EXHIBIT 99.1
The Pooling and Servicing Agreement
<PAGE>
======================
CWALT, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK GRANADA LLC,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2006
-----------------------------------
ALTERNATIVE LOAN TRUST 2006-OA18
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OA18
======================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS........................................................7
SECTION
1.01. Defined
Terms...........................................7
SECTION
1.02. Certain
Interpretive Principles........................42
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES.....43
SECTION
2.01. Conveyance of
Mortgage Loans...........................43
SECTION
2.02. Acceptance by
Trustee of the Mortgage Loans............47
SECTION
2.03. Representations,
Warranties and Covenants of the Sellers
and Master Servicer....................................49
SECTION
2.04. Representations
and Warranties of the Depositor as to
the Mortgage Loans.....................................52
SECTION
2.05. Delivery of
Opinion of Counsel in Connection with
Substitutions..........................................52
SECTION
2.06. Execution and
Delivery of Certificates.................53
SECTION
2.07. REMIC
Matters..........................................53
SECTION
2.08. Covenants of the
Master Servicer.......................53
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS..................54
SECTION
3.01. Master Servicer
to Service Mortgage Loans..............54
SECTION
3.02. Subservicing;
Enforcement of the Obligations of
Subservicers...........................................55
SECTION
3.03. Rights of the
Depositor, the NIM Insurer and the Trustee
in Respect of the Master Servicer......................55
SECTION
3.04. Trustee to Act
as Master Servicer......................56
SECTION
3.05. Collection of
Mortgage Loan Payments; Certificate
Account; Distribution Account; Carryover Reserve Fund;
Principal Reserve Fund.................................56
SECTION
3.06. Collection of
Taxes, Assessments and Similar Items;
Escrow Accounts........................................60
SECTION
3.07. Access to
Certain Documentation and Information
Regarding the Mortgage Loans...........................60
SECTION
3.08. Permitted
Withdrawals from the Certificate Account; the
Distribution Account, the Carryover Reserve Fund and the
Principal Reserve Fund.................................61
SECTION
3.09. Maintenance of
Hazard Insurance; Maintenance of Primary
Insurance Policies.....................................63
SECTION
3.10. Enforcement of
Due-on-Sale Clauses; Assumption
Agreements.............................................64
SECTION
3.11. Realization Upon
Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.................................65
SECTION
3.12. Trustee to
Cooperate; Release of Mortgage Files........69
SECTION
3.13. Documents,
Records and Funds in Possession of Master
Servicer to be Held for the Trustee....................70
i
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SECTION
3.14. Servicing
Compensation.................................70
SECTION
3.15. Access to
Certain Documentation........................71
SECTION
3.16. Annual Statement
as to Compliance......................71
SECTION
3.17. Errors and
Omissions Insurance; Fidelity Bonds.........72
SECTION
3.18. Notification of
Adjustments............................72
SECTION
3.19. The Swap
Contract......................................72
SECTION
3.20. Prepayment
Charges.....................................72
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE MASTER
SERVICER................76
SECTION
4.01.
Advances...............................................76
SECTION
4.02. Priorities of
Distribution.............................77
SECTION
4.03. Allocation of
Net Deferred Interest....................81
SECTION
4.04.
[Reserved].............................................81
SECTION
4.05.
