EXHIBIT 99.1
The Pooling and Servicing Agreement
<PAGE>
SA DRAFT
=====================
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 September 1, 2006
-----------------------------------
ALTERNATIVE LOAN TRUST 2006-32CB
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-32CB
=====================
<PAGE>
ARTICLE I DEFINITIONS
<TABLE>
<CAPTION>
<S>
<C>
<C>
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-4
SECTION 2.03.
Representations, Warranties and Covenants of the Sellers and
Master
Servicer.........II-6
SECTION 2.04.
Representations and Warranties of the Depositor as to the Mortgage
Loans..............II-8
SECTION 2.05.
Delivery of Opinion of Counsel in Connection with
Substitutions.......................II-9
SECTION 2.06.
Execution and Delivery of
Certificates................................................II-9
SECTION 2.07.
REMIC
Matters.........................................................................II-9
SECTION 2.08.
Covenants of the Master
Servicer.....................................................II-10
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 Supplemental Interest Trust and Corridor Contract Reserve
Fund...................III-3
SECTION 3.06.
Collection of Taxes, Assessments and Similar Items; Escrow
Accounts..................III-6
SECTION 3.07.
Access to Certain Documentation and Information Regarding the
Mortgage Loans.........III-6
SECTION 3.08.
Permitted Withdrawals from the Certificate Account, the
Distribution Account and
the Corridor Contract Reserve
Fund...................................................III-7
SECTION 3.09.
Maintenance of Hazard Insurance; Maintenance of Primary Insurance
Policies...........III-8
SECTION 3.10.
Enforcement of Due-on-Sale Clauses; Assumption
Agreements............................III-9
SECTION 3.11.
Realization Upon Defaulted Mortgage Loans; Repurchase of Certain
Mortgage Loans.....III-10
SECTION 3.12.
Trustee to Cooperate; Release of Mortgage
Files.....................................III-13
SECTION 3.13.
Documents, Records and Funds in Possession of Master Servicer to be
Held for the
Trustee.............................................................................III-14
SECTION 3.14.
Servicing
Compensation..............................................................III-15
SECTION 3.15.
Access to Certain
Documentation.....................................................III-15
SECTION 3.16.
Annual Statement as to
Compliance...................................................III-15
SECTION 3.17.
Errors and
Omissions Insurance; Fidelity
Bonds......................................III-16
SECTION 3.18.
The Corridor
Contracts..............................................................III-16
i
<PAGE>
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.
[Reserved]............................................................................IV-7
SECTION 4.04.
Allocation of Realized
Losses.........................................................IV-7
SECTION 4.05.
[Reserved]............................................................................IV-8
SECTION 4.06.
Monthly Statements to
Certificateholders..............................................IV-8
SECTION 4.07.
Determination of Pass-Through Rates for COFI
Certificates.............................IV-9
SECTION 4.08.
Determination of Pass-Through Rates for LIBOR
Certificates...........................IV-10
SECTION 4.09.
Distributions from the Corridor Contract Reserve
Fund................................IV-11
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-5
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
ii
<PAGE>
ARTICLE IX TERMINATION
SECTION 9.01.
Termination upon Liquidation or Purchase of all Mortgage
Loans........................IX-1
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-2
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-5
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
iii
<PAGE>
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
iv
<PAGE>
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:
[Reserved]............................................................................C-2-1
Exhibit C-3:
[Reserved]............................................................................C-3-1
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..............................................F-1-1
Exhibit F-2:
[Reserved]............................................................................F-2-1
Exhibit G-1:
Form of Delay Delivery Certification of
Trustee.......................................G-1-1
Exhibit G-2:
[Reserved]............................................................................G-2-1
Exhibit H-1:
Form of Final Certification of
Trustee................................................H-1-1
Exhibit H-2:
[Reserved]............................................................................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
Exhibit O:
[Reserved]..............................................................................O-1
Exhibit P:
[Reserved]..............................................................................P-1
Exhibit Q:
The then current version of Standard & Poor's LEVELS(R) Version
5.7 Glossary Revised,
Appendix
E..............................................................................Q-1
Exhibit R:
Form of Corridor
Contract...............................................................R-1
Exhibit S-1:
[Reserved]............................................................................S-1-1
Exhibit S-2:
[Reserved]............................................................................S-2-1
Exhibit T:
[Reserved]..............................................................................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
</TABLE>
v
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of September 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 will consist of two real estate mortgage investment
conduits
(each a "REMIC" or, in the alternative, the "Subsidiary REMIC" and
the "Master
REMIC," respectively). Each Certificate, other than the Class A-R
Certificate,
will represent ownership of one or more regular interests in the
Master REMIC
for purposes of the REMIC Provisions. The Class A-R Certificate
will represent
ownership of the sole class of residual interest in the Subsidiary
REMIC and the
Master REMIC. The Master REMIC will hold as assets the several
classes of
uncertificated Subsidiary REMIC Interests (other than the Class
SR-A-R
Interest). The Subsidiary REMIC will hold as assets all property of
the Trust
Fund. Each Subsidiary REMIC Interest (other than the Class SR-A-R
Interest) is
hereby designated as a regular interest in the Subsidiary REMIC.
The latest
possible maturity date of all REMIC regular interests created
herein shall be
the Latest Possible Maturity Date.
The Corridor Contracts, the Supplemental Interest Trust and the
Corridor Contract Reserve Fund will not form part of any REMIC.
<PAGE>
The following table sets forth characteristics of the Master REMIC
Certificates,
together with the minimum denominations and integral multiples in
excess thereof
in which such Classes shall be issuable (except that one
Certificate of each
Class of Certificates may be issued in a different amount and, in
addition, one
Residual Certificate representing the Tax Matters Person
Certificate may be
issued in a different amount):
<TABLE>
<CAPTION>
============================================================================================================================
Pass-Through
Initial Class Certificate
Rate
Integral Multiples
Class
Designation
Balance
(per annum)
Minimum Denomination in Excess of Minimum
----------------------------------------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
<C>
----------------------------------------------------------------------------------------------------------------------------
Class A-1
$50,000,000
(1)
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-2
$50,000,000(2)
(3)
$25,000.00(4)
$1.00(4)
----------------------------------------------------------------------------------------------------------------------------
Class A-3
$1,255,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-4
$64,085,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-5
$7,169,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-6
$3,694,000
6.00%
$1,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-7
$20,000,000
(5)
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-8
$20,000,000(6)
(7)
$25,000.00(4)
$1.00(4)
----------------------------------------------------------------------------------------------------------------------------
Class A-9
$56,469,000
6.00%
$1,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-10
$56,468,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-11
$11,511,000
6.00%
$1,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-12
$108,185,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-13
$5,506,000
6.00%
$1,000.00
$1.00(4)
----------------------------------------------------------------------------------------------------------------------------
Class A-14
$34,064,500
(8)
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-15
$34,064,500
(10)
$25,000.00(4)
$1.00(4)
----------------------------------------------------------------------------------------------------------------------------
Class A-16
$81,138,000
5.50%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-17
$4,130,000
5.50%
$1,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-18
$16,098,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-19
$15,940,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-20
$22,568,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-21
$16,925,500
5.50%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-22
$22,369,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class X
$590,071,434 (11)
(12)
$25,000.00(4)
$1.00(4)
----------------------------------------------------------------------------------------------------------------------------
Class PO
$861,054
(13)
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class A-R(14)
$100.00
6.00%
(15)
(15)
----------------------------------------------------------------------------------------------------------------------------
Class M
$13,437,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class B-1
$4,375,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class B-2
$3,438,000
6.00%
$25,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class B-3
$2,187,000
6.00%
$100,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class B-4
$1,563,000
6.00%
$100,000.00
$1.00
----------------------------------------------------------------------------------------------------------------------------
Class B-5
$1,562,940.45
6.00%
$100,000.00
$1.00
============================================================================================================================
</TABLE>
----------------------------
(1) The Class
A-1 Certificates will bear interest during each Interest
Accrual
Period at
a per annum rate of LIBOR plus 0.67%, subject to a maximum and
minimum
Pass-Through Rate of 6.00% and 0.67% per annum, respectively.
The
Pass-Through Rate for the Class A-1 Certificates during the
initial
Interest
Accrual Period is 6.00% per annum.
(2) The Class
A-2 Certificates will be Notional Amount Certificates, will
have
no Class
Certificate Balance and will bear interest on its Notional
Amount.
2
<PAGE>
(3) The Class
A-2 Certificates will bear interest during each Interest
Accrual
Period at
a per annum rate of 5.33% minus LIBOR, subject to a maximum and
minimum
Pass-Through Rate of 5.33% and 0.00% per annum, respectively.
The
Pass-Through Rate for the Class A-2 Certificates during the
initial
Interest
Accrual Period is 0.00% per annum.
(4) Minimum
denomination is based on the Notional Amount of such Class.
(5) The Class
A-7 Certificates will bear interest during each Interest
Accrual
Period at
a per annum rate of LIBOR plus 0.73%, subject to a maximum and
minimum
Pass-Through Rate of 6.00% and 0.73% per annum, respectively.
The
Pass-Through Rate for the Class A-7 Certificates during the
initial
Interest
Accrual Period is 6.00% per annum.
(6) The Class
A-8 Certificates will be Notional Amount Certificates, will
have
no Class
Certificate Balance and will bear interest on its Notional
Amount.
(7) The Class
A-8 Certificates will bear interest during each Interest
Accrual
Period at
a per annum rate of 5.27% minus LIBOR, subject to a maximum and
minimum
Pass-Through Rate of 5.27% and 0.00% per annum, respectively.
The
Pass-Through Rate for the Class A-8 Certificates during the
initial
Interest
Accrual Period is 0.00% per annum.
(8) The Class
A-14 Certificates will bear interest during each Interest
Accrual
Period at a per annum rate of LIBOR plus 0.35%, subject to a
maximum
and minimum Pass-Through Rate of 6.00% and 0.35% per annum,
respectively. The Pass-Through Rate for the Class A-14 Certificates
during
the
initial Interest Accrual Period is 5.68% per annum.
(9) The Class
A-15 Certificates will be Notional Amount Certificates, will
have no
Class Certificate Balance and will bear interest on its
Notional
Amount.
(10) The Class A-15
Certificates will bear interest during each Interest
Accrual
Period at a per annum rate of 7.15% minus LIBOR, subject to a
maximum
and minimum Pass-Through Rate of 7.15% and 0.00% per annum,
respectively. The Pass-Through Rate for the Class A-15 Certificates
during
the
initial Interest Accrual Period is 1.82% per annum.
(11) The Class X
Certificates will be Notional Amount Certificates, will have
no Class
Certificate Balance and will bear interest on its Notional
Amount.
(12) The Pass-Through
Rate for the Class X Certificates for the Interest
Accrual
Period for any Distribution Date will be equal to the excess of
(a) the
weighted average of the Adjusted Net Mortgage Rates of the
Non-Discount Mortgage Loans, weighted on the basis of the Stated
Principal
Balance
thereof as of the Due Date in the preceding calendar month
(after
giving
effect to Principal Prepayments received in the Prepayment
Period
related to
such prior Due Date), over (b) 6.00%. The Pass-Through Rate for
the Class
X Certificates for the Interest Accrual Period for the first
Distribution Date is 0.48068% per annum.
(13) The Class PO
Certificates will be Principal Only Certificates and will not
receive
any distributions of interest.
(14) The Class A-R
Certificates represent the sole Class of residual interest
in the
Master REMIC.
3
<PAGE>
(15) 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.
