1-B-4 and Class 1-B-5
Certificates
Group 2 Certificates............................. Group 2 Senior Certificates
and the Group 2 Subordinated Certificates.
Group 2 Senior Certificates.........................Class 2-A-1,
Class 2-A-2, Class 2-X-1, Class 2-X-2A, Class 2-X-2B and
Class 2-A-R Certificates.
Group 2 Subordinated Certificates................ Class 2-M-1, Class 2-M-2,
Class 2-M-3, Class 2-M-4, Class 2-M-5, Class 2-M-6,
Class 2-M-7, Class 2-M-8, Class 2-M-9, Class 2-M-10, Class 2-M-11,
Class 2-B-1,
Class 2-B-2 and Class 2-B-3 Certificates
Inverse Floating Rate Certificates............... None.
LIBOR Certificates............................... The Group 2 Subordinated
Certificates.
Non-Delay Certificates........................... LIBOR Certificates.
Notional Amount Certificates..................... Class 1-A-13, Class 1-X-1
and Class 2-X-1 Certificates.
Notional Amount Components....................... Class 2-X-2A-IO Component
and Class 2-X-2B-IO Component.
12
<PAGE>
Offered Certificates............................. All Classes of Certificates
other than the Private Certificates.
Physical Certificates............................ Private Certificates and the
Residual Certificates.
Planned Principal Classes........................ None.
Principal Only Certificates
or Class PO Certificates......................... Class 1-PO Certificates.
Principal Only Components........................ Class 2-X-2A-PO Component
and Class 2-X-2B-PO Component.
Private Certificates............................. Class 1-P, Class 2-P, Class
1-B-3, Class 1-B-4, Class 1-B-5, Class 2-B-1, Class
2-B-2 and Class 2-B-3 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.
Scheduled Principal Classes...................... None.
Senior Certificate Group............................The Group 1
Senior Certificates or the Group 2 Senior Certificates,
as applicable.
Senior Certificates.............................. The Group 1 Senior
Certificates and the Group 2 Senior Certificates.
Subordinated Certificates........................ The Group 1 Subordinated
Certificates and the Group 2 Subordinated Certificates.
Targeted Principal Classes....................... None.
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
herein
relating solely to such designations shall be of no force or
effect, and any
calculations herein incorporating references to such designations
shall be
interpreted without reference to such designations and amounts.
Defined terms
and provisions herein 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 in Loan Group 1 and Loan Group 2 on the Closing Date is equal
to or
greater than the aggregate Class Certificate Balance of the Group
1
Certificates and Group 2 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", "Remaining
Pre-funded
Amount", "Remaining Non-PO Pre-funded Amount", "Remaining PO
Pre-funded
Amount", "Pre-funded Amount", "Supplemental Cut-off Date",
"Pre-funding
Account", "Supplemental Mortgage Loan", "Supplemental Transfer
Agreement" and
"Supplemental Transfer Date"
13
<PAGE>
with respect to each Loan Group, as applicable, shall be of no
force or effect
and all provisions herein related thereto shall similarly be of no
force or
effect.
14
<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: The Escrow Account, the Certificate Account, the
Distribution Account, the Pre-funding Account, the Capitalized
Interest
Account, the Carryover Shortfall Reserve Fund, the ES Grantor
Trust, the
Principal Reserve Fund 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: With respect to any Class of Accrual Certificates
or
any Accrual Component and any Distribution Date prior to the
related Accrual
Termination Date, the amount allocable to interest on such Class of
Accrual
Certificates or Accrual Component with respect to such Distribution
Date
pursuant to Section 4.02(a).
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 sum of
the
Trustee Fee Rate and the Master Servicing Fee Rate. For purposes
of
determining whether any Substitute Mortgage Loan in Loan Group 1 is
a Discount
Mortgage Loan or a Non-Discount Mortgage Loan and for purposes of
calculating
the applicable PO Percentage and the applicable Non-PO Percentage,
each
Substitute Mortgage Loan shall be deemed to have an Adjusted Net
Mortgage Rate
equal to the Adjusted Net Mortgage Rate of the Deleted Mortgage
Loan for which
it is substituted.
Adjusted Rate Cap: With respect to the COFI Certificates for
any
Distribution Date, the excess, if any, of (1) the related Net Rate
Cap for
that Distribution Date, over (2) a fraction, the numerator of which
is equal
to the product of (x) 12 and (y) the amount of Net Deferred
Interest for that
Distribution Date, and (ii) the denominator of which is the
aggregate Stated
Principal Balance of the Group 2 Mortgage Loans as of the first day
of the
related Due Period (after giving effect to Principal Prepayments
received in
the Prepayment Period ending during such Due Period).
With respect to the LIBOR Certificates for any Distribution
Date,
the excess, if any, of (1) the related Net Rate Cap for that
Distribution
Date, over (2) a fraction, expressed as a percentage, (i)
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<PAGE>
the numerator of which is equal to the product of (a) a fraction,
the
numerator of which is 360 and the denominator of which is the
actual number of
days in the related Interest Accrual Period, and (b) the amount of
Net
Deferred Interest for that Distribution Date, and (ii) the
denominator of
which is the aggregate Stated Principal Balance of the Group 2
Mortgage Loans
as of the first day of the related Due Period (after giving effect
to
Principal Prepayments received in the Prepayment Period ending
during such Due
Period).
With
respect to the for each of the Class 2-X-2A-IO and Class
2-X-2B-IO
Components and any Distribution Date, the Pass-Through Rate for
such IO
Component computed for this purpose by (1) reducing the Weighted
Average
Adjusted Net Mortgage Rate of the Group 2 Mortgage Loans by a per
annum rate
equal to (A) the product of (i) the Net Deferred Interest for the
Group 2
Mortgage Loans for such Distribution Date and (ii) 12, divided by
(2) the
aggregate Stated Principal Balance of the Group 2 Mortgage Loans as
of the
first day of the related Due Period (after giving effect to
Principal
Prepayments received in the Prepayment Period ending during such
Due Period)
month prior to such Distribution Date, and (B) computing the
Pass-Through
Rates of the COFI Certificates, in the case of the Class 2-X-2A-IO
Component,
and the Subordinated Certificates, in the case of the Class
2-X-2B-IO
Component, by substituting "Adjusted Rate Cap" for "Net Rate Cap"
in the
calculation thereof.
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 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 from 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 Planned Balance: With respect to any group of Planned
Principal Classes or Components and any Distribution Date, the
amount set
forth for such group for such Distribution Date in Schedule V
hereto.
Aggregate Supplemental Purchase Amount: With respect to any
Supplemental Transfer Date and Loan Group 1, the applicable
"Aggregate
Supplemental Purchase Amount" identified in the related
Supplemental Transfer
Agreement for such Loan Group, which shall be an estimate of the
aggregate
Stated Principal Balances of the Supplemental Mortgage Loans to be
included in
such Loan Group identified in such Supplemental Transfer
Agreement.
Aggregate Supplemental Transfer Amount: With respect to any
Supplemental Transfer Date and Loan Group 1, the aggregate Stated
Principal
Balance as of the related Supplemental Cut-off Date of the
Supplemental
Mortgage Loans to be included in such Loan Group 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 allocated
to
purchasing Supplemental Mortgage Loans for such Loan Group.
Aggregate Targeted Balance: With respect to any group of
Targeted
Principal Classes or Components and any Distribution Date, the
amount set
forth for such group for such Distribution Date in Schedule V
hereto.
Agreement: This Pooling and Servicing Agreement and all
amendments
or supplements hereto.
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<PAGE>
Allocable Share: As to any Distribution Date and any Mortgage
Loan
in Loan Group 1 (i) with respect to the Class 1-PO Certificates,
zero, (ii)
with respect to the Class 1-X Certificates, (a) the ratio that the
excess, if
any, of the Adjusted Net Mortgage Rate with respect to such
Mortgage Loan,
over the related Required Coupon bears to such Adjusted Net
Mortgage Rate or
(b) if the Adjusted Net Mortgage Rate with respect to such Mortgage
Loan does
not exceed the related Required Coupon, zero and (iii) with respect
to each
other Class of Certificates the product of (a) the lesser of (I)
the ratio
that the related Required Coupon bears to the Adjusted Net Mortgage
Rate of
such Mortgage Loan and (II) one, multiplied by (b) the ratio that
the amount
calculated with respect to such Distribution 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 amount calculated with respect to such Distribution Date for
each Class of
Group 1 Certificates 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)). As to any Distribution Date,
any Mortgage
Loan in Loan Group 2 and any Group 2 Certificate, the ratio that
the amount
calculated with respect to such Distribution 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 Class of Group 2 Certificates 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)).
Amount Available for Senior Principal: As to any Distribution
Date
and any Loan Group, Available Funds for such Distribution Date and
Loan Group,
reduced by the aggregate amount distributable (or allocable to a
related
Accrual Amount, if applicable) on such Distribution Date in respect
of
interest on the related Senior Certificates pursuant to Section
4.02(a).
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 such Loan Group and (ii) all
Scheduled Payments
due after the related Due Date relating to such Loan Group.
Applicable Credit Support Percentage: As defined in Section
4.02(e).
Appraised Value: With respect to any Mortgage Loan, the
Appraised
Value of the related Mortgaged Property shall be: (i) 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 sale price of the
Mortgaged
Property at the time of the origination of such Mortgage Loan; (ii)
with
respect to a Refinancing Mortgage Loan other than a Streamlined
Documentation
Mortgage Loan, the value of the Mortgaged Property based upon the
appraisal
made-at the time of the origination of such Refinancing Mortgage
Loan; and
(iii) 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 loan being originated 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.