[Reserved].............................................81
SECTION
4.06. Monthly
Statements to Certificateholders...............81
SECTION
4.07. Determination of
Pass-Through Rates for COFI
Certificates...........................................82
SECTION
4.08. Determination of
Pass-Through Rates for LIBOR
Certificates...........................................83
SECTION
4.09. The Swap Trust
and Swap Account........................85
ARTICLE V THE
CERTIFICATES..................................................86
SECTION
5.01. The
Certificates.......................................86
SECTION
5.02. Certificate
Register; Registration of Transfer and
Exchange of Certificates...............................87
SECTION
5.03. Mutilated,
Destroyed, Lost or Stolen Certificates......92
SECTION
5.04. Persons Deemed
Owners..................................92
SECTION
5.05. Access to List
of Certificateholders' Names and
Addresses..............................................92
SECTION
5.06. Maintenance of
Office or Agency........................93
ARTICLE VI THE DEPOSITOR AND THE MASTER
SERVICER............................94
SECTION
6.01. Respective
Liabilities of the Depositor and the Master
Servicer...............................................94
SECTION
6.02. Merger or
Consolidation of the Depositor or the Master
Servicer...............................................94
SECTION
6.03. Limitation on
Liability of the Depositor, the Sellers,
the Master Servicer, the NIM Insurer and Others........94
SECTION
6.04. Limitation on
Resignation of Master Servicer...........95
ARTICLE VII
DEFAULT.........................................................96
SECTION
7.01. Events of
Default......................................96
SECTION
7.02. Trustee to Act;
Appointment of Successor...............98
SECTION
7.03. Notification to
Certificateholders.....................99
ARTICLE VIII CONCERNING THE
TRUSTEE........................................100
SECTION
8.01. Duties of
Trustee.....................................100
SECTION 8.02.
Certain Matters
Affecting the Trustee.................101
ii
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SECTION
8.03. Trustee Not
Liable for Certificates or Mortgage Loans.102
SECTION
8.04. Trustee May Own
Certificates..........................102
SECTION
8.05. Trustee's Fees
and Expenses...........................102
SECTION
8.06. Eligibility
Requirements for Trustee..................103
SECTION
8.07. Resignation and
Removal of Trustee....................103
SECTION
8.08. Successor
Trustee.....................................104
SECTION
8.09. Merger or
Consolidation of Trustee....................105
SECTION
8.10. Appointment of
Co-Trustee or Separate Trustee.........105
SECTION
8.11. Tax
Matters...........................................107
SECTION
8.12. Monitoring of
Significance Percentage.................109
ARTICLE IX
TERMINATION.....................................................111
SECTION
9.01. Termination upon
Liquidation or Purchase of all Mortgage
Loans.................................................111
SECTION
9.02. Final
Distribution on the Certificates................111
SECTION
9.03. Additional
Termination Requirements...................113
SECTION
9.04. Auction of the
Mortgage Loans and REO Properties......114
ARTICLE X MISCELLANEOUS
PROVISIONS.........................................118
SECTION
10.01.
Amendment.............................................118
SECTION
10.02. Recordation of Agreement;
Counterparts................119
SECTION
10.03. Governing
Law.........................................120
SECTION
10.04. Intention of
Parties..................................120
SECTION 10.05.
Notices...............................................121
SECTION
10.06. Severability of
Provisions............................123
SECTION
10.07.
Assignment............................................123
SECTION
10.08. Limitation on Rights of
Certificateholders............123
SECTION
10.09. Inspection and Audit
Rights...........................124
SECTION
10.10. Certificates Nonassessable and Fully
Paid.............124
SECTION
10.11.
[Reserved]............................................124
SECTION
10.12. Protection of
Assets..................................124
SECTION
10.13. Rights of NIM
Insurer.................................125
ARTICLE XI EXCHANGE ACT
REPORTING..........................................126
SECTION
11.01. Filing
Obligations....................................126
SECTION
11.02. Form 10-D
Filings.....................................126
SECTION
11.03. Form 8-K
Filings......................................127
SECTION
11.04. Form 10-K
Filings.....................................127
SECTION
11.05. Sarbanes-Oxley
Certification..........................128
SECTION
11.06. Form 15
Filing........................................128
SECTION
11.07. Report on Assessment of Compliance and
Attestation....129
SECTION
11.08. Use of Subservicers and
Subcontractors................130
SECTION
11.09.
