EXHIBIT 99.1
The Pooling and Servicing Agreement
<PAGE>
EXECUTION COPY
==============================================
CWALT, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK GRANADA LLC,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2006
-----------------------------------
ALTERNATIVE LOAN TRUST 2006-OC7
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC7
==============================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS
SECTION
1.01. Defined
Terms..........................................11
SECTION
1.02. Certain
Interpretive Provisions........................46
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION
2.01. Conveyance of
Mortgage Loans...........................48
SECTION
2.02. Acceptance by
Trustee of the Mortgage Loans............52
SECTION
2.03. Representations,
Warranties and Covenants of the Sellers
and Master Servicer....................................54
SECTION
2.04. Representations
and Warranties of the Depositor as to
the Mortgage
Loans.....................................56
SECTION
2.05. Delivery of
Opinion of Counsel in Connection with
Substitutions..........................................57
SECTION
2.06. Execution and
Delivery of Certificates.................57
SECTION
2.07. REMIC
Matters..........................................58
SECTION
2.08. Covenants of the
Master Servicer.......................58
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION
3.01. Master Servicer
to Service Mortgage Loans..............59
SECTION
3.02. Subservicing;
Enforcement of the Obligations of
Subservicers...........................................60
SECTION
3.03. Rights of the
Depositor, the NIM Insurer and the Trustee
in Respect of the Master Servicer......................60
SECTION
3.04. Trustee to Act
as Master Servicer......................61
SECTION
3.05. Collection of
Mortgage Loan Payments; Certificate
Account; Distribution Account; Carryover Reserve Fund;
Principal Reserve Fund.................................61
SECTION
3.06. Collection of
Taxes, Assessments and Similar Items;
Escrow Accounts........................................65
SECTION
3.07. Access to
Certain Documentation and Information
Regarding the Mortgage Loans...........................65
SECTION
3.08. Permitted
Withdrawals from the Certificate Account, the
Distribution Account, the Carryover Reserve Fund and the
Principal Reserve Fund.................................66
SECTION
3.09. Maintenance of
Hazard Insurance; Maintenance of Primary
Insurance Policies.....................................68
SECTION
3.10. Enforcement of
Due-on-Sale Clauses; Assumption
Agreements.............................................69
SECTION 3.11.
Realization Upon
Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.................................70
SECTION
3.12. Trustee to
Cooperate; Release of Mortgage Files........74
SECTION
3.13. Documents,
Records and Funds in Possession of Master
Servicer to be Held for the Trustee....................75
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SECTION
3.14. Servicing
Compensation.................................75
SECTION
3.15. Access to
Certain Documentation........................76
SECTION
3.16. Annual Statement
as to Compliance......................76
SECTION
3.17. Errors and
Omissions Insurance; Fidelity Bonds.........76
SECTION
3.18. Notification of
Adjustments............................77
SECTION
3.19. The Swap
Contract......................................77
SECTION
3.20. Prepayment
Charges.....................................79
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
SECTION
4.01.
Advances...............................................81
SECTION
4.02. Priorities of
Distribution.............................82
SECTION
4.03.
[Reserved].............................................88
SECTION
4.04.
[Reserved].............................................88
SECTION
4.05.
[Reserved].............................................88
SECTION
4.06. Monthly
Statements to Certificateholders...............88
SECTION
4.07. Determination of
Pass-Through Rates for COFI
Certificates...........................................88
SECTION
4.08. Determination of
Pass-Through Rates for LIBOR
Certificates...........................................89
SECTION
4.09. Swap Trust and
Swap Account............................91
ARTICLE V THE CERTIFICATES
SECTION
5.01. The
Certificates.......................................93
SECTION
5.02. Certificate
Register; Registration of Transfer and
Exchange of Certificates...............................94
SECTION
5.03. Mutilated,
Destroyed, Lost or Stolen Certificates......99
SECTION
5.04. Persons Deemed
Owners..................................99
SECTION
5.05. Access to List
of Certificateholders' Names and
Addresses..............................................99
SECTION
5.06. Maintenance of
Office or Agency.......................100
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER
SECTION
6.01. Respective
Liabilities of the Depositor and the Master
Servicer..............................................101
SECTION
6.02. Merger or
Consolidation of the Depositor or the Master
Servicer..............................................101
SECTION
6.03. Limitation on
Liability of the Depositor, the Sellers,
the Master Servicer, the NIM Insurer and Others.......101
SECTION
6.04. Limitation on
Resignation of Master Servicer..........102
ARTICLE VII DEFAULT
SECTION
7.01. Events of
Default.....................................103
SECTION
7.02. Trustee to Act;
Appointment of Successor..............105
SECTION
7.03. Notification to
Certificateholders....................106
ARTICLE VIII CONCERNING THE TRUSTEE
SECTION
8.01. Duties of
Trustee.....................................107
SECTION
8.02. Certain Matters
Affecting the Trustee.................108
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SECTION
8.03. Trustee Not
Liable for Certificates or Mortgage Loans.109
SECTION
8.04. Trustee May Own
Certificates..........................109
SECTION
8.05. Trustee's Fees
and Expenses...........................109
SECTION
8.06. Eligibility
Requirements for Trustee..................110
SECTION
8.07. Resignation and
Removal of Trustee....................110
SECTION
8.08. Successor
Trustee.....................................111
SECTION
8.09. Merger or
Consolidation of Trustee....................112
SECTION
8.10. Appointment of
Co-Trustee or Separate Trustee.........112
SECTION
8.11. Tax
Matters...........................................114
SECTION
8.12. Monitoring of
Significance Percentage.................116
ARTICLE IX TERMINATION
SECTION
9.01. Termination upon
Liquidation or Purchase of all Mortgage
Loans.................................................118
SECTION
9.02. Final
Distribution on the Certificates................118
SECTION
9.03. Additional
Termination Requirements...................120
SECTION
9.04. Auction of the
Mortgage Loans and REO Properties......120
ARTICLE X MISCELLANEOUS PROVISIONS
SECTION
10.01.
Amendment.............................................124
SECTION
10.02. Recordation of Agreement;
Counterparts................125
SECTION
10.03. Governing
Law.........................................126
SECTION
10.04. Intention of
Parties..................................126
SECTION
10.05.
Notices...............................................127
SECTION
10.06. Severability of
Provisions............................129
SECTION
10.07.
Assignment............................................129
SECTION
10.08. Limitation on Rights of
Certificateholders............129
SECTION
10.09. Inspection and Audit
Rights...........................130
SECTION
10.10. Certificates Nonassessable and Fully
Paid.............130
SECTION
10.11.
[Reserved]............................................130
SECTION
10.12. Protection of
Assets..................................130
SECTION
10.13. Rights of NIM
Insurer.................................130
ARTICLE XI EXCHANGE ACT REPORTING
SECTION
11.01. Filing
Obligations....................................131
SECTION
11.02. Form 10-D
Filings.....................................132
SECTION
11.03. Form 8-K
Filings......................................133
SECTION
11.04. Form 10-K
Filings.....................................133
SECTION
11.05. Sarbanes-Oxley
Certification..........................134
SECTION
11.06. Form 15
Filing........................................134
SECTION
11.07. Report on Assessment of Compliance and
Attestation....134
SECTION
11.08. Use of Subservicers and
Subcontractors................136
SECTION
11.09.
Amendments............................................137
SECTION
11.10. Reconciliation of
Accounts............................137
iii
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SCHEDULES
Schedule I:
Mortgage Loan Schedule.................................S-I-1
Schedule II-A: Representations and
Warranties of Countrywide.......S-II-A-1
Schedule II-B: Representations and
Warranties of Park Granada......S-II-B-1
Schedule II-C: Representations and
Warranties of Park Monaco.......S-II-C-1
Schedule III-A:
Representations and Warranties of Countrywide
as to all of the Mortgage Loans....................S-III-A-1
Schedule III-B:
Representations and Warranties of Countrywide
as to the Countrywide Mortgage Loans...............S-III-B-1
Schedule III-C:
Representations and Warranties of Park Granada
as to the Park Granada Mortgage Loans..............S-III-C-1
Schedule III-D:
Representations and Warranties of Park Monaco
as to the Park Monaco Mortgage Loans...............S-III-D-1
Schedule III-E:
Representations and Warranties of Park Sienna
as to the Park Sienna Mortgage Loans...............S-III-E-1
Schedule IV:
Representations and Warranties of the Master Servicer.S-IV-1
Schedule V:
Principal Balance Schedules [if applicable]............S-V-1
Schedule VI: Form of
Monthly Master Servicer Report................S-VI-1
Schedule VII: Prepayment
Charge Schedule...........................S-VII-1
EXHIBITS
Exhibit A: Form of
Senior Certificate (excluding Notional Amount
Certificates)
...........................................A-1
Exhibit B: Form of
Subordinated Certificate...........................B-1
Exhibit C-1: Form of Class A-R
Certificate............................C-1-1
Exhibit C-2: Form of Class P
Certificate..............................C-2-1
Exhibit C-3 Form of Class C
Certificate..............................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 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
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Exhibit P:
[Reserved].................................................P-1
Exhibit Q: Standard
& Poor's LEVELS(R) Version 5.7 Glossary Revised,
Appendix E.................................................Q-1
Exhibit R: Form of
Swap Contract......................................R-1
Exhibit S-1: Form of Swap Contract
Assignment Agreement...............S-1-1
Exhibit S-2: Form of Swap Contract
Administration Agreement...........S-2-1
Exhibit T: Form of
Officer's Certificate with respect to Prepayments..T-1
Exhibit U: Monthly
Statement..........................................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 Master
Servicer)
...............................................Y-1
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THIS
POOLING AND SERVICING AGREEMENT, dated as of August 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 contained in this
Agreement,
the parties to this Agreement agree as follows:
PRELIMINARY STATEMENT
The
Depositor is the owner of the Trust Fund that is hereby conveyed
to
the Trustee in return for the Certificates. The Trust Fund
(excluding the
Carryover Reserve Fund) for federal income tax purposes will
consist of three
REMICs (the "Swap-IO REMIC," the " Strip REMIC" and the "Master
REMIC").
Each Certificate, other than the Class A-R Certificate, will
represent
ownership of one or more regular interests in the Master REMIC for
purposes
of the REMIC Provisions. The Class A-R Certificate represents
ownership of
the sole class of residual interest in the Swap-IO REMIC,
Strip REMIC and
the Master REMIC. The
Master REMIC will hold as assets the several classes
of uncertificated Strip REMIC Interests (other than the STR-A-R
Interest).
Each Strip REMIC Interest (other than the STR-A-R Interest) is
hereby
designated as a regular interest in the Strip REMIC. The Strip REMIC will
hold as assets the several classes of uncertificated Swap-IO REMIC
Interests
(other than the SWR-A-R Interest). Each Swap-IO REMIC Interest
(other than
the SWR-A-R Interest) is hereby designated as a regular interest in
the
Swap-IO REMIC. The
Swap-IO REMIC will hold as assets all property of the
Trust Fund (excluding the Carryover Reserve Fund). The latest possible
maturity date of all REMIC regular interests created in this
Agreement shall
be the Latest Possible Maturity Date.
The Swap
Trust, Swap Contract and Swap Account will not constitute any
part of any REMIC.
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SWAP-IO REMIC:
The Swap-IO REMIC Interests will have the principal balances
and
pass-through rates as set forth below:
SWAP-IO REMIC Interests
Initial Principal Balance(1) Pass-Through
Rate
-----------------------
-------------------------
-----------------
SWR-1A
$ 1,186,503.51
(2)
SWR-1B
$ 1,186,503.51
(3)
SWR-2A
$ 1,324,645.39
(2)
SWR-2B
$ 1,324,645.39
(3)
SWR-3A
$ 1,460,369.29
(2)
SWR-3B
$ 1,460,369.29
(3)
SWR-4A
$ 1,591,848.26
(2)
SWR-4B
$ 1,591,848.26
(3)
SWR-5A
$ 1,694,249.05
(2)
SWR-5B
$ 1,694,249.05
(3)
SWR-6A
$ 1,830,824.08
(2)
SWR-6B
$ 1,830,824.08
(3)
SWR-7A
$ 1,959,264.33
(2)
SWR-7B
$ 1,959,264.33
(3)
SWR-8A
$ 2,066,840.62
(2)
SWR-8B
$ 2,066,840.62
(3)
SWR-9A
$ 2,165,876.71
(2)
SWR-9B
$ 2,165,876.71
(3)
SWR-10A
$ 2,267,930.04
(2)
SWR-10B
$ 2,267,930.04
(3)
SWR-11A
$ 2,311,816.37
(2)
SWR-11B
$
2,311,816.37
(3)
SWR-12A
$ 2,333,510.20
(2)
SWR-12B
$ 2,333,510.20
(3)
SWR-13A
$ 2,336,601.82
(2)
SWR-13B
$ 2,336,601.82
(3)
SWR-14A
$ 2,356,275.30
(2)
SWR-14B
$ 2,356,275.30
(3)
SWR-15A
$ 2,372,997.50
(2)
SWR-15B
$ 2,372,997.50
(3)
SWR-16A
$ 2,378,848.60
(2)
SWR-16B
$ 2,378,848.60
(3)
SWR-17A
$ 2,381,957.85
(2)
SWR-17B
$ 2,381,957.85
(3)
SWR-18A
$ 2,350,254.55
(2)
SWR-18B
$ 2,350,254.55
(3)
SWR-19A
$ 2,317,745.00
(2)
SWR-19B
$ 2,317,745.00
(3)
SWR-20A
$ 2,240,957.39
(2)
SWR-20B
$ 2,240,957.39
(3)
SWR-21A
$ 2,166,597.42
(2)
2
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SWAP-IO REMIC Interests
Initial Principal Balance(1) Pass-Through
Rate
-----------------------
-------------------------
-----------------
SWR-21B
$ 2,166,597.42
(3)
SWR-22A
$ 2,451,196.16
(2)
SWR-22B
$ 2,451,196.16
(3)
SWR-23A
$ 3,156,264.56
(2)
SWR-23B
$ 3,156,264.56
(3)
SWR-24A
$ 2,998,294.97
(2)
SWR-24B
$ 2,998,294.97
(3)
SWR-25A
$ 2,827,686.87
(2)
SWR-25B
$ 2,827,686.87
(3)
SWR-26A
$ 2,686,372.79
(2)
SWR-26B
$ 2,686,372.79
(3)
SWR-27A
$ 2,552,244.25
(2)
SWR-27B
$ 2,552,244.25
(3)
SWR-28A
$ 2,254,240.63
(2)
SWR-28B
$ 2,254,240.63
(3)
SWR-29A
$ 1,752,472.74
(2)
SWR-29B
$ 1,752,472.74
(3)
SWR-30A
$ 1,689,610.48
(2)
SWR-30B
$ 1,689,610.48
(3)
SWR-31A
$ 1,628,899.83
(2)
SWR-31B
$ 1,628,899.83
(3)
SWR-32A
$ 1,570,265.60
(2)
SWR-32B
$ 1,570,265.60
(3)
SWR-33A
$ 1,513,635.22
(2)
SWR-33B
$ 1,513,635.22
(3)
SWR-34A
$ 1,469,629.30
(2)
SWR-34B
$ 1,469,629.30
(3)
SWR-35A
$ 1,586,145.79
(2)
SWR-35B
$ 1,586,145.79
(3)
SWR-36A
$ 1,522,279.14
(2)
SWR-36B
$ 1,522,279.14
(3)
SWR-37A
$ 1,451,113.58
(2)
SWR-37B
$ 1,451,113.58
(3)
SWR-38A
$ 1,394,306.31
(2)
SWR-38B
$ 1,394,306.31
(3)
SWR-39A
$ 1,339,709.59
(2)
SWR-39B
$ 1,339,709.59
(3)
SWR-40A
$ 1,291,585.93
(2)
SWR-40B
$ 1,291,585.93
(3)
SWR-41A
$ 1,175,555.04
(2)
SWR-41B
$ 1,175,555.04
(3)
SWR-42A
$33,802,792.79
(2)
SWR-42B
$33,802,792.79
(3)
SWR-Support
(4)
(5)
SWR-P
$
100.00
(6)
3
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SWAP-IO REMIC Interests
Initial Principal Balance(1) Pass-Through
Rate
-----------------------
-------------------------
-----------------
SW-A-R
(7)
(7)
---------------
(1) Scheduled
principal,
prepayments and
Realized Losses will be allocated
first, to
the SWR-Support
Interest and second,
among the other Classes
designated
"-1", first, sequentially to the Class having the lowest
cardinal
number following such
designation, in each
case until reduced
to zero,
and second, among each
Class having the same cardinal number,
pro rata
between each such class.
(2) Prior to the
43rd Distribution
Date, a rate equal to twice the Pool Tax
Cap less
11.20% per annum.
On and after the 43rd
Distribution
Date a
rate equal
to the Pool Tax Cap.
The "Pool Tax Cap"
means the weighted
average of
the Adjusted Net Mortgage Rates of all the Mortgage Loans.
(3) Prior to the
43rd Distribution
Date, a rate equal to
the lesser of (i)
11.20%
per annum and (ii) twice the Pool Tax Cap. On and after the
43rd
Distribution Date, a rate equal to the Pool Tax Cap.
(4) On the
Closing Date and on each Distribution Date, following the
allocation
of Principal
Amounts and
Realized Losses, the principal
balance in
respect of the SWR-Support Interest will equal the excess
of
the
principal balance of the Mortgage
Loans (as of the end
of the Due
Period,
reduced by principal
prepayments received
after the Due Period
that are
to be distributed on the Distribution Date related to the Due
Period)
over the principal
balance in respect of the remaining Swap-IO
REMIC
Interests (other than the SWR-A-R and the SWR-P Interests).
(5) A rate equal
to the Pool Tax Cap.
(6) On each
Distribution
Date the Class SWR-P
Interest is entitled
to all
Prepayment
Charges collected with respect to the Mortgage
Loans. It
pays no
interest.
(7) The Class
SW-A-R Interest is the sole class of residual interest in the
Swap-IO
REMIC. It has no
principal and pays no principal or interest.
On each
Distribution Date, the Available Funds shall be payable with
respect to the Swap-IO
REMIC Interests in the following manner:
(1)
Interest.
Interest is to be
distributed with respect to each
Swap-IO REMIC Interest at the rate, or according to the formulas,
described
above.
(2)
Principal.
Principal Distribution
Amounts shall be allocated
among the Swap-IO REMIC Interests as described above.
(3)
Prepayment
Penalties. All
Prepayment Charges are allocated to
the SWR-P Interest.
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STRIP REMIC:
The Strip
REMIC Regular Interests will have the principal balances,
pass-through rates and Corresponding Classes of Certificates as set
forth in
the following table:
STRIP REMIC
Initial Principal Pass-Through Corresponding Class
Interests
Balance
Rate of
Certificates
-----------
----------------- ------------ -------------------
STR-1-A.....
(1)
(2)
Class 1-A
STR-2-A-1...
(1)
(2)
Class 2-A-1
STR-2-A-2A..
(1)
(2)
Class 2-A-2A
STR-2-A-2B..
(1)
(2)
Class 2-A-2B
STR-2-A-3...
(1)
(2)
Class 2-A-3
STR-M-1.....
(1)
(2)
Class M-1
STR-M-2.....
(1)
(2)
Class M-2
STR-M-3.....
(1)
(2)
Class M-3
STR-M-4.....
(1)
(2)
Class M-4
STR-M-5.....