4
<PAGE>
The following table specifies the class designation, interest rate,
and
principal amount for each class of Subsidiary REMIC Interests:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Subsidiary
REMIC
Interest
Initial Principal Balance
Interest Rate
Corresponding Certificates
-----------------------------------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
SR-A-1
$50,000,000
6.00%
Class A-1, Class A-2(1)
-----------------------------------------------------------------------------------------------------------------------
SR-A-3
$1,255,000
6.00%
Class A-3
-----------------------------------------------------------------------------------------------------------------------
SR-A-4
$64,085,000
6.00%
Class A-4
-----------------------------------------------------------------------------------------------------------------------
SR-A-5
$7,169,000
6.00%
Class A-5
-----------------------------------------------------------------------------------------------------------------------
SR-A-6
$3,694,000
6.00%
Class A-6
-----------------------------------------------------------------------------------------------------------------------
SR-A-7
$20,000,000
6.00%
Class A-7,
Class A-8(2)
-----------------------------------------------------------------------------------------------------------------------
SR-A-9
$56,469,000
6.00%
Class A-9
-----------------------------------------------------------------------------------------------------------------------
SR-A-10
$56,468,000
6.00%
Class A-10
-----------------------------------------------------------------------------------------------------------------------
SR-A-11
$11,511,000
6.00%
Class A-11
-----------------------------------------------------------------------------------------------------------------------
SR-A-12
$108,185,000
6.00%
Class A-12
-----------------------------------------------------------------------------------------------------------------------
SR-A-13
$5,506,000
6.00%
Class A-13
-----------------------------------------------------------------------------------------------------------------------
SR-A-14
$34,064,500
7.50%
Class A-14, Class A-15(3)
-----------------------------------------------------------------------------------------------------------------------
SR-A-16
$81,138,000
5.50%
Class A-16
-----------------------------------------------------------------------------------------------------------------------
SR-A-17
$4,130,000
5.50%
Class A-17
-----------------------------------------------------------------------------------------------------------------------
SR-A-18
$16,098,000
6.00%
Class A-18
-----------------------------------------------------------------------------------------------------------------------
SR-A-19
$15,940,000
6.00%
Class A-19
-----------------------------------------------------------------------------------------------------------------------
SR-A-20
$22,568,000
6.00%
Class A-20
-----------------------------------------------------------------------------------------------------------------------
SR-A-21
$16,925,000
5.50%
Class A-21
-----------------------------------------------------------------------------------------------------------------------
SR-A-22
$22,369,000
6.00%
Class A-22
-----------------------------------------------------------------------------------------------------------------------
SR-PO
$861,054
(4)
Class PO
-----------------------------------------------------------------------------------------------------------------------
SR-X
(5)
(6)
Class X
-----------------------------------------------------------------------------------------------------------------------
SR-$100
$100.00
6.00%
Class A-R
-----------------------------------------------------------------------------------------------------------------------
SR-M
$13,437,000
6.00%
Class M
-----------------------------------------------------------------------------------------------------------------------
SR-B-1
$4,375,000
6.00%
Class B-1
-----------------------------------------------------------------------------------------------------------------------
SR-B-2
$3,438,000
6.00%
Class B-2
-----------------------------------------------------------------------------------------------------------------------
SR-B-3
$2,187,000
6.00%
Class B-3
-----------------------------------------------------------------------------------------------------------------------
SR-B-4
$1,563,000
6.00%
Class B-4
-----------------------------------------------------------------------------------------------------------------------
SR-B-5
$1,562,940.45
6.00%
Class B-5
-----------------------------------------------------------------------------------------------------------------------
SR-A-R
(7)
(7)
N/A
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
---------------------
(1) The Class
A-2 Certificates are entitled to receive on each Distribution
Date a
specified portion of the interest payable on the SR-A-1
Subsidiary
REMIC
Interest. Specifically, for each Interest Accrual Period, the
Class
A-2
Certificates are entitled to interest accruals on the SR-A-1
Subsidiary
REMIC Interest at a per annum rate equal to 5.33% minus LIBOR,
but not
less than 0.00% per annum.
(2) The Class
A-8 Certificates are entitled to receive on each Distribution
Date a
specified portion of the interest payable on the SR-A-7
Subsidiary
REMIC
Interest. Specifically, for each Interest Accrual Period, the
Class
A-8
Certificates are entitled to interest accruals on the SR-A-7
Subsidiary
REMIC Interest at a per annum rate equal to 5.27% minus LIBOR,
but not
less than 0.00% per annum.
5
<PAGE>
(3) The Class
A-15 Certificates are entitled to receive on each Distribution
Date a
specified portion of the interest payable on the SR-A-14
Subsidiary
REMIC
Interest. Specifically, for each Interest Accrual Period, the
Class
A-15
Certificates are entitled to interest accruals on the SR-A-14
Subsidiary
REMIC Interest at a per annum rate equal to 7.15% minus LIBOR,
but not
less than 0.00% per annum.
(4) This
Subsidiary REMIC Interest will be a principal only Interest and
will
not be
entitled to receive any distributions of interest.
(5) This
Subsidiary REMIC Interest will be an interest only Interest and
will
not be
entitled to receive any distributions of principal.
(6) The Class
SR-X Subsidiary Interest is entitled to receive on each
Distribution Date a specified portion of the interest payable on
each
Non-Discount Mortgage Loan equal to all of the interest payable on
such
mortgage
loan in excess of an Adjusted Net Mortgage Rate of 6.00%.
(7) The SR-A-R
is the sole Class of residual interest in the Subsidiary REMIC.
It pays no
interest or principal.
On each
Distribution Date, the Available Funds shall be distributed
with
respect to the Subsidiary REMIC interests in the following
manner:
(1)
Interest is to be distributed with respect to each Subsidiary
REMIC
Regular Interest at the rate, or according to the formulas,
described above; and
(2)
Principal is to be distributed with respect to each Subsidiary
REMIC
Interest in the same manner and in the same amount as principal is
distributed
with respect to each Subsidiary REMIC Regular 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
Subsidiary REMIC Interests in the same manner that Realized Losses
(and
increases in Class Certificate Balances attributable to Subsequent
Recoveries)
are allocated among each Subsidiary REMIC Interest's Corresponding
Class or
Classes of Certificates.
6
<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........... Class A-1 and Class A-7
Certificates.
Accretion Directed Components............. None.
Accrual Certificates...................... Class A-3 Certificates.
Accrual Components........................ None.
Book-Entry Certificates................... All Classes of Certificates other
than the Physical Certificates.
COFI Certificates......................... None.
Combined Certificates..................... None.
Component Certificates.................... None.
Components................................ For purposes of calculating
distributions of principal and/or
interest, the Component Certificates, if any, will be comprised
of
multiple payment components having the designations, Initial
Component Balances or Notional Amounts, as applicable, and
Pass-Through Rates set
forth below:
Designation
Initial
Pass-Through Rate
Component Balance
N/A
N/A
N/A
Delay Certificates........................ All interest-bearing Classes of
Certificates other than the Non-Delay
Certificates, if any.
ERISA-Restricted Certificates.......
The Residual Certificates and Private Certificates; until an
ERISA-Qualifying Underwriting has occurred with respect to such
Class, the Class PO and Class X Certificates; and any Certificate
of
a Class that does not have or no longer has a rating of at least BBB-
or
its equivalent from at least one Rating Agency.
Floating Rate Certificates................ Class A-1, Class A-7 and Class
A-14 Certificates.
Inverse Floating Rate Certificates........ Class A-2, Class A-8 and Class
A-15 Certificates.
LIBOR Certificates........................ Floating Rate Certificates and
Inverse Floating Rate Certificates.
Non-Delay Certificates.................... LIBOR Certificates.
Notional Amount Certificates.............. Class A-2, Class A-8, Class A-15
and Class X Certificates.
7
<PAGE>
Notional Amount Components................ None.
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............... Class PO Certificates.
Private Certificates...................... Class B-3, Class B-4 and Class B-5
Certificates.
Rating Agencies........................... Fitch, Moody's and S&P.
Regular Certificates...................... All Classes of Certificates, other
than the Residual Certificates.
Residual Certificates..................... Class A-R Certificates.
Senior Certificates....................... Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class
A-11,
Class A-12, Class A-13, Class A-14, Class A-15, Class A-16,
Class
A-17, Class A-18, Class A-19, Class A-20, Class A-21, Class
A-22,
Class X, Class PO and Class A-R Certificates.
Subordinated Certificates ................ Class M, Class B-1, Class B-2,
Class B-3, Class B-4 and Class B-5
Certificates.
Targeted Principal Classes................ Class A-1 and Class A-7
Certificates.
Underwriter(s)............................ Morgan Stanley & Co.
Incorporated
</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.
8
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms
Whenever used in this Agreement, the following words and phrases,
unless the
context otherwise requires, shall have the following meanings:
Account: Any Escrow Account, the Certificate Account, the
Distribution Account, the Corridor Contract 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: On each Distribution Date up to and
including the Accrual Termination Date, the Accrual Amount for the
Class A-3
Certificates will be distributed as principal in the following
order of
priority:
(1) concurrently, to the Class A-1 and Class A-7 Certificates,
pro
rata, in an amount up to the amount necessary to reduce their
aggregate Class
Certificate Balance to their Aggregate Targeted Balance for that
Distribution
Date; and
(2) to the Class A-3 Certificates, until its Class Certificate
Balance is reduced to zero.
Accrual Amount: With respect to any Class of Accrual
Certificates
and any Distribution Date prior to the Accrual Termination Date,
the amount
allocable to interest on such Class of Accrual Certificates with
respect to such
Distribution Date pursuant to Section 4.02(a)(ii).
Accrual Certificates: As specified in the Preliminary
Statement.
Accrual Components: As specified in the Preliminary Statement.
Accrual Termination Date: The earlier to occur of the Senior
Credit
Support Depletion Date and the Distribution Date on which the
aggregate Class
Certificate Balance of the Class A-1 and Class A-7 Certificates is
reduced to
zero.
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 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.
I-1
<PAGE>
Advance: The payment required to be made by the Master Servicer
with
respect to any Distribution Date pursuant to Section 4.01, the
amount of any
such payment being equal to the aggregate of payments of principal
and interest
(net of the Master Servicing Fee) on the Mortgage Loans 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 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.
Allocable Share: As to any Distribution Date and any Mortgage
Loan
(i) with respect to the Class PO Certificates, zero, (ii) with
respect to the
Class X Certificates, (a) the ratio that the excess, if any, of the
Adjusted Net
Mortgage Rate with respect to such Mortgage Loan, over the Required
Coupon bears
to such Adjusted Net Mortgage Rate with respect to such Mortgage
Loan, over the
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
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 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
for such Class 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 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,
Available Funds for such Distribution Date, reduced by the
aggregate amount
distributable (or allocable to the Accrual Amount, if applicable)
on such
Distribution Date in respect of interest on the Senior Certificates
pursuant to
Section 4.02(a)(ii).
Amount
Held for Future Distribution: As to any Distribution Date,
the aggregate amount held in the Certificate Account at the close
of business on
the 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 and (ii)
all
Scheduled Payments due after the related Due Date.
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
I-2
<PAGE>
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.
Available Funds: As to any Distribution Date, 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,
net of the
Amount Held for Future Distribution and net of amounts permitted to
be withdrawn
from the Certificate Account pursuant to clauses (i)-(viii),
inclusive, of
Section 3.08(a) and amounts permitted to be withdrawn from the
Distribution
Account pursuant to clauses (i)-(v) inclusive of Section 3.08(b),
(b) the amount
of the related Advance and (c) in connection with Defective
Mortgage Loans, as
applicable, the aggregate of the Purchase Prices and Substitution
Adjustment
Amounts deposited on the related Distribution Account Deposit
Date.
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.
Ceiling Rate: With respect to each Class of Covered
Certificates,
the applicable percentage set forth below:
--------------------------------------------------------------
Class of Certificates
Ceiling Rate
--------------------------------------------------------------
Class A-1
9.33%
--------------------------------------------------------------
Class A-7
9.27%
--------------------------------------------------------------
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, initially Countrywide Bank, N.A., in the
name of the
Master Servicer for the benefit of the Trustee on behalf of
Certificateholders
and designated "Countrywide Home Loans Servicing LP, in trust for
the registered
holders of Alternative Loan Trust 2006-32CB, Mortgage Pass-Through
Certificates,
Series 2006-32CB."
Certificate Balance: With respect to any Certificate (other than
a
Notional Amount Certificate) at any date, the maximum dollar amount
of principal
to which the Holder thereof is then entitled hereunder, such amount
being equal
to the Denomination thereof (A) plus any increase in the
I-3
<PAGE>
Certificate Balance of such Certificate pursuant to Section 4.02
due to the
receipt of Subsequent Recoveries, (B) minus the sum of (i) all
distributions of
principal previously made with respect thereto and (ii) all
Realized Losses
allocated thereto and, in the case of any Subordinated
Certificates, all other
reductions in Certificate Balance previously allocated thereto
pursuant to
Section 4.04 and (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. The Notional Amount Certificates have no Certificate
Balances.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of such Book-Entry Certificate.
For the
purposes of this Agreement, in order 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.
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 A-19 Priority Amount: As to any Distribution Date, the
amount
equal to the sum of (i) the product of (A) the Scheduled Principal
Distribution
Amount, (B) the Shift Percentage, (C) the Class A-19 Priority
Percentage and (D)
the Senior Percentage and (ii) the product of (A) the Unscheduled
Principal
Distribution Amount, (B) the Prepayment Shift Percentage, (C) the
Class A-19
Priority Percentage and (D) the Senior Prepayment Percentage.