Amendments............................................131
SECTION
11.10. Reconciliation of
Accounts............................131
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 II-D: Representations and
Warranties of Park Sienna.......S-II-D-1
Schedule III-A:
Representations and Warranties of Countrywide
as to all of the Mortgage Loans....................S-III-A-1
Schedule III-B:
Representations and Warranties of Countrywide
as to the Countrywide Mortgage Loans...............S-III-B-1
Schedule III-C:
Representations and Warranties of Park Granada
as to the Park Granada Mortgage Loans..............S-III-C-1
Schedule III-D:
Representations and Warranties of Park Monaco
as to the Park Monaco Mortgage Loans...............S-III-D-1
Schedule III-E:
Representations and Warranties of Park Sienna
as to the Park Sienna Mortgage Loans...............S-III-E-1
Schedule IV:
Representations and Warranties of the Master Servicer.S-IV-1
Schedule V:
Principal 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 of
ERISA Letter (Covered Certificates)............L-2-1
Exhibit M:
Form of Request for Release (for Trustee)................M-1
Exhibit N:
Form of Request for Release of Documents (Mortgage Loan -
Paid in Full, Repurchased and Replaced)..................N-1
iv
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Exhibit O:
[Reserved]...............................................O-1
Exhibit P:
[Reserved]...............................................P-1
Exhibit Q:
Standard & Poor's LEVELS(R) Version 5.7 Glossary Revised,
Appendix E...............................................Q-1
Exhibit R:
Form or Swap Contract....................................R-1
Exhibit S-1: Swap
Contract Assignment Agreement.....................S-1-1
Exhibit S-2: 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
v
<PAGE>
THIS
POOLING AND SERVICING AGREEMENT, dated as of October 1, 2006,
among
CWALT, INC., a Delaware corporation, as depositor (the
"Depositor"),
COUNTRYWIDE HOME LOANS, INC. ("Countrywide"), a New York
corporation, as a
seller (a "Seller"), PARK GRANADA LLC ("Park Granada"), a Delaware
limited
liability company, as a seller (a "Seller"), PARK MONACO INC.
("Park Monaco"),
a Delaware corporation, as a seller (a "Seller"), PARK SIENNA LLC
("Park
Sienna"), a Delaware limited liability company, as a seller (a
"Seller"),
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership,
as master
servicer (the "Master Servicer"), and THE BANK OF NEW YORK, a
banking
corporation organized under the laws of the State of New York, as
trustee (the
"Trustee").
WITNESSETH THAT
In
consideration of the mutual agreements contained in this
Agreement,
the parties to this Agreement agree as follows:
PRELIMINARY STATEMENT
The
Depositor is the owner of the Trust Fund that is hereby conveyed
to
the Trustee in return for the Certificates. For federal income tax
purposes,
the Trust Fund (excluding the Carryover Reserve Fund), will consist
of two
real estate mortgage investment conduits (each a "REMIC" or, in
the
alternative, the "Subsidiary REMIC" and the "Master REMIC,"
respectively).
Each Certificate, other than the Class A-R Certificate, will
represent
ownership of one or more regular interests in the Master REMIC for
purposes of
the REMIC Provisions. The Class A-R Certificate represents
ownership of the
sole class of residual interest in each of the Subsidiary REMIC and
the Master
REMIC. The Master REMIC will hold as assets the several classes
of
uncertificated Subsidiary REMIC Interests (other than the SR-A-R
Interest).
The Subsidiary REMIC will hold as assets the all the property of
the Trust
Fund (excluding the Carryover Reserve Fund). For federal income tax
purposes,
each Subsidiary REMIC Interest and Master REMIC Interest (except
the SR-A-R
Interest and the A-R Interest) is hereby designated as a regular
interest in
its issuing REMIC. The latest possible maturity date of all REMIC
regular
interests created hereby shall be the Latest Possible Maturity
Date.
The Swap
Trust, Swap Contract and the Swap Account will not constitute
any part of any REMIC.