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<PAGE>
Available Funds: As to any Distribution Date and the Mortgage
Loans
in a Loan Group, the sum of (a) the aggregate amount held in the
Certificate
Account at the close of business on the related Determination Date,
including
any Subsequent Recoveries, in respect of such Mortgage Loans, net
of the
related Amount Held for Future Distribution, net of the related
Prepayment
Charges received 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 such Mortgage Loans and amounts permitted to
be
withdrawn from the Distribution Account pursuant to clauses (i) -
(v),
inclusive, of Section 3.08(b) in respect of such Mortgage Loans,
(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) with respect to Loan Group 1, on each Funding
Period
Distribution Date, the amount, if any, transferred from the
Capitalized
Interest Account in respect of the applicable Capitalized Interest
Requirement
with respect to such Loan Group, and (e) with respect to Loan Group
1, on the
last Funding Period Distribution Date, the amount, if any,
transferred from
the Pre-funding Account representing the Remaining Non-PO
Pre-funded Amount
and the applicable Remaining PO Pre-funded Amount, if any. The
Holders of the
Class 1-P and Class 2-P Certificates will be entitled to all
Prepayment
Charges received on the Mortgage Loans in Loan Group 1 and Loan
Group 2,
respectively, and such amounts will not be available for
distribution to the
Holders of any other Class of Certificates.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978,
as
amended.
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.
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 the 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 Requirement: With respect to each Funding
Period Distribution Date and Loan Group 1, 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 Group 1
Certificates
for such Distribution Date, plus (2) the Trustee Fee allocated to
Loan Group
1, over (b) with respect to each Mortgage Loan in Loan Group 1, (1)
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) minus
(2) any
related reductions required by Section 4.02(d) hereof. On the
Closing Date,
the amount deposited in the Capitalized Interest Account shall be
$206,450.13.
Carryover Shortfall Amount: For any Class of Floating Rate
Certificates and any Distribution Date, the sum of (a) the excess,
if any, of
(i) the amount of interest such Class of Certificates would have
been entitled
to receive on such Distribution Date pursuant to clause (i) of the
definition
of Class Optimal Interest Distribution Amount (prior to any
reductions
pursuant to Section 4.02(d) and any reduction due to the allocation
of Net
Deferred Interest) had the applicable Pass-Through Rate not been
limited to
the related Net Rate Cap, over (ii) the amount of interest such
Class of
Certificates is entitled to
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<PAGE>
receive on such Distribution Date pursuant to clause (i) of the
definition of
Class Optimal Interest Distribution Amount (prior to any reductions
pursuant
to Section 4.02(d) and any reduction due to the allocation of Net
Deferred
Interest) and (b) with respect to each Class of Floating Rate
Certificates
(other than the Class 2-B-1, Class 2-B-2 and Clas 2-B-3
Certificates), the
unpaid portion of any such excess from prior Distribution Dates
(and interest
accrued thereon at the then applicable Pass-Through Rate on such
Class of
Certificates, without giving effect to the related Net Rate
Cap).
Carryover Shortfall Reserve Fund: The separate fund created and
initially maintained by the Trustee pursuant to Section 3.05(g) in
the name of
the Trustee for the benefit of the Holders of the Floating Rate
Certificates
and the Class 2-X-2A and Class 2-X-2B Certificates and designated
"The Bank of
New York in trust for registered holders of CWALT, Inc.,
Alternative Loan
Trust 2006-J7, Mortgage Pass-Through Certificates, Series 2006-J7."
Funds in
the Carryover Shortfall Reserve Fund shall be held in trust for the
Holders of
the Floating Rate Certificates and the Class 2-X-2A and Class
2-X-2B
Certificates for the uses and purposes set forth in this
Agreement.
Certificate: Any one of the Certificates executed by the Trustee
in
substantially the forms attached hereto 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 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 2006-J7, Mortgage Pass-Through Certificates, Series
2006-J7."
Certificate Balance: With respect to any Certificate at any
date
(other than the Notional Amount Certificates), the maximum dollar
amount of
principal to which the Holder thereof is then entitled hereunder,
such amount
being equal to the Denomination thereof (A) plus any increase in
the
Certificate Balance of each 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 thereto and (ii) all
Realized Losses
allocated thereto and, in the case of the Subordinated
Certificates, all other
reductions in Certificate Balance previously allocated thereto
pursuant to
Section 4.04, (C) in the case of any Class of Accrual Certificates,
increased
by the Accrual Amount added to the Class Certificate Balance of
such Class
prior to such date and (D) with respect to the Group 2
Certificates, increased
by the amount of Net Deferred Interest allocated to the applicable
Class or
Component pursuant to Section 4.03. With respect to each of the
Component
Certificates at any date, the maximum dollar amount of principal to
which the
Holder thereof is entitled under this Agreement, such amount being
equal to
the Component Principal Balance of the related Principal Only
Component as of
such date. The Notional Amount Certificates have no Certificate
Balances.
Certificate Group: The Group 1 Certificates or the Group 2
Certificates, as the context requires.
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 for a Certificate Owner to
enforce any of
its rights hereunder, 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 hereof.
I-5
<PAGE>
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
hereof (other than the second sentence of Section 10.01 hereof)
that requires
the consent of the Holders of Certificates of a particular Class as
a
condition to the taking of any action hereunder. The Trustee is
entitled to
rely conclusively on a certification of the Depositor or any
affiliate of the
Depositor in determining which Certificates are registered in the
name of an
affiliate of the Depositor.
Certification Party: As defined in Section 11.05.
Certifying Person: As defined in Section 11.05.
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
or
Component, the amount by which the amount described in clause (i)
of the
definition of Class Optimal Interest Distribution Amount for such
Class or
Component exceeds the amount of interest actually distributed on
such Class or
Component on such Distribution Date pursuant to such clause
(i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest bearing Class or Component, with
respect to any
interest-bearing Component, 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, Notional Amount or Component
Notional
Amount, as applicable, immediately prior to such Distribution Date,
subject to
reduction as provided in Section 4.02(d), and with respect to each
Class of
Group 2 Certificates, reduced by any Net Deferred Interest on the
Mortgage
Loans in Loan Group 2 for that Distribution Date allocated to the
Class
Certificate Balance or Component Principal Balance, thereof and
(ii) any Class
Unpaid Interest Amounts for such Class or Component.
Class PO Certificates: The Class 1-PO Certificates.
Class P Principal Distribution Date: With respect to the Class
1-P
and Class 2-P Certificates, the first Distribution Date that occurs
after the
end of the latest Prepayment Charge period for the Mortgage Loans
that have a
Prepayment Charge in Loan Group 1 and Loan Group 2,
respectively.
Class PO Component: Not applicable.
Class PO Deferred Amount: As to any Distribution Date and Loan
Group
1, the aggregate of the applicable PO Percentage of each Realized
Loss on a
Discount Mortgage Loan in Loan Group 1 to be allocated to the Class
1-PO
Certificates on such Distribution Date on or prior to the related
Senior
Credit Support Depletion Date or previously allocated to such Class
1-PO
Certificates and not yet paid to the Holders of the Class 1-PO
Certificates.
I-6
<PAGE>
Class
Subordination Percentage: With respect to any Distribution
Date and each Class of Subordinated Certificates related to a Loan
Group, the
quotient (expressed as a percentage) of (a) the Class Certificate
Balance of
such Class of Subordinated Certificates immediately prior to such
Distribution
Date divided by (b) the aggregate of the Class Certificate
Balances
immediately prior to such Distribution Date of all Classes of
Certificates
related to such Loan Group.
Class Unpaid Interest Amounts: As to any Distribution Date and
Class
of interest bearing Certificates or any interest-bearing Component,
the amount
by which the aggregate Class Interest Shortfalls for such Class or
Component
on prior Distribution Dates exceeds the amount distributed on such
Class or
Component on prior Distribution Dates pursuant to clause (ii) of
the
definition of Class Optimal Interest Distribution Amount.
Closing Date: October 30, 2006.
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.
Combined Certificates: As specified in the Preliminary
Statement.
Combined Certificates Payment Rule: Not applicable.
Compensating Interest: As to any Distribution Date and Loan
Group,
an amount equal to the product of one-twelfth of 0.125% and the
aggregate
Stated Principal Balance of the Mortgage Loans in such Loan Group
as of the
Due Date in the prior calendar month.
Component: As specified in the Preliminary Statement.
Component Balance: [Reserved].
Component Certificates: As specified in the Preliminary
Statement.
Component Notional Amount: With respect to the Interest Accrual
Period for any Distribution Date and:
(i) the Class 2-X-2A-IO Component, the sum of the aggregate
Class
Certificate Balance of the Class 2-A-1 and Class 2-A-2
Certificates
and the Component Principal Balance of the Class 2-X-2A-PO
Component
immediately prior to such Distribution Date; and
(ii) the Class 2-X-2B-IO Component, the sum of (1) the
aggregate
Class Certificate Balance of the Group 2 Subordinated
Certificates
and the Component Principal Balance of the Class 2-X-2B-PO
Component
immediately prior to such Distribution Date.
Component Principal Balance: With respect to any date and any
Principal Only Component, an amount equal to (i) the aggregate Net
Deferred
Interest allocated to the related Notional Amount Component
pursuant to
Section 4.03 on all prior Distribution Dates minus (ii) all
amounts
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<PAGE>
actually distributed as principal of such Principal Only Component
and all
Realized Losses applied in reduction of principal of such Principal
Only
Component on all prior Distribution Dates plus (iii) any increase
in the
Component Principal Balance of such Principal Only Component
pursuant to
Section 4.02 on all prior Distribution Dates due to the receipt of
Subsequent
Recoveries.
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, 8W, New
York, New York 10286 (Attn: Mortgage-Backed Securities Group,
CWALT, Inc.
Series 2006-J7), facsimile no. (212) 815-3986, and which is the
address to
which notices to and correspondence with the Trustee should be
directed.
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.
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) with
respect to
Loan Group 1, the amount, if any, deposited in the Pre-funding
Account on the
Closing Date.