(1)
(2)
Class M-5
STR-M-6.....
(1)
(2)
Class M-6
STR-M-7.....
(1)
(2)
Class M-7
STR-M-8.....
(1)
(2)
Class
M-8
STR-$100....
$100
(3)
A-R
STR-C-OC....
(4)
(2)
N/A
STR-C-Swap-IO
(5)
(5)
N/A
STR-P.......
$100
(6)
P
STR-A-R.....
(7)
(7)
N/A
(1) This Strip
REMIC Interest has a principal balance that is initially
equal to 100% of its corresponding Certificate Class issued by the
Master
REMIC. Principal
payments, both scheduled and prepaid, Realized Losses and
Subsequent Recoveries attributable to the SWAP-IO REMIC Interests
held by the
Strip REMIC will be allocated to this class to maintain its size
relative to
its corresponding Certificate Class.
(2) On each
Distribution Date, the pass through rate will equal the "Strip
REMIC Cap." The Strip
REMIC Cap will equal the weighted average of the pass
through rates of the Swap-IO REMIC Interests (other than the Class
SWR-P and
Class SWR-A-R Interests) treating each "B" Interest the cardinal
number of
which (for example, SW-1B, SW-2B, SW-3B, etc.,) is not less than
the ordinal
number of the Distribution Date (first Distribution Date, second
Distribution
Date, third Distribution Date, etc., ) as capped at a rate equal to
the
product of (i) 2 and (ii) LIBOR.
(3) This Strip
REMIC Interest pays no interest.
(4) This Strip
REMIC Interest has a principal balance that is initially
equal to 100% of the Overcollateralization Amount. Principal payments, both
scheduled and prepaid, Realized Losses and Subsequent Recoveries
attributable
to the Swap-IO REMIC Interests held by the Strip
5
<PAGE>
REMIC will be allocated to this class to maintain its size relative
to the
Overcollateralization Amount.
(5) For each
Distribution Date, the STR-C-Swap-IO Interest is entitled to
receive from each Swap REMIC "B" Interest the cardinal number of
which (for
example, SW-1B, SW-2B, SW-3B, etc.,) is not less than the ordinal
number of
the Distribution Date (first Distribution Date, second Distribution
Date,
third Distribution Date, etc.) the interest accruing on such
interest in
excess of a per annum rate equal to the product of (i) 2 and (ii)
LIBOR.
(6) The STR-P
Interest is entitled to all amounts payable with respect to
the SWR-P Interest. It
pays no interest.
(7) The STR-A-R
Interest is the sole class of residual interest in the
Strip REMIC. It has no
principal balance and pays no principal or interest.
On each
Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the Swap-IO Interests
shall be
payable with respect to the Strip REMIC Interests in the following
manner:
(1)
Interest.
Interest is to be
distributed with respect to each
Strip REMIC Interest at the rate, or according to the formulas,
described
above.
(2)
Principal.
Principal Distribution
Amounts shall be allocated
among the Strip REMIC
Interests as described above.
(3)
Prepayment Penalties.
All Prepayment Charges are allocated to the
STR-P Interest.
Master REMIC:
The Master
REMIC Certificates will have the original certificate
principal balances and pass-through rates as set forth in the
following table:
Original Class
Class
Certificate Balance Pass-Through Rate
Class 1-A
$139,441,000.00
(1)
Class 2-A-1
$215,540,000.00
(1)
Class 2-A-2A
$124,181,000.00
(1)
Class 2-A-2B
$13,797,000.00
(1)
Class 2-A-3
$48,681,000.00
(1)
Class M-1
$8,765,000.00
(1)
Class M-2
$8,472,000.00
(1)
Class M-3
$4,966,000.00
(1)
Class M-4
$4,382,000.00
(1)
Class M-5
$3,798,000.00
(1)
Class M-6
$3,506,000.00
(1)
Class M-7
$3,506,000.00
(1)
Class M-8
$3,214,000.00
(1)
Class C
(2)
(3)
6
<PAGE>
Original Class
Class
Certificate Balance Pass-Through Rate
Class P
$100
(4)
Class A-R
$100
(5)
---------------
(1) The
Certificates will accrue interest at the related Pass-Through
Rates
identified in this Agreement. For federal income tax purposes,
including the
computation of the Class C Distributable Amount and entitlement to
Net Rate
Carryover the pass-through rate in respect of each Class 1
Certificate, Class
2 Certificate and Class M Certificate will be subject to a cap
equal to the
Strip REMIC Cap rather than its applicable Net Rate Cap.
(2) For federal
income tax purposes, the Class C Certificates will be
treated as having a Certificate Principal Balance equal to the
Overcollateralized Amount.
(3) For each
Interest Accrual Period the Class C Certificates are entitled
to an amount (the "Class C Distributable Amount") equal to the sum
of (a) the
interest payable on the STR-C-Swap-IO Interest, (b) the interest
payable on
the STR-C-OC Interest and (c) a specified portion of the interest
payable on
the Strip REMIC Regular Interests (other than the STR-$100,
STR-C-OC,
STR-C-Swap-IO and STR-X Interests) equal to the excess of the Pool
Tax Cap
over the weighted average interest rate of the Strip REMIC
Regular Interests
(other than the STR-$100, STR-C and STR-P Interests) with each such
Class
subject to a cap and a floor equal to the Pass-Through Rate of
the
Corresponding Master REMIC Class. The Pass-Through Rate of the Class
C
Certificates shall be a rate sufficient to entitle it to an amount
equal to
all interest accrued on the Mortgage Loans less the interest
accrued on the
other interests issued by the Master REMIC. The Class C Distributable
Amount
for any Distribution Date is payable from current interest on the
Mortgage
Loans and any related Overcollateralization Reduction Amount for
that
Distribution Date.
(4) For each
Distribution Date the Class P Certificates are entitled to all
Prepayment Charges distributed with respect to the STR-P
Interest.
(5) The Class
A-R Certificates represent the sole class of residual
interest in each REMIC created hereunder. The Class A-R Certificates are
not
entitled to distributions of interest.
The
foregoing REMIC structure is intended to cause all of the cash
from
the Mortgage Loans to flow through to the Master REMIC as cash flow
on REMIC
regular interests, without creating any shortfall--actual or
potential (other
than for credit losses)-- to any REMIC regular interest. It is not
intended
that the Class A-R Certificates be entitled to any cash flows
pursuant to
this Agreement except as provided in Section 4.02(b) hereunder.
7
<PAGE>
Set forth
below are designations of Classes or Components of
Certificates and other defined terms to the categories used in this
Agreement:
Accretion Directed
Certificates.................. None.
Accretion Directed
Components.................... None.
Accrual Certificates.......... None.
Accrual Components............ None.
Book-Entry Certificates....... All
Classes of Certificates other than
the Physical Certificates.
COFI Certificates............. 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:
Initial Component
Designation Principal
Balance
Pass-Through Rate
-----------
----------------- -----------------
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 the Private
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.
Group 1
Senior Certificates........... The Class
1-A Certificates.
Group 2
Senior Certificates........... The Class
2-A-1, Class 2-A-2A, Class
2-A-2B and Class 2-A-3 Certificates.
Inverse Floating Rate
8
<PAGE>
Certificates.................. None.
LIBOR Certificates............ The Class
1-A, Class 2-A-1, Class 2-A-2A,
Class 2-A-2B, Class 2-A-3, Class M-1,
Class M-2, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7 and Class M-8
Certificates.
Non-Delay Certificates........ The LIBOR
Certificates.
Notional Amount
Certificates.................. None.
Offered Certificates.......... All
Classes of Certificates other than the
Private Certificates.
Physical Certificates......... The
Private Certificates and the Residual
Certificates.
Planned Principal Classes..... None.
Planned Principal
Components.................... None.
Principal Only Certificates. . None.
Private Certificates.......... The Class
C and Class P Certificates.
Rating Agencies............... S&P
and Moody's.
Regular Certificates.......... All
Classes of Certificates, other than
the Residual Certificates.
Residual Certificates......... The Class
A-R Certificates.
Scheduled Principal
Classes....................... None.
Senior Certificates. ......... The Class
1-A, Class 2-A-1, Class 2-A-2A,
Class 2-A-2B and Class 2-A-3 Certificates.
Subordinated Certificates . .. The Class
M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7 and
Class M-8 Certificates.
Targeted Principal
Classes. ..................... None.
Underwriter ..................
Countrywide Securities Corporation.
With
respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions
in this
Agreement relating solely to such
9
<PAGE>
designations shall be of no force or effect, and any calculations
in this
Agreement incorporating references to such designations shall be
interpreted
without reference to such designations and amounts. Defined terms and
provisions in this Agreement relating to statistical rating
agencies not
designated above as Rating Agencies shall be of no force or
effect.
10
<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:
40-Year
Mortgage Loans: The
Mortgage Loans that have original terms to
maturity of 40-years.
Account:
Any Escrow Account,
the Certificate Account, the Distribution
Account, the Carryover Reserve Fund, the Principal Reserve Fund,
the Swap
Account or any other account related to the Trust Fund or the
Mortgage Loans.
Accretion
Directed Classes: As
specified in the Preliminary Statement.
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 related
Expense Fee
Rate.
Adjustment
Date: A date specified
in each Mortgage Note as a date on
which the Mortgage Rate on the related Mortgage Loan will be
adjusted.
Advance:
As to each Loan Group,
the payment required to be made by the
Master Servicer with respect to any Distribution Date pursuant to
Section
4.01, the amount of any such payment being equal to the aggregate
of payments
of principal and interest (net of the Master Servicing Fee) on the
Mortgage
Loans in such Loan Group that were due on the related Due Date and
not
received by the Master Servicer as of the close of business on the
related
Determination Date, together with an amount equivalent to interest
on each
Mortgage Loan as to which the related Mortgaged Property is an REO
Property,
net of any net income 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.
Agreement:
This Pooling and
Servicing Agreement and all amendments or
supplements this Pooling and Servicing Agreement.
Amount
Held for Future Distribution: As to any Distribution Date
and
each Loan Group, the aggregate amount held in the Certificate
Account at the
close of business on the related Determination Date on account of
(i)
Principal Prepayments received after the related Prepayment Period
and
Liquidation Proceeds and Subsequent Recoveries received in the
month of such
Distribution Date relating to such Loan Group and (ii) all
Scheduled Payments
due after the related Due Date relating to such Loan Group.
11
<PAGE>
Applied
Realized Loss Amount:
With respect to any Distribution Date
and the LIBOR Certificates, the sum of the Realized Losses with
respect to
the Mortgage Loans which are to be applied in reduction of the
Class
Certificate Balances of any such Class of Certificates pursuant to
this
Agreement, which, in the case of the Subordinated Certificates,
shall equal
the amount, if any, by which the aggregate Class Certificate
Balance of all
LIBOR Certificates (after all distributions of principal on such
Distribution
Date) exceeds the aggregate Stated Principal Balance of the
Mortgage Loans as
of the Due Date in the month in which such Distribution Date occurs
(after
giving effect to Principal Prepayments and Liquidation Proceeds
allocated to
principal and Subsequent Recoveries received in the related
Prepayment
Period). With respect
to each Class of Group 1 Senior Certificates and any
Distribution Date on or after which the aggregate Class Certificate
Balance
of the Subordinated Certificates and Class C Certificates is equal
to zero,
the pro rata share (based on the Class Certificate Balance of each
such
Class) of the amount, if any, by which the aggregate Class
Certificate
Balance of the Group 1 Senior Certificates (after all distributions
of
principal on such Distribution Date) exceeds the aggregate Stated
Principal
Balance of the Group 1 Mortgage Loans as of the Due Date in the
month in
which such Distribution Date occurs (after giving effect to
Principal
Prepayments and Liquidation Proceeds allocated to principal and
Subsequent
Recoveries received in the related Prepayment Period). With respect to each
Class of Group 2 Senior Certificates and any Distribution Date on
or after
which the aggregate Class Certificate Balance of the
Subordinated
Certificates and Class C Certificates is equal to zero, the pro
rata share
(based on the Class Certificate Balance of each such Class) of the
amount, if
any, by which the aggregate Class Certificate Balance of the Group
2 Senior
Certificates (after all distributions of principal on such
Distribution Date)
exceeds the aggregate Stated Principal Balance of the Group 2
Mortgage Loans
as of the Due Date in the month in which such Distribution Date
occurs (after
giving effect to Principal Prepayments and Liquidation Proceeds
allocated to
principal and Subsequent Recoveries received in the related
Prepayment
Period).
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 sales price of
the
Mortgaged Property at the time of the origination of such Mortgage
Loan; (ii)
with respect to a Refinancing Mortgage Loan other than a
Streamlined
Documentation Mortgage Loan, the value of the Mortgaged Property
based upon
the appraisal made-at the time of the origination of such
Refinancing
Mortgage Loan; and (iii) with respect to a Streamlined
Documentation Mortgage
Loan, (a) if the loan-to-value ratio with respect to the Original
Mortgage
Loan at the time of the origination thereof was 80% or less and the
loan
amount of the new mortgage loan is $650,000 or less, the value of
the
Mortgaged Property based upon the appraisal made at the time of
the
origination of the Original Mortgage Loan and (b) if the
loan-to-value ratio
with respect to the Original Mortgage Loan at the time of the
origination
thereof was greater than 80% or the loan amount of the new mortgage
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.
Bankruptcy
Code: The United
States Bankruptcy Reform Act of 1978, as
amended.
Bid Date:
As specified in
Section 9.04(b).
12
<PAGE>
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.
Calculation Rate: For
each Distribution Date, the product of (i) 10
and (ii) the weighted average rate of the outstanding Class A and
Class B
Interests, treating each Class A Interest as having an interest
rate of 0.00%
per annum.
Carryover
Reserve Fund: The
separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.05(g) in
the name
of the Trustee for the benefit of the Holders of the Offered
Certificates and
designated "The Bank of New York in trust for registered holders of
CWALT,
Inc., Alternative Loan Trust 2006-OC7, Mortgage Pass-Through
Certificates,
Series 2006-OC7."
Funds in the Carryover Reserve Fund shall be held in trust
for the Holders of the Offered Certificates for the uses and
purposes set
forth in this Agreement.
Certificate: Any one
of the Certificates executed by the Trustee in
substantially the forms attached this Agreement as exhibits.
Certificate Account:
The separate Eligible Account or Accounts created
and maintained by the Master Servicer pursuant to Section 3.05 with
a
depository institution, initially Countrywide Bank, N.A., in the
name of the
Master Servicer for the benefit of the Trustee on behalf of
Certificateholders and designated "Countrywide Home Loans Servicing
LP in
trust for the registered holders of Alternative Loan Trust
2006-OC7, Mortgage
Pass-Through Certificates Series 2006-OC7."
Certificate Balance:
With respect to any Certificate (other than the
Class C Certificates) at any date, the maximum dollar amount of
principal to
which the Holder thereof is then entitled under this Agreement,
such amount
being equal to the Denomination of that Certificate (A) plus, with
respect to
the LIBOR Certificates, any increase to the Certificate Balance of
such
Certificate pursuant to Section 4.02 due to the receipt of
Subsequent
Recoveries and (B) minus the sum of (i) all distributions of
principal
previously made with respect to that Certificate and (ii) with
respect to the
LIBOR Certificates, any Applied Realized Loss Amounts allocated to
such
Certificate on previous Distribution Dates pursuant to Section 4.02
without
duplication.
Certificateholder or Holder: The person in whose name a
Certificate is
registered in the Certificate Register, except that, solely for the
purpose
of giving any consent pursuant to this Agreement, any Certificate
registered
in the name of the Depositor or any affiliate of the Depositor
shall be
deemed not to be Outstanding and the Percentage Interest evidenced
thereby
shall not be taken into account in determining whether the
requisite amount
of Percentage Interests necessary to effect such consent has been
obtained;
provided, however, that if any such Person (including the
Depositor) owns
100% of the Percentage Interests evidenced by a Class of
Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any
provision
of this Agreement (other than the second sentence of Section 10.01)
that
requires the consent of the Holders of Certificates of a particular
Class as
a condition to the taking of any action under this Agreement.
The Trustee is
entitled to rely conclusively on a certification of the Depositor
or any
13
<PAGE>
affiliate of the Depositor in determining which Certificates are
registered
in the name of an affiliate of the Depositor.
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 under this Agreement, it shall first have to provide
evidence
of its beneficial ownership interest in a Certificate that is
reasonably
satisfactory to the Trustee, the Depositor, and/or the Master
Servicer, as
applicable.
Certificate Register:
The register maintained pursuant to Section 5.02.
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 C
Distributable Amount:
As defined in the Preliminary Statement.
Class
Certificate Balance:
With respect to any Class of Certificates
other than the Class C Certificates and as to any date of
determination, the
aggregate of the Certificate Balances of all Certificates of such
Class as of
such date. With
respect to the Class C Certificates and any Distribution
Date, the excess, if any, of the aggregate Stated Principal Balance
of the
Mortgage Loans as of the Due Date in the prior calendar month
(after giving
effect to Principal Prepayments, the principal portion of any
Liquidation
Proceeds and any Subsequent Recoveries received in the Prepayment
Period
related to that prior Due Date) over the aggregate Class
Certificate Balance
of the Offered Certificates and the Class P Certificates
immediately prior to
that Distribution Date.
Class P
Certificate: Any
Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit C-2
hereto,
representing the right to distributions as set forth herein.
Class P
Principal Distribution Date: The first Distribution Date
that
occurs after the end of the latest Prepayment Charge Period for all
Mortgage
Loans that have a Prepayment Charge.
Closing
Date: August 30,
2006.
Code:
The Internal Revenue
Code of 1986, including any successor or
amendatory provisions.
COFI:
The Monthly Weighted
Average Cost of Funds Index for the
Eleventh District Savings Institutions published by the Federal
Home Loan
Bank of San Francisco.
COFI
Certificates: As
specified in the Preliminary Statement.
Commission: The U.S.
Securities and Exchange Commission.
14
<PAGE>
Compensating Interest:
As to any Distribution Date, an amount equal to
the product of 50% and the aggregate Master Servicing Fee payable
to the
Master Servicer for that Distribution Date.
Component:
As specified in the
Preliminary Statement.
Component
Balance: Not applicable.
Component
Certificates: As
specified in the Preliminary Statement.
Component
Notional Amount: Not
applicable.
Coop
Shares: Shares issued by a Cooperative Corporation.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and
improvements
constituting the Cooperative Property and which governs the
Cooperative
Property, which Cooperative Corporation must qualify as a
Cooperative Housing
Corporation under Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and
a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by
the
Cooperative Corporation, including the allocation of individual
dwelling
units to the holders of the Coop Shares of the Cooperative
Corporation.
Cooperative Unit: A single family dwelling located in a
Cooperative
Property.
Corporate
Trust Office: The
designated office of the Trustee in the
State of New York at which at any particular time its corporate
trust
business with respect to this Agreement shall be administered,
which office
at the date of the execution of this Agreement is located at 101
Barclay
Street, 8W, New York, New York 10286 (Attn: Mortgage-Backed Securities
Group, CWALT, Inc. Series 2006-OC7, facsimile no. (212) 815-3986),
and which
is the address to which notices to and correspondence with the
Trustee should
be directed.
Countrywide:
Countrywide Home Loans, Inc., a New York corporation and
its successors and assigns, in its capacity as the seller of the
Countrywide
Mortgage Loans to the Depositor.