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<PAGE>
Subsidiary REMIC:
The
following table specifies the Class designation, interest rate,
and
principal amount for each Class of Subsidiary REMIC Interests:
Initial
Pass-
Corresponding
Subsidiary
Principal Through
Class
of
REMIC Interests
Balance
Rate
Certificates
SR-A-1
(1)
(2) Class
A-1
SR-A-2
(1)
(2) Class
A-2
SR-A-3
(1)
(2) Class
A-3
SR-$100
$100
(2) Class
A-R
SR-M-1
(1)
(2) Class
M-1
SR-M-2
(1)
(2) Class
M-2
SR-M-3
(1)
(2) Class
M-3
SR-M-4
(1)
(2) Class
M-4
SR-M-5
(1)
(2) Class
M-5
SR-M-6
(1)
(2) Class
M-6
SR-M-7
(1)
(2) Class
M-7
SR-M-8
(1)
(2) Class
M-8
SR-M-9
(1)
(2) Class
M-9
SR-P
$100
(3) Class
P
SR-C
(1)
(2) Class
C
SR-A-R
(4)
(4)
N/A
---------------
(1) On each
Distribution Date, following the allocation of scheduled
principal,
Principal Prepayments and Realized Losses, the Class SR-A-1
Interest,
Class SR-A-2 Interest, Class SR-A-3 Interest, Class SR-$100
Interest,
Class SR-M-1 Interest, Class SR-M-2 Interest, Class SR-M-3
Interest,
Class SR-M-4 Interest, Class SR-M-5 Interest, Class SR-M-6
Interest,
Class SR-M-7 Interest, Class SR-M-8 Interest and Class SR-M-9
Interest
will each have a principal balance that is equal to 100% of its
corresponding Class of Certificates issued by the Master REMIC, and
the
Class SR-C
Interest will have a principal balance that is equal to the
Overcollateralized Amount.
(2) The interest
rate with respect to any Distribution Date (and the related
Interest
Accrual Period) for this Subsidiary REMIC Interest is a per
annum rate
equal to the Weighted Average Adjusted Net Mortgage Rate of
the
Mortgage Loans.
(3) The Class
SR-P Interest will not bear interest. The Class P Interest
will be
entitled to all Prepayment Charge Amounts received in respect
of
the
Mortgage Loans.
(4) The Class
SR-A-R Interest is the sole class of residual interest in the
Subsidiary
REMIC. It has no principal balance and pays no principal or
interest.
On each
Distribution Date, the Interest Funds, the Principal
Distribution Amount and the Prepayment Charges will be payable with
respect to
the Subsidiary REMIC Interests in the following manner:
2
<PAGE>
(1)
Interest. Interest is to be distributed with respect to each
Subsidiary REMIC Interest at the rate or according to the formulas
described
above.
(2)
Prepayment Charge Amounts. All Prepayment Charge Amounts will
be
allocated to the Class SR-P Interest.
(3) Principal.
Principal (including Subsequent Recoveries) shall be
allocated among the Subsidiary REMIC Interests in the same manner
that such
items are allocated among their corresponding Classes of
Certificates.
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
Pass-
Certificate
Through
Class
Balance
Rate
------------------------------------------------------------------------------
Class A-1
$275,102,000
(1)
------------------------------------------------------------------------------
Class A-2
$114,625,000
(1)
------------------------------------------------------------------------------
Class A-3
$68,775,000
(1)
------------------------------------------------------------------------------
Class M-1
$11,569,000
(1)
------------------------------------------------------------------------------
Class M-2
$8,551,000
(1)
------------------------------------------------------------------------------
Class M-3
$2,767,000
(1)
------------------------------------------------------------------------------
Class M-4
$4,527,000
(1)
------------------------------------------------------------------------------
Class M-5
$2,515,000
(1)
------------------------------------------------------------------------------
Class M-6
$2,515,000
(1)
------------------------------------------------------------------------------
Class M-7
$2,515,000
(1)
------------------------------------------------------------------------------
Class M-8
$2,515,000
(1)
------------------------------------------------------------------------------
Class M-9
$2,516,156
(1)
------------------------------------------------------------------------------
Class C
(2)
(3)
------------------------------------------------------------------------------
Class P
$100 (4)
(4)
------------------------------------------------------------------------------
Class A-R
$100
(5)
------------------------------------------------------------------------------
---------------
(1) Each Class
of Certificates will accrue interest at the related
Pass-Through Rate.