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
which 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 which is required to
be
repurchased pursuant to Section 2.02 or 2.03.
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<PAGE>
Deferred Interest: With respect to each Mortgage Loan in Loan
Group
2 and any Due Period, the excess, if any, of the amount of interest
accrued on
such Mortgage Loan at the applicable Mortgage Rate from the Due
Date in the
preceding Due Period to the Due Date in such Due Period over the
Scheduled
Payment due on such Mortgage Loan for such Due Period.
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)
hereof.
Delay Delivery Mortgage Loans: The Mortgage Loans for which all or
a
portion of a related Mortgage File is not delivered to the Trustee
on the
Closing Date or Supplemental Transfer Date, as applicable. The
number of Delay
Delivery Mortgage Loans shall not exceed 50% of the aggregate
number of
Initial Mortgage Loans in each Loan Group as of the Closing Date
and 90% of
the Supplemental Mortgage Loans in Loan Group 1 conveyed on the
related
Supplemental Transfer Date. To the extent that Countrywide Home
Loans
Servicing LP shall be in possession of any Mortgage Files with
respect to any
Delay Delivery Mortgage Loan, until delivery of such Mortgage File
to the
Trustee as provided in Section 2.01, Countrywide Home Loans
Servicing LP 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) hereof.
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof 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.
Depositable Certificate: As specified in the Preliminary
Statement.
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 and the Group 1
Mortgage Loans, the 22nd day of each month or if such 22nd day is
not a
Business Day the next preceding Business Day. As to any
Distribution Date and
the Group 2 Mortgage Loans, the 15th day of each month or if such
15th day is
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<PAGE>
not a Business Day the next preceding Business Day. Notwithstanding
the
foregoing, if such 22nd day or 15th day or such Business Day,
whichever is
applicable, is less than two Business Days prior to the related
Distribution
Date, the Determination Date for the affected Loan Group shall be
the first
Business Day which is two Business Days preceding such Distribution
Date.
Discount Mortgage Loan: Any Mortgage Loan in Loan Group 1 with
an
Adjusted Net Mortgage Rate that is less than the Required Coupon
for Loan
Group 1.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of
the Trustee
for the benefit of the Certificateholders and designated "The Bank
of New York
in trust for registered holders of Alternative Loan Trust 2006-J7,
Mortgage
Pass-Through Certificates, Series 2006-J7." 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: With respect to the Group 1 Certificates,
the
25th day of each calendar month after the initial issuance of
the
Certificates, or if such 25th day is not a Business Day, the next
succeeding
Business Day, commencing in November 2006. With respect to the
Group 2
Certificates, the 20th day of each calendar month after the initial
issuance
of the Certificates, or if such 20th day is not a Business Day, the
next
succeeding Business Day, commencing in November 2006.
Due Date: With respect to a Mortgage Loan, the date on which
Scheduled Payments are due on that Mortgage Loan. With respect to
any
Distribution Date, the related Due Date is the first day of the
calendar 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.
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<PAGE>
Eligible EPD Protected Mortgage Loan: A Mortgage Loan that (i)
was
originated not more than one year prior to the Closing Date or the
related
Supplemental Transfer Date, as applicable, (ii) was purchased by a
Seller or
one of its affiliates pursuant to a purchase agreement containing
provisions
under which the seller thereunder has become obligated to
repurchase such
Mortgage Loan from Countrywide due to a Scheduled Payment due on or
prior to
the first Scheduled Payment owing to the Trust Fund becoming
delinquent and
(iii) was not purchased through Countrywide Home Loan Inc.'s
Correspondent
Lending Division.
Eligible Repurchase Month: As defined in Section 3.11 hereof.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
the
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
ES Grantor Trust: The separate trust created under this
Agreement
pursuant to Section 3.05(l).
Escrow Account: The Eligible Account or Accounts established
and
maintained pursuant to Section 3.06(a) hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any Liquidation Proceeds
received with
respect to such Mortgage Loan during 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 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.
Exchangeable Certificate: As specified in the Preliminary
Statement.
Expense Fee: As to each Mortgage Loan and any Distribution Date,
the
product of the Expense Fee Rate and its Stated Principal Balance as
of the Due
Date in the prior month.
Expense Fee Rate: As to each Mortgage Loan, the sum of the
Master
Servicing Fee Rate and the Trustee Fee Rate.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
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<PAGE>
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 thereto.
Final Certification: As defined in Section 2.02(a) hereof.
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
thereto.
Form 10-D Disclosure Item: With respect to any Person, any
material
litigation or governmental proceedings pending against such Person,
or against
any of the Trust Fund, the Depositor, the Trustee, the 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.
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 and (iii)
November 30 ,
2006.
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.
Grantor Trust: A trust described in section 671 of the Code,
the
items of income, deductions and credits of which must be included
in computing
the taxable income and credits of the person treated as the owner
of such
trust (either the grantor or other person designated under the
Code).
Gross Margin: With respect to each Mortgage Loan in Loan Group
2,
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 Certificates: As defined in the Preliminary Statement.
Group 1 Lower Tier REMIC: As specified in the Preliminary
Statement.
Group 1 Master Tier REMIC: As specified in the Preliminary
Statement.
Group 1 Mortgage Loans: As defined in the Preliminary
Statement.
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<PAGE>
Group 1 Senior Certificates: As specified in the Preliminary
Statement.
Group 1 Senior Principal Distribution Amount: As to any
Distribution
Date and the Group 1 Senior Certificates, the sum of (i) the sum of
the
related Senior Percentage of the applicable Non-PO Percentage of
all amounts
described in subclauses (a) through (d) of clause (i) of the
definition of
"Non-PO Formula Principal Amount" with respect to Loan Group 1 for
such
Distribution Date, (ii) with respect to any Mortgage Loan in Loan
Group 1 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 applicable Non-PO Percentage of the Stated
Principal Balance
of such Mortgage Loan and (y) the related Senior Prepayment
Percentage of the
applicable Non-PO Percentage of the amount of the Liquidation
Proceeds
allocable to principal received with respect to the Mortgage Loan
and (iii)
the sum of (x) the related Senior Prepayment Percentage of the
applicable
Non-PO Percentage of the amounts described in subclause (f) of
clause (i) of
the definition of "Non-PO Formula Principal Amount" with respect to
Loan Group
1 for such Distribution Date plus (y) on the last Funding Period
Distribution
Date, the amount, if any, of the Remaining Non-PO Pre-funded Amount
with
respect to that Loan Group plus (z) the related Senior Prepayment
Percentage
of any Subsequent Recoveries described in clause (ii) of the
definition of
"Non-PO Formula Principal Amount" for such Distribution Date.
Group 1 Subordinated Principal Distribution Amount: With respect
to
any Distribution Date and Loan Group 1, an amount equal to the
excess of (A)
the sum, not less than zero, of (i) the Subordinated Percentage of
the
applicable Non-PO Percentage for Loan Group 1 of all amounts
described in
subclauses (a) through (d) of clause (i) of the definition of
"Non-PO Formula
Principal Amount" for such Distribution Date, (ii) with respect to
each
Mortgage Loan in Loan Group 1 that became a Liquidated Mortgage
Loan during
the calendar month preceding the month of such Distribution Date,
the
applicable Non-PO Percentage of the amount of the Liquidation
Proceeds
allocated to principal received with respect thereto remaining
after
application thereof pursuant to clause (ii) of the definition of
Group 1
Senior Principal Distribution Amount, up to the Subordinated
Percentage for
Loan Group 1 of the applicable Non-PO Percentage of the Stated
Principal
Balance of such Mortgage Loan, (iii) the Subordinated Prepayment
Percentage of
the applicable Non-PO Percentage of all amounts described in
subclause (f) of
clause (i) of the definition of "Non-PO Formula Principal Amount"
for Loan
Group 1 and Distribution Date, and (iv) the related Subordinated
Prepayment
Percentage of any Subsequent Recoveries described in clause (ii) of
the
definition of "Non-PO Formula Principal Amount" for such
Distribution Date,
over (B) the amount of any payments in respect of Class PO Deferred
Amounts
for the Class 1-PO Certificates on the related Distribution
Date.
Group 2 Certificates: As defined in the Preliminary Statement.
Group 2 Lower Tier REMIC: As specified in the Preliminary
Statement.
Group 2 Master Tier REMIC: As specified in the Preliminary
Statement.
Group 2 Mortgage Loans: As defined in the Preliminary
Statement.
Group 2 Senior Certificates: As specified in the Preliminary
Statement.
Group 2 Senior Principal Distribution Amount: As to any
Distribution
Date and the Group 2 Senior Certificates, 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 the Loan Group 2
for such
Distribution Date, (ii) with respect to any Mortgage Loan in Loan
Group 2 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
I-13
<PAGE>
Date occurring in the month preceding the month of the Distribution
Date
(after giving effect to Principal Prepayments in the Prepayment
Period related
to that prior Due Date) and (y) the related Senior Prepayment
Percentage of
the amount of the Liquidation Proceeds allocable to principal
received on such
Mortgage Loan, (iii) the sum of the related Senior Prepayment
Percentage of
the amounts described in clauses (f) and (g) of the definition of
"Principal
Amount" with respect to Loan Group 2 for such Distribution
Date.
Group 2 Subordinated Principal Distribution Amount: With respect
to
any Distribution Date and Loan Group 2, 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 Loan Group 2 and that Distribution Date,
(ii) with
respect to each Mortgage Loan in Loan Group 2 that became a
Liquidated
Mortgage Loan during the calendar month preceding the month of
such
Distribution Date, the Liquidation Proceeds allocable to principal
received
with respect thereto remaining after application thereof pursuant
to clause
(ii) of the definition of "Group 2 Senior Principal Distribution
Amount", up
to the Subordinated Percentage for Loan Group 2 of the Stated
Principal
Balance of that Mortgage Loan as of the Due Date occurring in the
month
preceding the month of the Distribution Date, and (iii) the
Subordinated
Prepayment Percentage for Loan Group 2 of all amounts described in
clauses (f)
and (g) of the definition of "Principal Amount" for Loan Group 2
and
Distribution Date.