Countrywide Mortgage Loans: The Mortgage Loans identified as
such on
the Mortgage Loan Schedule for which Countrywide is the applicable
Seller.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a
Texas
limited partnership and its successors and assigns.
Covered
Certificates: The LIBOR Certificates.
Cumulative
Loss Trigger Event: With respect to a Distribution Date on
or after the Stepdown Date, the aggregate amount of Realized Losses
on the
Mortgage Loans from (and including) the Cut-off Date to (and
including) the
related Due Date (reduced by the aggregate
15
<PAGE>
amount of Subsequent Recoveries received from the Cut-off Date
through the
Prepayment Period related to that Due Date) exceeds the
applicable
percentage, for such Distribution Date, of the Cut-off Date Pool
Principal
Balance as set forth below:
Distribution Date
Percentage
-----------------
----------
September 2008 - August 2009.. 0.35% with respect to September
2008, plus an
additional 1/12th of 0.50% for each month
thereafter through August 2009
September 2009 - August 2010.. 0.85% with respect to September
2009, plus an
additional 1/12th of 0.60% for each month
thereafter through August 2010
September 2010 - August 2011.. 1.45% with respect to September
2010, plus an
additional 1/12th of 0.65% for each month
thereafter through August 2011
September 2011 - August 2012.. 2.10% with respect to September
2011, plus an
additional 1/12th of 0.35% for each month
thereafter through August 2012
September 2012 - August 2013.. 2.45% with respect to September
2012, plus an
additional 1/12th of 0.05% for each month
thereafter through August 2013
September 2013 and thereafter. 2.50%
Current
Interest: With respect
to each Class of Offered Certificates
and each Distribution Date, the interest accrued at the
applicable
Pass-Through Rate for the applicable Interest Accrual Period on the
Class
Certificate Balance of such Class immediately prior to such
Distribution Date.
Cut-off
Date: As to any
Mortgage Loan, the later of the date of
origination of that Mortgage Loan and August 1, 2006.
Cut-off
Date Pool Principal Balance: $584,293,914.43.
Cut-off
Date Principal Balance: As to any Mortgage Loan, the
Stated
Principal Balance thereof as of the close of business on the
Cut-off Date.
Debt
Service Reduction:
With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the
Bankruptcy
Code in the Scheduled Payment for such Mortgage Loan that became
final and
non-appealable, except such a reduction resulting from a Deficient
Valuation
or any reduction that results in a permanent forgiveness of
principal.
16
<PAGE>
Defective
Mortgage Loan: Any
Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deficient
Valuation: With
respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an
amount less
than the then-outstanding indebtedness under the Mortgage Loan, or
any
reduction in the amount of principal to be paid in connection with
any
Scheduled Payment that results in a permanent forgiveness of
principal, which
valuation or reduction results from an order of such court which is
final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive
Certificates: Any
Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Delay
Certificates: As specified in the Preliminary Statement.
Delay
Delivery Certification: As defined in Section 2.02(a).
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. With
respect to up to 50% of the Mortgage Loans in each Loan
Group, the Depositor may deliver all or a portion of each related
Mortgage
File to the Trustee not later than thirty days after the Closing
Date. To
the extent that Countrywide Servicing shall be in possession of any
Mortgage
Files with respect to any Delay Delivery Mortgage Loan, until
delivery of
such Mortgage File to the Trustee as provided in Section 2.01,
Countrywide
Servicing shall hold such files as Master Servicer hereunder, as
agent and in
trust for the Trustee.
Deleted
Mortgage Loan: As
defined in Section 2.03(C).
Delinquency Trigger Event: With respect to a Distribution Date on
or
after the Stepdown Date, the Rolling Sixty-Day Delinquency Rate
equals or
exceeds the product of (x) the Senior Enhancement Percentage for
such
Distribution Date and (y) the applicable percentage listed below
for the most
senior Class of outstanding LIBOR Certificates:
Class
Percentage
--------------------------------- ------------
Group 1
Senior Certificates and
Group 2
Senior Certificates
41.41%
M-1
52.00%
M-2
69.25%
M-3
86.25%
M-4
109.75%
M-5
143.75%
M-6
201.50%
M-7
335.75%
M-8
863.50%
Denomination: With
respect to each Certificate, the amount set forth
on the face of that Certificate as the "Initial Certificate Balance
of this
Certificate" or the "Initial Notional Amount
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of this Certificate" or, if neither of the foregoing, the
Percentage Interest
appearing on the face thereof.
Depositor:
CWALT, Inc., a
Delaware corporation, or its successor in
interest.
Depository: The
initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered
Holder of the
Book-Entry Certificates. The Depository shall at all times
be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform
Commercial Code
of the State of New York.
Depository
Participant: A broker,
dealer, bank or other financial
institution or other Person for whom from time to time a Depository
effects
book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: As
to any Distribution Date, the 22nd day of each
month or, if such 22nd day is not a Business Day, the 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
that is two Business Days preceding such Distribution Date.
Distribution Account:
The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(d) in the name
of the
Trustee for the benefit of the Certificateholders and designated
"The Bank of
New York in trust for registered holders of Alternative Loan Trust
2006-OC7,
Mortgage Pass-Through Certificates, Series 2006-OC7." 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 September
2006.
Due Date:
With respect to a
Mortgage Loan, the date on which Scheduled
Payments are due on that Mortgage Loan. With respect to any
Distribution
Date, the related Due Date is the first day of the calendar month
in which
that Distribution Date occurs.
Due
Period: Not
applicable.
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 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
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<PAGE>
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.
Eligible
EPD Protected Mortgage Loan: A Mortgage Loan that (i) was
originated not more than one year prior to the Closing Date and
(ii) was
purchased by a Seller or one of its affiliates pursuant to a
purchase
agreement containing provisions under which the seller thereunder
has become
obligated to repurchase such Mortgage Loan from Countrywide due to
a
Scheduled Payment due on or prior to the first Scheduled Payment
owing to the
Trust Fund becoming delinquent.
ERISA:
The Employee
Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
the
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the
Preliminary
Statement.
Escrow
Account: The Eligible
Account or Accounts established and
maintained pursuant to Section 3.06(a).
Event of
Default: As defined in
Section 7.01.
Excess
Cashflow: With respect
to any Distribution Date the sum of (i)
the amount remaining as set forth in Section 4.02(a)(iv)(B), (ii)
the amount
remaining as set forth in Section 4.02(b)(i)(C) or 4.02(b)(ii)(C),
as
applicable, in each case for such Distribution Date and (iii)
the
Overcollateralization Reduction Amount for that Distribution Date,
if any.
Excess
Overcollateralization Amount: With respect to any
Distribution
Date, the excess, if any, of the Overcollateralized Amount for
the
Distribution Date over the Overcollateralization Target Amount for
the
Distribution Date.
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
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<PAGE>
became a Liquidated Mortgage Loan plus (ii) accrued interest at the
Mortgage
Rate from the Due Date as to which interest was last paid or
advanced (and
not reimbursed) to Certificateholders up to the Due Date applicable
to the
Distribution Date immediately following the calendar month during
which such
liquidation occurred.
Exchange
Act: The Securities
Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
Exchange
Act Reports: Any
reports on Form 10-D, Form 8-K and Form 10-K
required to be filed by the Depositor with respect to the Trust
Fund under
the Exchange Act.
Expense
Fee: As to each
Mortgage Loan and any Distribution Date, the
product of the related Expense Fee Rate and its Stated Principal
Balance as
of that Distribution Date.
Expense
Fee Rate: As to each
Mortgage Loan and any date of
determination, the sum of (a) the related Master Servicing Fee Rate
and (b)
the Trustee Fee Rate.
Extra
Principal Distribution Amount: With respect to any
Distribution
Date and Loan Group, the product of (a) the lesser of (1) the
Overcollateralization Deficiency Amount and (2) the Excess Cashflow
available
for payment pursuant to Section 4.02(c) and (b) a fraction, the
numerator of
which is the Principal Remittance Amount for such Loan Group and
the
denominator of which is the sum of the Principal Remittance Amounts
for both
Loan Groups.
FDIC:
The Federal Deposit
Insurance Corporation, or any successor
thereto.
FHLMC:
The Federal Home Loan
Mortgage Corporation, a corporate
instrumentality of the United States created and existing under
Title III of
the Emergency Home Finance Act of 1970, as amended, or any
successor to the
Federal Home Loan Mortgage Corporation.
Final
Certification: As
defined in Section 2.02(a).
Final
Maturity OC Trigger Event: With respect to a Distribution
Date
on or after the Distribution Date in September 2026, the
Overcollateralization Amount is less than the aggregate Stated
Principal
Balance of the 40-Year Mortgage Loans as of the Due Date in the
month of that
Distribution Date (after giving effect to Principal Prepayments
received in
the related Prepayment Period).
FIRREA:
The Financial
Institutions Reform, Recovery, and Enforcement
Act of 1989.
Fitch:
Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes
of
Section 10.05(b) the address for notices to Fitch shall be Fitch,
Inc., One
State Street Plaza, New York, New York 10004, Attention: Residential
Mortgage Surveillance Group, or such other address as Fitch may
hereafter
furnish to the Depositor and the Master Servicer.
FNMA:
The Federal National
Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the
Federal
National Mortgage Association Charter Act, or any successor to the
Federal
National Mortgage Association.
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Form 10-D
Disclosure Item: With
respect to any Person, any material
litigation or governmental proceedings pending (a) against such
Person, or
(b) against any of the Trust Fund, the Depositor, the Trustee,
any
co-trustee, the Master Servicer or any Subservicer, if such Person
has actual
knowledge thereof.
Form 10-K
Disclosure Item: With
respect to any Person, (a) any Form
10-D Disclosure Item, and (b) any affiliations or relationships
between such
Person and any Item 1119 Party.
Gross
Margin: The percentage
set forth in the related Mortgage Note
for the Mortgage Loans to be added to One-Year LIBOR for use in
determining
the Mortgage Rate on each Adjustment Date, and which is set forth
in the
Mortgage Loan Schedule.
Group 1
Mortgage Loans: The
Mortgage Loans in Loan Group 1.
Group 1
Overcollateralization Reduction Amount: For any Distribution
Date, the Overcollateralization Reduction Amount for such
Distribution Date
multiplied by a fraction, the numerator of which is the Principal
Remittance
Amount for Loan Group 1 for such Distribution Date, and the
denominator of
which is the aggregate Principal Remittance Amount for Loan Group 1
and Loan
Group 2 for such Distribution Date.
Group 1
Principal Distribution Target Amount: For any Distribution
Date, the excess of (1) the Class Certificate Balance of the Class
1-A
Certificates immediately prior to such Distribution Date, over (2)
the lesser
of (x) 85.40% of the aggregate Stated Principal Balance of the
Mortgage Loans
in Loan Group 1 as of the Due Date in the month of that
Distribution Date
(after giving effect to Principal Prepayments received in the
related
Prepayment Period) and (y) the aggregate Stated Principal Balance
of the
Mortgage Loans in Loan Group 1 as of the Due Date in the month of
that
Distribution Date (after giving effect to Principal Prepayments
received in
the related Prepayment Period) minus 0.35% of the aggregate Stated
Principal
Balance of the Mortgage Loans in Loan Group 1 as of the Cut-off
Date.
Group 1
Senior Principal Distribution Amount: For any Distribution
Date, the product of (x) the Senior Principal Distribution Target
Amount and
(y) a fraction, the numerator of which is the Group 1 Principal
Distribution
Target Amount for Loan Group 1 and the denominator of which is the
sum of the
Group 1 Principal Distribution Target Amount and the Group 2
Principal
Distribution Target Amount.
Group 1
Tax Net Rate Cap: As defined in the Preliminary Statement.
Group 2
Mortgage Loans: The
Mortgage Loans in Loan Group 2.
Group 2
Overcollateralization Reduction Amount: For any Distribution
Date, the Overcollateralization Reduction Amount for such
Distribution Date
multiplied by a fraction, the numerator of which is the Principal
Remittance
Amount for Loan Group 2 for such Distribution Date, and the
denominator of
which is the aggregate Principal Remittance Amount for Loan Group 1
and Loan
Group 2 for such Distribution Date.
Group 2
Principal Distribution Target Amount: For any Distribution
Date, the excess of (1) the aggregate Class Certificate Balance of
the Group
2 Senior Certificates immediately prior
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<PAGE>
to such Distribution Date, over (2) the lesser of (x) 85.40% of the
aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 as
of the Due
Date in the month of that Distribution Date (after giving effect to
Principal
Prepayments received in the related Prepayment Period) and (y) the
aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 as
of the Due
Date in the month of that Distribution Date (after giving effect to
Principal
Prepayments received in the related Prepayment Period) minus 0.35%
of the
aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2 as
of the Cut-off Date.
Group 2
Senior Principal Distribution Amount: For any Distribution
Date, the product of (x) the Senior Principal Distribution Target
Amount and
(y) a fraction, the numerator of which is the Group 2 Principal
Distribution
Target Amount for Loan Group 2 and the denominator of which is the
sum of the
Group 1 Principal Distribution Target Amount and the Group 2
Principal
Distribution Target Amount.
Group 2
Tax Net Rate Cap: As defined in the Preliminary Statement.
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).
Initial
Component Balance: As
specified in the Preliminary Statement.
Initial
Periodic Rate Cap: As
to each Mortgage Loan and the related
Mortgage Note, the provision therein that limits permissible
increases and
decreases in the Mortgage Rate on the first Adjustment Date for
that Mortgage
Loan to not more than the amount set forth therein.
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 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
REMIC
Regular Interest and any Distribution Date, the period commencing
on the
Distribution Date in the month preceding the month in which such
Distribution
Date occurs (other than the first Distribution Date, for which it
is the
Closing Date) and ending on the day preceding such Distribution
Date.
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<PAGE>
Interest
Carry Forward Amount:
With respect to each Class of Offered
Certificates and each Distribution Date, the excess of (i) the
Current
Interest for such Class with respect to prior Distribution Dates
over (ii)
the amount actually distributed to such Class with respect to
interest on
such prior Distribution Dates.
Interest
Determination Date:
With respect to (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
Funds: With respect to
any Distribution Date and Loan Group,
the excess of the Interest Remittance Amount for that Loan Group
over the
portion of the Trustee Fee for such Distribution Date allocable to
such Loan
Group.
Interest
Remittance Amount:
With respect to the Mortgage Loans in a
Loan Group and any Distribution Date, (x) the sum, without
duplication, of
(i) all scheduled interest on the Mortgage Loans in that Loan Group
due on
the related Due Date and received on or prior to the related
Determination
Date, less the related Master Servicing Fees and any payments made
in respect
of premiums on Lender PMI Mortgage Loans, (ii) all interest on
Principal
Prepayments on the Mortgage Loans in that Loan Group, other than
Prepayment
Interest Excess, (iii) all Advances relating to interest with
respect to the
Mortgage Loans in that Loan Group, (iv) all Compensating Interest
with
respect to the Mortgage Loans in that Loan Group and (v)
Liquidation Proceeds
with respect to the Mortgage Loans in that Loan Group during the
related
Prepayment Period (to the extent such Liquidation Proceeds relate
to
interest), less (y) all reimbursements to the Master Servicer since
the
immediately preceding Due Date for Advances of interest previously
made
allocable to such Loan Group.
Investment
Letter: As defined in Section 5.02(b).
Item 1119
Party: The Depositor,
any Seller, the Master Servicer, the
Trustee, any Subservicer, any originator identified in the
Prospectus
Supplement, the Swap Counterparty and any other material
transaction party,
as identified in Exhibit 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 Mortgagor) acquires the Primary Insurance
Policy and
charges the related Mortgagor an interest premium.
LIBOR:
The London interbank
offered rate for one-month United States
dollar deposits calculated in the manner described in Section
4.08.
LIBOR
Certificates: As
specified in the Preliminary Statement.
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Limited
Exchange Act Reporting Obligations: The obligations of the
Master Servicer under Section 3.16(b), Section 6.02 and Section
6.04 with
respect to notice and information to be provided to the Depositor
and Article
XI (except Section 11.07(a)(1) and (2)).
Liquidated
Mortgage Loan: With
respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) that was
liquidated in
the calendar month preceding the month of such Distribution Date
and as to
which the Master Servicer has determined (in accordance with this
Agreement)
that it has received all amounts it expects to receive in
connection with the
liquidation of such Mortgage Loan, including the final disposition
of an REO
Property.
Liquidation Proceeds:
Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of defaulted
Mortgage
Loans, whether through trustee's sale, foreclosure sale or
otherwise or
amounts received in connection with any condemnation or partial
release of a
Mortgaged Property and any other proceeds received in connection
with an REO
Property, less the sum of related unreimbursed Master Servicing
Fees,
Servicing Advances and Advances.
Loan
Group: Any of Loan
Group 1 and Loan Group 2, as applicable.
Loan Group
1: All Mortgage Loans
identified as Loan Group 1 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group
2: All Mortgage Loans
identified as Loan Group 2 Mortgage
Loans on the Mortgage Loan Schedule.
Loan-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
that date
of determination and the denominator of which is the Appraised
Value of the
related Mortgaged Property.
Lost
Mortgage Note: Any
Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Maintenance: With respect to any Cooperative Unit, the rent paid by
the
Mortgagor to the Cooperative Corporation pursuant to the
Proprietary Lease.
Majority
in Interest: As to any
Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate,
at least
51% of the Percentage Interests evidenced by all Certificates of
such Class.
Master
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.
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Master
Servicing Fee: As to
each Mortgage Loan and any Distribution
Date, an amount payable out of each full payment of interest
received on such
Mortgage Loan and equal to one-twelfth of the Master Servicing Fee
Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as
of the
Due Date in the month preceding the month of such Distribution
Date, subject
to reduction as provided in Section 3.14.
Master Servicing
Fee Rate: With respect
to each Mortgage Loan, the per
annum rate set forth on the Mortgage Loan Schedule for such
Mortgage Loan.
Maximum
Mortgage Rate: With
respect to each Mortgage Loan, the maximum
rate of interest set forth as such in the related Mortgage
Note.
MERS:
Mortgage Electronic
Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or
any
successor to Mortgage Electronic Registration Systems, Inc.
MERS
Mortgage Loan: Any
Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R)
System: The system of
recording transfers of mortgages
electronically maintained by MERS.
MIN:
The mortgage
identification number for any MERS Mortgage Loan.
Minimum
Bid Price: With
respect to any auction of the Mortgage Loans
and any REO Properties pursuant to Section 9.04, the sum of (i)
the
Termination Price that would be payable by the NIM Insurer if the
Optional
Termination were exercised in the following calendar month pursuant
to
Section 9.01 and (ii) all reasonable fees and expenses incurred by
the
Trustee in connection with any auction conducted pursuant to
Section 9.04;
provided, however, that if in connection with any auction
administered
hereunder the Directing Certificateholder elects to pay the amount
of any
difference between such Minimum Bid Price and such lesser amount
that is the
highest bid submitted by a Qualified Bidder, then the Minimum Bid
Price shall
mean the highest bid submitted by a Qualified Bidder.
Minimum
Mortgage Rate: With
respect to each Mortgage Loan, the minimum
rate of interest set forth as such in the related Mortgage Note,
which, with
respect to certain Mortgage Loans is equal to the related Gross
Margin.
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.
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Mortgage:
The mortgage, deed of
trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real
property
securing a Mortgage Note.
Mortgage
File: The mortgage
documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional
documents
delivered to the Trustee to be added to the Mortgage File pursuant
to this
Agreement.