(2) For federal
income tax purposes, the Class C Certificates have an
Original
Class Certificate Balance equal to the Overcollateralization
Amount as
of the Closing Date.
(3) For each
Interest Accrual Period the Class C Certificates are entitled
to the
"Class C Distributable Amount," which shall equal the sum of
(i)
a specified
portion of the interest on each of the Subsidiary REMIC
Regular
Interests (excluding the SR-P Interest, the SR-C Interest and
the
SR-$100 Interest) in an amount equal to the excess of the
Pass-Through Rate in respect of the Subsidiary REMIC Regular
Interest
over the
Pass-Through Rate in respect of the corresponding Class of
Certificates of each such Subsidiary REMIC Regular Interest, and
(ii)
all
accruals of interest and collections of scheduled principal and
Principal
Prepayments allocated to the SR-C Interest. The Class
3
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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) The Class P
Certificates shall also have a notional amount equal to the
aggregate
Stated Principal Balance of the Mortgage Loans containing
provisions
providing for the payment of a Prepayment Charge. For each
Distribution Date the Class P Certificates are entitled to all
Prepayment
Charge Amounts distributed with respect to the Class SR-P
Interests.
(5) The Class
A-R Certificates represent the sole class of residual interest
in each
REMIC created hereunder. The Pass-Through Rate for the Class
A-R
Certificates and any Interest Accrual Period will be a per annum
rate
equal to
the Weighted Average Adjusted Net Mortgage Rate of the Mortgage
Loans.
It is not
intended that the Class A-R Certificates be entitled to any
cash flows pursuant to this agreement except as provided in
Sections 4.02(a)
and 4.02(b) hereunder (that is, its entitlement to $100.00 and
interest
thereon).
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 a REMIC
regular interest, without creating any shortfall--actual or
potential (other
than for credit losses)--to any REMIC regular interest.
4
<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
Principal
Pass-Through
Designation Balance
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
Offered Certificates and the Private
Certificates; and any Certificate of a Class
(other than the Class A-1 Certificates) that
ceases to satisfy the applicable rating
requirement under the Underwriter's Exemption.
Inverse Floating Rate
Certificates............ None.
LIBOR Certificates...... The Senior
Certificates
(other than the Class
A-R Certificates) and the Subordinated
Certificates.
5
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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
A-1, Class A-2, Class A-3 and Class
A-R 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,
Class M-8 and Class M-9 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 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.
6
<PAGE>
ARTICLE I
DEFINITIONS
SECTION
1.01. Defined Terms.
Whenever
used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following
meanings:
Acceptable
Bid Amount: Either (i) a bid equal to or greater than the
Minimum Auction Amount or (ii) the highest bid submitted by a
Qualified Bidder
in an auction if the Directing Certificateholder agrees to pay the
related
Auction Supplement Amount.
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
Cap Rate: For any Distribution Date and Class of Offered
Certificates, the excess, if any, of the related Net Rate Cap for
such
Distribution Date, over a fraction expressed as a percentage, the
numerator of
which is equal to the product of (i) a fraction, the numerator of
which is 360
and the denominator of which is the actual number of days in the
related
Interest Accrual Period and (ii) the amount of Net Deferred
Interest for the
Mortgage Loans for that Distribution Date, and the denominator of
which is the
aggregate Stated Principal Balance of the Mortgage Loans as of the
Due Date
occurring in the month preceding the month of that Distribution
Date (after
giving effect to Principal Prepayments in the Prepayment Period
related that
prior Due Date).
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:
The payment required to be made by the Master Servicer with
respect to any Distribution Date pursuant to Section 4.01, the
amount of any
such payment being equal to the aggregate of payments of principal
and
interest (net of the Master Servicing Fee) on the Mortgage Loans
that were due
on the related Due Date and not received by the Master Servicer as
of the
close of business on the related Determination Date, together with
an amount
equivalent to interest on each Mortgage Loan as to which the
related Mortgaged
Property is an REO Property, net of any net income from such REO
Property,
less the aggregate amount of any such delinquent payments that the
Master
Servicer has determined would constitute a Nonrecoverable Advance
if advanced.