Index: With respect to any Interest Accrual Period for the COFI
Certificates, if any, the then-applicable index used by the Trustee
pursuant
to Section 4.07 to determine the applicable Pass-Through Rate for
such
Interest Accrual Period for the COFI Certificates.
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) hereof.
Initial Component Balance: As specified in the Preliminary
Statement.
Initial Cut-off Date: With respect to any Initial Mortgage Loan,
the
later of (i) the date of origination of such Mortgage Loan and (ii)
October 1,
2006. Initial Cut-off Date Pool Principal Balance:
$317,385,197.
Initial Mortgage Loan: With respect to any Mortgage Loan included
in
each Loan Group, 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.
I-14
<PAGE>
Interest Accrual Period: With respect to each Class of Delay
Certificates, its corresponding Lower Tier REMIC Regular Interest
and any
Distribution Date, the calendar month prior to the month of such
Distribution
Date. With respect to any Class of Non-Delay Certificates, its
corresponding
Lower Tier REMIC Regular Interest and any Distribution Date, the
one month
period commencing on the Distribution Date of the month preceding
the month in
which such Distribution Date occurs (or, in the case of the first
Distribution
Date, commencing on the Closing Date) and ending on the day prior
to such
Distribution Date.
Interest Determination Date: With respect to (a) any Interest
Accrual Period for any LIBOR Certificates and (b) any Interest
Accrual Period
for the COFI Certificates for which the applicable Index is LIBOR,
the second
Business Day prior to the first day of such Interest Accrual
Period.
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
X 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 borrower) acquires the Primary Insurance
Policy and
charges the related borrower an interest premium.
LIBOR: The London interbank offered rate for one-month United
States
dollar deposits calculated in the manner described in Section
4.08.
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) which 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: Any 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.
I-15
<PAGE>
Loan Group 2: All Mortgage Loans identified as Loan Group 2
Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group Principal Balance: As to any Distribution Date and
Loan
Group, the aggregate Stated Principal Balance of the Mortgage Loans
in that
Loan Group as of the Due Date in the month preceding the month of
the
Distribution Date (after giving effect to Principal Prepayments
received in
the Prepayment Period related to such prior Due Date), plus the
amount, if
any, on deposit in the Pre-funding Account with respect to that
Loan Group).
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 balance of the related Mortgage Loan at
such 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.
Lower Tier REMIC: As specified in the Preliminary Statement.
Lower Tier REMIC Interest: As specified in the Preliminary
Statement.
Lower Tier REMIC Regular Interest: As specified in the
Preliminary
Statement.
LTR-A-R Interest: As specified in the Preliminary Statement.
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
and
Certificate Group, 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 in such Certificate Group.
Master REMIC: As described in the Preliminary Statement.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its
capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date,
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 preceding the month of such Distribution Date,
subject to
reduction as provided in Section 3.14.
Master Servicing Fee Rate: With respect to each Mortgage Loan,
the
per annum rate set forth on the Mortgage Loan Schedule.
Maximum Mortgage Rate: With respect to each Mortgage Loan in
Loan
Group 2, the maximum rate of interest set forth as such in the
related
Mortgage Note.
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<PAGE>
Maximum Negative Amortization: With respect to each Mortgage Loan
in
Loan Group 2, the percentage set forth in the related Mortgage Note
as the
percentage of the original principal balance of such Mortgage Loan,
that if
exceeded due to Deferred Interest, will result in a recalculation
of the
Scheduled Payment so that the then unpaid principal balance of such
Mortgage
Loan will be fully amortized over the Mortgage Loan's remaining
term to
maturity.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the
MERS System.
MERS (R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
Middle Tier REMIC: As specified in the Preliminary Statement.
Middle Tier REMIC Interest: As specified in the Preliminary
Statement.
Middle Tier REMIC Regular Interest: As specified in the
Preliminary
Statement.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan in
Loan
Group 2, the minimum rate of interest set forth as such in the
related
Mortgage Note.
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
hereof
pertaining to a particular Mortgage Loan and any additional
documents
delivered to the Trustee to be added to the Mortgage File pursuant
to this
Agreement.
Mortgage Index: As to each Mortgage Loan in Loan Group 2, 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 Loans: Such of the mortgage loans as from time to time
are
transferred and assigned to the Trustee pursuant to the provisions
hereof and
any Supplemental Transfer Agreement and that are held as a part of
the Trust
Fund (including any REO Property), the mortgage loans so held
being
I-17
<PAGE>
identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other
acquisition of title of the related Mortgaged Property.
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 hereto 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;
(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 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 on the Cut-off Date;
(xii) 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;
(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 as of the Cut-off Date and the Master
Servicing Fee Rate;
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<PAGE>
(xvii) a code
indicating whether the Mortgage Loan is a MERS
Mortgage Loan; and
(xviii) with respect to each Mortgage Loan in Loan Group 2, the
Gross Margin, the Mortgage Index, the Maximum Mortgage Rate,
the Minimum Mortgage Rate, the Payment Adjustment Date, the
Maximum Negative Amortization and the first Adjustment Date
after the Cut-off Date, as applicable.
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
and in the aggregate. 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 Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
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.
MTR-A-R Interest: As specified in the Preliminary Statement.
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 Deferred Interest: With respect to Loan Group 2 and each
Distribution Date, an amount equal to the excess, if any, of the
Deferred
Interest that accrued on the Mortgage Loans in Loan Group 2 from
the preceding
Due Date to the Due Date related to that Distribution Date over the
Principal
Prepayment Amount for Loan Group 2 for that Distribution Date.
Net Prepayment Interest Shortfalls: As to any Distribution Date
and
Loan Group, the amount by which the aggregate of Prepayment
Interest
Shortfalls for such Distribution Date and Loan Group exceeds the
Compensating
Interest for such Loan Group and Distribution Date.
Net Prepayments: As to any Distribution Date and Loan Group 2,
the
amount equal to the excess, if any, of (i) the Principal Prepayment
Amount for
that Loan Group over (ii) the aggregate amount of Deferred Interest
accrued on
the Mortgage Loans in that Loan Group from the preceding Due Date
to the Due
Date related to that Distribution Date.
Net Rate Cap: With respect to the Class 2-A-1, Class 2-A-2 and
Class
2-A-R Certificates for any Distribution Date, the Weighted Average
Adjusted
Net Mortgage Rate of the Mortgage Loans in Loan Group 2, minus
0.600%.
With respect to the Group 2 Subordinated Certificates for any
Distribution Date, the Weighted Average Adjusted Net Mortgage Rate
of the
Mortgage Loans in Loan Group 2, adjusted to
I-19
<PAGE>
reflect the accrual of interest on the basis of a 360-day year and
the actual
number of days for the related Interest Accrual Period.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Discount Mortgage Loan: Any Mortgage Loan in Loan Group 1
with
an Adjusted Net Mortgage Rate that is greater than or equal to the
Required
Coupon for Loan Group 1.
Non-PO Formula Principal Amount: As to any Distribution Date
and
Loan Group 1, the sum of (i) the sum of the applicable Non-PO
Percentage 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 in Loan Group 1 on the
related Due Date,
(b) the Stated Principal Balance of each Mortgage Loan in the Loan
Group 1
that was repurchased by a 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
Loan Group 1
received with respect to such Distribution Date, (d) any Insurance
Proceeds or
Liquidation Proceeds allocable to recoveries of principal of
Mortgage Loans in
the Loan Group 1 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 Loan Group 1 that became a
Liquidated
Mortgage Loan during the calendar month preceding the month of
such
Distribution Date, the amount of the Liquidation Proceeds allocable
to
principal received during the calendar month preceding the month of
such
Distribution Date with respect to such Mortgage Loan and (f) all
Principal
Prepayments for Loan Group 1 received during the related Prepayment
Period,
(ii) (A) any Subsequent Recoveries on the Mortgage Loans in Loan
Group 1
received during the calendar month preceding the month of such
Distribution
Date, or (B) with respect to Subsequent Recoveries attributable to
a Discount
Mortgage Loan in Loan Group 1 which incurred a Realized Loss after
the related
Senior Credit Support Depletion Date, the Non-PO Percentage of such
Subsequent
Recoveries received during the calendar month preceding the month
of such
Distribution Date and (iii) the last Funding Period Distribution
Date, the
Remaining Non-PO Pre-funded Amount.
Non-PO Percentage: As to any Discount Mortgage Loan in Loan Group
1,
a fraction (expressed as a percentage) the numerator of which is
the Adjusted
Net Mortgage Rate of such Discount Mortgage Loan and the
denominator of which
is the Required Coupon for Loan Group 1. As to any Non-Discount
Mortgage Loan,
100%.
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,
Subsequent
Recoveries 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: With respect to any Distribution Date on or
after
one of the following Recombinations has been exercised and the
Class 1-A-13
Certificates are Outstanding, an amount equal to either:
(a) a fraction, the numerator of which is (i) the product of
0.25%
and the Class Certificate Balance of the Class 1-A-10
Certificates
immediately prior to such Distribution Date, and the
denominator
of which is (ii) 6.25% if Recombination 5 is applicable;
I-20
<PAGE>
(b) a fraction, the numerator of which is (i) the product of
0.50%
and the Class Certificate Balance of the Class 1-A-11
Certificates
immediately prior to such Distribution Date, and the
denominator
of which is and (ii) 6.25% if Recombination 6 is applicable; or
(c) a fraction, the numerator of which is (i) the product of
0.75%
and the Class Certificate Balance of the Class 1-A-12
Certificates
immediately prior to such Distribution Date, and the
denominator
of which is (ii) 6.25% if Recombination 7 is applicable.