Mortgage
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 to
this
Agreement as Schedule I, setting forth the following information
with respect
to each Mortgage Loan:
(i) the loan number;
(ii) the Loan Group;
(iii) the Mortgagor's name and the street address of the
Mortgaged Property, including the zip code;
(iv) the maturity date;
(v) the original principal balance;
(vi) the Cut-off Date Principal Balance;
(vii) the first payment date of the Mortgage Loan;
(viii) the Scheduled Payment in effect as of the Cut-off Date;
(ix) the Loan-to-Value Ratio at origination;
(x) a code indicating whether the residential dwelling at the
time
of origination was represented to be owner-occupied;
(xi) a code indicating whether the residential dwelling is
either
(a) a detached or attached single family dwelling, (b) a
dwelling
in a de minimis PUD, (c) a condominium unit or PUD (other than
a
de minimis PUD) or (d) a two- to four-unit residential property
or
(e) a Cooperative Unit;
(xii) the Mortgage Rate as of the Cut-off Date, the Gross
Margin,
the Initial Periodic Rate Cap, the Subsequent Periodic Rate
Cap,
the Maximum Mortgage Rate and the Minimum Mortgage Rate;
(xiii) the initial Adjustment Date and the Master Servicing Fee
Rate both before and after the initial Adjustment Date for each
Mortgage Loan;
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(xiv) 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;
(xv) the purpose for the Mortgage Loan;
(xvi) the type of documentation program pursuant to which the
Mortgage Loan was originated;
(xvii) 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;
(xviii) the direct servicer of such Mortgage Loan as of the
Cut-off Date; and
(xix) 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 and for each
Loan
Group.
Mortgage
Loans: Such of the
mortgage loans as from time to time are
transferred and assigned to the Trustee pursuant to the provisions
of this
Agreement 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
Note: The original
executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
Mortgage
Pool: The aggregate of
the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage
Rate: The annual rate
of interest borne by a Mortgage Note
from time to time, net of any interest premium charged by the
mortgagee to
obtain or maintain any Primary Insurance Policy.
Mortgaged
Property: The
underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Coop
Shares and
Proprietary Lease.
Mortgagor:
The obligor(s) on a
Mortgage Note.
National
Cost of Funds Index:
The National Monthly Median Cost of
Funds Ratio to SAIF-Insured Institutions published by the Office of
Thrift
Supervision.
Net
Prepayment Interest Shortfalls: As to any Distribution Date and
Loan Group, the excess of the amount of the aggregate Prepayment
Interest
Shortfalls for that Loan Group during the related Prepayment Period
over the
sum of (i) the Compensating Interest for such Loan Group and
Distribution
Date and (ii) the excess, if any, of the Compensating Interest for
the
27
<PAGE>
other Loan Group for such Distribution Date over the Prepayment
Interest
Shortfall for such other Loan Group.
Net Rate
Cap: For each
Distribution Date and the Senior Certificates,
the weighted average Adjusted Net Mortgage Rate on the Mortgage
Loans in the
related Loan Group as of the Due Date in the prior calendar month
(except for
the first Distribution Date, after giving effect to Principal
Prepayments
received in the Prepayment Period related to that prior Due Date),
adjusted
to an effective rate reflecting the accrual of interest on the
basis of a
360-day year and the actual number of days that elapsed in the
related
Interest Accrual Period, minus the Swap Adjustment Rate for such
Distribution
Date and the related Loan Group. For each Distribution Date and
the
Subordinated Certificates, the Subordinate Net Rate Cap.
Net Rate
Carryover: For any
Class of LIBOR Certificates and any
Distribution Date, the sum of (A) the excess of (i) the amount of
interest
that such Class would otherwise have accrued for such Distribution
Date had
the Pass-Through Rate for such Class not been determined based on
the
applicable Net Rate Cap, over (ii) the amount of interest accrued
on such
Class at the applicable Net Rate Cap for such Distribution Date and
(B) the
Net Rate Carryover for such Class for all previous Distribution
Dates not
previously paid pursuant to Section 4.02, together with interest
thereon at
the then applicable Pass-Through Rate for such Class, without
giving effect
to the applicable Net Rate Cap.
Net Swap
Payment: With respect
to the Swap Contract, any Distribution
Date and payment by the Swap Contract Administrator to the Swap
Counterparty,
the excess, if any, of the "Fixed Amount" (as defined in the Swap
Contract)
with respect to such Distribution Date over the "Floating Amount"
(as defined
in the Swap Contract) with respect to such Distribution Date.
With respect
to any Distribution Date and payment by the Swap Counterparty to
the Swap
Contract Administrator, the excess, if any, of the "Floating
Amount" (as
defined in the Swap Contract) with respect to such Distribution
Date over the
"Fixed Amount" (as defined in the Swap Contract) with respect to
such
Distribution Date.
NIM
Insurer: Any insurer guarantying at the request of Countrywide
certain payments under notes backed or secured by the Class C or
Class P
Certificates.
Non-Delay
Certificates: As
specified in the Preliminary Statement.
Nonrecoverable Advance: Any portion of an Advance
previously made or
proposed to be made by the Master Servicer that, in the good faith
judgment
of the Master Servicer, will not be ultimately recoverable by the
Master
Servicer from the related Mortgagor, related Liquidation Proceeds
or
otherwise.
Notice of
Final Distribution:
The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Notional
Amount: Not
applicable.
Notional
Amount Certificates:
As specified in the Preliminary
Statement.
28
<PAGE>
OC Floor:
An amount equal to
0.35% of the Cut-off Date Pool Principal
Balance of the Mortgage Loans.
Offered
Certificates: As
specified in the Preliminary Statement.
Officer's
Certificate: A
certificate (i) in the case of the Depositor,
signed by the Chairman of the Board, the Vice Chairman of the
Board, the
President, a Managing Director, a Vice President (however
denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of
the
Assistant Treasurers or Assistant Secretaries of the Depositor,
(ii) in the
case of the Master Servicer, signed by the President, an Executive
Vice
President, a Vice President, an Assistant Vice President, the
Treasurer, or
one of the Assistant Treasurers or Assistant Secretaries of
Countrywide GP,
Inc., its general partner, (iii) if provided for in this Agreement,
signed by
a Servicing Officer, as the case may be, and delivered to the
Depositor and
the Trustee, as the case may be, as required by this Agreement or
(iv) in the
case of any other Person, signed by an authorized officer of such
Person.
One-Year
LIBOR: As of any date
of determination, the per annum rate
equal to the average of the London interbank offered rates for
one-year U.S.
dollar deposits in the London market, generally as set forth in
either The
Wall Street Journal or some other source generally accepted in
the
residential mortgage loan origination business and specified in the
related
Mortgage Note, or, if such rate ceases to be published in The Wall
Street
Journal or becomes unavailable for any reason, then based upon a
new index
selected by the Master Servicer, based on comparable information,
in each
case, as most recently announced as of either 45 days prior to, or
the first
business day of the month immediately preceding the month of, such
Adjustment
Date.
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 Date: The
first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less
than or
equal to 10% of the Cut-off Date Pool Principal Balance.
Original
Mortgage Loan: The
mortgage loan refinanced in connection
with the origination of a Refinancing Mortgage Loan.
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.
29
<PAGE>
Outstanding: With
respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates
theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in
exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage
Loan with a
Stated Principal Balance greater than zero, which was not the
subject of a
Principal Prepayment in Full prior to the end of the related
Prepayment
Period and which did not become a Liquidated Mortgage Loan prior to
the end
of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to
any
Distribution Date, the amount, if any, by which the
Overcollateralization
Target Amount exceeds the Overcollateralized Amount on such
Distribution Date
(after giving effect to distributions in respect of the Principal
Remittance
Amount for each Loan Group on such Distribution Date).
Overcollateralization Reduction Amount: With respect to any
Distribution Date, the amount equal to the lesser of (i) the
Excess
Overcollateralization Amount for the Distribution Date and (ii) the
Principal
Remittance Amount for Loan Group 1 and Loan Group 2 for the
Distribution Date.
Overcollateralization Target Amount: With respect to any
Distribution
Date, the OC Floor.
Overcollateralized Amount: For any Distribution Date, the
amount, if
any, by which (x) the aggregate Stated Principal Balance of the
Mortgage
Loans as of the Due Date in the month of that Distribution Date
(after giving
effect to Principal Prepayments, the principal portion of any
Liquidation
Proceeds and any Subsequent Recoveries received in the related
Prepayment
Period) exceeds (y) the aggregate Class Certificate Balance of the
Offered
Certificates as of such Distribution Date (after giving effect
to
distributions of the Principal Remittance Amount for each Loan
Group to be
made on such Distribution Date).
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.
30
<PAGE>
Park
Monaco Mortgage Loans:
The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Monaco is the applicable
Seller.
Park
Sienna: Park Sienna
LLC, a Delaware limited liability company,
and its successors and assigns, in its capacity as the seller of
the Park
Sienna Mortgage Loans to the Depositor.
Park
Sienna Mortgage Loans:
The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Sienna is the applicable
Seller.
Pass-Through Margin:
With respect to the Interest Accrual Period for
any Distribution Date and Class of LIBOR Certificates, the per
annum rate
indicated in the following table:
Pass-Through
Pass-Through
Class
Margin (1)
Margin (2)
Class 1-A...............
0.160%
0.320%
Class 2-A-1.............
0.070%
0.140%
Class 2-A-2A............
0.170%
0.340%
Class 2-A-2B............
0.250%
0.500%
Class 2-A-3.............
0.250%
0.500%
Class M-1...............
0.310%
0.465%
Class M-2...............
0.330%
0.495%
Class M-3...............
0.350%
0.525%
Class M-4...............
0.410%
0.615%
Class M-5...............
0.440%
0.660%
Class M-6...............
0.510%
0.765%
Class M-7...............
1.050%
1.575%
Class M-8...............
1.450%
2.175%
(1) For the
Interest Accrual
Period related to any Distribution
Date occurring on or prior to the Optional Termination Date.
(2) For the
Interest Accrual
Period related to any Distribution
Date occurring after the Optional Termination Date.
Pass-Through Rate:
With respect to any Interest Accrual Period and
each Class of LIBOR Certificates the lesser of (x) LIBOR for such
Interest
Accrual Period plus the Pass-Through Margin for such Class and
Interest
Accrual Period and (y) the applicable Net Rate Cap for such Class
and the
related Distribution Date.
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. With
respect to the Class C, Class P and Class A-R Certificates, the
portion of
the Class evidenced thereby, expressed as a percentage, as stated
on the face
of such Certificate.
Performance Certification: As defined in Section 11.05.
31
<PAGE>
Permitted
Investments: At any
time, any one or more of the following
obligations and securities:
(i) obligations
of the United States or any agency thereof,
provided such obligations are backed by the full faith and
credit
of the United States;
(ii) general
obligations of or obligations guaranteed by any
state of the United States or the District of Columbia
receiving
the highest long-term debt rating of each Rating Agency, or
such
lower rating as will not result in the downgrading or
withdrawal
of
the ratings then assigned to the Certificates by each Rating
Agency;
(iii) commercial or finance company paper which is then
receiving
the highest commercial or finance company paper rating of each
Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
(iv) certificates of
deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust company incorporated under the laws of the United States
or
of any state thereof and subject to supervision and examination
by federal and/or state banking authorities, provided that the
commercial paper and/or long term unsecured debt obligations of
such depository institution or trust company (or in the case of
the principal depository institution in a holding company
system,
the commercial paper or long-term unsecured debt obligations of
such holding company, but only if Moody's is not a Rating
Agency)
are then rated one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities,
or
such lower ratings as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by
either Rating Agency;
(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,
and reasonably acceptable to the NIM Insurer, as evidenced by a
signed writing delivered by the NIM Insurer;
32
<PAGE>
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)(1) of
the Code) with respect to any Residual Certificate, (iv) rural
electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the
Code, (v) an
"electing large partnership" as defined in Section 775 of the Code,
(vi) a
Person that is not a citizen or resident of the United States, a
corporation,
partnership, or other entity created or organized in or under the
laws of the
United States, any state thereof or the District of Columbia, or an
estate or
trust whose income from sources without the United States is
includible in
gross income for United States federal income tax purposes
regardless of its
connection with the conduct of a trade or business within the
United States
or a trust if a court within the United States is able to exercise
primary
supervision over the administration of the trust and one or more
United
States persons have the authority to control all substantial
decisions of the
trust unless such Person has furnished the transferor and the
Trustee with a
duly completed Internal Revenue Service Form W-8ECI or any
applicable
successor form, and (vii) any other Person so designated by the
Depositor
based upon an Opinion of Counsel that the Transfer of an Ownership
Interest
in a Residual Certificate to such Person may cause any REMIC
created under
this Agreement to fail to qualify as a REMIC at any time that
the
Certificates are outstanding. The terms "United States," "State"
and
"International Organization" shall have the meanings set forth in
Section
7701 of the Code or successor provisions. A corporation will not be
treated
as an instrumentality of the United States or of any State or
political
subdivision thereof for these purposes if all of its activities are
subject
to tax and, with the exception of the Federal Home Loan Mortgage
Corporation,
a majority of its board of directors is not selected by such
government unit.
Person:
Any individual,
corporation, partnership, joint venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical
Certificate: As
specified in the Preliminary Statement.
Pool
Stated Principal Balance: The aggregate of the Stated
Principal
Balances of the Outstanding Mortgage Loans.
Prepayment
Charge: With respect
to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial
prepayment of such
Mortgage Loan within the related Prepayment Charge Period in
accordance with
the terms thereof.
Prepayment
Charge Amount: As to
any Distribution Date, the sum of the
Prepayment Charges collected on the Mortgage Loans during the
related
Prepayment Period and any amounts paid pursuant to Section 3.20
with respect
to such Distribution Date.
33
<PAGE>
Prepayment
Charge Period: With
respect to any Mortgage Loan, the
period of time during which a Prepayment Charge may be imposed.
Prepayment
Charge Schedule: As of
the Cut off Date with respect to
each Mortgage Loan, a list attached hereto as Schedule VII
(including the
prepayment charge summary attached thereto), setting forth the
following
information with respect to each Prepayment Charge:
(i) the Mortgage
Loan identifying number;
(ii) a code indicating
the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which
the first monthly payment was due on the
related
Mortgage Loan;
(v) the term of
the related Prepayment Charge; and
(vi) the principal
balance of the related Mortgage Loan as of
the Cut
off Date.
As of the
Closing Date, the Prepayment Charge Schedule shall contain
the necessary information for each Mortgage Loan. The Prepayment Charge
Schedule shall be amended from time to time by the Master Servicer
in
accordance with the provisions of this Agreement and a copy of each
related
amendment shall be furnished by the Master Servicer to the Class P
and Class
C Certificateholders and the NIM Insurer.
Prepayment
Interest Excess: 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 August 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 related Master Servicing Fee Rate, on such Principal
Prepayment
exceeds the amount of interest paid in connection with such
Principal
Prepayment.
Prepayment
Period: As to any
Distribution Date and the related Due
Date, the period from the 16th day of the calendar month
immediately
preceding the month in which the Distribution Date occurs (or, in
the case of
the first Distribution Date, from August 1, 2006) through the 15th
day of the
calendar month in which the Distribution Date occurs.
Primary
Insurance Policy: Each
policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any
Mortgage
Loan.
34
<PAGE>
Prime
Rate: The prime
commercial lending rate of The Bank of New York,
as publicly announced to be in effect from time to time.
The Prime Rate
shall be adjusted automatically, without notice, on the effective
date of any
change in such prime commercial lending rate. The Prime Rate is not
necessarily The Bank of New York's lowest rate of interest.
Principal
Distribution Amount:
With respect to each Distribution Date
and Loan Group, the sum of: (1) the Principal Remittance Amount for
such Loan
Group and Distribution Date, less any portion of such amount used
to cover
any payment due to the Swap Counterparty with respect to such
Distribution
Date, and (2) the Extra Principal Distribution Amount for such Loan
Group and
Distribution Date and minus (a) the Group 1 Overcollateralization
Reduction
Amount for the Distribution Date, in the case of Loan Group 1, and
(b) the
Group 2 Overcollateralization Reduction Amount for the Distribution
Date, in
the case of Loan Group 2.
Principal
Prepayment: Any
payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date
and is
not accompanied by an amount representing scheduled interest due on
any date
or dates in any month or months subsequent to the month of
prepayment.
Partial Principal Prepayments shall be applied by the Master
Servicer in
accordance with the terms of the related Mortgage Note.
Principal
Prepayment in Full:
Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal
Remittance Amount: As
to any Distribution Date and either
Loan Group, (x) the sum, without duplication, of (a) the principal
portion of
each Scheduled Payment (without giving effect to any reductions
thereof
caused by any Debt Service Reductions or Deficient Valuations) due
on each
Mortgage Loan in that Loan Group (other than a Liquidated Mortgage
Loan) on
the related Due Date, (b) the principal portion of the Purchase
Price of each
Mortgage Loan in that Loan Group that was repurchased by the
applicable
Seller or purchased by the Master Servicer pursuant to this
Agreement as of
such Distribution Date, (c) the Substitution Adjustment Amount in
connection
with any Deleted Mortgage Loan in that Loan Group received with
respect to
such Distribution Date, (d) any Insurance Proceeds or Liquidation
Proceeds
allocable to recoveries of principal of Mortgage Loans in that Loan
Group
that are not yet Liquidated Mortgage Loans received during the
calendar month
preceding the month of such Distribution Date, (e) with respect to
each
Mortgage Loan in that Loan Group that became a Liquidated Mortgage
Loan
during the related Prepayment Period, the amount of the Liquidation
Proceeds
allocable to principal received during such Prepayment Period with
respect to
such Mortgage Loan, (f) all Principal Prepayments on the Mortgage
Loans in
that Loan Group received during the related Prepayment Period and
(g) any
Subsequent Recoveries on the Mortgage Loans in that Loan Group
received
during the related Prepayment Period minus (y) all Advances on the
Mortgage
Loans in that Loan Group relating to principal and certain
expenses
reimbursable pursuant to Section 6.03 and reimbursed since the
immediately
preceding Due Date.
Principal Reserve
Fund: The separate
Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.05(c) in
the name
of the Trustee for the benefit of the Holders of the Class P
Certificates and
designated "The Bank of New York in trust for registered holders of
CWALT,
Inc., Alternative Loan Trust 2006-OC7, Mortgage Pass-Through
35
<PAGE>
Certificates, Series 2006-OC7." Funds in the Principal Reserve
Fund shall be
held in trust for the Holders of the Class P Certificates for the
uses and
purposes set forth in this Agreement.
Priority
Amount: Not
applicable.
Priority
Percentage: Not
applicable.
Private
Certificate: As
specified in the Preliminary Statement.
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 August 29, 2006
relating to the Offered Certificates.
PUD:
Planned Unit
Development.
Purchase
Price: With respect to
any Mortgage Loan required to be
purchased by the applicable Seller pursuant to Section 2.02 or 2.03
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 that arises
out of a
violation of any predatory or abusive lending law with respect to
the related
Mortgage Loan.
Qualified
Bidder: With respect
to any auction of the Mortgage Loans
and any REO Properties pursuant to Section 9.04, any
nationally-recognized
broker dealer and any holder of an interest in the Class C
Certificates;
provided, however, that if Countrywide or any of its affiliates
holds any of
the Class C Certificates, then neither Countrywide nor any of its
affiliates
shall constitute a Qualified Bidder.