7
<PAGE>
Agreement:
This Pooling and Servicing Agreement and all amendments or
supplements to this Pooling and Servicing Agreement.
Amount
Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of
business on
the related Determination Date on account of (i) Principal
Prepayments
received after the related Prepayment Period and Liquidation
Proceeds and
Subsequent Recoveries received in the month of such Distribution
Date and (ii)
all Scheduled Payments due after the related Due Date.
Applied
Realized Loss Amount: With respect to any Distribution Date,
the
sum of the Realized Losses which are to be applied in reduction of
the Class
Certificate Balances of the Certificates and the Swap Principal
Amount
pursuant to Section 4.02(g), which shall equal the amount, if any,
by which
the sum of (i) the aggregate Class Certificate Balance of all
Senior and
Subordinated Certificates and (ii) the Swap Principal Amount (in
each case,
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.
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.
Auction
Supplement Amount: As
defined in Section 9.04(c).
Bankruptcy
Code: The United
States Bankruptcy Reform Act of 1978, as
amended.
Bid Date:
As defined in Section
9.04(b).
Book-Entry
Certificates: As
specified in the Preliminary Statement.
Business
Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the City of New York, New
York, or the
States of California or Texas or the city in which the Corporate
Trust Office
of the Trustee is located are authorized or obligated by law or
executive
order to be closed.
8
<PAGE>
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 LIBOR
Certificates and
designated "The Bank of New York in trust for registered holders of
CWALT,
Inc., Alternative Loan Trust 2006-OA18, Mortgage Pass-Through
Certificates,
Series 2006-OA18." Funds in the Carryover Reserve Fund shall be
held in trust
for the Holders of the LIBOR 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-OA18, Mortgage
Pass-Through
Certificates Series 2006-OA18."
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 Offered 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
Offered Certificates, any Applied Realized Loss Amounts allocated
to such
Certificate on previous Distribution Dates pursuant to Section 4.02
without
duplication and (C) increased by the amount of Net Deferred
Interest allocated
to the applicable Class or Component pursuant to Section 4.03.
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.
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
9
<PAGE>
affiliate of the Depositor in determining which Certificates are
registered in
the name of an affiliate of the Depositor.
Certification Party:
As defined in Section 11.05.
Certifying
Person: As defined in
Section 11.05.
Class:
All Certificates
bearing the same class designation as set
forth in the Preliminary Statement.
Class 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 sum of (i) the aggregate Class Certificate
Balance of
the Offered Certificates and the Class P Certificates and (ii) the
Swap
Principal Amount, in each case, 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-3
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: November 15,
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.
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.
10
<PAGE>
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, 4 West,
New York, New York 10286 (Attn: Mortgage-Backed Securities Group,
CWALT, Inc.
Series 2006-OA18, 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: Not
applicable.
Cumulative
Loss Trigger Event: With respect to a Distribution Date on or
after the Stepdown Date, if 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 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:
11
<PAGE>
Distribution Date
Percentage
-------------------------------------------------------------------------------
November 2008 - October 2009... 0.20% with respect to November 2008, plus an
additional
1/12th of
0.25% for each month
thereafter through October 2009
November 2009 - October 2010... 0.45% with respect to November 2009, plus an
additional
1/12th of 0.35%
for each month
thereafter through October 2010
November 2010 - October 2011... 0.80% with respect to November 2010, plus an
additional
1/12th of 0.35%
for each month
thereafter through October 2011
November 2011 - October 2012... 1.15% with respect to November 2011, plus an
additional
1/12th of 0.40%
for each month
thereafter through October 2012
November 2012 - October 2013... 1.55% with respect to November 2012, plus an
additional
1/12th of 0.15%
for each month
thereafter through October 2013
November 2013 and thereafter... 1.70%
Current
Interest: With respect to each Class of Offered Certificates
and
each Distribution Date, the excess, if any, of (i) 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 over (ii) the Net Deferred Interest, if any, allocated to that
Class for
such Distribution Date pursuant to Section 4.03.