Class A-19 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 A-19 Certificates immediately
prior to such
Distribution Date, and the denominator of which is the aggregate
Class
Certificate Balance of the Senior Certificates (other than the
Class PO
Certificates) immediately prior to that Distribution Date.
Class A-20 Priority Amount: As to any Distribution Date, the
amount
equal to the sum of (i) the product of (A) the Scheduled Principal
Distribution
Amount, (B) the Shift Percentage, (C) the Class A-20 Priority
Percentage and (D)
the Senior Percentage and (ii) the product of (A) the
Unscheduled
I-4
<PAGE>
Principal Distribution Amount, (B) the Prepayment Shift Percentage,
(C) the
Class A-20 Priority Percentage and (D) the Senior Prepayment
Percentage.
Class A-20 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 A-20 Certificates immediately
prior to such
Distribution Date, and the denominator of which is the aggregate
Class
Certificate Balance of the Senior Certificates (other than the
Class PO
Certificates) immediately prior to that Distribution Date.
Class A-21 Priority Amount: As to any Distribution Date, the
amount
equal to the sum of (i) the product of (A) the Scheduled Principal
Distribution
Amount, (B) the Shift Percentage, (C) the Class A-21 Priority
Percentage and (D)
the Senior Percentage and (ii) the product of (A) the Unscheduled
Principal
Distribution Amount, (B) the Prepayment Shift Percentage, (C) the
Class A-21
Priority Percentage and (D) the Senior Prepayment Percentage.
Class A-21 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 A-21 Certificates immediately
prior to such
Distribution Date, and the denominator of which is the aggregate
Class
Certificate Balance of the Senior Certificates (other than the
Class PO
Certificates) immediately prior to that Distribution Date.
Class Certificate Balance: With respect to any Class and as to
any
date of determination, the aggregate of the Certificate Balances of
all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and Class,
the
amount by which the amount described in clause (i) of the
definition of
Class Optimal Interest Distribution Amount for such Class exceeds
the amount of
interest actually distributed on such Class on such Distribution
Date pursuant
to such clause (i).
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date and interest bearing Class or, 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, Component 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 (ii)
any
Class Unpaid Interest Amounts for such Class or Component.
Class PO Deferred Amount: As to any Distribution Date, the
aggregate
of the applicable PO Percentage of each Realized Loss to be
allocated to the
Class PO Certificates on such Distribution Date on or prior to the
Senior Credit
Support Depletion Date or previously allocated to the Class PO
Certificates and
not yet paid to the Holders of the Class PO Certificates.
Class Subordination Percentage: With respect to any
Distribution
Date and each Class of Subordinated Certificates, the quotient
(expressed as a
percentage) of (a) the Class Certificate Balance of such Class of
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.
Class Unpaid Interest Amounts: As to any Distribution Date and
Class of interest bearing Certificates, the amount by which the
aggregate
Class Interest Shortfalls for such Class on prior Distribution
Dates exceeds the
amount distributed on such Class on prior Distribution Dates
pursuant to clause
(ii) of the definition of Class Optimal Interest Distribution
Amount.
I-5
<PAGE>
Closing Date: September 28, 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.
Combined Certificates: As specified in the Preliminary
Statement.
Combined Certificates Payment Rule: Not applicable.
Combined Priority Amount: As to any Distribution Date, the
amount
equal to the sum of (i) the product of (A) the Scheduled Principal
Distribution
Amount, (B) the Prepayment Shift Percentage, (C) the Combined
Priority
Percentage and (D) the Senior Percentage and (ii) the product of
(A) the
Unscheduled Principal Distribution Amount (B) the Prepayment Shift
Percentage,
(C) the Combined Priority Percentage and (D) the Senior Prepayment
Percentage.
Combined Priority Percentage: As to any Distribution Date the
percentage equivalent of a fraction, the numerator of which is the
aggregate
Class Certificate Balance of the Class A-18 and Class A-22
Certificates
immediately prior to such Distribution Date, and the denominator of
which is the
aggregate Class Certificate Balance of all Classes of Senior
Certificates (other
than the Class PO Certificates) immediately prior to such
Distribution Date.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: As to any Distribution Date, an amount
equal
to the product of one-twelfth of 0.125% and the aggregate Stated
Principal
Balance of the Mortgage Loans as of the Due Date in the prior
calendar month.
Component: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any
Distribution Date, the Initial Component Balance thereof on the
Closing Date,
(A) plus any increase in the Component Balance of such Component
pursuant to
Section 4.02 due to the receipt of Subsequent Recoveries, (B) minus
the sum of
all amounts applied in reduction of the principal balance of such
Component and
Realized Losses allocated thereto on previous Distribution
Dates.
Component Certificates: As specified in the Preliminary
Statement.
Component Notional Amount: Not applicable.
Confirmation: With respect to the Class A-1 Certificates, the
confirmation (reference #KQBHN)), dated September 28, 2006 and with
respect to
the Class A-7 Certificates, the confirmation (reference #KQBHN),
dated September
28, 2006, each evidencing a transaction between the Supplemental
Interest
Trustee and Morgan Stanley Capital Services Inc.
Coop
Shares: Shares issued by a Cooperative Corporation.
I-6
<PAGE>
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 2006-32CB), facsimile no. (212) 815-3986, and which is the
address to
which notices to and correspondence with the Trustee should be
directed.
Corridor Contract: With respect to each Class of Covered
Certificates, the transaction evidenced by the related
Confirmation, a form of
which is attached hereto as Exhibit R.
Corridor Contract Counterparty: Morgan Stanley Capital Services
Inc.
Corridor Contract Reserve Fund: The separate fund created and
initially maintained by the Supplemental Interest Trustee pursuant
to Section
3.05(i) in the name of the Supplemental Interest Trustee for the
benefit of the
Holders of the Covered Certificates and designated "The Bank of New
York in
trust for registered holders of CWALT, Inc., Alternative Loan Trust
2006-32CB,
Mortgage Pass-Through Certificates, Series 2006-32CB." Funds in the
Corridor
Contract Reserve Fund shall be held in trust for the Holders of the
Covered
Certificates for the uses and purposes set forth in this Agreement.
For all
federal income tax purposes, the Corridor Contract Reserve Fund
will be
beneficially owned by Morgan Stanley Capital Services Inc.
Corridor Contract Scheduled Termination Date: The Distribution
Date
in November 2010.
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.
Covered Certificates: The Class A-1 and Class A-7 Certificates.
Cut-off Date: In the case of any Mortgage Loan, the later of (i)
the
date of origination of such Mortgage Loan and (ii) August 1,
2006.
Cut-off Date Pool Principal Balance: $624,999,094.60.
I-7
<PAGE>
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.
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. The number of Delay Delivery Mortgage Loans shall not
exceed 50%
of the aggregate number of Mortgage Loans as of the Closing 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.
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.
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Determination Date: As to any Distribution Date, the 22nd day
of
each month or if such 22nd day is not a Business Day the next
preceding Business
Day; provided, however, that if such 22nd day or such Business Day,
whichever is
applicable, is less than two Business Days prior to the related
Distribution
Date, the Determination Date shall be the first Business Day which
is two
Business Days preceding such Distribution Date.
Discount Mortgage Loan: Any Mortgage Loan with an Adjusted Net
Mortgage Rate that is less than the Required Coupon.
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
2006-32CB, Mortgage
Pass-Through Certificates, Series 2006-32CB." Funds in the
Distribution Account
shall be held in trust for the Certificateholders for the uses and
purposes set
forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:30 p.m. Pacific time on the Business Day immediately preceding
such
Distribution Date.
Distribution Date: The 25th day of each calendar month after
the
initial issuance of the Certificates, or if such 25th day is not a
Business Day,
the next succeeding Business Day, commencing in October 2006.
Due Date: With respect to any Distribution Date, the first day
of
the month in which that Distribution Date occurs.
EDGAR: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Any of (i) an account or accounts maintained
with
a federal or state chartered depository institution or trust
company the
short-term unsecured debt obligations of which (or, in the case of
a depository
institution or trust company that is the principal subsidiary of a
holding
company, the debt obligations of such holding company) have the
highest
short-term ratings of Moody's or Fitch and one of the two highest
short-term
ratings of S&P, if S&P is a Rating Agency, at the time any
amounts are held on
deposit therein, or (ii) an account or accounts in a depository
institution or
trust company in which such accounts are insured by the FDIC (to
the limits
established by the FDIC) and the uninsured deposits in which
accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to
the Trustee and to each Rating Agency, the Certificateholders have
a claim with
respect to the funds in such account or a perfected first priority
security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of any
other
depositors or creditors of the depository institution or trust
company in which
such account is maintained, or (iii) a trust account or accounts
maintained with
(a) the trust department of a federal or state chartered depository
institution
or (b) a trust company, acting in its fiduciary capacity or (iv)
any other
account acceptable to each Rating Agency. Eligible Accounts may
bear interest,
and may include, if otherwise qualified under this definition,
accounts
maintained with the Trustee.
Eligible Repurchase Month: As defined in Section 3.11 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
an
Underwriter's Exemption.
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ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and
maintained pursuant to Section 3.06(a) 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.
Expense 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.
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 (a) against such
Person, or (b)
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.
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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.
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.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including all riders and
endorsements thereto
in effect, including any replacement policy or policies for any
Insurance
Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in
such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class of Delay
Certificates, its corresponding Subsidiary 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
Subsidiary REMIC Regular Interest and any Distribution Date, the
one month
period commencing on the 25th day of the month preceding the month
in which such
Distribution Date occurs and ending on the 24th day of the month in
which such
Distribution Date occurs.
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.
Interest Distribution Amount: Not applicable.
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.
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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-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.
Maintenance: With respect to any Cooperative Unit, the rent paid
by
the Mortgagor to the Cooperative Corporation pursuant to the
Proprietary Lease.
Majority in Interest: As to any Class of Regular Certificates,
the
Holders of Certificates of such Class evidencing, in the aggregate,
at least 51%
of the Percentage Interests evidenced by all Certificates of such
Class.
Master 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,
0.250% per annum.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
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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.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
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 Loans: Such of the mortgage loans as from time to time
are
transferred and assigned to the Trustee pursuant to the provisions
hereof and
that are held as a part of the Trust Fund (including any REO
Property), the
mortgage loans so held being identified in the Mortgage Loan
Schedule,
notwithstanding foreclosure or other acquisition of title of the
related
Mortgaged Property.
Mortgage 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 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:
(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;
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(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;
(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; and
(xvi) a
code indicating whether the Mortgage Loan is a MERS Mortgage
Loan.
Such schedule shall also set forth the total of the amounts
described under (iv) and (v) above for all of the Mortgage
Loans.
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.
National Cost of Funds Index: The National Monthly Median Cost
of
Funds Ratio to SAIF-Insured Institutions published by the Office of
Thrift
Supervision.
Net Prepayment Interest Shortfalls: As to any Distribution Date,
the
amount by which the aggregate of Prepayment Interest Shortfalls
during the
related Prepayment Period exceeds the Compensating Interest for
that
Distribution Date.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Discount Mortgage Loan: Any Mortgage Loan with an Adjusted
Net
Mortgage Rate that is greater than or equal to the Required
Coupon.
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<PAGE>
Non-PO Formula Principal Amount: As to any Distribution Date,
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 on the related Due Date, (b) the Stated
Principal Balance of
each Mortgage Loan 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
received with respect to such Distribution Date, (d) any Insurance
Proceeds or
Liquidation Proceeds allocable to recoveries of principal of
Mortgage Loans 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 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 received during the related Prepayment Period, and (ii)
(A) any
Subsequent Recoveries 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 which incurred a Realized
Loss after
the Senior Credit Support Depletion Date, the Non-PO Percentage of
any such
Subsequent Recoveries received during the calendar month preceding
the month of
such Distribution Date.