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.
36
<PAGE>
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 in
this Agreement to a given rating category of a Rating Agency shall
mean such
rating category without giving effect to any modifiers.
Realized
Loss: With respect to
each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal
Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the
Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of
such
liquidation, plus (ii) interest at the Adjusted Net Mortgage Rate
from the
Due Date as to which interest was last paid or advanced (and not
reimbursed)
to Certificateholders up to the Due Date in the month in which
Liquidation
Proceeds are required to be distributed on the Stated Principal
Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the
Liquidation
Proceeds, if any, received during the month in which such
liquidation
occurred, to the extent applied as recoveries of interest at the
Adjusted Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan.
With respect
to each Mortgage Loan 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 Mortgage Loan, the amount of Realized Losses with
respect to
that Mortgage Loan will be reduced by the amount of 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: With respect to
any Distribution Date and the Delay
Certificates, the last Business Day of the month preceding the
month of a
Distribution Date.
With respect to any Distribution Date and the Non-Delay
Certificates, the Business Day immediately preceding such
Distribution Date,
or if such Certificates are no longer Book-Entry Certificates, the
last
Business Day of the month preceding the month of such Distribution
Date.
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,
37
<PAGE>
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 and any similar state
or local laws.
REMIC:
A "real estate
mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC
Change of Law: Any
proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement
or
interpretation relating to REMICs and the REMIC Provisions issued
after the
Closing Date.
REMIC
Provisions: Provisions
of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections
860A
through 860G of Subchapter M of Chapter 1 of the Code, and
related
provisions, and regulations promulgated thereunder, as the
foregoing may be
in effect from time to time as well as provisions of applicable
state laws.
REO
Property: A Mortgaged
Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Reportable
Event: Any event
required to be reported on Form 8-K, and
in any event, the following:
(a) entry into a
definitive agreement related to the Trust
Fund, the
Certificates or the Mortgage Loans, or an amendment to a
Transaction Document, even if the Depositor is not a party to
such
agreement
(e.g., a servicing agreement with a servicer contemplated by
Item
1108(a)(3) of Regulation AB);
(b) termination
of a Transaction Document (other than by
expiration
of the agreement on its stated termination date or as a
result of
all parties completing their obligations under such
agreement), even if the Depositor is not a party to such
agreement
(e.g., a
servicing agreement with a servicer contemplated by Item
1108(a)(3)
of Regulation AB);
(c) with respect
to the Master Servicer only, if the Master
Servicer
becomes aware of any bankruptcy or receivership with respect
to
Countrywide, the Depositor, the Master Servicer, any
Subservicer,
the
Trustee, the Swap Counterparty, any enhancement or support
provider
contemplated by Items 1114(b) or 1115 of Regulation AB, or any
other
material
party contemplated by Item 1101(d)(1) of Regulation AB;
(d) with respect
to the Trustee, the Master Servicer and the
Depositor
only, the occurrence of an early amortization, performance
trigger or
other event, including an Event of Default under this
Agreement;
(e) 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
38
<PAGE>
(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 to
this Agreement, as appropriate.
Required Insurance
Policy: With respect
to any Mortgage Loan, any
insurance policy that is required to be maintained from time to
time under
this Agreement.
Residual
Certificates: As
specified in the Preliminary Statement.
Responsible Officer:
When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any
Assistant
Secretary, any Trust Officer or any other officer of the Trustee
customarily
performing functions similar to those performed by any of the
above
designated officers and also to whom, with respect to a particular
matter,
such matter is referred because of such officer's knowledge of
and
familiarity with the particular subject.
Rolling
Sixty-Day Delinquency Rate: With respect to any
Distribution
Date on or after the Stepdown Date, the average of the Sixty-Day
Delinquency
Rates for such Distribution Date and the two immediately
preceding
Distribution Dates.
S&P:
Standard & Poor's,
a division of The McGraw-Hill Companies, Inc.
If S&P is designated as a Rating Agency in the Preliminary
Statement, for
purposes of Section 10.05(b) the address for notices to S&P
shall be Standard
& Poor's, 55 Water Street, New York, New York 10041, Attention:
Mortgage
Surveillance Monitoring, or such other address as S&P may
hereafter furnish
to the Depositor and the Master Servicer.
Sarbanes-Oxley Certification: As defined in Section 11.05.
Scheduled
Balances: Not
applicable.
Scheduled
Classes: As specified
in the Preliminary Statement.
39
<PAGE>
Scheduled
Payment: The scheduled
monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such
Mortgage
Loan which, unless otherwise specified in this Agreement, shall
give effect
to any related Debt Service Reduction and any Deficient Valuation
that
affects the amount of the monthly payment due on such Mortgage
Loan.
Securities
Act: The Securities
Act of 1933, as amended.
Seller:
Countrywide, Park
Granada, Park Monaco or Park Sienna, as
applicable.
Senior
Certificates: As
specified in the Preliminary Statement.
Senior
Enhancement Percentage: With respect to a Distribution
Date on
and after the Stepdown Date, the fraction (expressed as a
percentage) (1) the
numerator of which is the excess of (a) the aggregate Stated
Principal
Balance of the Mortgage Loans for the preceding Distribution Date
over (b)
(i) before the Class Certificate Balances of the Senior
Certificates have
been reduced to zero, the sum of the Class Certificate Balances of
the Senior
Certificates, or (ii) after the Class Certificate Balances of the
Senior
Certificates have been reduced to zero, the Class Certificate
Balance of the
most senior Class of Subordinate Certificates outstanding as of the
preceding
Master Servicer Advance Date and (2) the denominator of which is
the
aggregate Stated Principal Balance of the Mortgage Loans for the
preceding
Distribution Date.
Senior
Principal Distribution Allocation Amount: For any Distribution
Date, (a) with respect to the Class 1-A Certificates, the Group 1
Senior
Principal Distribution Amount and (b) with respect to the Group 2
Senior
Certificates, the Group 2 Senior Principal Distribution Amount.
Senior Principal
Distribution Target Amount: As to any Distribution
Date, the excess of (x) the aggregate Class Certificate Balance of
the Senior
Certificates immediately prior to such Distribution Date, over (y)
the lesser
of (i) 85.40% of the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Due Date in the month of such Distribution Date (after
giving
effect to Principal Prepayments, the principal portion of any
Liquidation
Proceeds and any Subsequent Recoveries received in the related
Prepayment
Period) and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans
as of the Due Date in the month of such Distribution Date (after
giving
effect to Principal Prepayments, the principal portion of any
Liquidation
Proceeds and any Subsequent Recoveries received in the related
Prepayment
Period), minus the OC Floor.
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.
40
<PAGE>
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: Not
applicable.
Sixty-Day
Delinquency Rate: With
respect to any Distribution Date on
or after the Stepdown Date, a fraction, expressed as a percentage,
the
numerator of which is the aggregate Stated Principal Balance of all
Mortgage
Loans 60 or more days delinquent as of the close of business on the
last day
of the calendar month preceding such Distribution Date (including
Mortgage
Loans in foreclosure, bankruptcy and REO Properties) and the
denominator of
which is the aggregate Stated Principal Balance for such
Distribution Date of
the Mortgage Loans as of the related Due Date (after giving effect
to
Principal Prepayments, the principal portion of any Liquidation
Proceeds and
any Subsequent Recoveries received in the related Prepayment
Period).
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.
Stepdown
Date: The earlier to
occur of: (1) the Distribution Date on
which the aggregate Class Certificate Balance of the Senior
Certificates is
reduced to zero, and (2) the later to occur of (x) the Distribution
Date in
September 2009 and (y) the first Distribution Date on which the
aggregate
Class Certificate Balance of the Senior Certificates (after
calculating
anticipated distributions on such Distribution Date) is less than
or equal to
85.40% of the aggregate Stated Principal Balance of the Mortgage
Loans as of
the Due Date in the month of that Distribution Date (after giving
effect to
Principal Prepayments, the principal portion of any Liquidation
Proceeds and
any Subsequent Recoveries received in the Prepayment Period related
to that
prior Due Date).
Stepdown
Target Subordination Percentage: With respect to any Class of
Subordinated Certificates, the respective percentage indicated in
the
following table:
41
<PAGE>
Stepdown Target
Subordination
Percentage
----------------------
Class M-1............
11.60%
Class M-2............
8.70%
Class M-3............
7.00%
Class M-4............
5.50%
Class M-5............
4.20%
Class M-6............
3.00%
Class M-7............
1.80%
Class M-8............
0.70%
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.
Strip
REMIC: As defined in the Preliminary Statement.
Subcontractor: Any
vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly
understood
by participants in the mortgage-backed securities market) of
Mortgage Loans
but performs one or more discrete functions identified in Item
1122(d) of
Regulation AB with respect to the Mortgage Loans under the
direction or
authority of the Master Servicer or a Subservicer or the Trustee,
as the case
may be.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Class Principal Distribution Target Amount:
With respect
to any Distribution Date and any Class of Subordinated Certificates
and
Distribution Date will equal the excess of: (1) the sum of: (a) the
aggregate Class Certificate Balance of the Senior Certificates
(after taking
into account the distribution of the Senior Principal Distribution
Amount for
such Distribution Date), (b) the aggregate Class Certificate
Balance of any
Class(es) of Subordinated Certificates that are senior to the
subject Class
(in each case, after taking into account distribution of the
Subordinated
Class Principal Distribution Target Amount(s) for such more senior
Class(es)
of Certificates for such Distribution Date), and (c) the Class
Certificate
Balance of the subject Class of Subordinated Certificates
immediately prior
to such Distribution Date over (2) the lesser of (a) the product of
(x) 100%
minus the Stepdown Target Subordination Percentage for the subject
Class of
Certificates and (y) the aggregate Stated Principal Balance of the
Mortgage
Loans in the Mortgage Pool for such Distribution Date and (b) the
aggregate
Stated Principal Balance of the Mortgage Loans in the Mortgage Pool
for such
Distribution Date minus the OC Floor; provided, however, that if
such Class
of Subordinated Certificates is the only Class of Subordinated
Certificates
outstanding on such Distribution Date, that Class will be entitled
to receive
the entire remaining Principal Distribution Amount until its
Class
Certificate Balance is reduced to zero.
42
<PAGE>
Subordinate Net Rate Cap: For each Distribution Date, the
weighted
average of the Group 1 Net Rate Cap and the Group 2 Net Rate Cap
weighted on
the basis of the respective Subordinate Portion of their
corresponding Loan
Groups.
Subordinate Portion: For any Distribution Date and Loan Group,
the
excess of the aggregate Stated Principal Balance of the Mortgage
Loans in
such Loan Group as of the Due Date in the prior month (after giving
effect to
Principal Prepayments received in the Prepayment Period related to
such prior
Due Date) over the aggregate Class Certificate Balance of the Group
1 Senior
Certificates in the case of Loan Group 1 and the aggregate Class
Certificate
Balance of the Group 2 Senior Certificates in the case of Loan
Group 2, in
each case, immediately prior to such Distribution Date.
Subsequent
Periodic Rate Cap: As
to each Mortgage Loan and the related
Mortgage Note, the provision therein that limits permissible
increases and
decreases in the Mortgage Rate on the each Adjustment Date after
the first
Adjustment Date for that Mortgage Loan to not more than the amount
set forth
therein.
Subsequent
Recoveries: As to any
Distribution Date and Loan Group,
with respect to a Liquidated Mortgage Loan in that Loan Group 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 after the classification of such Mortgage Loan as a Liquidated
Mortgage
Loan.
Subservicer: Any
person to whom the Master Servicer has contracted for
the servicing of all or a portion of the Mortgage Loans pursuant
to
Section 3.02.
Substitute
Mortgage Loan: A
Mortgage Loan substituted by the
applicable Seller for a Deleted Mortgage Loan which must, on the
date of such
substitution, as confirmed in a Request for Release, substantially
in the
form of Exhibit M, (i) have a Stated Principal Balance, after
deduction of
the principal portion of the Scheduled Payment due in the month
of
substitution, not in excess of, and not more than 10% less than the
Stated
Principal Balance of the Deleted Mortgage Loan; (ii) be accruing
interest at
a rate no lower than and not more than 1% per annum higher than,
that of the
Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher
than that
of the Deleted Mortgage Loan; (iv) have a remaining term to
maturity no
greater than (and not more than one year less than that of) the
Deleted
Mortgage Loan; (v) have a maximum interest rate no lower than and
not more
than 1% per annum higher than, that of the Deleted Mortgage Loan;
(vi) have a
minimum interest specified in its related mortgage note not more
than 1% per
annum higher or lower than the minimum mortgage rate of the Deleted
Mortgage
Loan; (vii) have the same mortgage index reset period and periodic
rate cap
as the Deleted Mortgage Loan and a gross margin not more than 1%
per annum
higher or lower than that of the Deleted Mortgage Loan; (viii) not
be a
Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative
Loan; and
(ix) comply with each representation and warranty set forth in
Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such
term
pursuant to Section 2.03.
43
<PAGE>
Successful
Auction: An auction
held pursuant to Section 9.04 hereof at
which at least three Qualified Bidders submitted bids and at least
the
Minimum Bid Price was submitted.
Swap
Account: The separate
Eligible Account created and initially
maintained by the Swap Trustee pursuant to Section 4.09.
Swap
Adjustment Rate: For any Distribution Date and Loan Group, a
fraction, (A) the numerator of which is the product of (i) the sum
of (a) the
Net Swap Payment payable to the Swap Counterparty under the Swap
Contract
with respect to such Distribution Date times a fraction, the
numerator of
which is equal to 360 and the denominator of which is equal to the
actual
number of days in the related Interest Accrual Period and (b) any
Swap
Termination Payment payable to the Swap Counterparty under the Swap
Contract
for such Distribution Date (other than a Swap Termination Payment
due to a
Swap Counterparty Trigger Event), and (ii) a fraction, the
numerator of which
is the Interest Funds for that Loan Group and the denominator of
which is the
aggregate of the Interest Funds for both Loan Groups and (B) the
denominator
of which is equal to the aggregate Stated Principal Balance of the
Mortgage
Loans in that Loan Group as of the Due Date in the prior calendar
month
(after giving effect to Principal Prepayments, the principal
portion of
Liquidation Proceeds and any Subsequent Recoveries received in the
Prepayment
Period related to that prior Due Date).
Swap
Contract: With respect
to the Covered Certificates, the
transaction evidenced by the related confirmation (as assigned to
the Swap
Contract Administrator pursuant to the Swap Contract Assignment
Agreement), a
form of which is attached hereto as Exhibit R.
Swap
Contract Administration Agreement: The swap contract
administration agreement dated as of the Closing Date among
Countrywide, the
Trustee and the Swap Contract Administrator, a form of which is
attached
hereto as Exhibit S-2.
Swap
Contract Administrator: The Bank of New York, in its
capacity as
swap contract administrator under the Swap Contract Administration
Agreement
and its successors and assigns.
Swap
Contract Assignment Agreement: The assignment agreement dated
as
of the Closing Date among Countrywide, the Swap Contract
Administrator and
the Swap Counterparty, a form of which is attached hereto as
Exhibit S-1.
Swap
Contract Termination Date: The Distribution Date in February
2010.
Swap
Counterparty: Lehman
Brothers Special Financing Inc. and its
successors.
Swap
Counterparty Trigger Event: A Swap Termination Payment that
is
triggered upon (i) an "Event of Default" under the Swap Contract
with respect
to which the Swap Counterparty is the sole "Defaulting Party" (as
defined in
the Swap Contract) or (ii) a "Termination Event" (other than
Illegality or a
Tax Event (as such terms are defined in the Swap Contract)) or
"Additional
Termination Event" under the Swap Contract with respect to which
the Swap
Counterparty is the sole "Affected Party" (as defined in the Swap
Contract).
Swap
Termination Payment:
The payment payable to either party under
the Swap Contract due to an early termination of the Swap
Contract.
44
<PAGE>
Swap
Trust: The trust fund
established by Section 4.09.
Swap
Trustee: The Bank of
New York, a New York banking corporation,
not in its individual capacity, but solely in its capacity as
trustee for the
benefit of the Holders of the LIBOR Certificates under this
Agreement, and
any successor thereto, and any corporation or national banking
association
resulting from or surviving any consolidation or merger to which it
or its
successors may be a party and any successor trustee as may from
time to time
be serving as successor trustee hereunder.
Tax
Matters Person: The
person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and
Treasury
regulation ss. 301.6231(a)(7)1. Initially, the Tax Matters Person
shall be the
Trustee.
Tax
Matters Person Certificate: The Class A-R Certificate with
a
Denomination of $0.01.
Termination Price: As
defined in Section 9.01.
Terminator: As defined
in Section 9.01.
Transaction Documents:
This Agreement, the Swap Contract, the Swap
Administration Agreement and any other document or agreement
entered into in
connection with the Trust Fund, the Certificates or the Mortgage
Loans.
Transfer:
Any direct or indirect
transfer or sale of any Ownership
Interest in a Residual Certificate.
Trigger
Event: With respect to
a Distribution Date on or after the
Stepdown Date, either a Delinquency Trigger Event or a Cumulative
Loss
Trigger Event is in effect with respect to that Distribution
Date.
Trust
Fund: The corpus of
the trust created under this Agreement
consisting of (i) the Mortgage Loans and all interest and principal
received
on or with respect thereto after the Cut-off Date to the extent not
applied
in computing the Cut-off Date Principal Balance of the Mortgage
Loans;
(ii) the Certificate Account, the Distribution Account and the
Carryover
Reserve Fund and all amounts deposited therein pursuant to the
applicable
provisions of this Agreement; (iii) property that secured a
Mortgage Loan and
has been acquired by foreclosure, deed-in-lieu of foreclosure or
otherwise;
and (iv) all proceeds of the conversion, voluntary or involuntary,
of any of
the foregoing.
Trustee:
The Bank of New York
and its successors and, if a successor
trustee is appointed under this Agreement, such successor.
Trustee
Advance Rate: With respect to any Advance made by the Trustee
pursuant to Section 4.01(b), a per annum rate of interest
determined as of
the date of such Advance equal to the Prime Rate in effect on such
date plus
5.00%.
Trustee
Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated
Principal
Balance with respect to such Distribution Date.
45
<PAGE>
Trustee
Fee Rate: With respect
to each Mortgage Loan, 0.009% per
annum.
Underwriters: As specified in the Preliminary Statement.
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.
Unpaid
Realized Loss Amount:
For any Class of LIBOR Certificates, (x)
the portion of the aggregate Applied Realized Loss Amount
previously
allocated to that Class remaining unpaid from prior Distribution
Dates minus
(y) any increase in the Class Certificate Balance of that Class of
Subsequent
Recoveries to the Class Certificate Balance of that Class pursuant
to Section
4.02(h).
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), (b) 1% of all Voting Rights shall
be
allocated to each of the Class A-R, Class C and Class P
Certificates, and (c)
the remaining Voting Rights (or 100% of the Voting Rights if there
is no
Class of Notional Amount Certificates) shall be allocated among
Holders of
the remaining Classes of Certificates in proportion to the
Certificate
Balances of their respective Certificates on such date.
Weighted
Average Adjusted Net Mortgage Rate: As to any Distribution
Date, the average of the Adjusted Net Mortgage Rates on the
Mortgage Loans,
weighted on the basis of the Stated Principal Balance of each
Mortgage Loan
as of the Due Date in the prior calendar month (after giving effect
to
Principal Prepayments received in the Prepayment Period related to
that prior
Due Date).