Cut-off
Date: As to any Mortgage Loan, the later of the date of
origination of that Mortgage Loan and October 1, 2006.
Cut-off
Date Pool Principal Balance: $503,019,431.
Cut-off
Date Principal Balance: As to any Mortgage Loan, the
Stated
Principal Balance thereof as of the close of business on the
Cut-off Date.
Debt
Service Reduction: With respect to any Mortgage Loan, a
reduction
by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became final
and
non-appealable, except such a reduction resulting from a Deficient
Valuation
or any reduction that results in a permanent forgiveness of
principal.
Defective
Mortgage Loan: Any Mortgage Loan that is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deferred
Interest: With respect to each Mortgage Loan and Due Period,
the amount of interest accrued on such Mortgage Loan at the
applicable
Mortgage Rate from the Due Date in the preceding Due Period to the
Due Date in
such Due Period that is greater than the Scheduled Payment due on
such
Mortgage Loan for such Due Period and that is added to the
principal balance
of such Mortgage Loan in accordance with the terms of the related
Mortgage
Note.
12
<PAGE>
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, 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 exists if the Rolling Sixty-Day Delinquency
Rate
equals or exceeds the product of (i) the Senior Enhancement
Percentage for
such Distribution Date and (ii) the applicable percentage listed
below for the
most senior Class of Certificates then outstanding.
Class
Percentage (1)
Percentage (2)
------------------------------------------------------
Senior Certificates...
31.50%
39.50%
M-1...................
42.50%
53.25%
M-2...................
57.25%
72.00%
M-3...................
64.75%
81.25%
M-4...................
81.75%
102.75%
M-5...................
96.00%
120.50%
M-6...................
116.00%
145.50%
M-7...................
146.50%
183.75%
M-8...................
199.00%
249.50%
M-9...................
309.50%
388.25%
---------
(1) For any
Distribution Date occurring on or after the Distribution Date
occurring
in November 2009 and prior to the Distribution Date occurring
in
November 2012.
(2) For any
Distribution Date occurring on or after the Distribution Date
occurring
in November 2012.
13
<PAGE>
Denomination: With respect to each Certificate, the amount set
forth on
the face of that Certificate as the "Initial Certificate Balance of
this
Certificate" or the "Initial Notional Amount of this Certificate"
or, if
neither of the foregoing, the Percentage Interest appearing on the
face of
that Certificate.
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.
Directing
Certificateholder: As
defined in Section 9.04(a).
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-OA18,
Mortgage Pass-Through Certificates, Series 2006-OA18." 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 November 2006.
Due Date:
With respect to a Mortgage Loan, the date on which Scheduled
Payments are due on that Mortgage Loan. With respect to any
Distribution Date,
the related Due Date is the first day of the calendar month in
which that
Distribution Date occurs.
Due
Period: With respect to any Distribution Date, the period
beginning
on the second day of the calendar month preceding the month in
which such
Distribution Date occurs and ending on the first day of the
calendar month in
which such Distribution Date occurs.
EDGAR:
The Commission's
Electronic Data Gathering, Analysis and
Retrieval system.
14
<PAGE>
Eligible
Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company
the
short-term unsecured debt obligations of which (or, in the case of
a
depository institution or trust company that is the principal
subsidiary of a
holding company, the debt obligations of such holding company) have
the
highest short-term ratings of Moody's or Fitch and one of the two
highest
short-term ratings of S&P, if S&P is a Rating Agency at the
time any amounts
are held on deposit therein, or (ii) an account or accounts in a
depository
institution or trust company in which such accounts are insured by
the FDIC
(to the limits established by the FDIC) and the uninsured deposits
in which
accounts are otherwise secured such that, as evidenced by an
Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such
account or a
perfected first priority security interest against any collateral
(which shall
be limited to Permitted Investments) securing such funds that is
superior to
claims of any other depositors or creditors of the depository
institution or
trust company in which such account is maintained, or (iii) a trust
account or
accounts maintained with (a) the trust department of a federal or
state
chartered depository institution or (b) a trust company, acting in
its
fiduciary capacity or (iv) any other account acceptable to each
Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise
qualified
under this definition, accounts maintained with the Trustee.