Non-PO Percentage: As to any Discount Mortgage Loan, 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. 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 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 and: (w)
the
Class A-2 Certificates, an amount equal to the Class Certificate
Balance of the
Class A-1 Certificates immediately prior to such Distribution Date;
(x) the
Class A-8 Certificates, an amount equal to the Class Certificate
Balance of the
Class A-7 Certificates immediately prior to such Distribution Date;
(y) the
Class A-15 Certificates, an amount equal to the Class Certificate
Balance of the
Class A-14 Certificates immediately prior to such Distribution
Date; and (z) the
Class X Certificates, an amount equal to the aggregate of the
Stated Principal
Balances of the Non-Discount Mortgage Loans as of the Due Date in
the preceding
calendar month (after giving effect to Principal Prepayments
received in the
Prepayment Period related to such Due 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
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Treasurer, or one of the Assistant Treasurers or Assistant
Secretaries of
Countrywide GP, Inc., its general partner, (iii) if provided for in
this
Agreement, signed by a Servicing Officer, as the case may be, and
delivered to
the Depositor and the Trustee, as the case may be, as required by
this Agreement
or (iv) in the case of any other Person, signed by an authorized
officer of such
Person.
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:
Class M...................4.25%
Class B-1.................2.10%
Class B-2.................1.40%
Class B-3.................0.85%
Class B-4.................0.50%
Class B-5.................0.25%
Original Mortgage Loan: The mortgage loan refinanced in
connection
with the origination of a Refinancing Mortgage Loan.
Original Subordinate Principal Balance: The aggregate of the
Class Certificate Balances of the 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.
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
Prepayment
Period related to such Due Date and which did not become a
Liquidated Mortgage
Loan prior to such Due Date.
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Ownership Interest: As
to any Residual Certificate, any ownership
interest in such Certificate including any interest in such
Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal
or beneficial.
Park Granada: Park Granada LLC, a Delaware limited liability
company, and its successors and assigns, in its capacity as the
seller of the
Park Granada Mortgage Loans to the Depositor.
Park Granada Mortgage Loans: The Mortgage Loans identified as
such
on the Mortgage Loan Schedule for which Park Granada is the
applicable Seller.
Park Monaco: Park Monaco Inc., a Delaware corporation, and its
successors and assigns, in its capacity as the seller of the Park
Monaco
Mortgage Loans to the Depositor.
Park Monaco Mortgage Loans: The Mortgage Loans identified as such
on
the Mortgage Loan Schedule for which Park Monaco is the applicable
Seller.
Park Sienna: Park Sienna LLC, a Delaware limited liability
company,
and its successors and assigns, in its capacity as the seller of
the Park Sienna
Mortgage Loans to the Depositor.
Park Sienna Mortgage Loans: The Mortgage Loans identified as such
on
the Mortgage Loan Schedule for which Park Sienna is the applicable
Seller.
Pass-Through Rate: For any interest bearing Class of Certificates
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
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United States or of any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or long
term unsecured debt obligations of such depository institution
or trust company (or in the case of the principal depository
institution in a holding company system, the commercial paper
or long-term unsecured debt obligations of such holding
company, but only if Moody's is not a Rating Agency) are then
rated one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities,
or such lower ratings as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
either Rating Agency;
(v) repurchase
obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as
principal) described in clause (iv) above;
(vi) units of a
taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except if Fitch is a
Rating Agency and has not rated the portfolio, the highest
rating assigned by Moody's) and restricted to obligations
issued or guaranteed by the United States of America or
entities whose obligations are backed by the full faith and
credit of the United States of America and repurchase
agreements collateralized by such obligations; and
(vii) such other relatively risk free investments bearing
interest
or sold at a discount acceptable to each Rating Agency as will
not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by either Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment
if such
instrument evidences the right to receive interest only payments
with respect to
the obligations underlying such instrument.
Permitted Transferee: Any person other than (i) the United
States,
any State or political subdivision thereof, or any agency or
instrumentality of
any of the foregoing, (ii) a foreign government, International
Organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in section 521 of
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
I-18
<PAGE>
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, association,
joint
venture, limited liability company, joint-stock company, trust,
unincorporated
organization or government, or any agency or political subdivision
thereof.
Physical Certificate: As specified in the Preliminary
Statement.
Planned Principal Classes: As specified in the Preliminary
Statement.
PO Formula Principal Amount: As to any Distribution Date, 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 on
the related Due Date, (b) the Stated Principal Balance of each
Mortgage Loan
that was repurchased by the applicable Seller or purchased by the
Master
Servicer pursuant to this Agreement as of such Distribution Date,
(c) the
Substitution Adjustment Amount in connection with any Deleted
Mortgage Loan
received with respect to such Distribution Date, (d) any Insurance
Proceeds or
Liquidation Proceeds allocable to recoveries of principal of
Mortgage Loans 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 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 during the month preceding the
month of such
Distribution Date with respect to such Mortgage Loan, and (f) all
Principal
Prepayments received during the related Prepayment Period and (ii)
with respect
to Subsequent Recoveries attributable to a Discount Mortgage Loan
which incurred
a Realized Loss after the Senior Credit Support Depletion Date, the
PO
Percentage of any such Subsequent Recoveries received during the
calendar month
preceding the month of such Distribution Date.
PO Percentage: As to any Discount Mortgage Loan, a fraction
(expressed as a percentage) the numerator of which is the excess of
the Required
Coupon 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%.
Pool Stated Principal Balance: As of any date of determination,
the
aggregate of the Stated Principal Balances of the Outstanding
Mortgage Loans.
Prepayment Interest Excess: As to any Principal Prepayment
received
by the Master Servicer from the first day through the fifteenth day
of any
calendar month (other than the calendar month in which the 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 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 September 1, 2006) and on or
before the
last day of 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.
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<PAGE>
Prepayment Period: As to any Distribution Date and the related
Due
Date, the period from the 16th day of the calendar month (or, in
the case of the
first Distribution Date, from September 1, 2006) through the 15th
day of the
calendar month of such Distribution Date.
Prepayment 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%.
Primary Insurance Policy: Each policy of primary mortgage
guaranty
insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Prime Rate: The prime commercial lending rate of The Bank of
New
York, as publicly announced to be in effect from time to time. The
Prime Rate
shall be adjusted automatically, without notice, on the effective
date of any
change in such prime commercial lending rate. The Prime Rate is not
necessarily
The Bank of New York's lowest rate of interest.
Principal 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.
Private Certificate: As specified in the Preliminary Statement.
Pro Rata Share: As to any Distribution Date, the Subordinated
Principal Distribution Amount and any Class of Subordinated
Certificates, the
portion of the Subordinated Principal Distribution Amount allocable
to such
Class, equal to the product of the Subordinated Principal
Distribution Amount on
such Distribution Date and a fraction, the numerator of which is
the related
Class Certificate Balance thereof and the denominator of which is
the aggregate
of the Class Certificate Balances of the Subordinated
Certificates.
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 August 29, 2006 generally
relating
to mortgage pass-through certificates to be sold by the
Depositor.
Prospectus Supplement: The Prospectus Supplement, dated
September
26, 2006, relating to the Offered Certificates.
PUD: Planned Unit Development.
I-20
<PAGE>
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, identified as a
rating agency
under the Underwriter's Exemption, 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
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.
Record Date: As to any Distribution Date, the close of business
on
the last Business Day of the month preceding the month in which
such
Distribution Date occurs.
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<PAGE>
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.
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
I-22
<PAGE>
Subservicer, the Trustee, any enhancement or support provider
contemplated by
Items 1114(b) or 1115 of Regulation AB, or any other material party
contemplated
by Item 1101(d)(1) of Regulation AB;
(d) with respect to the Trustee, the Master Servicer and the
Depositor only, the occurrence of an early amortization,
performance trigger or
other event, including an Event of Default under this
Agreement;
(e) the resignation, removal, replacement, substitution of the
Master Servicer, any Subservicer or the Trustee;
(f) with respect to the Master Servicer only, if the Master
Servicer
becomes aware that (i) any material enhancement or support
specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation
AB that was
previously applicable regarding one or more Classes of the
Certificates has
terminated other than by expiration of the contract on its stated
termination
date or as a result of all parties completing their obligations
under such
agreement; (ii) any material enhancement specified in Item
1114(a)(1) through
(3) of Regulation AB or Item 1115 of Regulation AB has been added
with respect
to one or more Classes of the Certificates; or (iii) any existing
material
enhancement or support specified in Item 1114(a)(1) through (3) of
Regulation AB
or Item 1115 of Regulation AB with respect to one or more Classes
of the
Certificates has been materially amended or modified; and
(g) with respect to the Trustee, the Master Servicer and the
Depositor only, a required distribution to Holders of the
Certificates is not
made as of the required Distribution Date under this Agreement.
Reporting Subcontractor: With respect to the Master Servicer or
the
Trustee, any Subcontractor determined by such Person pursuant to
Section
11.08(b) to be "participating in the servicing function" within the
meaning of
Item 1122 of Regulation AB. References to a 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: 6.00% 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).
Sarbanes-Oxley Certification: As defined in Section 11.05.
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<PAGE>
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.
Schedule: The Schedule set forth in Schedule V hereto.
Scheduled Balances: With respect to any Scheduled 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.
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 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, an amount equal to the sum of 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.
Securities Act: The Securities Act of 1933, as amended.
Seller: Countrywide, Park Granada, Park Monaco or Park Sienna,
as
applicable.
Senior Certificates: As specified in the Preliminary Statement.
Senior Credit Support Depletion Date: The date on which the
Class Certificate Balance of each Class of Subordinated
Certificates has been
reduced to zero.
Senior Percentage: As to any Distribution Date, the percentage
equivalent of a fraction, not in excess of 100%, the numerator of
which is the
aggregate of the Class Certificate Balances of each Class of Senior
Certificates
(other than the Class PO Certificates) immediately prior to such
Distribution
Date and the denominator of which is the aggregate of the Class
Certificate
Balances of all Classes of Certificates (other than the Class PO
Certificates)
immediately prior to such Distribution Date.
Senior Prepayment Percentage: For any Distribution Date during
the
five years beginning on the first Distribution Date, 100%. The
Senior Prepayment
Percentage 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 Senior
Percentage
plus 70% of the Subordinated Percentage for such Distribution Date;
for any
Distribution Date in the second year thereafter, the Senior
Percentage plus 60%
of the Subordinated Percentage for such Distribution Date; for any
Distribution
Date in the third year thereafter, the Senior Percentage plus 40%
of the
Subordinated Percentage for such Distribution Date; for any
Distribution Date in
the fourth year thereafter, the Senior Percentage plus 20% of the
Subordinated
Percentage for such Distribution Date; and for any Distribution
Date thereafter,
the Senior Percentage for such Distribution Date (unless on any
Distribution
Date the Senior Percentage exceeds the initial Senior Percentage,
in which case
the Senior Prepayment Percentage for such Distribution Date will
once again
equal 100%). Notwithstanding the foregoing, no decrease in
I-24
<PAGE>
the Senior Prepayment Percentage will occur unless both of the
Senior Step Down
Conditions are satisfied.
Senior Principal Distribution Amount: As to any Distribution
Date,
the sum, not less than zero, of (i) the 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"
for such
Distribution Date, (ii) with respect to each Mortgage Loan that
became a
Liquidated Mortgage Loan during the calendar month preceding the
month of such
Distribution Date, the lesser of (x) the Senior Percentage of the
applicable
Non-PO Percentage of the Stated Principal Balance of such Mortgage
Loan and (y)
the Senior Prepayment Percentage of the applicable Non-PO
Percentage of the
amount of the Liquidation Proceeds allocable to principal received
with respect
to such Mortgage Loan, and (iii) the sum of (x) the 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"
for such
Distribution Date plus (y) the Senior Prepayment Percentage of any
Subsequent
Recoveries described in clause (ii) of the definition of "Non-PO
Formula
Principal Amount" for such Distribution Date.
Senior Step Down Conditions: As of the first Distribution Date as
to
which any decrease in the Senior Prepayment Percentage applies, (i)
the
outstanding principal balance of all Mortgage Loans delinquent 60
days or more
(including Mortgage Loans in foreclosure, REO Property and Mortgage
Loans the
mortgagors of which are in bankruptcy) (averaged over the preceding
six month
period), as a percentage of the aggregate Class Certificate Balance
of the
Subordinated Certificates on such Distribution Date, does not equal
or exceed
50% and (ii) cumulative Realized Losses with respect to the
Mortgage Loans do
not exceed (a) commencing with the Distribution Date on the fifth
anniversary of
the first Distribution Date, 30% of the Original Subordinate
Principal Balance,
(b) commencing with the Distribution Date on the sixth anniversary
of the first
Distribution Date, 35% of the Original Subordinate Principal
Balance, (c)
commencing with the Distribution Date on the seventh anniversary of
the first
Distribution Date, 40% of the Original Subordinate Principal
Balance, (d)
commencing with the Distribution Date on the eighth anniversary of
the first
Distribution Date, 45% of the Original Subordinate Principal
Balance, and (e)
commencing with the Distribution Date on the ninth anniversary of
the first
Distribution Date, 50% of the 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
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,
100%.