With respect to any Distribution Date and the Class 1-X
Certificates, the aggregate Stated Principal Balance of the
Non-Discount
Mortgage Loans in Loan Group 1 as of the Due Date in the preceding
calendar
month (after giving effect to Principal Prepayments received in the
Prepayment
Period related to that preceding Due Date).
With respect to any Distribution Date and the Class 2-X-1
Certificates, the aggregate Class Certificate Balance of the Class
2-A-1 and
Class 2-A-2 Certificates immediately prior to such Distribution
Date.
Notional Amount Certificates: 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 or (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.
Opinion of Counsel: A written opinion of counsel, who may be
counsel
for a Seller, the Depositor 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 a Seller, the Depositor
and the
Master Servicer, (ii) not have any direct financial interest in a
Seller, the
Depositor or the Master Servicer or in any affiliate thereof, and
(iii) not be
connected with a Seller, the Depositor or the Master Servicer as an
officer,
employee, promoter, underwriter, trustee, partner, director or
person
performing similar functions.
Optional Termination: The termination of the trust created
hereunder
in connection with the purchase of the Mortgage Loans pursuant to
Section
9.01(a) hereof.
Original Applicable Credit Support Percentage: With respect to
each
of the following Classes of Certificates, the corresponding
percentage
described below, as of the Closing Date:
The
Group 1 Subordinated
Loan Group 1
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<PAGE>
Certificates
Class 1-M
6.20%
Class 1-B-1
3.50%
Class 1-B-2
2.25%
Class 1-B-3
1.50%
Class 1-B-4
0.90%
Class 1-B-5
0.40%
The
Group 2 Subordinated
Loan Group 2
Certificates
Class 2-M-1
15.50%
Class 2-M-2
12.50%
Class 2-M-3
9.75%
Class 2-M-4
8.75%
Class 2-M-5
7.75%
Class 2-M-6
6.75%
Class 2-M-7
6.00%
Class 2-M-8
5.50%
Class 2-M-9
5.00%
Class 2-M-10
4.25%
Class 2-M-11
2.70%
Class 2-B-1
2.10%
Class 2-B-2
1.60%
Class 2-B-3
1.30%
Original Mortgage Loan: The mortgage loan refinanced in
connection
with the origination of a Refinancing Mortgage Loan.
Original Subordinate Principal Balance: For a Loan Group, the
aggregate of the Class Certificate Balances of the related
Subordinated
Certificates as of the Closing Date.
OTS: The Office of Thrift Supervision.
Outside Reference Date: As to any Interest Accrual Period for
the
COFI Certificates, the close of business on the tenth day
thereof.
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;
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<PAGE>
provided, however, that upon the exchange of any Depositable or
Exchangeable
Certificate pursuant to Section 5.02 hereof, the Depositable or
Exchangeable
Certificate so exchanged shall be deemed no longer to be
Outstanding, and the
Certificates issued in exchange therefor shall be deemed to be
Outstanding.
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 such Due Date or during the
related
Prepayment Period related to such Due Date and which did not become
a
Liquidated Mortgage Loan prior to such Due Date.
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 Margin: With respect to the Interest Accrual Period
for
any Distribution Date and each Class of LIBOR Certificates, the per
annum rate
indicated in the following table:
Pass-Through Margin (%)
Class of Certificates
(1)
(2)
------------------------------------- ------------------ ------------------
Class 2-M-1.......................... 0.410%
0.615%
Class 2-M-2.......................... 0.430%
0.645%
Class 2-M-3.......................... 0.450%
0.675%
Class 2-M-4.......................... 0.570%
0.855%
Class 2-M-5.......................... 0.620%
0.930%
Class 2-M-6.......................... 0.720%
1.080%
Class 2-M-7.......................... 1.550%
2.325%
Class 2-M-8.......................... 1.850%
2.775%
Class 2-M-9.......................... 2.250%
3.375%
Class 2-M-10......................... 2.250%
3.375%
Class 2-M-11......................... 2.250%
3.375%
Class 2-B-1.......................... 2.250%
2.250%
Class 2-B-2.......................... 2.250%
2.250%
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<PAGE>
Pass-Through Margin (%)
Class of Certificates
(1)
(2)
------------------------------------- ------------------ ------------------
Class 2-B-3.......................... 2.250%
2.250%
_________________
(1) For the Interest
Accrual Period related to any Distribution
Date occurring on or prior to the first possible Optional
Termination Date.
(2) For each other
Interest Accrual Period.
Pass-Through Rate: For any interest bearing Class of Certificates
or
Component, 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.
Permitted Investments: At any time, any one or more of the
following
obligations and securities:
(i)
obligations of the United States or any agency thereof,
provided
such obligations are backed by the full faith and
credit of the United States;
(ii)
general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia
receiving the highest long-term debt rating of each Rating
Agency, or such lower rating as 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;
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<PAGE>
(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
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)(l)
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 hereunder 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,
limited liability company, association, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificate: As specified in the Preliminary
Statement.
I-25
<PAGE>
Plan: An "employee benefit plan" as defined in section 3(3) of
ERISA
that is subject to Title I of ERISA, a "plan" as defined in section
4975 of
the Code that is subject to section 4975 of the Code, or any Person
investing
on behalf of or with plan assets (as defined in 29 CFR
ss.2510.3-101 or
otherwise under ERISA) of such an employee benefit plan or
plan.
Planned Balance: With respect to any group of Planned Principal
Classes or Components in the aggregate and any Distribution Date
appearing in
Schedule V hereto, the Aggregate Planned Balance for such group
and
Distribution Date. With respect to any other Planned Principal
Class or
Component and any Distribution Date appearing in Schedule V hereto,
the
applicable amount appearing opposite such Distribution Date for
such Class or
Component.
Planned Principal Classes: As specified in the Preliminary
Statement.
PO Formula Principal Amount: As to any Distribution Date and
the
Class 1-PO Certificates, the sum of (i) the sum of the applicable
PO
Percentage 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 in Loan Group 1
on the
related Due Date, (b) the Stated Principal Balance of each Mortgage
Loan in
Loan Group 1 that was repurchased by a 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
the related 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 Loan Group 1 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 Loan
Group 1 that
became a Liquidated Mortgage Loan during the calendar month
preceding the
month of such Distribution Date, the amount of Liquidation Proceeds
allocable
to principal received with respect to such Mortgage Loan during the
calendar
month preceding the month of such Distribution Date with respect to
such
Mortgage Loan, and (f) all Principal Prepayments with respect to
the Mortgage
Loans in Loan Group 1 received during the related Prepayment
Period, (ii) with
respect to Subsequent Recoveries attributable to a Discount
Mortgage Loan in
Loan Group 1 which incurred a Realized Loss after the Senior Credit
Support
Depletion Date for the Group 1 Certificates, the PO Percentage of
any such
Subsequent Recoveries on the Mortgage Loans in Loan Group 1
received during
the calendar month preceding the month of such Distribution Date
and (iii)
with respect to the last Funding Period Distribution Date, the
Remaining PO
Pre-funded Amount.
PO Percentage: As to any Discount Mortgage Loan in a Loan Group 1,
a
fraction (expressed as a percentage) the numerator of which is the
excess of
the Required Coupon for Loan Group 1 over the Adjusted Net Mortgage
Rate of
such Discount Mortgage Loan and the denominator of which is such
Required
Coupon. As to any Non-Discount Mortgage Loan, 0%.
PO Sublimit: With respect to Loan Group 1, $0.00.
Pool Characteristics: With respect to the Mortgage Loans in
Loan
Group 1 as of the Cut-off Date, the characteristics set forth in
the sixth
bullet point under "The Mortgage Pool--Conveyance of Supplemental
Mortgage
Loans" set forth on pages S-73 of the Prospectus Supplement.
Pool Stated Principal Balance: As of any date of determination,
the
aggregate of the Stated Principal Balances of the Outstanding
Mortgage Loans
plus, with respect to Loan Group 1, the amount on deposit in the
Pre-funding
Account, exclusive of any investment income included therein.
Pre-funded Amount: The amount deposited in the Pre-funding
Account
on the Closing Date, which shall equal $36,496,682.
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<PAGE>
Pre-funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of
the Trustee
for the benefit of the Certificateholders and designated "The Bank
of New
York, in trust for registered holders of Alternative Loan Trust
2006-J7,
Mortgage Pass-Through Certificates, Series 2006-J7." 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 Charge: With respect to any Mortgage Loan, the charges
or
premiums, if any, due in connection with a full or partial
Principal
Prepayment of such Mortgage Loan within the related Prepayment
Charge Period
in accordance with the terms thereof.
Prepayment Charge Amount: As to any Loan Group and Distribution
Date, the sum of the Prepayment Charges collected on the Mortgage
Loans in
that Loan Group during the related Prepayment Period and any
amounts in
respect of such Mortgage Loans paid pursuant to Section 3.19 for
such
Distribution Date.
Prepayment Charge Period: With respect to any Mortgage Loan,
the
period of time during which a Prepayment Charge may be imposed.
Prepayment Interest Excess: As to any Principal Prepayment
received
by Countrywide Home Loans Servicing LP 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,
Mortgage
Loan and Principal Prepayment received (a) by Countrywide Home
Loans Servicing
LP on or after the sixteenth day of the month preceding the month
of such
Distribution Date (or, in the case of the first Distribution Date,
on or after
October 1, 2006) and on or before the last day of the month
preceding the
month of such Distribution Date or (b) by any other servicer during
the month
preceding the month of such Distribution Date, the amount, if any,
by which
one month's interest at the related Mortgage Rate, net of the
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 (i) with respect to any Mortgage Loan directly serviced by
Countrywide
Home Loans Servicing LP, the period from the 16th day of a calendar
month (or,
in the case of the first Distribution Date, from October 1, 2006)
through the
15th day of the following calendar month and (ii) with respect to
any other
Mortgage Loan, the calendar month immediately preceding the month
of that
Distribution Date.