Winning
Bidder: With respect
to a Successful Auction, the Qualified
Bidder offering to pay the highest price (but in no event less than
the
Minimum Bid Price).
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)
46
<PAGE>
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.
47
<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 of this
Agreement, hereby sells, transfers, assigns, sets over and
otherwise conveys
to the Depositor, without recourse, all its respective right, title
and
interest in and to the related Mortgage Loans, including all
interest and
principal received or receivable by such Seller, on or with respect
to the
applicable 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
applicable
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 in this
Agreement by
such Seller or to repurchase or substitute for any affected
Mortgage Loan in
accordance herewith.
(c)
In connection
with the transfer and assignment set forth in
clause (b) above, the Depositor has delivered or caused to be
delivered to
the Trustee (or, in the case of the Delay Delivery Mortgage Loans,
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
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(B) with respect to any Lost Mortgage Note, a lost note
affidavit
from Countrywide stating that the original Mortgage
Note was lost or destroyed, together with a copy of such
Mortgage
Note;
(ii) except as
provided below and for each Mortgage Loan that
is not a MERS Mortgage Loan, the original recorded Mortgage or
a
copy of such Mortgage, with recording information, (or, in the
case of a Mortgage for which the related Mortgaged Property is
located in the Commonwealth of Puerto Rico, a true copy of the
Mortgage certified as such by the applicable notary) and in the
case of each MERS Mortgage Loan, the original Mortgage or a
copy
of such mortgage, with recording information, noting the
presence
of the MIN of the Mortgage Loans and either language indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
MOM Loan or if the Mortgage Loan was not a MOM Loan at
origination, the original Mortgage and the assignment thereof
to
MERS, with evidence of recording indicated thereon, or a copy
of
the Mortgage certified by the public recording office in which
such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan
that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage or a
copy of such assignment, with recording information, (which may
be included in a blanket assignment or assignments), together
with, except as provided below, all interim recorded
assignments
of such mortgage or a copy of such assignment, with recording
information, (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect
the
assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates); provided that, if
the
related Mortgage has not been returned from the applicable
public
recording office, such assignment of the Mortgage may exclude
the
information to be provided by the recording office; provided,
further, that such assignment of Mortgage need not be delivered
in the case of a Mortgage for which the related Mortgaged
Property is located in the Commonwealth of Puerto Rico;
(iv) the original or
copies of each assumption, modification,
written assurance or substitution agreement, if any;
(v) except as provided
below, the original or a copy of
lender's title policy or a printout of the electronic
equivalent
and all riders thereto; and
(vi) in the case of a
Cooperative Loan, the originals of the
following documents or instruments:
(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;
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(E) The executed UCC-1 financing statement with evidence
of recording thereon which have been filed in all places
required to perfect the applicable Seller's interest in the
Coop Shares and the Proprietary Lease; and
(F) The executed UCC-3 financing statements or other
appropriate UCC financing statements required by state law,
evidencing a complete and unbroken line from the mortgagee
to the Trustee with evidence of recording thereon (or in a
form suitable for recordation).
In
addition, in connection with the assignment of any MERS
Mortgage
Loan, each Seller agrees that it will cause, at the Trustee's
expense, the
MERS(R) System to indicate that the Mortgage Loans sold by such
Seller to the
Depositor have been assigned by that Seller to the Trustee in
accordance with
this Agreement for the benefit of the Certificateholders by
including (or
deleting, in the case of Mortgage Loans which are repurchased in
accordance
with this Agreement) in such computer files the information
required by the
MERS(R) System to identify the series of the Certificates issued in
connection
with such Mortgage Loans. Each Seller further agrees that it
will not, and
will not permit the Master Servicer to, and the Master Servicer
agrees that
it will not, alter the information referenced in this paragraph
with respect
to any Mortgage Loan sold by such Seller to the Depositor during
the term of
this Agreement unless and until such Mortgage Loan is repurchased
in
accordance with the terms of this Agreement.
In the
event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Depositor cannot deliver (a) the original
recorded
Mortgage or a copy of such mortgage, with recording information, or
(b) all
interim recorded assignments or a copy of such assignments, with
recording
information, or (c) the lender's title policy or a copy of lender's
title
policy (together with all riders thereto) satisfying the
requirements of
clause (ii), (iii) or (v) above, respectively, concurrently with
the
execution and delivery of this Agreement because such document or
documents
have not been returned from the applicable public recording office
in the
case of clause (ii) or (iii) above, or because the title policy has
not been
delivered to either the Master Servicer or the Depositor by the
applicable
title insurer in the case of clause (v) above, the Depositor shall
promptly
deliver to the Trustee, in the case of clause (ii) or (iii) above,
such
original Mortgage or a copy of such mortgage, with recording
information, or
such interim assignment or a copy of such assignments, with
recording
information, as the case may be, with evidence of recording
indicated thereon
upon receipt thereof from the public recording office, or a copy
thereof,
certified, if appropriate, by the relevant recording office, but in
no event
shall any such delivery of the original Mortgage and each such
interim
assignment or a copy thereof, certified, if appropriate, by the
relevant
recording office, be made later than one year following 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
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event that the original Mortgage is not delivered and in connection
with the
payment in full of the related Mortgage Loan and the public
recording office
requires the presentation of a "lost instruments affidavit and
indemnity" or
any equivalent document, because only a copy of the Mortgage can be
delivered
with the instrument of satisfaction or reconveyance, the Master
Servicer
shall execute and deliver or cause to be executed and delivered
such a
document to the public recording office. In the case where a public
recording office retains the original recorded Mortgage or in the
case where
a Mortgage is lost after recordation in a public recording
office,
Countrywide shall deliver to the Trustee a copy of such Mortgage
certified by
such public recording office to be a true and complete copy of the
original
recorded Mortgage.
As
promptly as practicable subsequent to such transfer and
assignment,
and in any event, within one-hundred twenty (120) days after such
transfer
and assignment, the Trustee shall (A) as the assignee thereof,
affix the
following language to each assignment of Mortgage: "CWALT, Inc., Series
2006-OC7, The Bank of New York, as trustee", (B) cause such
assignment to be
in proper form for recording in the appropriate public office for
real
property records and (C) cause to be delivered for recording in
the
appropriate public office for real property records the assignments
of the
Mortgages to the Trustee, except that, (i) with respect to any
assignments of
Mortgage as to which the Trustee has not received the information
required to
prepare such assignment in recordable form, the Trustee's
obligation to do so
and to deliver the same for such recording shall be as soon as
practicable
after receipt of such information and in any event within thirty
(30) days
after receipt thereof and (ii) the Trustee need not cause to be
recorded any
assignment which relates to a Mortgage Loan, the Mortgaged Property
and
Mortgage File relating to which are located in any jurisdiction
(including
Puerto Rico) under the laws of which the recordation of such
assignment is
not necessary to protect the Trustee's and the Certificateholders'
interest
in the related Mortgage Loan as evidenced by an opinion of counsel
delivered
by Countrywide to the Trustee within 90 days of the Closing Date
(which
opinion may be in the form of a "survey" opinion and is not
required to be
delivered by counsel admitted to practice law in the jurisdiction
as to which
such legal opinion applies).
In the
case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above
documents to the
Trustee, will deposit in the Certificate Account the portion of
such payment
that is required to be deposited in the Certificate Account
pursuant to
Section 3.05.
Notwithstanding anything to the contrary in this Agreement,
within
thirty (30) days after the Closing Date with respect to the
Mortgage Loans,
Countrywide (on its own behalf and on behalf of Park Granada, Park
Monaco and
Park Sienna) shall either (i) deliver to the Depositor, or at the
Depositor's
direction, to the Trustee or other designee of the Depositor the
Mortgage
File as required pursuant to this Section 2.01 for each Delay
Delivery
Mortgage Loan or (ii) either (A) substitute a Substitute Mortgage
Loan for
the Delay Delivery Mortgage Loan or (B) repurchase the Delay
Delivery
Mortgage Loan, which substitution or repurchase shall be
accomplished in the
manner and subject to the conditions set forth in Section 2.03
(treating each
Delay Delivery Mortgage Loan as a Deleted Mortgage Loan for
purposes of such
Section 2.03); provided, however, that if Countrywide fails to
deliver a
Mortgage File for any Delay Delivery Mortgage Loan within the
thirty (30)-day
period provided in the prior sentence, Countrywide (on its own
behalf and on
behalf of Park Granada, Park Monaco and Park Sienna) shall use its
best
reasonable efforts to effect a substitution, rather than a
repurchase of,
such Deleted Mortgage Loan and provided further that the cure
period provided
for in Section 2.02 or in Section 2.03
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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
(an
"Initial Certification") and declares that it holds and will hold
such
documents and the other documents delivered to it constituting the
Mortgage
Files, and that it holds or will hold such other assets as are
included in
the Trust Fund, in trust for the exclusive use and benefit of all
present and
future Certificateholders. The Trustee acknowledges that it
will maintain
possession of the Mortgage Notes in the State of California, unless
otherwise
permitted by the Rating Agencies.
The
Trustee agrees to execute and deliver on the Closing Date to
the
Depositor, the Master Servicer and Countrywide (on its own behalf
and on
behalf of Park Granada, Park Monaco and Park Sienna) an Initial
Certification
in the form annexed to this Agreement as Exhibit F-1. Based on its review
and examination, and only as to the documents identified in such
Initial
Certification, the Trustee acknowledges that such documents appear
regular on
their face and relate to the Mortgage Loans. The Trustee shall be under no
duty or obligation to inspect, review or examine said documents,
instruments,
certificates or other papers to determine that the same are
genuine,
enforceable or appropriate for the represented purpose or that they
have
actually been recorded in the real estate records or that they are
other than
what they purport to be on their face.
On or
about the thirtieth (30th) day after the Closing Date, the
Trustee shall deliver to the Depositor, the Master Servicer and
Countrywide
(on its own behalf and on behalf of Park Granada, Park Monaco and
Park
Sienna) a Delay Delivery Certification with respect to the Mortgage
Loans in
the form annexed hereto as Exhibit G-1 (a "Delay Delivery
Certification"),
with any applicable exceptions noted thereon.
Not later
than 90 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer and Countrywide (on
its own
behalf and on behalf of Park Granada, Park Monaco and Park Sienna)
a Final
Certification with respect to the Mortgage Loans in the form
annexed hereto
as Exhibit H-1 (a "Final Certification"), with any applicable
exceptions
noted thereon.
If, in the
course of such review, the Trustee finds any document
constituting a part of a Mortgage File that does not meet the
requirements of
Section 2.01, the Trustee shall list such as an exception in the
Final
Certification; provided, however that the Trustee shall not make
any
determination as to whether (i) any endorsement is sufficient to
transfer all
right, title and interest
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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) that has not been returned by the
appropriate recording
office or (b) as to which there is a dispute as to location or
status of such
Mortgage Loan. Such notice shall be delivered every 90 days
thereafter until
the related Mortgage Loan is returned to the Trustee. Any such
substitution
pursuant to (a) above or purchase pursuant to (b) above shall not
be effected
prior to the delivery to the Trustee of the Opinion of Counsel
required by
Section 2.05, if any, and any substitution pursuant to (a) above
shall not be
effected prior to the additional delivery to the Trustee of a
Request for
Release substantially in the form of Exhibit N. No substitution is
permitted
to be made in any calendar month after the Determination Date for
such month.
The Purchase Price for any such Mortgage Loan shall be deposited
by
Countrywide (on its own behalf and on behalf of Park Granada, Park
Monaco and
Park Sienna) in the Certificate Account on or prior to the
Distribution
Account Deposit Date for the Distribution Date in the month
following the
month of repurchase and, upon receipt of such deposit and
certification with
respect thereto in the form of Exhibit N hereto, the Trustee shall
release the
related Mortgage File to Countrywide (on its own behalf and on
behalf of Park
Granada, Park Monaco and Park Sienna) and shall execute and deliver
at
Countrywide's (on its own behalf and on behalf of Park Granada,
Park Monaco
and Park Sienna) request such instruments of transfer or assignment
prepared
by Countrywide, in each case without recourse, as shall be
necessary to vest
in Countrywide (on its own behalf and on behalf of Park Granada,
Park Monaco
and Park Sienna), or its designee, the Trustee's interest in any
Mortgage Loan
released pursuant hereto. If pursuant to the foregoing provisions
Countrywide
(on its own behalf and on behalf of Park Granada, Park Monaco and
Park Sienna)
repurchases a 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.
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<PAGE>
(b)
[Reserved].
(c)
[Reserved].
(d)
The Trustee
shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set
forth in
this Agreement. The
Master Servicer shall promptly deliver to the Trustee,
upon the execution or receipt thereof, the originals of such other
documents
or instruments constituting the Mortgage File as come into the
possession of
the Master Servicer from time to time.
(e)
It is understood
and agreed that the respective obligations of
each Seller to substitute for or to purchase any Mortgage Loan sold
to the
Depositor by it which does not meet the requirements of Section
2.01 above
shall constitute the sole remedy respecting such defect available
to the
Trustee, the Depositor and any Certificateholder against that
Seller.
SECTION
2.03. Representations,
Warranties and Covenants of the
Sellers and Master Servicer.
(a)
Countrywide
hereby makes the representations and warranties set
forth in (i) Schedule II-A, Schedule II-B, Schedule II-C and
Schedule II-D
hereto, and by this reference incorporated herein, to the
Depositor, the
Master Servicer and the Trustee, as of the Closing Date, (ii)
Schedule III-A
hereto, and by this reference incorporated herein, to the
Depositor, the
Master Servicer and the Trustee, as of the Closing Date, or if so
specified
therein, as of the Cut-off Date with respect to 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 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.
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(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, the NIM
Insurer and
the Swap Counterparty.
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) that materially and
adversely affects
the interests of the Certificateholders in that Mortgage Loan, it
shall cure
such breach in all material respects, and if such breach is not so
cured,
shall, (i) if such 90-day period expires prior to the second
anniversary of
the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage
Loan") from
the Trust Fund and substitute in its place a Substitute Mortgage
Loan, in the
manner and subject to the conditions set forth in this Section;
or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from
the Trustee
at the Purchase Price in the manner set forth below; provided,
however, that
any such substitution pursuant to (i) above shall not be effected
prior to
the delivery to the Trustee of the Opinion of Counsel required
by
Section 2.05, if any, and any such substitution pursuant to (i)
above shall
not be effected prior to the additional delivery to the Trustee of
a Request
for Release substantially in the form of Exhibit N and the Mortgage
File for
any such Substitute Mortgage Loan. The Seller repurchasing a Mortgage
Loan
pursuant to this Section 2.03(c) shall promptly reimburse the
Master Servicer
and the Trustee for any expenses reasonably incurred by the Master
Servicer
or the Trustee in respect of enforcing the remedies for such
breach. With
respect to the representations and warranties described in this
Section which
are made to the best of a Seller's knowledge, if it is discovered
by either
the Depositor, a Seller or the Trustee that the substance of
such
representation and warranty is inaccurate and such inaccuracy
materially and
adversely affects the value of the related Mortgage Loan or the
interests of
the Certificateholders therein, notwithstanding that Seller's lack
of
knowledge with respect to the substance of such representation or
warranty,
such inaccuracy shall be deemed a breach of the applicable
representation or
warranty. Any breach
of a representation set forth in clauses (45) through
(64) of Schedule III-A with respect to a Mortgage Loan in Loan
Group 1 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
55
<PAGE>
Agreement in all respects, and the related Seller shall be deemed
to have
made with respect to such Substitute Mortgage Loan or Loans, as of
the date
of substitution, the representations and warranties made pursuant
to
Section 2.03(a) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Certificate Account of the
amount
required to be deposited therein in connection with such
substitution as
described in the following paragraph, the Trustee shall release the
Mortgage
File held for the benefit of the Certificateholders relating to
such Deleted
Mortgage Loan to the related Seller and shall execute and deliver
at such
Seller's direction such instruments of transfer or assignment
prepared by
Countrywide (on its own behalf and on behalf of Park Granada, Park
Monaco and
Park Sienna), in each case without recourse, as shall be necessary
to vest
title in that Seller, or its designee, the Trustee's interest in
any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.
For any
month in which a Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer
will determine the amount (if any) by which the aggregate principal
balance
of all Substitute Mortgage Loans sold to the Depositor by that
Seller as of
the date of substitution is less than the aggregate Stated
Principal Balance
of all Deleted Mortgage Loans repurchased by that Seller (after
application
of the scheduled principal portion of the monthly payments due in
the month
of substitution). The
amount of such shortage (the "Substitution Adjustment
Amount") plus an amount equal to the aggregate of any unreimbursed
Advances
with respect to such Deleted Mortgage Loans shall be deposited in
the
Certificate Account by Countrywide (on its own behalf and on behalf
of Park
Granada, Park Monaco and Park Sienna) on or before the Distribution
Account
Deposit Date for the Distribution Date in the month succeeding the
calendar
month during which the related Mortgage Loan became required to be
purchased
or replaced hereunder.
In the
event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate
Account
pursuant to Section 3.05 on or before the Distribution Account
Deposit Date
for the Distribution Date in the month following the month during
which that
Seller became obligated hereunder to repurchase or replace such
Mortgage Loan
and upon such deposit of the Purchase Price, the delivery of the
Opinion of
Counsel required by Section 2.05 and receipt of a Request for
Release in the
form of Exhibit N hereto, the Trustee shall release the related
Mortgage File
held for the benefit of the Certificateholders to such Person, and
the
Trustee shall execute and deliver at such Person's direction such
instruments
of transfer or assignment prepared by such Person, in each case
without
recourse, as shall be necessary to transfer title from the Trustee.
It is
understood and agreed that the obligation under this Agreement of
any Person
to cure, repurchase or replace any Mortgage Loan as to which a
breach has
occurred and is continuing shall constitute the sole remedy against
such
Persons respecting such breach available to Certificateholders, the
Depositor
or the Trustee on their behalf.
The
representations and warranties made pursuant to this Section
2.03
shall survive delivery of the respective Mortgage Files to the
Trustee for
the benefit of the Certificateholders.
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 of this Agreement or
such other
date set forth in this Agreement
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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), together with all rights of the Depositor to
require a
Seller to cure any breach thereof or to repurchase or substitute
for any
affected Mortgage Loan in accordance with this Agreement.
It is
understood and agreed that the representations and warranties
set
forth in this Section 2.04 shall survive delivery of the Mortgage
Files to
the Trustee. Upon
discovery by the Depositor or the Trustee of a breach of
any of the foregoing representations and warranties set forth in
this Section
2.04 (referred to herein as a "breach"), which breach materially
and
adversely affects the interest of the Certificateholders, the
party
discovering such breach shall give prompt written notice to the
others and to
each Rating Agency and the NIM Insurer.
SECTION
2.05. Delivery of
Opinion of Counsel in Connection with
Substitutions.
(a)
Notwithstanding
any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or Section 2.03 shall be made
more than
90 days after the Closing Date unless Countrywide delivers to the
Trustee an
Opinion of Counsel, which Opinion of Counsel shall not be at the
expense of
either the Trustee or the Trust Fund, addressed to the Trustee, to
the effect
that such substitution will not (i) result in the imposition of the
tax on
"prohibited transactions" on the Trust Fund or contributions after
the
Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the
Code,
respectively, or (ii) cause any REMIC created under this Agreement
to fail to
qualify as a REMIC at any time that any Certificates are
outstanding.