SR-A-R Interest: The sole Class of "residual interest" in the
Subsidiary REMIC.
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<PAGE>
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) 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.
Strike Rate: With respect to each Class of Covered Certificates,
the
applicable percentage set forth below:
--------------------------------------------------------------
Class of Certificates
Strike Rate
--------------------------------------------------------------
Class A-1
5.33%
--------------------------------------------------------------
Class A-7
5.27%
--------------------------------------------------------------
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.
Subordinated Percentage: As to any Distribution Date, 100% minus
the
Senior Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution
Date,
100% minus the Senior Prepayment Percentage for such Distribution
Date.
Subordinated Principal Distribution Amount: With respect to any
Distribution Date, 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 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 that became a Liquidated
Mortgage Loan during
the calendar month preceding the month
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<PAGE>
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
Senior Principal Distribution Amount, up to the Subordinated
Percentage 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 such Distribution
Date, and
(iv) the 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 on the related Distribution Date.
Subsequent Recoveries: As to any Distribution Date, with respect
to
a Liquidated Mortgage Loan that resulted in a Realized Loss in a
prior calendar
month, unexpected amounts received by the Master Servicer (net of
any related
expenses permitted to be reimbursed pursuant to Section 3.08)
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.
Subsidiary REMIC: As described in the Preliminary Statement.
Subsidiary
REMIC Interest: Any one of the Subsidiary REMIC Interests
or the AR-A-R Interest.
Subsidiary REMIC Regular Interest: Any one of the "regular
interests" in the Subsidiary REMIC described in the Preliminary
Statement.
Substitute
Mortgage Loan: A Mortgage Loan substituted by a Seller
for a Deleted Mortgage Loan which must, on the date of such
substitution, as
confirmed in a Request for 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) not be a Cooperative Loan unless the
Deleted
Mortgage Loan was a Cooperative Loan and (vi) comply with each
representation
and warranty set forth in Section 2.03 hereof.
Substitution Adjustment Amount: The meaning ascribed to such
term
pursuant to Section 2.03.
Supplemental Interest Trust: The separate trust created under
this
Agreement pursuant to Section 3.05(i).
Supplemental Interest Trustee: The Bank of New York, a New York
banking corporation, not in its individual capacity, but solely in
its capacity
as trustee of the Supplemental Interest Trust for the benefit of
the Holders of
the Covered Certificates under this Agreement, and any successor
thereto, and
any corporation or national banking association resulting from or
surviving any
consolidation or merger to which it or its successors may be a
party and any
successor trustee as may from time to time be serving as successor
trustee
hereunder.
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<PAGE>
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, the Corridor Contract,
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 and the
Distribution Account, and all amounts deposited therein pursuant to
the
applicable provisions of this Agreement; (iii) property that
secured a Mortgage
Loan and has been acquired by foreclosure, deed-in-lieu of
foreclosure or
otherwise; and (iv) all proceeds of the conversion, voluntary or
involuntary, of
any of the foregoing.
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 Pool Stated
Principal
Balance with respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.009%
per
annum.
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(s): As specified in the Preliminary Statement.
Unscheduled Principal Distribution Amount: As to any
Distribution
Date, an amount equal to the sum of (i) with respect to each
Mortgage Loan that
became a Liquidated Mortgage Loan during the calendar month
preceding the month
of such Distribution Date, the applicable Non-PO
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<PAGE>
Percentage of the Liquidation Proceeds allocable to the principal
received with
respect to such Mortgage Loan, (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 Distribution Date and (iii) any
Subsequent
Recoveries described in clause (ii) of the definition of "Non-PO
Formula
Principal Amount" for such Distribution Date.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date
of
determination, (a) 1% of all Voting Rights shall be allocated to
each Class of
Notional Amount Certificates, if any (such Voting Rights to be
allocated among
the holders of Certificates of each such Class in accordance with
their
respective Percentage Interests), and (b) the remaining Voting
Rights (or 100%
of the Voting Rights if there is no Class of Notional Amount
Certificates) shall
be allocated among Holders of the remaining Classes of Certificates
in
proportion to the Certificate Balances of their respective
Certificates on such
date.
Yield Supplement Amount: For any Distribution Date and Class of
Covered Certificates, on or prior to the applicable Corridor
Contract
Termination Date, on which LIBOR exceeds the applicable Strike
Rate, the related
Yield Supplement Amount will equal the interest for the related
Interest Accrual
Period on the Class Certificate Balance of such Class of Covered
Certificates
immediately prior to such Distribution Date at a rate equal to the
excess of (i)
the lesser of LIBOR and the applicable Ceiling Rate over (ii) the
applicable
Strike Rate.
SECTION 1.02. Certain Interpretive Provisions
All terms defined in this Agreement shall have the defined
meanings
when used in any certificate, agreement or other document delivered
pursuant
hereto unless otherwise defined therein. For purposes of this
Agreement and all
such certificates and other documents, unless the context otherwise
requires:
(a) accounting terms not otherwise defined in this Agreement, and
accounting
terms partly defined in this Agreement to the extent not defined,
shall have the
respective meanings given to them under generally accepted
accounting
principles; (b) the words "hereof," "herein" and "hereunder" and
words of
similar import refer to this Agreement (or the certificate,
agreement or other
document in which they are used) as a whole and not to any
particular provision
of this Agreement (or such certificate, agreement or document); (c)
references
to any Section, Schedule or Exhibit are references to Sections,
Schedules and
Exhibits in or to this Agreement, and references to any paragraph,
subsection,
clause or other subdivision within any Section or definition refer
to such
paragraph, subsection, clause or other subdivision of such Section
or
definition; (d) the term "including" means "including without
limitation"; (e)
references to any law or regulation refer to that law or regulation
as amended
from time to time and include any successor law or regulation; (f)
references to
any agreement refer to that agreement as amended from time to time;
(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-29
<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 Mortgage Loans, including all interest and principal
received or
receivable by such Seller, on or with respect to the Mortgage Loans
after the
Cut-off Date and all interest and principal payments on the related
Mortgage
Loans received prior to the 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 Mortgage Loans, on or before the
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). 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 Mortgage Loan that does not have a first
payment date
on or before the Due Date in the month of the first Distribution
Date,
Countrywide shall deposit into the Distribution Account on or
before the
Distribution Account Deposit Date relating to the first
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 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, will
deliver or
cause to be delivered to the Trustee within thirty (30) days
following the
Closing 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
(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-1
<PAGE>
(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 from the mortgagee to
the
Trustee with evidence of recording thereon (or in a form
suitable
for recordation).
II-2
<PAGE>
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 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 and twenty (120)
days after
such transfer and assignment, the Trustee shall (A) as the assignee
thereof,
affix the following language to each assignment of Mortgage: "CWALT
Series
2006-32CB, 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
II-3
<PAGE>
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
CHL to the
Trustee within 90 days of the Closing Date (which opinion may be in
the form of
a "survey" opinion and is not required to be delivered by counsel
admitted to
practice law in the jurisdiction as to which such 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, 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) 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 (49) of Schedule III-A hereto.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt of the documents identified
in
the Initial Certification in the form annexed hereto as Exhibit F-1
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
II-4
<PAGE>
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 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 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 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 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,
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<PAGE>
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 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) [Reserved].
(c) 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.
(d) 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
Cut-off Date with respect to all of the 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 Cut-off Date with respect to the 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 Cut-off Date with respect to the
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 Cut-off
Date with respect to the 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
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<PAGE>
Closing Date, or if so specified therein, as of the Cut-off Date
with respect to
the 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) that materially and adversely affects the interests
of the
Certificateholders in that Mortgage Loan, the party discovering
such breach
shall give prompt notice thereof to the other parties. Each Seller
hereby
covenants that within 90 days of the earlier of its discovery or
its receipt of
written notice from any party of a breach of any representation or
warranty with
respect to a Mortgage Loan sold by it pursuant to Section 2.03(a)
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. Any breach of
a
representation set forth in clauses (45) through (63) of Schedule
III-A with
respect to a Mortgage Loan shall be deemed to materially and
adversely affect
the Certificateholders.
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
II-7
<PAGE>
date of substitution, the representations and warranties made
pursuant to
Section 2.03(a) with respect to such Mortgage Loan. Upon any such
substitution
and the deposit to the Certificate Account of the amount required
to be
deposited therein in connection with such substitution as described
in the
following paragraph, the Trustee shall release the Mortgage File
held for the
benefit of the Certificateholders relating to such Deleted Mortgage
Loan to the
related Seller and shall execute and deliver at such Seller's
direction such
instruments of transfer or assignment prepared by Countrywide (on
its own behalf
and on behalf of Park Granada, Park Monaco and Park Sienna), in
each case
without recourse, as shall be necessary to vest title in that
Seller, or its
designee, the Trustee's interest in any Deleted Mortgage Loan
substituted for
pursuant to this Section 2.03.
For any month in which a Seller substitutes one or more
Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will
determine the amount (if any) by which the aggregate principal
balance of all
Substitute Mortgage Loans sold to the Depositor by that Seller as
of the date of
substitution is less than the aggregate Stated Principal Balance of
all Deleted
Mortgage Loans repurchased by that Seller (after application of the
scheduled
principal portion of the monthly payments due in the month of
substitution). The
amount of such shortage (the "Substitution Adjustment Amount") plus
an amount
equal to the aggregate of any unreimbursed Advances with respect to
such Deleted
Mortgage Loans shall be deposited in the Certificate Account by
Countrywide (on
its own behalf and on behalf of Park Granada, Park Monaco and Park
Sienna) on or
before the Distribution Account Deposit Date for the Distribution
Date in the
month succeeding the calendar month during which the related
Mortgage Loan
became required to be purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage
Loan,
the Purchase Price therefor shall be deposited in the Certificate
Account
pursuant to Section 3.05 on or before the Distribution Account
Deposit Date for
the Distribution Date in the month following the month during which
that Seller
became obligated hereunder to repurchase or replace such Mortgage
Loan and upon
such deposit of the Purchase Price, the delivery of the Opinion of
Counsel
required by Section 2.05 and receipt of a Request for Release in
the form of
Exhibit N hereto, the Trustee shall release the related Mortgage
File held for
the benefit of the Certificateholders to such Person, and the
Trustee shall
execute and deliver at such Person's direction such instruments of
transfer or
assignment prepared by such Person, in each case without recourse,
as shall be
necessary to transfer title from the Trustee. It is understood and
agreed that
the obligation under this Agreement of any Person to cure,
repurchase or replace
any Mortgage Loan as to which a breach has occurred and is
continuing shall
constitute the sole remedy against such Persons respecting such
breach available
to Certificateholders, the Depositor or the Trustee on their
behalf.
The representations and warranties made pursuant to this
Section
2.03 shall survive delivery of the respective Mortgage Files to the
Trustee for
the benefit of the Certificateholders.
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 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 Mortgage
Loans to it by each Seller, the Depositor had good title to the
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
II-8
<PAGE>
Seller to cure any breach thereof or to repurchase or substitute
for any
affected Mortgage Loan in accordance with this Agreement.
It is understood and agreed that the representations and
warranties
set forth in this Section 2.04 shall survive delivery of the
Mortgage Files to
the Trustee. Upon discovery by the Depositor or the Trustee of a
breach of any
of the foregoing representations and warranties set forth in this
Section 2.04
(referred to herein as a "breach"), which breach materially and
adversely
affects the interest of the Certificateholders, the party
discovering such
breach shall give prompt written notice to the others and to each
Rating Agency.
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions.
(a) Notwithstanding any contrary provision of this Agreement,
no
substitution pursuant to Section 2.02 or Section 2.03 shall be made
more than 90
days after the Closing Date unless Countrywide delivers to the
Trustee an
Opinion of Counsel, which Opinion of Counsel shall not be at the
expense of
either the Trustee or the Trust Fund, addressed to the Trustee, to
the effect
that such substitution will not (i) result in the imposition of the
tax on
"prohibited transactions" on the Trust Fund or contributions after
the Startup
Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively,
or (ii) cause 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.