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.
I-27
<PAGE>
Principal Amount: As to any Distribution Date and Loan Group 2,
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 Loan Group 2 on the related Due Date, (b) the
principal
portion of the Purchase Price of each Mortgage Loan in the Loan
Group 2 that
was repurchased by the applicable Seller or 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 Loan Group 2
received
with respect to such Distribution Date, (d) any Insurance Proceeds
or
Liquidation Proceeds allocable to recoveries of principal of
Mortgage Loans in
the related Loan Group 2 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 Loan Group 2 that became a
Liquidated
Mortgage Loan during the calendar month preceding the month of
such
Distribution Date, the amount of the Liquidation 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 Loan Group 2 received during the related Prepayment
Period,
(g) any Subsequent Recoveries received during the calendar month
preceding the
month of such Distribution Date and (h) with respect to the last
Funding
Period Distribution Date, the Remaining Pre-funded Amount.
Principal Only Certificates: As specified in the Preliminary
Statement.
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
an
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.
Principal Reserve Fund: A separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(j) with a
depository
institution in the name of the Trustee for the benefit of the Class
P
Certificateholders specified in Section 3.05(j) and designated "The
Bank of
New York, Principal Reserve Fund in trust for registered holders of
CWALT
2006-J7 Alternative Loan Trust, Mortgage Pass-Through Certificates,
Series
2006-J7, Class P".
Priority Amount: As to any Distribution Date, an amount equal to
the
sum of (i) the product of (A) the Scheduled Principal Distribution
Amount for
Loan Group 1, (B) the Shift Percentage and (C) the Priority
Percentage and
(ii) the product of (A) the Unscheduled Principal Distribution
Amount for Loan
Group 1, (B) the Shift Percentage and (C) the Priority
Percentage.
Priority Percentage: As to any Distribution Date, the
percentage
equivalent of a fraction, the numerator of which is the Class
Certificate
Balance of the Class 1-A-4 Certificates immediately prior to such
Distribution
Date and the denominator of which is the aggregate Class
Certificate Balance
of the Group 1 Certificates (other than the Class 1-PO
Certificates)
immediately prior to that Distribution Date.
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<PAGE>
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date, the Group 1
Subordinated Principal Distribution Amount, the Group 2
Subordinated Principal
Distribution Amount and any Class of Subordinated Certificates in
the related
Certificate Group, the portion of the applicable Subordinated
Principal
Distribution Amount allocable to such Class, equal to the product
of the
applicable Subordinated Principal Distribution Amount on such
Distribution
Date and a fraction, the numerator of which is the Class
Certificate Balance
thereof and the denominator of which is the aggregate of the Class
Certificate
Balances of the Subordinated Certificates in the same Certificate
Group as
such Class of Subordinated Certificates.
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 October 26, 2006 generally
relating
to the mortgage pass-through certificates to be sold by the
Depositor.
Prospectus Supplement: The Prospectus Supplement dated October
27,
2006 relating to the Offered Certificates.
PUD: Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to
be
purchased by a Seller pursuant to Section 2.02 or 2.03 hereof 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 hereof 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, as is designated
by the
Depositor, notice of which designation shall be given to the
Trustee.
References herein to a given rating category of a Rating Agency
shall mean
such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an
amount (not less than zero or more than the Stated Principal
Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the
Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of
such
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<PAGE>
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 which 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.
To the extent the Master Servicer receives Subsequent
Recoveries
with respect to any Liquidated Mortgage Loan, the amount of the
Realized Loss
with respect to that Mortgage Loan will be reduced by such
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.
Recombination Group: Each Class or Classes of Depositable
Certificates and each Class or Classes of Exchangeable Certificates
included
within any particular "Recombination" specified in Schedule
VII.
Record Date: As to any Distribution Date and Class of
Certificates
(other than the LIBOR Certificates), the close of business on the
last
Business Day of the month preceding the month of each Distribution
Date. As to
any Distribution Date, (i) in the case of the LIBOR Certificates
represented
by Book-Entry Certificates, the Business Day immediately preceding
such
Distribution Date and (ii) in the case of LIBOR Certificates
represented by
Definitive Certificates, the close of business on the last Business
Day of the
month preceding the month in which such Distribution Date
occurs.
Reference Bank: As defined in Section 4.08(b).
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 state laws, 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.
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<PAGE>
Remaining Non-PO Pre-funded Amount: With respect to Loan Group 1
and
the last Funding Period Distribution Date, the excess of the amount
on deposit
in the Pre-funding Account attributable to Loan Group 1 on such
date over the
Remaining PO Pre-funded Amount.
Remaining PO Pre-funded Amount: Not Applicable.
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.
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
I-31
<PAGE>
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 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, as
appropriate.
Required Coupon: With respect to the Mortgage Loans in Loan Group
1,
6.25% per annum.
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).
S&P: Standard & Poor's, 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, 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.
Sarbanes-Oxley Certification: As defined in Section 11.05.
Scheduled Balances: Not applicable.
Scheduled Classes: As specified in the Preliminary Statement.
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
I-32
<PAGE>
herein, 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.
Scheduled Principal Distribution Amount: As to any Distribution
Date
and Loan Group, an amount equal to the Non-PO Percentage of all
amounts
described in subclauses (a) through (d) of clause (i) of the
definition of
Non-PO Formula Principal Amount for such Distribution Date and Loan
Group.
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: With respect to each
Certificate Group, the date on which the Class Certificate Balance
of each
Class of Subordinated Certificates in such Certificate Group 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 Class Certificate Balance of the Senior
Certificates of
such Senior Certificate Group (other than the Class PO Certificates
and
Notional Amount Certificates) immediately prior to such
Distribution Date and
the denominator of which is the aggregate of (x) in the case of
Loan Group 1,
the applicable Non-PO Percentage of the Stated Principal Balance of
each
Mortgage Loan in the Loan Group 1 as of the Due Date occurring in
the month
prior to the month of such Distribution Date (after giving effect
to Principal
Prepayments received in the Prepayment Period related to such prior
Due Date)
and (ii) in the case of Loan Group 2, the aggregate Stated
Principal Balance
of the Mortgage Loans in Loan Group 2 as of the Due Date occurring
in the
month prior to the month of such Distribution Date (after giving
effect to
Principal Prepayments received in the Prepayment Period related to
such prior
Due Date).
Senior Prepayment Percentage: As to a Senior Certificate Group 1
and
any Distribution Date during the five years, with respect to
beginning on the
first Distribution Date, 100%. The Senior Prepayment Percentage for
Senior
Certificate Group 1 for any Distribution Date occurring on or after
the fifth
anniversary of the first Distribution Date will, except as provided
herein, 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 (unless on any Distribution Date the Senior
Percentage
exceeds the initial Senior Percentage of Senior Certificate Group
1, in which
case the Senior Prepayment Percentage for Senior Certificate Group
1 for such
Distribution Date will once again equal 100%).
As to a Senior Certificate Group 2 and any Distribution Date
during
the ten years with respect to beginning on the first Distribution
Date, 100%.
The Senior Prepayment Percentage for the Senior Certificate Group 2
for any
Distribution Date occurring on or after the tenth anniversary of
the first
Distribution Date will, except as provided herein, be as follows:
for any
Distribution Date in the first year
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<PAGE>
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 (unless on any Distribution Date the Senior
Percentage
exceeds the initial Senior Percentage of Senior Certificate Group
2, in which
case the Senior Prepayment Percentage for Senior Certificate Group
2 for such
Distribution Date will once again equal 100%). Notwithstanding the
foregoing,
if the Two Times Test is satisfied with respect to Loan Group 2 on
a
Distribution Date, the Senior Prepayment Percentage for Senior
Certificate
Group 2 will equal (x) if such Distribution Date is on or prior to
the
Distribution Date in October 2009, the related Senior Percentage
plus 50% of
the related Subordinated Percentage for the Distribution Date and
(y) if such
Distribution Date is after the Distribution Date in October 2009,
the related
Senior Percentage.
Senior Step Down Conditions: With respect to Loan Group 1 and as
of
the first Distribution Date as to which any decrease in the related
Senior
Prepayment Percentage applies: (i) the outstanding principal
balance of all
Mortgage Loans in Loan Group 1 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),
as a
percentage of the aggregate Class Certificate Balance of the
Subordinated
Certificates in Certificate Group 1, does not equal or exceed 50%,
and (ii)
cumulative Realized Losses on the Mortgage Loans in Loan Group 1 do
not
exceed: (a) commencing with the Distribution Date on the fifth
anniversary of
the first Distribution Date, 30% of the related Original
Subordinate Principal
Balance, (b) commencing with the Distribution Date on the sixth
anniversary of
the first Distribution Date, 35% of the related Original
Subordinate Principal
Balance, (c) commencing with the Distribution Date on the seventh
anniversary
of the first Distribution Date, 40% of the related Original
Subordinate
Principal Balance, (d) commencing with the Distribution Date on the
eighth
anniversary of the first Distribution Date, 45% of the related
Original
Subordinate Principal Balance, and (e) commencing with the
Distribution Date
on the ninth anniversary of the first Distribution Date, 50% of the
related
Original Subordinate Principal Balance.