(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
and the NIM Insurer.
In connection therewith, the Trustee shall require
Countrywide (on its own behalf and on behalf of Park Granada, Park
Monaco and
Park Sienna) at its option, to either (i) substitute, if the
conditions in
Section 2.03(c) with respect to substitutions are satisfied, a
Substitute
Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase
the affected
Mortgage Loan within 90 days of such discovery in the same manner
as it would
a Mortgage Loan for a breach of representation or warranty made
pursuant to
Section 2.03. The
Trustee shall reconvey to Countrywide the Mortgage Loan to
be released pursuant to this Section in the same manner, and on the
same
terms and conditions, as it would a Mortgage Loan repurchased for
breach of a
representation or warranty contained in Section 2.03.
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
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the rights referred to above for the benefit of all present and
future
Holders of the Certificates and to perform the duties set forth in
this
Agreement, to the end that the interests of the Holders of the
Certificates
may be adequately and effectively protected.
SECTION
2.07. REMIC
Matters.
The
Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all
interests
created hereby. The
"Startup Day" for purposes of the REMIC Provisions shall
be the Closing Date.
The "tax matters person" with respect to each REMIC
hereunder shall be the Trustee and the Trustee shall hold the Tax
Matters
Person Certificate.
Each REMIC's fiscal year shall be the calendar year.
SECTION
2.08. Covenants of the
Master Servicer.
The Master
Servicer hereby covenants to the Depositor and the Trustee
as follows:
(a)
the Master
Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and
requirements
of the insurer under each Required Insurance Policy; and
(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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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION
3.01. Master Servicer
to Service Mortgage Loans.
For and on
behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with the
terms of
this Agreement and customary and usual standards of practice of
prudent
mortgage loan servicers. In connection with such servicing
and
administration, the Master Servicer shall have full power and
authority,
acting alone and/or through Subservicers as provided in Section
3.02, subject
to the terms of this Agreement (i) to execute and deliver, on
behalf of the
Certificateholders and the Trustee, customary consents or waivers
and other
instruments and documents, (ii) to consent to transfers of any
Mortgaged
Property and assumptions of the Mortgage Notes and related
Mortgages (but
only in the manner provided in this Agreement), (iii) to collect
any
Insurance Proceeds and other Liquidation Proceeds (which for the
purpose of
this Section 3.01 includes any Subsequent Recoveries), and (iv) to
effectuate
foreclosure or other conversion of the ownership of the Mortgaged
Property
securing any Mortgage Loan; provided that the Master Servicer shall
not take
any action that is inconsistent with or prejudices the interests of
the Trust
Fund or the Certificateholders in any Mortgage Loan or the rights
and
interests of the Depositor, the Trustee and the Certificateholders
under this
Agreement. The Master
Servicer shall represent and protect the interests of
the Trust Fund in the same manner as it protects its own interests
in
mortgage loans in its own portfolio in any claim, proceeding or
litigation
regarding a Mortgage Loan, and shall not make or permit any
modification,
waiver or amendment of any Mortgage Loan which would cause any
REMIC created
under this Agreement to fail to qualify as a REMIC or result in
the
imposition of any tax under section 860F(a) or section 860G(d) of
the Code.
Without limiting the generality of the foregoing, the Master
Servicer, in its
own name or in the name of the Depositor and the Trustee, is
hereby
authorized and empowered by the Depositor and the Trustee, when the
Master
Servicer believes it appropriate in its reasonable judgment, to
execute and
deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or
any of them, any and all instruments of satisfaction or
cancellation, or of
partial or full release or discharge and all other comparable
instruments,
with respect to the Mortgage Loans, and with respect to the
Mortgaged
Properties held for the benefit of the Certificateholders.
The Master
Servicer shall prepare and deliver to the Depositor and/or the
Trustee such
documents requiring execution and delivery by either or both of
them as are
necessary or appropriate to enable the Master Servicer to service
and
administer the Mortgage Loans to the extent that the Master
Servicer is not
permitted to execute and deliver such documents pursuant to the
preceding
sentence. Upon receipt
of such documents, the Depositor and/or the Trustee
shall execute such documents and deliver them to the Master
Servicer. The
Master Servicer further is authorized and empowered by the Trustee,
on behalf
of the Certificateholders and the Trustee, in its own name or in
the name of
the Subservicer, when the Master Servicer or the Subservicer, as
the case may
be, believes it appropriate in its best judgment to register any
Mortgage
Loan on the MERS(R) System, or cause the removal from the
registration of any
Mortgage Loan on the MERS(R) System, to execute and deliver, on
behalf of the
Trustee and the Certificateholders or any of them, any and all
instruments of
assignment and other comparable instruments with respect to such
assignment
or re-recording of a Mortgage in the name of MERS, solely as
nominee for the
Trustee and its successors and assigns.
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In
accordance with the standards of the preceding paragraph, the
Master
Servicer shall advance or cause to be advanced funds as necessary
for the
purpose of effecting the payment of taxes and assessments on the
Mortgaged
Properties, which advances shall be reimbursable in the first
instance from
related collections from the Mortgagors pursuant to Section 3.06,
and further
as provided in Section 3.08. The costs incurred by the Master
Servicer, if
any, in effecting the timely payments of taxes and assessments on
the
Mortgaged Properties and related insurance premiums shall not, for
the
purpose of calculating monthly distributions to the
Certificateholders, be
added to the Stated Principal Balances of the related Mortgage
Loans,
notwithstanding that the terms of such Mortgage Loans so
permit.
SECTION
3.02. Subservicing;
Enforcement of the Obligations of
Subservicers.
(a)
The Master
Servicer may arrange for the subservicing of any
Mortgage Loan by a Subservicer pursuant to a subservicing
agreement;
provided, however, that such subservicing arrangement and the terms
of the
related subservicing agreement must provide for the servicing of
such
Mortgage Loans in a manner consistent with the servicing
arrangements
contemplated under this Agreement; provided, however, that the NIM
Insurer
shall have consented to such subservicing agreements (which consent
shall not
be unreasonably withheld). 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, the NIM Insurer and the
Trustee in Respect of the Master Servicer.
The
Depositor may, but is not obligated to, enforce the obligations
of
the Master Servicer under this Agreement and may, but is not
obligated to,
perform, or cause a designee to perform, any defaulted obligation
of the
Master Servicer under this Agreement and in connection with any
such
defaulted obligation to exercise the related rights of the Master
Servicer
under this Agreement; provided that the Master Servicer shall not
be relieved
of any of its obligations under this Agreement by virtue of such
performance
by the Depositor or its designee. None of the Trustee, the NIM
Insurer or
the Depositor shall have any responsibility or liability for any
action
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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
under this Agreement or otherwise.
SECTION
3.04. Trustee to Act
as Master Servicer.
In the
event that the Master Servicer shall for any reason no longer
be
the Master Servicer under this Agreement (including by reason of an
Event of
Default or termination by the Depositor), the Trustee or its
successor shall
then assume all of the rights and obligations of the Master
Servicer under
this Agreement arising thereafter (except that the Trustee shall
not be
(i) liable for losses of the Master Servicer pursuant to Section
3.09 or any
acts or omissions of the predecessor Master Servicer under this
Agreement),
(ii) obligated to make Advances if it is prohibited from doing so
by
applicable law, (iii) obligated to effectuate repurchases or
substitutions of
Mortgage Loans under this Agreement including, but not limited
to,
repurchases or substitutions of Mortgage Loans pursuant to Section
2.02 or
2.03, (iv) responsible for expenses of the Master Servicer pursuant
to
Section 2.03 or (v) deemed to have made any representations and
warranties of
the Master Servicer under this Agreement). Any such assumption shall be
subject to Section 7.02. If the Master Servicer shall for
any reason no
longer be the Master Servicer (including by reason of any Event of
Default or
termination by the Depositor), the Trustee or its successor shall
succeed to
any rights and obligations of the Master Servicer under each
subservicing
agreement.
The Master
Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all
documents
and records relating to each subservicing agreement or
substitute
subservicing agreement and the Mortgage Loans then being serviced
thereunder
and an accounting of amounts collected or held by it and otherwise
use its
best efforts to effect the orderly and efficient transfer of the
substitute
subservicing agreement to the assuming party.
SECTION
3.05. Collection of
Mortgage Loan Payments; Certificate
Account; Distribution Account; Carryover Reserve
Fund; Principal Reserve Fund.
(a)
The Master
Servicer shall make reasonable efforts in accordance
with the customary and usual standards of practice of prudent
mortgage
servicers to collect all payments called for under the terms and
provisions
of the Mortgage Loans to the extent such procedures shall be
consistent with
this Agreement and the terms and provisions of any related Required
Insurance
Policy. Consistent
with the foregoing, the Master Servicer may in its
discretion (i) waive any late payment charge or, subject to Section
3.20, any
Prepayment Charge or penalty interest in connection with the
prepayment of a
Mortgage Loan and (ii) extend the due dates for payments due on a
Mortgage
Note for a period not greater than 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. In addition, the NIM Insurer's
prior written
consent shall be required for any waiver of Prepayment Charges or
for the
extension of the due dates for payments due on a Mortgage Note, if
the
aggregate number of outstanding Mortgage Loans that
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have been granted such waivers or extensions exceeds 5% of the
aggregate
number of Mortgage Loans. The Master Servicer shall not be
required to
institute or join in litigation with respect to collection of any
payment
(whether under a Mortgage, Mortgage Note or otherwise or against
any public
or governmental authority with respect to a taking or condemnation)
if it
reasonably believes that enforcing the provision of the Mortgage or
other
instrument pursuant to which such payment is required is prohibited
by
applicable law.
(b)
The Master
Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be
deposited
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
"A3" by Moody's,
the Master Servicer shall deposit or cause to be deposited on a
daily basis
within one Business Day of receipt), except as otherwise
specifically
provided in this Agreement, the following payments and collections
remitted
by Subservicers or received by it in respect of Mortgage Loans
subsequent to
the Cut-off Date (other than in respect of principal and interest
due on the
Mortgage Loans on or before the Cut-off Date) and the following
amounts
required to be deposited under this Agreement:
(i) all payments
on account of principal on the Mortgage Loans,
including
Principal Prepayments;
(ii) all payments on
account of interest on the Mortgage Loans,
net of the
related Master Servicing Fee, 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 a Mortgaged Property or released to
the
Mortgagor
in accordance with the Master Servicer's normal servicing
procedures;
(iv) any amount
required to be deposited by the Master Servicer
or the
Depositor 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;
(vi) all Substitution
Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to
Section
4.01;
(viii) all payments on account of Prepayment Charges on the
Mortgage
Loans;
and
(ix) any other amounts
required to be deposited under this
Agreement.
In
addition, with respect to any Mortgage Loan that is subject to
a
buydown agreement, on each Due Date for such Mortgage Loan, in
addition to
the monthly payment remitted by the Mortgagor, the Master Servicer
shall
cause funds to be deposited into the Certificate Account in
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an amount required to cause an amount of interest to be paid with
respect to
such Mortgage Loan equal to the amount of interest that has accrued
on such
Mortgage Loan from the preceding Due Date at the Mortgage Rate net
of the
related Master Servicing Fee.
The
foregoing requirements for remittance by the Master Servicer
shall
be exclusive, it being understood and agreed that, without limiting
the
generality of the foregoing, payments in the nature of late payment
charges
or assumption fees, if collected, need not be remitted by the
Master
Servicer. In the event
that the Master Servicer shall remit any amount not
required to be remitted, it may at any time withdraw or direct
the
institution maintaining the Certificate Account to withdraw such
amount from
the Certificate Account, any provision in this Agreement to the
contrary
notwithstanding. Such
withdrawal or direction may be accomplished by
delivering written notice thereof to the Trustee or such other
institution
maintaining the Certificate Account which describes the amounts
deposited in
error in the Certificate Account. The Master Servicer shall
maintain
adequate records with respect to all withdrawals made pursuant to
this
Section. All funds
deposited in the Certificate Account shall be held in
trust for the Certificateholders until withdrawn in accordance
with
Section 3.08.
(c)
The Trustee
shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the
Trustee. On
the Closing Date, the Depositor shall deposit into the Principal
Reserve Fund
$100. Funds on deposit
in the Principal Reserve Fund shall not be invested.
The Principal Reserve Fund shall be treated as an "outside reserve
fund"
under applicable Treasury regulations and shall not be part of any
REMIC
created under this Agreement. Amounts on deposit in the
Principal Reserve
Fund shall not be invested.
(d)
The Trustee
shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly
upon receipt, deposit in the Distribution Account and retain in
the
Distribution Account the following:
(i) the
aggregate amount remitted by the Master Servicer to the
Trustee
pursuant to Section 3.08(a)(ix);
(ii) any amount
deposited by the Master Servicer 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 in this
Agreement to
the contrary notwithstanding. Such direction may be accomplished
by
delivering an Officer's Certificate to the Trustee which describes
the
amounts deposited in error in the Distribution Account.
All funds
deposited
in the Distribution Account shall be held by the Trustee in trust
for the
Certificateholders until disbursed in accordance with this
Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee
incur liability for withdrawals from the Distribution Account at
the
direction of the Master Servicer.
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(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 in this Agreement. The amount of any realized losses
in the
Certificate Account or the Distribution Account incurred in any
such account
in respect of any such investments shall promptly be deposited by
the Master
Servicer in the Certificate Account or paid to the Trustee for
deposit into
the Distribution Account, as applicable. The 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 or the Carryover Reserve Fund prior to any change
thereof.
(g)
On the Closing
Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the
Offered
Certificates, the Carryover Reserve Fund and shall deposit $1,000
therein
upon receipt from or on behalf of the Depositor of such amount.
The
Carryover Reserve Fund shall be an Eligible Account, and funds on
deposit
therein shall be held separate and apart from, and shall not be
commingled
with, any other moneys, including without limitation, other moneys
held by
the Trustee pursuant to this Agreement.
Funds in
the Carryover Reserve Fund may be invested in Permitted
Investments at the direction of the Majority of the Holders of the
Class C
Certificates, which Permitted Investments shall mature not later
than the
Business Day immediately preceding the first Distribution Date that
follows
the date of such investment (except that if such Permitted
Investment is an
obligation of the institution that maintains the Carryover Reserve
Fund, then
such Permitted Investment shall mature not later than such
Distribution Date)
and shall not be sold or disposed of prior to maturity.
All such Permitted
Investments shall be made in the name of the Trustee, for the
benefit of the
Holders of the Class C Certificates. In the absence of such
written
direction, all funds in the Carryover Reserve Fund shall be
invested by the
Trustee in The Bank of New York cash reserves. Any net investment earnings
on such amounts shall be retained therein until withdrawn as
provided in
Section 3.08. Any
losses incurred in the Carryover Reserve Fund in respect
of any such investments shall be charged against amounts on deposit
in the
Carryover Reserve Fund (or such investments) immediately as
realized. The
Trustee shall not be liable for
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the amount of any loss incurred in respect of any investment or
lack of
investment of funds held in the Carryover Reserve Fund and made in
accordance
with this Section 3.05. The Carryover Reserve Fund will
not constitute an
asset of any REMIC created hereunder. The Class C Certificates shall
evidence ownership of the Carryover Reserve Fund for federal tax
purposes.
SECTION
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 in this
Agreement shall require the Master Servicer to compel a Mortgagor
to
establish an Escrow Account in violation of applicable law.
(b)
Withdrawals of
amounts so collected from the Escrow Accounts may
be made only to effect timely payment of taxes, assessments, hazard
insurance
premiums, condominium or PUD association dues, or comparable items,
to
reimburse the Master Servicer out of related collections for any
payments
made pursuant to Sections 3.01 (with respect to taxes and
assessments and
insurance premiums) and 3.09 (with respect to hazard insurance), to
refund to
any Mortgagors any sums determined to be overages, to pay interest,
if
required by law or the terms of the related Mortgage or Mortgage
Note, to
Mortgagors on balances in the Escrow Account or to clear and
terminate the
Escrow Account at the termination of this Agreement in accordance
with
Section 9.01. The
Escrow Accounts shall not be a part of the Trust Fund.
(c)
The Master
Servicer shall advance any payments referred to in
Section 3.06(a) that are not timely paid by the Mortgagors on the
date when
the tax, premium or other cost for which such payment is intended
is due, but
the Master Servicer shall be required so to advance only to the
extent that
such advances, in the good faith judgment of the Master Servicer,
will be
recoverable by the Master Servicer out of Insurance Proceeds,
Liquidation
Proceeds or otherwise.
SECTION
3.07. Access to
Certain Documentation and Information
Regarding the Mortgage Loans.
The Master
Servicer shall afford each Seller, the Depositor, the NIM
Insurer 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
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reimbursed by each such Certificateholder and/or Certificate Owner
for actual
expenses incurred by the Master Servicer in providing such reports
and
access. Upon request,
the Master Servicer shall furnish to the Trustee and
the NIM Insurer its most recent publicly available financial
statements and
any other information relating to its capacity to perform its
obligations
under this Agreement reasonably requested by the NIM Insurer.
SECTION
3.08. Permitted
Withdrawals from the Certificate Account,
the Distribution Account, the Carryover Reserve Fund
and the Principal Reserve Fund.
(a)
The Master
Servicer may from time to time make withdrawals from
the Certificate Account for the following purposes:
(i) to pay to
the Master Servicer (to the extent not previously
retained
by the Master Servicer) the servicing compensation to which it
is
entitled pursuant to Section 3.14 and to pay to the Master
Servicer,
as
additional servicing compensation, earnings on or investment
income
with
respect to funds in or credited to the Certificate Account;
(ii) to reimburse each
of the Master Servicer and the Trustee
for
unreimbursed Advances made by it, such right of reimbursement
pursuant
to this subclause (ii) being limited to amounts received on
the
Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to reimburse each of the Master Servicer and the Trustee
for any
Nonrecoverable Advance previously made by it;
(iv) to reimburse the
Master Servicer for Insured Expenses from
the
related Insurance Proceeds;
(v) to reimburse
the Master Servicer for (a) unreimbursed
Servicing
Advances, the Master Servicer's right to reimbursement
pursuant
to this clause (a) with respect to any Mortgage Loan being
limited to
amounts received on such Mortgage Loan(s) that represent
late
recoveries of the payments for which such advances were made
pursuant
to Section 3.01 or Section 3.06 and (b) for unpaid Master
Servicing
Fees as provided in Section 3.11;
(vi) to pay to the
purchaser, with respect to each Mortgage Loan
or
property acquired in respect thereof that has been purchased
pursuant
to Section 2.02, 2.03 or 3.11, all amounts received on such
Mortgage
Loan after the date of such purchase;
(vii) to reimburse the Sellers, the Master Servicer, the NIM
Insurer or
the Depositor for expenses incurred by any of them and
reimbursable pursuant to Section 6.03;
(viii) to withdraw any amount deposited in the Certificate
Account
and not
required to be deposited in the Certificate Account;
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(ix) on or prior to the Distribution
Account Deposit Date, to
withdraw
an amount equal to the related Interest Remittance Amount,
Principal
Remittance Amount, Prepayment Charge Amount collected 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.
The Master
Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying
any
withdrawal from the Certificate Account pursuant to such subclauses
(i),
(ii), (iv), (v) and (vi). Prior to making any withdrawal
from the
Certificate Account pursuant to subclause (iii), the Master
Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing
Officer
indicating the amount of any previous Advance determined by the
Master
Servicer to be a Nonrecoverable Advance and identifying the related
Mortgage
Loans(s), and their respective portions of such Nonrecoverable
Advance.