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<PAGE>
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
(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
III-2
<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 Supplemental
Interest Trust and Corridor Contract 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 prepayment charge or penalty
interest in
connection with the prepayment of a Mortgage Loan and (ii) extend
the due dates
for payments due on a Mortgage Note for a period not greater than
180 days;
provided, however, that the Master Servicer cannot extend the
maturity of any
such Mortgage Loan past the date on which the final payment is due
on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any
such
arrangement, the Master Servicer shall make Advances on the related
Mortgage
Loan in accordance with the provisions of Section 4.01 during the
scheduled
period in accordance with the amortization schedule of such
Mortgage Loan
without modification thereof by reason of such arrangements. The
Master Servicer
shall not be required to institute or join in litigation with
respect to
collection of any payment (whether under a Mortgage, Mortgage Note
or otherwise
or against any public or governmental authority with respect to a
taking or
condemnation) if it 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
Master Servicing Fee, Prepayment Interest Excess and any
lender-paid mortgage insurance premiums;
(iii) 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;
III-3
<PAGE>
(iv) 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;
(v) any amounts required to be deposited by the Master Servicer
pursuant
to Section 3.09(c) and in respect of net monthly rental income
from REO
Property pursuant to Section 3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to
Section
4.01;
and
(viii) any other amounts required to be deposited 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 Master Servicing Fee.
The foregoing requirements for remittance by the Master
Servicer
shall be exclusive, it being understood and agreed that, without
limiting the
generality of the foregoing, payments in the nature of prepayment
charges, 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
(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
III-4
<PAGE>
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 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 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 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 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
prior to any change thereof. The Supplemental Interest 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 Corridor Contract Reserve
Fund prior to
any change thereof.
(g) On the Closing Date, there is hereby established a separate
trust (the "Supplemental Interest Trust"), the assets of which
shall consist of
the Corridor Contract Reserve Fund and the Supplemental Interest
Trustee's
rights and obligations under the Corridor Contracts. The
Supplemental Interest
Trust shall be maintained by the Supplemental Interest Trustee, who
initially,
shall be the Trustee.
On the Closing Date, the Supplemental Interest Trustee shall
establish and maintain in its name, in trust for the benefit of the
Holders of
the Covered Certificates, the Corridor Contract Reserve Fund, and
shall deposit
$1,000 therein upon receipt from or on behalf of the Depositor of
such amount.
All funds on deposit in the Corridor Contract Reserve Fund shall be
held
separate and apart from, and shall not be commingled with, any
other moneys,
including without limitation, other moneys held by the Trustee
pursuant to this
Agreement.
On each Distribution Date, the Supplemental Interest Trustee
shall
deposit into the Corridor Contract Reserve Fund all amounts
received in respect
of the Corridor Contracts for the related Interest Accrual Period.
The
Supplemental Interest Trustee shall make withdrawals from the
Corridor
III-5
<PAGE>
Contract Reserve Fund to make distributions pursuant to Section
4.09 exclusively
(other than as expressly provided for in Section 3.08).
Funds in the Corridor Contract Reserve Fund will remain
uninvested.
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.
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.
III-6
<PAGE>
SECTION 3.08. Permitted Withdrawals from the Certificate
Account,
the Distribution Account and the Corridor Contract
Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals
from
the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not previously
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;
(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 related Available Funds and 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.
III-7
<PAGE>
(b) The Trustee shall withdraw funds from the Distribution
Account
for distributions to Certificateholders in the manner specified in
this
Agreement (and to withhold from the amounts so withdrawn, the
amount of any
taxes that it is authorized to withhold pursuant to the third
paragraph of
Section 8.11). In addition, the Trustee may from time to time make
withdrawals
from the Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution
Date;
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to funds
in the
Distribution Account;
(iii) to withdraw and return to the Master Servicer any amount
deposited
in the Distribution Account and not required to be deposited
therein;
(iv) to reimburse the Trustee for any unreimbursed Advances made
by
it
pursuant to Section 4.01(b) hereof, such right of reimbursement
pursuant
to this subclause (iv) being limited to (x) amounts received on
the
related Mortgage Loan(s) in respect of which any such Advance was
made
and (y)
amounts not otherwise reimbursed to the Trustee pursuant to
Section
3.08(a)(ii) hereof;
(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.
(c) The Supplemental Interest Trustee shall withdraw funds from
the
Corridor Contract Reserve Fund for distribution to the Covered
Certificates in
the manner specified in Section 4.09 (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 Supplemental
Interest
Trustee may from time to time make withdrawals from the Corridor
Contract
Reserve Fund for the following purposes:
(i) to withdraw any amount deposited in the Corridor Contract
Reserve
Fund and not required to be deposited therein; and
(ii) to clear and terminate the Corridor Contract Reserve Fund
upon
the
earlier of (i) the reduction of the aggregate Class Certificate
Balance of
the Covered Certificates to zero, and (ii) the latest Corridor
Contract
Scheduled Termination Date.
SECTION 3.09. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount
that is at
least equal to the lesser of (i) the maximum insurable value of the
improvements
securing such Mortgage Loan or (ii) the greater of (y) the
outstanding principal
balance of the Mortgage Loan and (z) an amount such that the
proceeds of such
policy shall be sufficient to prevent the Mortgagor and/or the
mortgagee from
becoming a co-insurer. Each such policy of standard hazard
insurance shall
contain, or have an accompanying endorsement that contains, a
standard mortgagee
clause. Any amounts collected by the Master Servicer under any
such
III-8
<PAGE>
policies (other than the amounts to be applied to the restoration
or repair of
the related Mortgaged Property or amounts released to the Mortgagor
in
accordance with the Master Servicer's normal servicing procedures)
shall be
deposited in the Certificate Account. Any cost incurred by the
Master Servicer
in maintaining any such insurance shall not, for the purpose of
calculating
monthly distributions to the Certificateholders or remittances to
the Trustee
for their benefit, be added to the principal balance of the
Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such
costs shall
be recoverable by the Master Servicer out of late payments by the
related
Mortgagor or out of the proceeds of liquidation of the Mortgage
Loan or
Subsequent Recoveries to the extent permitted by Section 3.08
hereof. It is
understood and agreed that no earthquake or other additional
insurance is to be
required of any Mortgagor or maintained on property acquired in
respect of a
Mortgage other than pursuant to such applicable laws and
regulations as shall at
any time be in force and as shall require such additional
insurance. If the
Mortgaged Property is located at the time of origination of the
Mortgage Loan in
a federally designated special flood hazard area and such area is
participating
in the national flood insurance program, the Master Servicer shall
cause flood
insurance to be maintained with respect to such Mortgage Loan. Such
flood
insurance shall be in an amount equal to the least of (i) the
outstanding
principal balance of the related Mortgage Loan, (ii) the
replacement value of
the improvements which are part of such Mortgaged Property, and
(iii) the
maximum amount of such insurance available for the related
Mortgaged Property
under the national flood insurance program.
(b) The Master Servicer shall not take any action which would
result
in non-coverage under any applicable Primary Insurance Policy of
any loss which,
but for the actions of the Master Servicer, would have been covered
thereunder.
The Master Servicer shall not cancel or refuse to renew any such
Primary
Insurance Policy that is in effect at the date of the initial
issuance of the
Certificates and is required to be kept in force hereunder unless
the
replacement Primary Insurance Policy for such canceled or
non-renewed policy is
maintained with a Qualified Insurer.
Except with respect to any Lender PMI Mortgage Loans, the
Master
Servicer shall not be required to maintain any Primary Insurance
Policy (i) with
respect to any Mortgage Loan with a Loan-to-Value Ratio less than
or equal to
80% as of any date of determination or, based on a new appraisal,
the principal
balance of such Mortgage Loan represents 80% or less of the new
appraised value
or (ii) if maintaining such Primary Insurance Policy is prohibited
by applicable
law. With respect to the Lender PMI Mortgage Loans, the Master
Servicer shall
maintain the Primary Insurance Policy for the life of such Mortgage
Loans,
unless otherwise provided for in the related Mortgage Note or
prohibited by law.
The Master Servicer agrees to effect the timely payment of the
premiums on each Primary Insurance Policy, and such costs not
otherwise
recoverable shall be recoverable by the Master Servicer from the
related
proceeds of liquidation and Subsequent Recoveries.
(c) In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present on behalf of
itself, the
Trustee and Certificateholders, claims to the insurer under any
Primary
Insurance Policies and, in this regard, to take such reasonable
action as shall
be necessary to permit recovery under any Primary Insurance
Policies respecting
defaulted Mortgage Loans. Any amounts collected by the Master
Servicer under any
Primary Insurance Policies shall be deposited in the Certificate
Account.
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section, when any
property
subject to a Mortgage has been conveyed by the Mortgagor, the
Master Servicer
shall to the extent that it has knowledge of such conveyance,
enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to
the extent
permitted under applicable law and governmental regulations, but
only to the
III-9
<PAGE>
extent that such enforcement will not adversely affect or
jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing,
the Master
Servicer is not required to exercise such rights with respect to a
Mortgage Loan
if the Person to whom the related Mortgaged Property has been
conveyed or is
proposed to be conveyed satisfies the terms and conditions
contained in the
Mortgage Note and Mortgage related thereto and the consent of the
mortgagee
under such Mortgage Note or Mortgage is not otherwise so required
under such
Mortgage Note or Mortgage as a condition to such transfer. In the
event that the
Master Servicer is prohibited by law from enforcing any such
due-on-sale clause,
or if coverage under any Required Insurance Policy would be
adversely affected,
or if nonenforcement is otherwise permitted hereunder, the Master
Servicer is
authorized, subject to Section 3.10(b), to take or enter into an
assumption and
modification agreement from or with the person to whom such
property has been or
is about to be conveyed, pursuant to which such person becomes
liable under the
Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor
remains liable thereon, provided that the Mortgage Loan shall
continue to be
covered (if so covered before the Master Servicer enters such
agreement) by the
applicable Required Insurance Policies. The Master Servicer,
subject to Section
3.10(b), is also authorized with the prior approval of the insurers
under any
Required Insurance Policies to enter into a substitution of
liability agreement
with such Person, pursuant to which the original Mortgagor is
released from
liability and such Person is substituted as Mortgagor and becomes
liable under
the Mortgage Note. Notwithstanding the foregoing, the Master
Servicer shall not
be deemed to be in default under this Section by reason of any
transfer or
assumption which the Master Servicer reasonably believes it is
restricted by law
from preventing, for any reason whatsoever.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale
clause to the extent set forth in Section 3.10(a) hereof, in any
case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such Person
is to enter into an assumption agreement or modification agreement
or supplement
to the Mortgage Note or Mortgage that requires the signature of the
Trustee, or
if an instrument of release signed by the Trustee is required
releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer
shall prepare
and deliver or cause to be prepared and delivered to the Trustee
for signature
and shall direct, in writing, the Trustee to execute the assumption
agreement
with the Person to whom the Mortgaged Property is to be conveyed
and such
modification agreement or supplement to the Mortgage Note or
Mortgage or other
instruments as are reasonable or necessary to carry out the terms
of the
Mortgage Note or Mortgage or otherwise to comply with any
applicable laws
regarding assumptions or the transfer of the Mortgaged Property to
such Person.
In connection with any such assumption, no material term of the
Mortgage Note
may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property
must be acceptable to the Master Servicer in accordance with its
underwriting
standards as then in effect. Together with each such substitution,
assumption or
other agreement or instrument delivered to the Trustee for
execution by it, the
Master Servicer shall deliver an Officer's Certificate signed by a
Servicing
Officer stating that the requirements of this subsection have been
met in
connection therewith. The Master Servicer shall notify the Trustee
that any such
substitution or assumption agreement has been completed by
forwarding to the
Trustee the original of such substitution or assumption agreement,
which in the
case of the original shall be added to the related Mortgage File
and shall, for
all purposes, be considered a part of such Mortgage File to the
same extent as
all other documents and instruments constituting a part thereof.
Any fee
collected by the Master Servicer for entering into an assumption or
substitution
of liability agreement will be retained by the Master Servicer as
additional
servicing compensation.