With respect to Loan Group 2 and as of the first Distribution
Date
as to which any decrease in the related Senior Prepayment
Percentage applies:
(i) the outstanding principal balance of all Mortgage Loans in Loan
Group 2
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), as a percentage of
the
aggregate Class Certificate Balance of the Subordinated
Certificates in
Certificate Group 2, does not equal or exceed 50%, and (ii)
cumulative
Realized Losses on the Mortgage Loans in Loan Group 2 do not
exceed: (a)
commencing with the Distribution Date on the tenth anniversary of
the first
Distribution Date, 30% of the related Original Subordinate
Principal Balance,
(b) commencing with the Distribution Date on the eleventh
anniversary of the
first Distribution Date, 35% of the related Original Subordinate
Principal
Balance, (c) commencing with the Distribution Date on the twelfth
anniversary
of the first Distribution Date, 40% of the related Original
Subordinate
Principal Balance, (d) commencing with the Distribution Date on the
thirteenth
anniversary of the first Distribution Date, 45% of the related
Original
Subordinate Principal Balance, and (e) commencing with the
Distribution Date
on the fourteenth anniversary of the first Distribution Date, 50%
of the
related Original Subordinate Principal Balance.
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
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<PAGE>
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.
Shift Percentage: As to any Distribution Date occurring during
the
five years beginning on the first Distribution Date, 0%. For any
Distribution
Date occurring on or after the fifth anniversary of the first
Distribution
Date as follows: for any Distribution Date in the first year
thereafter, 30%;
for any Distribution Date in the second year thereafter, 40%; for
any
Distribution Date in the third year thereafter, 60%; for any
Distribution Date
in the fourth year thereafter, 80%; and for any Distribution Date
thereafter,
100%.
Startup Day: The Closing Date.
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), plus any Deferred Interest added
to the
principal balance of that Mortgage Loan if such Mortgage Loan is a
Group 2
Mortgage Loan, pursuant to the terms of the related Mortgage Note
on or prior
to that Due Date, minus the sum of: (i) any previous partial
Principal
Prepayments and 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 and Principal
Prepayments received
through the last day of the related Prepayment Period, in each
case, with
respect to that Mortgage Loan and (iii) 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'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 Mortgage Loans under the direction or
authority
of the Master Servicer or a Subservicer or the Trustee, as the case
may be.
Subordinated Certificates: As specified in the Preliminary
Statement.
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<PAGE>
Subordinated Percentage: As to any Loan Group and Distribution
Date,
100% minus the Senior Percentage for the Senior Certificate Group
relating to
such Loan Group for such Distribution Date.
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: The Group 1
Subordinated
Principal Distribution Amount or the Group 2 Subordinated
Principal
Distribution Amount, as applicable.
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 hereof.
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 and Mortgage Index reset period 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; (ix) have the same Maximum
Negative
Amortization, payment cap and recast provisions as the Deleted
Mortgage Loan;
(x) comply with each representation and warranty set forth in
Section 2.03;
and (xi) provide for a Prepayment Charge on terms substantially
similar to
those of the Prepayment Charge, if any, of the Deleted Mortgage
Loan.
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.
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<PAGE>
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.
Targeted Balance: With respect to any group of Targeted
Principal
Classes or Components in the aggregate and any Distribution Date
appearing in
Schedule V hereto, the Aggregate Targeted Balance for such group
and
Distribution Date. With respect to any other Targeted Principal
Class or
Component and any Distribution Date appearing in Schedule V hereto,
the
applicable amount appearing opposite such Distribution Date for
such Class or
Component.
Targeted Principal Classes: As specified in the Preliminary
Statement.
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.
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and principal received on
or with
respect thereto after the Cut-off Date to the extent not applied in
computing
the Cut-off Date Principal Balance thereof; (ii) the Certificate
Account, the
Carryover Shortfall Reserve Fund, the Distribution Account, the
Pre-funding
Account, the Capitalized Interest Account and the Principal Reserve
Fund, 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.
Trustee: The Bank of New York and its successors and, if a
successor
trustee is appointed hereunder, 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 sum of (i)
the Pool
Stated Principal Balance and (ii) any amounts remaining in the
Pre-funding
Account (excluding any investment earnings thereon) with respect to
such
Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.009%
per
annum.
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<PAGE>
Two Times Test: As to any Distribution Date and the Group 2
Subordinated Certificates, if (i) the Subordinated Percentage for
the Group 2
Subordinated Certificates is at least 200% of the Subordinated
Percentage as
of the Closing Date, (ii) clause (i) of the Senior Step Down
Conditions is
satisfied with respect to the Group 2 Mortgage Loans and (iii) the
cumulative
Realized Losses on all the Group 2 Mortgage Loans do not exceed (x)
with
respect to any Distribution Date on or prior to October 2009, 20%
of the
aggregate Class Certificate Balance of the Group 2 Subordinated
Certificates
as of the Closing Date or (y) with respect to any Distribution Date
after
October 2009, 30% of the aggregate Class Certificate Balance of the
Group 2
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.
Underwriter: As specified in the Preliminary Statement.
Unscheduled Principal Distribution Amount: With respect to any
Distribution Date and Loan Group 1, an amount equal to the sum of
(i) 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 applicable Non-PO Percentage of the
Liquidation
Proceeds allocable to principal received with respect to such
Mortgage Loan
and (ii) the applicable Non-PO Percentage of the amount described
in subclause
(f) of clause (i) of the definition of Non-PO Formula Principal
Amount for
such Loan Group and Distribution Date and (iii) any Subsequent
Recoveries
described in clause (ii) of the definition of Non-PO Formula
Principal Amount
for such Loan Group and Distribution Date.
Voting Rights: The portion of the voting rights of all of the
Certificates in a Certificate Group which is allocated to any
related
Certificate. As of any date of determination, (a) 1% of all Voting
Rights for
a Certificate Group shall be allocated to each related 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 for a
Certificate
Group (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 such Certificate Group in proportion to the
Certificate
Balances of their respective Certificates on such date. The Voting
Rights of a
Class of Exchangeable Certificates will be allocated a
proportionate share of
the Voting Rights allocated to the related Class or Classes of
Depositable
Certificates.
Weighted Average Adjusted Net Mortgage Rate: As to any
Distribution
Date and Loan Group 2, the average of the Adjusted Net Mortgage
Rate of each
Mortgage Loan in Loan Group 2, weighted on the basis of its Stated
Principal
Balance as of the first day of the related Due Period (after giving
effect to
Principal Prepayments received on the Prepayment Period ending
during such Due
Period).
SECTION 1.02. Certain
Interpretive 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
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<PAGE>
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.
I-39
<PAGE>
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
hereof, 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
herein 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:
(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
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<PAGE>
(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, certified by Countrywide as
being a
true
and complete copy of the Mortgage (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 duplicate
original
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:
(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 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
II-2
<PAGE>
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,
(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 the
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 assignment, 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 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
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<PAGE>
assignee thereof, affix the following language to each assignment
of Mortgage:
"CWALT Series 2006-J7, 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 hereof.
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 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.
(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 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.
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<PAGE>
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 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;
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<PAGE>
(vi) no Supplemental Mortgage Loan conveyed on such
Supplemental Transfer date was 30 or more days delinquent;
(vii) the aggregate of the PO Percentages of the Stated
Principal Balance of all Supplemental Mortgage Loans in Loan Group
1
shall not exceed the applicable PO Sublimit;
(viii) 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 Pool
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;
(ix) none of the Sellers or the Depositor shall be insolvent or
shall be rendered insolvent as a result of such transfer; and
(x) 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 to the Loan Group into which each Supplement Mortgage
Loan was
conveyed 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
Aggregate Supplemental Transfer Amount for Loan Group 1 used to
purchase
Supplemental Mortgage Loans for Loan Group 1 from such Seller from
those funds
that were set aside in the Pre-funding Account pursuant to Section
2.01(e).
The positive difference, if any, between the Aggregate Supplemental
Transfer
Amount for Loan Group 1 and the Aggregate Supplemental Purchase
Amount for
Loan Group 1 shall be reinvested by the Trustee in the Pre-funding
Account and
shall remain designated as a portion of the Pre-funded Amount
allocated to
that Loan Group.
(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.
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), (vii) and (viii) for that
Loan Group.
(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 clause (48) of Schedule III-A hereto.
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<PAGE>
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
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 hereto 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 such Initial 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 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, 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, 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 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 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
II-7
<PAGE>
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 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 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
II-8
<PAGE>
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 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.
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<PAGE>
(d)
The Trustee shall retain possession and custody of each
Mortgage
File in accordance with and subject to the terms and conditions set
forth
herein. 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.
(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 representation or warranty with
respect to a
Supplemental Mortgage Loan under Section 2.01(e)(i) that
II-10
<PAGE>
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
hereof, 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.
(d) 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 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.
II-11
<PAGE>
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.
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 hereof or such
other date
set forth herein 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 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)(ii) hereof, together with all rights of the
Depositor to
require each 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.
II-12
<PAGE>
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 each REMIC created hereunder to fail to qualify as a
REMIC at
any time that any Certificates are outstanding.
(b) 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 hereto in the same manner, and on the same terms and
conditions, as
it would a Mortgage Loan repurchased for breach of a representation
or
warranty contained in Section 2.03.
SECTION 2.06. 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, to the end that the interests of the Holders of the
Certificates
may be adequately and effectively protected.
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 hereby covenants to the Depositor and the
Trustee as follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and
requirements of
the insurer under each Required Insurance Policy; and
II-13
<PAGE>
(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 hereof, subject to
the terms
hereof (i) to execute and deliver, on behalf of the
Certificateholders and the
Trustee, customary consents or waivers and other instruments and
documents,
(ii) to consent to transfers of any Mortgaged Property and
assumptions of the
Mortgage Notes and related Mortgages (but only in the manner
provided in this
Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation
Proceeds (which, for the purpose of this Section, 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 hereunder 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.
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
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<PAGE>
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
hereunder.