(b)
The Trustee
shall withdraw funds from the Distribution Account
for distributions to Certificateholders and remittance to the Swap
Account,
in the manner specified in this Agreement (and to withhold from the
amounts
so withdrawn, the amount of any taxes that it is authorized to
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.
(c)
The Trustee
shall withdraw funds from the Carryover Reserve Fund
for distribution to the LIBOR Certificates and the Class C
Certificates in
the manner specified in Section 4.02(e) (and to withhold from the
amounts so
withdrawn the amount of any taxes that it
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is authorized to retain pursuant to the third paragraph of Section
8.11). In
addition, the Trustee may from time to time make withdrawals from
the
Carryover Reserve Fund for the following purposes:
(i) to withdraw
any amount deposited in the Carryover Reserve
Fund and
not required to be deposited therein; and
(ii) to clear and
terminate the Carryover Reserve Fund upon the
termination of this Agreement pursuant to Section 9.01.
(d)
On the Business
Day before the Class P Principal Distribution
Date, the Trustee shall transfer $100.00 from the Principal Reserve
Fund to
the Distribution Account and shall distribute such amount to the
Class P
Certificates on the Class P Principal Distribution Date.
Following the
distributions to be made in accordance with the preceding sentence,
the
Trustee shall then terminate the Principal Reserve Fund.
SECTION
3.09. Maintenance of
Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a)
The Master
Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount
that is
at least equal to the lesser of (i) the maximum insurable value of
the
improvements securing such Mortgage Loan or (ii) the greater of (y)
the
outstanding principal balance of the Mortgage Loan and (z) an
amount such
that the proceeds of such policy shall be sufficient to prevent the
Mortgagor
and/or the mortgagee from becoming a co-insurer. Each such policy of
standard hazard insurance shall contain, or have an accompanying
endorsement
that contains, a standard mortgagee clause. Any amounts collected by the
Master Servicer under any such policies (other than the amounts to
be applied
to the restoration or repair of the related Mortgaged Property or
amounts
released to the Mortgagor in accordance with the Master Servicer's
normal
servicing procedures) shall be deposited in the Certificate
Account. Any
cost incurred by the Master Servicer in maintaining any such
insurance shall
not, for the purpose of calculating monthly distributions to
the
Certificateholders or remittances to the Trustee for their benefit,
be added
to the principal balance of the Mortgage Loan, notwithstanding that
the terms
of the Mortgage Loan so permit. Such costs shall be recoverable by
the
Master Servicer out of late payments by the related Mortgagor or
out of
proceeds of liquidation of the Mortgage Loan or Subsequent
Recoveries to the
extent permitted by Section 3.08. It is understood and agreed that
no
earthquake or other additional insurance is to be required of any
Mortgagor
or maintained on property acquired in respect of a Mortgage other
than
pursuant to such applicable laws and regulations as shall at any
time be in
force and as shall require such additional insurance. If the Mortgaged
Property is located at the time of origination of the Mortgage Loan
in a
federally designated special flood hazard area and such area is
participating
in the national flood insurance program, the Master Servicer shall
cause
flood insurance to be maintained with respect to such Mortgage
Loan. Such
flood insurance shall be in an amount equal to the least of (i)
the
outstanding principal balance of the related Mortgage Loan, (ii)
the
replacement value of the improvements which are part of such
Mortgaged
Property, and (iii) the maximum amount of such insurance available
for the
related Mortgaged Property under the national flood insurance
program.
(b)
[Reserved].
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(c)
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.
(d)
In connection
with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present on behalf of
itself,
the Trustee and Certificateholders, claims to the insurer under any
Primary
Insurance Policies and, in this regard, to take such reasonable
action as
shall be necessary to permit recovery under any Primary Insurance
Policies
respecting defaulted Mortgage Loans. Any amounts collected by the
Master
Servicer under any Primary Insurance Policies shall be deposited in
the
Certificate Account.
SECTION
3.10. Enforcement of
Due-on-Sale Clauses; Assumption
Agreements.
(a)
Except as
otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the
Master Servicer
shall to the extent that it has knowledge of such conveyance,
enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to
the extent
permitted under applicable law and governmental regulations, but
only to the
extent that such enforcement will not adversely affect or
jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing,
the
Master Servicer is not required to exercise such rights with
respect to a
Mortgage Loan if the Person to whom the related Mortgaged Property
has been
conveyed or is proposed to be conveyed satisfies the terms and
conditions
contained in the Mortgage Note and Mortgage related thereto and the
consent
of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so
required under such Mortgage Note or Mortgage as a condition to
such
transfer. In the event
that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any
Required
Insurance Policy would be adversely affected, or if nonenforcement
is
otherwise permitted hereunder, the Master Servicer is authorized,
subject to
Section 3.10(b), to take or enter into an assumption and
modification
agreement from or with the person to whom such property has been or
is about
to be conveyed, pursuant to which such person becomes liable under
the
Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor
remains liable thereon, provided that the Mortgage Loan shall
continue to be
covered (if so covered
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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), in any case in
which a
Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such
Person is to enter into an assumption agreement or modification
agreement or
supplement to the Mortgage Note or Mortgage that requires the
signature of
the Trustee, or if an instrument of release signed by the Trustee
is required
releasing the Mortgagor from liability on the Mortgage Loan, the
Master
Servicer shall prepare and deliver or cause to be prepared and
delivered to
the Trustee for signature and shall direct, in writing, the Trustee
to
execute the assumption agreement with the Person to whom the
Mortgaged
Property is to be conveyed and such modification agreement or
supplement to
the Mortgage Note or Mortgage or other instruments as are
reasonable or
necessary to carry out the terms of the Mortgage Note or Mortgage
or
otherwise to comply with any applicable laws regarding assumptions
or the
transfer of the Mortgaged Property to such Person. In connection with any
such assumption, no material term of the Mortgage Note may be
changed. In
addition, the substitute Mortgagor and the Mortgaged Property must
be
acceptable to the Master Servicer in accordance with its
underwriting
standards as then in effect. Together with each such
substitution,
assumption or other agreement or instrument delivered to the
Trustee for
execution by it, the Master Servicer shall deliver an Officer's
Certificate
signed by a Servicing Officer stating that the requirements of
this
subsection have been met in connection therewith. The Master Servicer shall
notify the Trustee that any such substitution or assumption
agreement has
been completed by forwarding to the Trustee the original of such
substitution
or assumption agreement, which in the case of the original shall be
added to
the related Mortgage File and shall, for all purposes, be
considered a part
of such Mortgage File to the same extent as all other documents
and
instruments constituting a part thereof. Any fee collected by the
Master
Servicer for entering into an assumption or substitution of
liability
agreement will be retained by the Master Servicer as additional
servicing
compensation.
SECTION
3.11. Realization Upon
Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans.
(a)
The Master
Servicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties
securing
such of the Mortgage Loans as come into and continue in default and
as to
which no satisfactory arrangements can be made for collection of
delinquent
payments. In
connection with 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
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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 Certificates
are
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outstanding, and that the Trust Fund may continue to hold such
Mortgaged
Property (subject to any conditions contained in such Opinion of
Counsel)
after the expiration of such three-year period. Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the
Trust Fund
shall be rented (or allowed to continue to be rented) or otherwise
used for
the production of income by or on behalf of the Trust Fund in such
a manner
or pursuant to any 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
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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 which such Mortgage
Loan
became 151 days delinquent (such month, the "Eligible Repurchase
Month");
provided further, that any such Mortgage Loan which becomes current
but
thereafter becomes delinquent may be purchased by the Master
Servicer
pursuant to this Section in any ensuing Eligible Repurchase Month.
The
Master Servicer, in its sole discretion, shall also have the right
to
purchase for its own account from the Trust Fund at a price equal
to the
Purchase Price any Eligible EPD Protected Mortgage Loan.
The Master
Servicer's right to purchase any such Eligible EPD Protected
Mortgage Loan
shall expire on the 270th day following the date on which such
Mortgage Loan
became an Eligible EPD Protected Mortgage Loan. The Purchase Price for any
Mortgage Loan purchased under this Section 3.11 shall be deposited
in the
Certificate Account and the Trustee, upon receipt of a certificate
from the
Master Servicer in the form of Exhibit N to this Agreement, shall
release or
cause to be released to the purchaser of such Mortgage Loan the
related
Mortgage File and shall execute and deliver such instruments of
transfer or
assignment prepared by the purchaser of such Mortgage Loan, in each
case
without recourse, as shall be necessary to vest in the purchaser of
such
Mortgage Loan any Mortgage Loan released pursuant hereto and the
purchaser of
such Mortgage Loan shall succeed to all the Trustee's right, title
and
interest in and to such Mortgage Loan and all security and
documents related
thereto. Such
assignment shall be an assignment outright and not for
security. The
purchaser of such Mortgage Loan shall thereupon own such
Mortgage Loan, and all security and documents, free of any further
obligation
to the Trustee or the Certificateholders with respect thereto.
(b)
Countrywide may
agree to a modification of any Mortgage Loan (the
"Modified Mortgage Loan") if (i) the modification is in lieu of a
refinancing
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 to the Master Servicer and the Master Service
shall deposit the Purchase Price for any Modified Mortgage Loan in
the
Certificate Account pursuant to Section 3.05 within one Business
Day after
the purchase of the Modified Mortgage Loan. Upon receipt by the
Trustee of
written notification of any such deposit signed by a Servicing
Officer, the
Trustee shall release to Countrywide the related Mortgage File and
shall
execute and deliver such instruments of transfer or assignment, in
each case
without recourse, as shall be necessary to vest in Countrywide any
Modified
Mortgage Loan previously transferred and assigned pursuant
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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 of this Agreement.
Upon
receipt of such request, the Trustee shall promptly release the
related
Mortgage File to the Master Servicer, and the Trustee shall at the
Master
Servicer's direction execute and deliver to the Master Servicer the
request
for reconveyance, deed of reconveyance or release or satisfaction
of mortgage
or such instrument releasing the lien of the Mortgage in each case
provided
by the Master Servicer, together with the Mortgage Note with
written evidence
of cancellation on the Mortgage Note. The Master Servicer is authorized
to
cause the removal from the registration on the MERS(R) System of
such Mortgage
and to execute and deliver, on behalf of the 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.
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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.
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, if
any, with respect to such Distribution Date, but not by more than
the
Compensating Interest for that 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, assumption fees, late payment charges
and all
income and gain net of any losses realized from Permitted
Investments shall
be retained by the Master Servicer to the extent not required to be
deposited
in the Certificate Account pursuant to Section 3.05. The Master Servicer
shall be required to pay all expenses incurred by it in connection
with its
master servicing activities hereunder (including payment of any
premiums for
hazard insurance and any Primary Insurance Policy and maintenance
of the
other forms of insurance coverage required by this Agreement) and
shall not
be entitled to reimbursement therefor except as specifically
provided in this
Agreement.
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<PAGE>
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.
(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.
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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. Notification of
Adjustments.
On each
Adjustment Date, the Master Servicer shall make interest rate
adjustments for each Mortgage Loan in compliance with the
requirements of the
related Mortgage and Mortgage Note and applicable regulations.
The Master
Servicer shall execute and deliver the notices required by each
Mortgage and
Mortgage Note and applicable regulations regarding interest
rate
adjustments. The
Master Servicer also shall provide timely notification to
the Trustee of all applicable data and information regarding such
interest
rate adjustments and the Master Servicer's methods of implementing
such
interest rate adjustments. Upon the discovery by the Master
Servicer or the
Trustee that the Master Servicer has failed to adjust or has
incorrectly
adjusted a Mortgage Rate or a monthly payment pursuant to the terms
of the
related Mortgage Note and Mortgage, the Master Servicer shall
immediately
deposit in the Certificate Account from its own funds the amount of
any
interest loss caused thereby without reimbursement therefor;
provided,
however, the Master Servicer shall be held harmless with respect to
any
interest rate adjustments made by any servicer prior to the Master
Servicer.
SECTION
3.19. The Swap
Contract.
Countrywide shall cause The Bank of New York to enter into the
Swap
Contract Administration Agreement and shall assign all of its
right, title
and interest in and to the interest rate swap transaction evidenced
by the
Swap Contract to, and shall cause all of its obligations in respect
of such
transaction to be assumed by, the Swap Contract Administrator, on
the terms
and conditions set forth in the Swap Contract Assignment Agreement.
The
Trustee's rights to receive certain proceeds of the Swap Contract
as provided
in the Swap Contract Administration Agreement shall be rights of
the Trustee
as Swap Trustee hereunder, shall be an asset of the Swap Trust and
shall not
be an asset of the Trust Fund nor of any REMIC. The Swap Trustee shall
deposit any amounts received from time to time from the Swap
Contract
Administrator with respect to the Swap Contract into the Swap
Account. The
Master Servicer shall deposit any amounts received on behalf of the
Swap
Trustee from time to time with respect to the Swap Contract into
the Swap
Account.
On the
Business Day preceding each Distribution Date, the Swap Trustee
shall notify the Swap Contract Administrator of any amounts
distributable to
the Covered Certificates pursuant to Section 4.02(d)(iii) through
(viii) that
will remain unpaid following all distributions to be made on
such
Distribution Date pursuant to Section 4.02(a) through (c).
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<PAGE>
No later
than two Business Days following each Distribution Date, the
Trustee shall provide the Swap Contract Administrator with
information
regarding the aggregate Class Certificate Balance of the LIBOR
Certificates
after all distributions on such Distribution Date.
Upon the
Swap Contract Administrator obtaining actual knowledge of the
rating of the Swap Counterparty falling below the Approved Rating
Thresholds
(as defined in the Swap Contract) or upon the Swap Contract
Administrator
obtaining actual knowledge of a Ratings Event (as defined in the
Swap
Contract), the Swap Trustee shall direct the Swap Contract
Administrator to
(i) demand payment of the Delivery Amount (as defined in the ISDA
Credit
Support Annex) on each Valuation Date (as defined in the ISDA
Credit Support
Annex) and to perform its other obligations in accordance with the
ISDA
Credit Support Annex or (ii) take such other action required under
the Swap
Contract. If a
Delivery Amount is demanded, the Swap Trustee shall set up an
account in accordance with Section 4.09 to hold cash or other
eligible
investments pledged under the ISDA Credit Support Annex.
Any cash or other
eligible investments pledged under the ISDA Credit Support Annex
shall not be
part of the Distribution Account or the Swap Account unless they
are applied
in accordance with the ISDA Credit Support Annex to make a payment
due to the
Swap Contract Administrator pursuant to the Swap Contract.
If Eligible
Credit Support (as defined in the ISDA Credit Support Annex) with a
value
equal to the Delivery Amount is not delivered, the Swap Trustee
shall direct
the Swap Contract Administrator to notify the Swap Counterparty of
such
failure.
Upon the Swap
Trustee obtaining actual knowledge of an Event of Default
(as defined in the Swap Contract) or Termination Event (as defined
in the
Swap Contract) for which the Swap Contract Administrator has the
right to
designate an Early Termination Date (as defined in the Swap
Contract), the
Swap Trustee shall act at the written direction of the Depositor as
to
whether to direct the Swap Contract Administrator to designate an
Early
Termination Date; provided, however, that the Swap Trustee shall
provide
written notice to each Rating Agency following the Event of Default
or
Termination Event.
Upon the termination of the Swap Contract under the
circumstances contemplated by this Section 3.19, the Swap Trustee
shall use
its reasonable best efforts to enforce the rights of the Swap
Contract
Administrator as may be permitted by the terms of the Swap Contract
and
consistent with the terms hereof, and Countrywide shall assist the
Swap
Contract Administrator in procuring a replacement swap contract
with terms
approximating those of the original Swap Contract.
In the event that the swap counterparty in respect of a
replacement swap contract pays any upfront amount to the Swap
Contract
Administrator in connection with entering into the replacement swap
contract
and such upfront amount is received by the Swap Contract
Administrator prior
to the Distribution Date on which any Swap Termination Payment will
be
payable to the Swap Counterparty in respect of the original Swap
Contract, a
portion of that upfront amount equal to the lesser of (x) that
upfront amount
and (y) the amount of the Swap Termination Payment due to the
Swap
Counterparty in respect of the original Swap Contract (the "Adjusted
Replacement Upfront Amount") shall be included in Interest Funds
for Loan
Group 1 and Loan Group 2 pro rata based on their respective
Interest Funds
for that Distribution Date and any upfront amount in excess of the
Adjusted
Replacement Upfront Amount shall be distributed to Countrywide and
will not
be available to make distributions in respect of any Class of
Certificates.
Any upfront amount paid to the Swap Contract Administrator by the
swap
counterparty in respect of a replacement swap contract after the
Distribution
Date on which any Swap Termination Payment will be payable to the
Swap
Counterparty in respect of the original
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Swap Contract shall be retained by the Swap Contract Administrator
and
remitted to the Swap Trustee on subsequent Distribution Dates up to
and
including the Swap Contract Termination Date to pay any amounts
distributable
to the Covered Certificates pursuant to Section 4.02(d)(iii)
through (viii)
that will remain unpaid following all distributions to be made on
such
Distribution Date pursuant to Section 4.02(a) through (c).
Any
portion of any Net Swap Payment or Swap Termination Payment
payable
by the Swap Counterparty and not remitted by the Swap Contract
Administrator
to the Swap Trustee with respect to any Distribution Date will be
remitted to
Countrywide and will not be available to make distributions in
respect of any
Class of Certificates.
The Swap
Counterparty shall be an express third party beneficiary of
this Agreement for the purpose of enforcing the provisions hereof
to the
extent of the Swap Counterparty's rights explicitly specified
herein as if a
party hereto.
SECTION
3.20. Prepayment
Charges.
(a)
Notwithstanding
anything in this Agreement to the contrary, in
the event of a Principal Prepayment in full or in part of a
Mortgage Loan,
the Master Servicer may not waive any Prepayment Charge or portion
thereof
required by the terms of the related Mortgage Note unless (i) such
Mortgage
Loan is in default or the Master Servicer believes that such a
default is
imminent, and the Master Servicer determines that such waiver would
maximize
recovery of Liquidation Proceeds for such Mortgage Loan, taking
into account
the value of such Prepayment Charge, or (ii) (A) the enforceability
thereof
is limited (1) by bankruptcy, insolvency, moratorium, receivership,
or other
similar law relating to creditors' rights generally or (2) due
to
acceleration in connection with a foreclosure or other involuntary
payment,
or (B) the enforceability is otherwise limited or prohibited by
applicable
law. In the event of a
Principal Prepayment in full or in part with respect
to any Mortgage Loan, the Master Servicer shall deliver to the
Trustee an
Officer's Certificate substantially in the form of Exhibit T no
later than
the third Business Day following the immediately succeeding
Determination
Date with a copy to the Class P Certificateholders. If the Master Servicer
has waived or does not collect all or a portion of a Prepayment
Charge
relating to a Principal Prepayment in full or in part due to any
action or
omission of the Master Servicer, other than as provided above, the
Master
Servicer shall deliver to the Trustee, together with the Principal
Prepayment
in full or in part, the amount of such Prepayment Charge (or such
portion
thereof as had been waived) for deposit into the Certificate
Account (not
later than 1:00 p.m. Pacific time on the immediately succeeding
Master
Servicer Advance Date, in the case of such Prepayment Charge)
for
distribution in accordance with the terms of this Agreement.
(b)