SECTION 3.11. Realization Upon Defaulted Mortgage Loans;
Repurchase
of Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts to
foreclose
upon or otherwise comparably convert the ownership of properties
securing such
of the Mortgage Loans as come into and continue in default and as
to which no
satisfactory arrangements can be made for collection of
delinquent
III-10
<PAGE>
payments. In connection with such foreclosure or other conversion,
the Master
Servicer shall follow such practices and procedures as it shall
deem necessary
or advisable and as shall be normal and usual in its general
mortgage servicing
activities and meet the requirements of the insurer under any
Required Insurance
Policy; provided, however, that the Master Servicer shall not be
required to
expend its own funds in connection with any foreclosure or towards
the
restoration of any property unless it shall determine (i) that such
restoration
and/or foreclosure will increase the proceeds of liquidation of the
Mortgage
Loan after reimbursement to itself of such expenses and (ii) that
such expenses
will be recoverable to it through the proceeds of liquidation of
the Mortgage
Loan and Subsequent Recoveries (respecting which it shall have
priority for
purposes of withdrawals from the Certificate Account). The Master
Servicer shall
be responsible for all other costs and expenses incurred by it in
any such
proceedings; provided, however, that it shall be entitled to
reimbursement
thereof from the proceeds of liquidation of the Mortgage Loan and
Subsequent
Recoveries with respect to the related Mortgaged Property, as
provided in the
definition of Liquidation Proceeds. If the Master Servicer has
knowledge that a
Mortgaged Property which the Master Servicer is contemplating
acquiring in
foreclosure or by deed in lieu of foreclosure is located within a 1
mile radius
of any site listed in the Expenditure Plan for the Hazardous
Substance Clean Up
Bond Act of 1984 or other site with environmental or hazardous
waste risks known
to the Master Servicer, the Master Servicer will, prior to
acquiring the
Mortgaged Property, consider such risks and only take action in
accordance with
its established environmental review procedures.
With
respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of
the
Certificateholders, or its nominee, on behalf of the
Certificateholders. The
Trustee's name shall be placed on the title to such REO Property
solely as the
Trustee hereunder and not in its individual capacity. The Master
Servicer shall
ensure that the title to such REO Property references the Pooling
and Servicing
Agreement and the Trustee's capacity thereunder. Pursuant to its
efforts to sell
such REO Property, the Master Servicer shall either itself or
through an agent
selected by the Master Servicer protect and conserve such REO
Property in the
same manner and to such extent as is customary in the locality
where such REO
Property is located and may, incident to its conservation and
protection of the
interests of the Certificateholders, rent the same, or any part
thereof, as the
Master Servicer deems to be in the best interest of the
Certificateholders for
the period prior to the sale of such REO Property. The Master
Servicer shall
prepare for and deliver to the Trustee a statement with respect to
each REO
Property that has been rented showing the aggregate rental income
received and
all expenses incurred in connection with the maintenance of such
REO Property at
such times as is necessary to enable the Trustee to comply with the
reporting
requirements of the REMIC Provisions. The net monthly rental
income, if any,
from such REO Property shall be deposited in the Certificate
Account no later
than the close of business on each Determination Date. The Master
Servicer shall
perform the tax reporting and withholding required by Sections 1445
and 6050J of
the Code with respect to foreclosures and abandonments, the tax
reporting
required by Section 6050H of the Code with respect to the receipt
of mortgage
interest from individuals and any tax reporting required by Section
6050P of the
Code with respect to the cancellation of indebtedness by certain
financial
entities, by preparing such tax and information returns as may be
required, in
the form required, and delivering the same to the Trustee for
filing.
In the event that the Trust Fund acquires any Mortgaged Property
as
aforesaid or otherwise in connection with a default or imminent
default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged
Property as
soon as practicable in a manner that maximizes the Liquidation
Proceeds thereof,
but in no event later than three years after its acquisition by the
Trust Fund.
In that event, the Trustee shall have been supplied with an Opinion
of Counsel
to the effect that the holding by the Trust Fund of such Mortgaged
Property
subsequent to a three-year period, if applicable, will not result
in the
imposition of taxes on "prohibited transactions" of any REMIC
hereunder as
defined in section 860F of the Code or cause any REMIC hereunder to
fail to
qualify as a REMIC at any time that any
III-11
<PAGE>
Certificates are outstanding, the Trust Fund may continue to hold
such Mortgaged
Property (subject to any conditions contained in such Opinion of
Counsel) after
the expiration of such three-year period. Notwithstanding any other
provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund
shall be rented
(or allowed to continue to be rented) or otherwise used for the
production of
income by or on behalf of the Trust Fund in such a manner or
pursuant to any
terms that would (i) cause such Mortgaged Property to fail to
qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of
the Code or
(ii) subject any REMIC hereunder to the imposition of any federal,
state or
local income taxes on the income earned from such Mortgaged
Property under
Section 860G(c) of the Code or otherwise, unless the Master
Servicer has agreed
to indemnify and hold harmless the Trust Fund with respect to the
imposition of
any such taxes.
In the event of a default on a Mortgage Loan one or more of
whose
obligor is not a United States Person, as that term is defined in
Section
7701(a)(30) of the Code, in connection with any foreclosure or
acquisition of a
deed in lieu of foreclosure (together, "foreclosure") in respect of
such
Mortgage Loan, the Master Servicer will cause compliance with the
provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto) necessary
to assure that no withholding tax obligation arises with respect to
the proceeds
of such foreclosure except to the extent, if any, that proceeds of
such
foreclosure are required to be remitted to the obligors on such
Mortgage Loan.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master
Servicer that
the proceeds of such foreclosure would exceed the costs and
expenses of bringing
such a proceeding. The income earned from the management of any REO
Properties,
net of reimbursement to the Master Servicer for expenses incurred
(including any
property or other taxes) in connection with such management and net
of
unreimbursed Master Servicing Fees, Advances and Servicing
Advances, shall be
applied to the payment of principal of and interest on the related
defaulted
Mortgage Loans (with interest accruing as though such Mortgage
Loans were still
current) and all such income shall be deemed, for all purposes in
this
Agreement, to be payments on account of principal and interest on
the related
Mortgage Notes and shall be deposited into the Certificate Account.
To the
extent the net income received during any calendar month is in
excess of the
amount attributable to amortizing principal and accrued interest at
the related
Mortgage Rate on the related Mortgage Loan for such calendar month,
such excess
shall be considered to be a partial prepayment of principal of the
related
Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as
any
income from an REO Property, will be applied in the following order
of priority:
first, to reimburse the Master Servicer for any related
unreimbursed Servicing
Advances and Master Servicing Fees; second, to reimburse the Master
Servicer or
the Trustee for any unreimbursed Advances; third, to reimburse the
Certificate
Account for any Nonrecoverable Advances (or portions thereof) that
were
previously withdrawn by the Master Servicer or the Trustee pursuant
to Section
3.08(a)(iii) that related to such Mortgage Loan; fourth, to accrued
and unpaid
interest (to the extent no Advance has been made for such amount or
any such
Advance has been reimbursed) on the Mortgage Loan or related REO
Property, at
the Adjusted Net Mortgage Rate to the Due Date occurring in the
month in which
such amounts are required to be distributed; and fifth, as a
recovery of
principal of the Mortgage Loan. Excess Proceeds, if any, from the
liquidation of
a Liquidated Mortgage Loan will be retained by the Master Servicer
as additional
servicing compensation pursuant to Section 3.14.
The Master Servicer, in its sole discretion, shall have the right
to
purchase for its own account from the Trust Fund any Mortgage Loan
which is 151
days or more delinquent at a price equal to the Purchase Price;
provided,
however, that the Master Servicer may only exercise this right on
or before the
next to the last day of the calendar month in which such Mortgage
Loan became
151 days delinquent (such month, the "Eligible Repurchase Month");
provided
further, that any such Mortgage Loan which
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<PAGE>
becomes current but thereafter becomes delinquent may be purchased
by the Master
Servicer pursuant to this Section in any ensuing Eligible
Repurchase Month. The
Purchase Price for any Mortgage Loan purchased hereunder shall be
deposited in
the Certificate Account and the Trustee, upon receipt of a
certificate from the
Master Servicer in the form of Exhibit N hereto, shall release or
cause to be
released to the purchaser of such Mortgage Loan the related
Mortgage File and
shall execute and deliver such instruments of transfer or
assignment prepared by
the purchaser of such Mortgage Loan, in each case without recourse,
as shall be
necessary to vest in the purchaser of such Mortgage Loan any
Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan
shall succeed
to all the Trustee's right, title and interest in and to such
Mortgage Loan and
all security and documents related thereto. Such assignment shall
be an
assignment outright and not for security. The purchaser of such
Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and
documents, free of
any further obligation to the Trustee or the Certificateholders
with respect
thereto.
(b) Countrywide may agree to a modification of any Mortgage
Loan
(the "Modified Mortgage Loan") if (i) the modification is in lieu
of a
refinancing and (ii) the Mortgage Rate on the Modified Mortgage
Loan is
approximately a prevailing market rate for newly-originated
mortgage loans
having similar terms and (iii) Countrywide purchases the Modified
Mortgage Loan
from the Trust Fund as described below. Effective immediately after
the
modification, and, in any event, on the same Business Day on which
the
modification occurs, all interest of the Trustee in the Modified
Mortgage Loan
shall automatically be deemed transferred and assigned to
Countrywide and all
benefits and burdens of ownership thereof, including the right to
accrued
interest thereon from the date of modification and the risk of
default thereon,
shall pass to Countrywide. The Master Servicer shall promptly
deliver to the
Trustee a certification of a Servicing Officer to the effect that
all
requirements of this paragraph have been satisfied with respect to
the Modified
Mortgage Loan. For federal income tax purposes, the Trustee shall
account for
such purchase as a prepayment in full of the Modified Mortgage
Loan.
Countrywide shall remit the Purchase Price for any Modified
Mortgage
Loan to the Master Servicer for deposit into the Certificate
Account pursuant to
Section 3.05 within one Business Day after the purchase of the
Modified Mortgage
Loan. Upon receipt by the Trustee of written notification of any
such deposit
signed by a Servicing Officer, the Trustee shall release to
Countrywide the
related Mortgage File and shall execute and deliver such
instruments of transfer
or assignment, in each case without recourse, as shall be necessary
to vest in
Countrywide any Modified Mortgage Loan previously transferred and
assigned
pursuant hereto. Countrywide covenants and agrees to indemnify the
Trust Fund
against any liability for any "prohibited transaction" taxes and
any related
interest, additions, and penalties imposed on the Trust Fund
established
hereunder as a result of any modification of a Mortgage Loan
effected pursuant
to this subsection (b), any holding of a Modified Mortgage Loan by
the Trust
Fund or any purchase of a Modified Mortgage Loan by Countrywide
(but such
obligation shall not prevent Countrywide or any other appropriate
Person from in
good faith contesting any such tax in appropriate proceedings and
shall not
prevent Countrywide from withholding payment of such tax, if
permitted by law,
pending the outcome of such proceedings). Countrywide shall have no
right of
reimbursement for any amount paid pursuant to the foregoing
indemnification,
except to the extent that the amount of any tax, interest, and
penalties,
together with interest thereon, is refunded to the Trust Fund or
Countrywide.
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files.
Upon the
payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be
escrowed in a
manner customary for such purposes, the Master Servicer will
immediately notify
the Trustee by delivering, or causing to be delivered a "Request
for Release"
substantially in the form of Exhibit N. Upon receipt of such
request, the
Trustee shall promptly release the related Mortgage File to the
Master Servicer,
and the Trustee shall at the Master Servicer's
III-13
<PAGE>
direction execute and deliver to the Master Servicer the request
for
reconveyance, deed of reconveyance or release or satisfaction of
mortgage or
such instrument releasing the lien of the Mortgage in each case
provided by the
Master Servicer, together with the Mortgage Note with written
evidence of
cancellation thereon. The Master Servicer is authorized to cause
the removal
from the registration on the MERS System of such Mortgage and to
execute and
deliver, on behalf of the Trustee and the Certificateholders or any
of them, any
and all instruments of satisfaction or cancellation or of partial
or full
release. Expenses incurred in connection with any instrument of
satisfaction or
deed of reconveyance shall be chargeable to the related Mortgagor.
From time to
time and as shall be appropriate for the servicing or foreclosure
of any
Mortgage Loan, including for such purpose, collection under any
policy of flood
insurance, any fidelity bond or errors or omissions policy, or for
the purposes
of effecting a partial release of any Mortgaged Property from the
lien of the
Mortgage or the making of any corrections to the Mortgage Note or
the Mortgage
or any of the other documents included in the Mortgage File, the
Trustee shall,
upon delivery to the Trustee of a Request for Release in the form
of Exhibit M
signed by a Servicing Officer, release the Mortgage File to the
Master Servicer.
Subject to the further limitations set forth below, the Master
Servicer shall
cause the Mortgage File or documents so released to be returned to
the Trustee
when the need therefor by the Master Servicer no longer exists,
unless the
Mortgage Loan is liquidated and the proceeds thereof are deposited
in the
Certificate Account, in which case the Master Servicer shall
deliver to the
Trustee a Request for Release in the form of Exhibit N, signed by a
Servicing
Officer.