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 Trustee or the
Depositor
be obligated to supervise the performance of the Master Servicer
hereunder 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 thereupon
assume all of the rights and obligations of the Master Servicer
hereunder
arising thereafter (except that the Trustee shall not be (i) liable
for losses
of the Master Servicer pursuant to Section 3.09 hereof or any acts
or
omissions of the predecessor Master Servicer hereunder), (ii)
obligated to
make Advances if it is prohibited from doing so by applicable law,
(iii)
obligated to effectuate repurchases or substitutions of Mortgage
Loans
hereunder including, but not limited to, repurchases or
substitutions of
Mortgage Loans pursuant to Section 2.02 or 2.03 hereof, (iv)
responsible for
expenses of the Master Servicer pursuant to Section 2.03 or (v)
deemed to have
made any representations and warranties of the Master Servicer
hereunder). Any
such assumption shall be subject to Section 7.02
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<PAGE>
hereof. If the Master Servicer shall for any reason no longer be
the Master
Servicer (including by reason of any Event of Default or
termination by the
Depositor), the Trustee or 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; the Pre-funding
Account the Capitalized Interest Account; the
Carryover Shortfall Reserve Fund; the ES Grantor
Trust; the Principal Reserve Fund.
(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 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 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 is reduced below "A-" by S&P or
Fitch, 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 herein, the following payments and collections remitted
by
Subservicers or received by it in respect of Mortgage Loans
subsequent to the
Cut-off Date (other than in respect of principal and interest due
on the
Mortgage Loans on or before the Cut-off Date) and the following
amounts
required to be deposited hereunder:
(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 and Prepayment Interest
Excess;
(iii) all payments on account of Prepayment Charges on the
Mortgage
Loans;
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<PAGE>
(iv) all Insurance Proceeds, Subsequent Recoveries and
Liquidation
Proceeds, other than proceeds to be applied to the restoration or
repair
of
the Mortgaged Property or released to the Mortgagor in accordance
with
the
Master Servicer's normal servicing procedures;
(v) any amount required to be deposited by the Master Servicer
or
the
Depositor pursuant to Section 3.05(e) in connection with any
losses
on
Permitted Investments for which it is responsible;
(vi) 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 hereof;
(vii) all Substitution Adjustment Amounts;
(viii) all Advances made by the Master Servicer pursuant to
Section
4.01; and
(ix) any other amounts required to be deposited hereunder.
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 late payment
charges or
assumption fees, if collected, need not be remitted by the Master
Servicer. In
the event that the Master Servicer shall remit any amount not
required to be
remitted, it may at any time withdraw or direct the institution
maintaining
the Certificate Account to withdraw such amount from the
Certificate Account,
any provision herein to the contrary notwithstanding. Such
withdrawal or
direction may be accomplished by delivering written notice thereof
to the
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 therein 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 or the
Depositor
pursuant to Section 3.05(e) in connection with any losses on
Permitted
Investments for which it is responsible; and
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<PAGE>
(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 herein 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 therein 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 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 herein. 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 Principal Reserve Fund, the ES Grantor Trust, 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
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<PAGE>
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 Class 1-PO Certificates, to the extent of the
Remaining
PO Pre-funded Amount and to the other Classes of Group 1 Senior
Certificates,
to the extent of the Remaining Non-PO 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 aggregate Capitalized Interest
Requirement to the
Trustee for deposit in the Capitalized Interest Account. On each
Distribution
Account Deposit Date related to a Funding Period Distribution 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 and Loan Group, the Trustee shall transfer from the
Capitalized
Interest Account to the Distribution Account an amount equal to the
related
Capitalized Interest Requirement (which, to the extent required,
may include
investment earnings on amounts on deposit therein) with respect to
the related
amount remaining in the Pre-funding Account for the related
Distribution Date
as identified by Countrywide in the Supplemental Transfer
Agreement.
If any funds remain in the Capitalized Interest Account at the
end
of the Funding Period, the Trustee shall make the transfer
described in the
preceding paragraph if necessary for the remaining Funding Period
Distribution
Date and the Trustee shall distribute any remaining funds in the
Capitalized
Interest Account to the order of the Depositor.
(i) On the Closing Date, the Trustee shall establish and maintain
in
its name, in trust for the benefit of the Holders of the Floating
Rate
Certificates, the Carryover Shortfall Reserve Fund and shall
deposit therein,
upon receipt from or on behalf of the Depositor, an amount equal to
$1,000.
All funds on deposit in the Carryover Shortfall Reserve Fund shall
(x) be held
separate and apart from, and shall not be commingled with, any
other moneys,
including without limitation, other moneys held by the Trustee
pursuant to
this Agreement and (y) remain uninvested.
(j) On each Distribution Date, the Trustee shall deposit into
the
Carryover Shortfall Reserve Fund all amounts otherwise
distributable to the
Class 2-X-2A-IO and Class 2-X-2B-IO Components on such Distribution
Date.
(k) The Trustee shall make withdrawals from the Carryover
Shortfall
Reserve Fund to make distributions pursuant to Section 4.02(a)(4).
Upon the
earlier of (i) the reduction of the aggregate Class Certificate
Balance of the
Floating Rate Certificates to zero and (ii) the termination of the
Trust Fund
in accordance with Section 9.01, the Trustee shall distribute to
the Depositor
all monies remaining on deposit in the Carryover Shortfall Reserve
Fund after
making the distributions specified in Section 4.02(a)(4).
(l) On the Closing Date, there is hereby established a separate
trust (the "ES Grantor Trust"), which shall be a Grantor Trust for
federal
income tax purposes. The ES Grantor Trust shall be
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<PAGE>
maintained by the Trustee in its name, for the benefit of the
Holders of the
Class 1-A-4 Certificates and such other Holders as may, from
time-to-time,
deposit interests in Group 1 Master REMIC Certificates or Interests
with the
Trustee in exchange for Exchangeable Certificates. All funds on
deposit in the
ES Grantor Trust, together with all interests in Group 1 Master
REMIC
Certificates or Interests on deposit in the ES Grantor Trust and
any
distributions received in respect of such Group 1 Master REMIC
Certificates or
Interests, shall be held by the Trustee separate and apart from,
and shall not
be commingled with, any other moneys or properties, including
without
limitation, other moneys or properties held by the Trustee pursuant
to this
Agreement.
At
the request of the Holder of a Class or Classes of Depositable
Certificates, and upon the surrender of such Depositable
Certificates, the
Trustee shall issue such Exchangeable Certificates as shall
represent in the
aggregate, the entire beneficial ownership of the Group 1 Master
REMIC
Interests related to such deposited Depositable Certificates as set
forth in
Schedule VII.. In addition, at the request of the Holder of a Class
or Classes
of Exchangeable Certificates, and upon the surrender of such
Exchangeable
Certificates, the Trustee shall exchange such Exchangeable
Certificates for
another Class or Classes of Exchangeable Certificates or the
related deposited
Depositable Certificates, as set forth in Schedule VII.
The
initial assets of the ES Grantor Trust shall consist of the
uncertificated Class 1-A-4A-8, Class 1-A-4B-8, Class 1-A-4C-8,
Class 1-A-4D-8,
Class 1-A-4A-9, Class 1-A-4B-9, Class 1-A-4C-9 and Class 1-A-4D-9
Group 1
Master REMIC Interests, the beneficial interest in which shall be
represented
by the Class 1-A-4 Certificates. At the request of the Holder of a
Class 1-A-4
Certificate, and upon the surrender of such Class 1-A-4
Certificate, the
Trustee shall exchange such Class 1-A-4 Certificate for
individual
Certificates each of which shall represent separately one of
the
uncertificated, Class 1-A-4A-8, Class 1-A-4B-8, Class 1-A-4C-8,
Class
1-A-4D-8, Class 1-A-4A-9, Class 1-A-4B-9, Class 1-A-4C-9 and Class
1-A-4D-9
Group 1 Master REMIC Interests.
(m) The Trustee shall establish and maintain, on behalf of the
Class
P Certificateholders, a Principal Reserve Fund in the name of the
Trustee. On
the Closing Date, the Depositor shall deposit into the Principal
Reserve Fund
$100. Funds on deposit in the Principal Reserve Fund shall not be
invested.
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
therein
all collections from the Mortgagors (or advances by the Master
Servicer) for
the payment of taxes, assessments, hazard insurance premiums or
comparable
items for the account of the Mortgagors. Nothing herein shall
require the
Master Servicer to compel a Mortgagor to establish an Escrow
Account in
violation of applicable law.
(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 hereof (with respect to taxes and
assessments and
insurance premiums) and 3.09 hereof (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 hereof. 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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<PAGE>
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,
the Distribution Account, the Carryover Shortfall
Reserve Fund, the ES Grantor Trust and the Principal
Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals
from
the Certificate Account with respect to the Mortgage Loans in a
Loan Group 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) which 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 hereof;
(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 thereon after the
date
of
such purchase;
III-8
<PAGE>
(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
hereof;
(viii) to withdraw any amount deposited in the Certificate
Account
and
not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw an amount equal to the sum of (a) the related Available
Funds,
(b)
the related Prepayment Charge Amount and (c) the applicable
portion
of
the Trustee Fee for such Distribution Date 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 hereof.
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 second to
last
paragraph of Section 8.11). In addition, the Trustee may from time
to time
make withdrawals from the Distribution Account with respect to the
Mortgage
Loans in a Loan Group or 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;
(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 hereof.
(vii) [Reserved.]
III-9
<PAGE>
(c) The Trustee shall withdraw funds from the Carryover
Shortfall
Reserve Fund for distribution to the Floating Rate Certificates and
the Class
2-X-2A and Class 2-X-2B Certificates in the manner specified in
Section
4.02(a)(4) (and to withhold from the amounts so withdrawn the
amount of any
taxes that it is authorized to retain pursuant to the third
paragraph of
Section 8.11). In addition, the Trustee may from time to time make
withdrawals
from the Carryover Shortfall Reserve Fund for the following
purposes:
(i) to withdraw any amount deposited in the Carryover Shortfall
Reserve Fund and not required to be deposited therein; and