If the Master Servicer at any time seeks to initiate a
foreclosure
proceeding in respect of any Mortgaged Property as authorized by
this Agreement,
the Master Servicer shall deliver or cause to be delivered to the
Trustee, for
signature, as appropriate, any court pleadings, requests for
trustee's sale or
other documents necessary to effectuate such foreclosure or any
legal action
brought to obtain judgment against the Mortgagor on the Mortgage
Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other
remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise
available at
law or in equity.
SECTION 3.13. Documents, Records and Funds in Possession of
Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Master
Servicer shall transmit to the Trustee as required by this
Agreement all
documents and instruments in respect of a Mortgage Loan coming into
the
possession of the Master Servicer from time to time and shall
account fully to
the Trustee for any funds received by the Master Servicer or which
otherwise are
collected by the Master Servicer as Liquidation Proceeds, Insurance
Proceeds or
Subsequent Recoveries in respect of any Mortgage Loan. All Mortgage
Files and
funds collected or held by, or under the control of, the Master
Servicer in
respect of any Mortgage Loans, whether from the collection of
principal and
interest payments or from Liquidation Proceeds and any Subsequent
Recoveries,
including but not limited to, any funds on deposit in the
Certificate Account,
shall be held by the Master Servicer for and on behalf of the
Trustee and shall
be and remain the sole and exclusive property of the Trustee,
subject to the
applicable provisions of this Agreement. The Master Servicer also
agrees that it
shall not create, incur or subject any Mortgage File or any funds
that are
deposited in the Certificate Account, Distribution Account or any
Escrow
Account, or any funds that otherwise are or may become due or
payable to the
Trustee for the benefit of the Certificateholders, to any claim,
lien, security
interest, judgment, levy, writ of attachment or other encumbrance,
or assert by
legal action or otherwise any claim or right of setoff against any
Mortgage File
or any funds collected on, or in connection with, a Mortgage Loan,
except,
however, that the Master Servicer shall be entitled to set off
against and
deduct from any such funds any amounts that are properly due and
payable to the
Master Servicer under this Agreement.
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<PAGE>
SECTION 3.14. Servicing Compensation.
As compensation for its activities hereunder, the Master
Servicer
shall be entitled to retain or withdraw from the Certificate
Account an amount
equal to the Master Servicing Fee; provided, that the aggregate
Master Servicing
Fee with respect to any Distribution Date shall be reduced (i) by
an amount
equal to the aggregate of the Prepayment Interest Shortfalls on all
of the
Mortgage Loans, if any, with respect to such Distribution Date, but
not to
exceed the Compensating Interest for such Distribution Date, and
(ii) with
respect to the first Distribution Date, an amount equal to any
amount to be
deposited into the Distribution Account by the Depositor pursuant
to Section
2.01(a) and not so deposited.
Additional
servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, prepayment charges, assumption fees,
late payment
charges and all income and gain net of any losses realized from
Permitted
Investments on funds in the Certificate Account and Distribution
Account shall
be retained by the Master Servicer to the extent not required to be
deposited in
the Certificate Account pursuant to Section 3.05 hereof. The Master
Servicer
shall be required to pay all expenses incurred by it in connection
with its
master servicing activities hereunder (including payment of any
premiums for
hazard insurance and any Primary Insurance Policy and maintenance
of the other
forms of insurance coverage required by this Agreement) and shall
not be
entitled to reimbursement therefor except as specifically provided
in this
Agreement.
SECTION 3.15. Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and
to
comparable regulatory authorities supervising Holders and/or
Certificate Owners
and the examiners and supervisory agents of the OTS, the FDIC and
such other
authorities, access to the documentation regarding the Mortgage
Loans required
by applicable regulations of the OTS and the FDIC. Such access
shall be afforded
without charge, but only upon reasonable and prior written request
and during
normal business hours at the offices designated by the Master
Servicer. Nothing
in this Section shall limit the obligation of the Master Servicer
to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors
and the failure of the Master Servicer to provide access as
provided in this
Section as a result of such obligation shall not constitute a
breach of this
Section.
The Master
Servicer acknowledges that as part of its servicing
activities, the Master Servicer shall fully furnish, in accordance
with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete
information (i.e., favorable and unfavorable) on its borrower
credit files
related to the Mortgage Loans to Equifax, Experian and Trans Union
Credit
Information Company (three of the nationally recognized credit
bureaus) on a
monthly basis.
SECTION 3.16. Annual Statement as to Compliance.
(a) The Master Servicer shall deliver to the Depositor and the
Trustee on or before March 15 of each year, commencing with its
2007 fiscal
year, an Officer's Certificate stating, as to the signer thereof,
that (i) a
review of the activities of the Master Servicer during the
preceding calendar
year (or applicable portion thereof) and of the performance of the
Master
Servicer under this Agreement has been made under such officer's
supervision and
(ii) to the best of such officer's knowledge, based on such review,
the Master
Servicer has fulfilled all its obligations under this Agreement in
all material
respects throughout such year (or applicable portion thereof), or,
if there has
been a failure to fulfill any such obligation in any material
respect,
specifying each such failure known to such officer and the nature
and status
thereof.
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<PAGE>
(b) The Master Servicer shall cause each Subservicer to deliver
to
the Depositor and the Trustee on or before March 15 of each year,
commencing
with its 2007 fiscal year, an Officer's Certificate stating, as to
the signer
thereof, that (i) a review of the activities of such Subservicer
during the
preceding calendar year (or applicable portion thereof) and of the
performance
of the Subservicer under the applicable Subservicing Agreement or
primary
servicing agreement, has been made under such officer's supervision
and (ii) to
the best of such officer's knowledge, based on such review, such
Subservicer has
fulfilled all its obligations under the applicable Subservicing
Agreement or
primary servicing agreement, in all material respects throughout
such year (or
applicable portion thereof), or, if there has been a failure to
fulfill any such
obligation in any material respect, specifying each such failure
known to such
officer and the nature and status thereof.
(c) The Trustee shall forward a copy of each such statement to
each
Rating Agency.
SECTION 3.17. Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall for so long as it acts as master
servicer
under this Agreement, obtain and maintain in force (a) a policy or
policies of
insurance covering errors and omissions in the performance of its
obligations as
Master Servicer hereunder and (b) a fidelity bond in respect of its
officers,
employees and agents. Each such policy or policies and bond shall,
together,
comply with the requirements from time to time of FNMA or FHLMC for
persons
performing servicing for mortgage loans purchased by FNMA or FHLMC.
In the event
that any such policy or bond ceases to be in effect, the Master
Servicer shall
obtain a comparable replacement policy or bond from an insurer or
issuer,
meeting the requirements set forth above as of the date of such
replacement.
SECTION 3.18. The Corridor Contracts.
The Supplemental Interest Trustee will enter into the Corridor
Contracts with the Corridor Contract Counterparty for the benefit
of the Covered
Certificates. The Corridor Contracts will not be assets of the
trust or any
REMIC. The Corridor Contracts instead will be an assets of the
Supplemental
Interest Trust. The Trustee, on behalf of the Supplemental Interest
Trust, shall
cause to be deposited any amounts received from time to time with
respect to the
Corridor Contracts into the Corridor Contract Reserve Fund.
The Trustee, on behalf of the Supplemental Interest Trust, shall
act
as calculation agent and/or shall terminate the Corridor Contracts,
upon the
occurrence of certain events of default or termination events to
the extent
specified thereunder. Upon any such termination, the Corridor
Contract
Counterparty will be obligated to pay the Trustee, for the benefit
of the
Supplemental Interest Trust, an amount in respect of such
termination. Any
amounts received by the Trustee for the benefit of the Supplemental
Interest
Trust in respect of the termination of a Corridor Contract shall be
deposited
and held in the Corridor Contract Reserve Fund and applied on
future
Distribution Dates to pay the related Yield Supplement Amount on
the applicable
Class of Covered Certificates.
Any amounts remaining in the Corridor Contract Reserve Fund on
the
Distribution Date immediately following the earlier of (x) the
latest Corridor
Contract Scheduled Termination Date and (y) the date on which the
aggregate
Class Certificate Balance of the Covered Certificates has been
reduced to zero,
will be distributed to Morgan Stanley & Co. Incorporated, and
will not be
available for payment of any Yield Supplement Amounts on the
Covered
Certificates.
III-16
<PAGE>
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances.
(a) The Master Servicer shall determine on or before each
Master
Servicer Advance Date whether it is required to make an Advance
pursuant to the
definition thereof. If the Master Servicer determines it is
required to make an
Advance, it shall, on or before the Master Servicer Advance Date,
either (i)
deposit into the Certificate Account an amount equal to the Advance
or (ii) make
an appropriate entry in its records relating to the Certificate
Account that any
Amount Held for Future Distribution has been used by the Master
Servicer in
discharge of its obligation to make any such Advance. Any funds so
applied shall
be replaced by the Master Servicer by deposit in the Certificate
Account no
later than the close of business on the next Master Servicer
Advance Date. The
Master Servicer shall be entitled to be reimbursed from the
Certificate Account
for all Advances of its own funds made pursuant to this Section as
provided in
Section 3.08. The obligation to make Advances with respect to any
Mortgage Loan
shall continue if such Mortgage Loan has been foreclosed or
otherwise terminated
and the related Mortgaged Property has not been liquidated.
(b) If the Master Servicer determines that it will be unable to
comply with its obligation to make the Advances as and when
described in the
second sentence of Section 4.01(a), it shall use its best efforts
to give
written notice thereof to the Trustee (each such notice a "Trustee
Advance
Notice"; and such notice may be given by telecopy), not later than
3:00 P.M.,
New York time, on the Business Day immediately preceding the
related Master
Servicer Advance Date, specifying the amount that it will be unable
to deposit
(each such amount an "Advance Deficiency") and certifying that such
Advance
Deficiency constitutes an Advance hereunder and is not a
Nonrecoverable Advance.
If the Trustee receives a Trustee Advance Notice on or before 3:30
P.M., New
York time on a Master Servicer Advance Date, the Trustee shall, not
later than
3:00 P.M., New York time, on the related Distribution Date, deposit
in the
Distribution Account an amount equal to the Advance Deficiency
identified in
such Trustee Advance Notice unless it is prohibited from so doing
by applicable
law. Notwithstanding the foregoing, the Trustee shall not be
required to make
such deposit if the Trustee shall have received written
notification from the
Master Servicer that the Master Servicer has deposited or caused to
be deposited
in the Certificate Account an amount equal to such Advance
Deficiency. All
Advances made by the Trustee pursuant to this Section 4.01(b) shall
accrue
interest on behalf of the Trustee at the Trustee Advance Rate from
and including
the date such Advances are made to but excluding the date of
repayment, with
such interest being an obligation of the Master Servicer and not
the Trust Fund.
The Master Servicer shall reimburse the Trustee for the amount of
any Advance
made by the Trustee pursuant to this Section 4.01(b) together with
accrued
interest, not later than the fifth day following the related Master
Servicer
Advance Date. In the event that the Master Servicer does not
reimburse the
Trustee in accordance with the requirements of the preceding
sentence, the
Trustee shall have the right, but not the obligation, to
immediately (a)
terminate all of the rights and obligations of the Master Servicer
under this
Agreement in accordance with Section 7.01 and (b) subject to the
limitations set
forth in Section 3.04, assume all of the rights and obligations of
the Master
Servicer hereunder.
(c) The Master Servicer shall, not later than the close of
business
on the second Business Day immediately preceding each Distribution
Date, deliver
to the Trustee a report (in form and substance reasonably
satisfactory to the
Trustee) that indicates (i) the Mortgage Loans with respect to
which the Master
Servicer has determined that the related Scheduled Payments should
be advanced
and (ii) the amount of the related Scheduled Payments. The Master
Servicer shall
deliver to the Trustee on
IV-1
<PAGE>
the related Master Servicer Advance Date an Officer's Certificate
of a Servicing
Officer indicating the amount of any proposed Advance determined by
the Master
Servicer to be a Nonrecoverable Advance.
SECTION 4.02. Priorities of Distribution.
(a) On each Distribution Date, the Trustee shall withdraw the
Available Funds from the Distribution Account and apply such funds
to
distributions on the Certificates in the following order and
priority and, in
each case, to the extent of Available Funds remaining:
(i) [Reserved];
(ii) concurrently, to each interest-bearing Class of Senior
Certificate