Eligible
EPD Protected Mortgage Loan: A Mortgage Loan that (i) was
originated not more than one year prior to the Closing Date, (ii)
was
purchased by a Seller or one of its affiliates pursuant to a
purchase
agreement containing provisions under which the seller thereunder
has become
obligated to repurchase such Mortgage Loan from Countrywide due to
a Scheduled
Payment due on or prior to the first Scheduled Payment owing to the
Trust Fund
becoming delinquent and (iii) was not purchased through Countrywide
Home Loan
Inc.'s Correspondent Lending Division.
Eligible
Repurchase Month: As
defined in Section 3.11.
ERISA:
The Employee
Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
an
Underwriter's Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow
Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.06(a).
Event of
Default: As defined in
Section 7.01.
Excess
Cashflow: With respect to any Distribution Date the sum of (i)
the amount remaining as set forth in Section 4.02(a)(iv), and (ii)
the amount
remaining as set forth in Section 4.02(b)(i)(B)(ii) or
4.02(b)(ii)(B)(ii), as
applicable, in each case for such Distribution Date.
Excess
Overcollateralization Amount: With respect to any Distribution
Date, the excess, if any, of the Overcollateralized Amount for
such
Distribution Date over the Overcollateralization Target Amount for
such
Distribution Date.
15
<PAGE>
Excess
Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds
received with
respect to such Mortgage Loan during the calendar month in which
such Mortgage
Loan became a Liquidated Mortgage Loan plus any Subsequent
Recoveries received
with respect to such Mortgage Loan, net of any amounts previously
reimbursed
to the Master Servicer as Nonrecoverable Advance(s) with respect to
such
Mortgage Loan pursuant to Section 3.08(a)(iii), exceeds (i) the
unpaid
principal balance of such Liquidated Mortgage Loan as of the Due
Date in the
month in which such Mortgage Loan became a Liquidated Mortgage Loan
plus (ii)
accrued interest at the Mortgage Rate from the Due Date as to which
interest
was last paid or advanced (and not reimbursed) to
Certificateholders up to the
Due Date applicable to the Distribution Date immediately following
the
calendar month during which such liquidation occurred.
Exchange
Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
Exchange
Act Reports: Any reports on Form 10-D, Form 8-K and Form 10-K
required to be filed by the Depositor with respect to the Trust
Fund under the
Exchange Act.
Expense
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, the lesser of (1) the Overcollateralization Deficiency Amount
and (2)
the Excess Cashflow available for payment pursuant to Section
4.02(c).
FDIC:
The Federal Deposit
Insurance Corporation, or any successor
thereto.
FHLMC: The
Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under
Title III of
the Emergency Home Finance Act of 1970, as amended, or any
successor to the
Federal Home Loan Mortgage Corporation.
Final
Certification: As
defined in Section 2.02(a).
FIRREA:
The Financial
Institutions Reform, Recovery, and Enforcement
Act of 1989.
Fitch:
Fitch, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes
of
Section 10.05(b) the address for notices to Fitch shall be Fitch,
Inc., One
State Street Plaza, New York, New York 10004, Attention: Residential
Mortgage Surveillance Group, or such other address as Fitch may
hereafter
furnish to the Depositor and the Master Servicer.
FNMA: The
Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the
Federal
National Mortgage Association Charter Act, or any successor to the
Federal
National Mortgage Association.
16
<PAGE>
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: With respect to each Mortgage Loan, the fixed
percentage
set forth in the related Mortgage Note that is added to the
Mortgage Index on
each Adjustment Date in accordance with the terms of the related
Mortgage Note
used to determine the Mortgage Rate for such Mortgage Loan.
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.
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.
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.
17
<PAGE>
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, an amount equal
to (a) the sum of the Interest Remittance Amount for that
Distribution Date
and the lesser of (i) the Deferred Interest that accrued on the
Mortgage Loans
for the related Due Period and (ii) the Principal Prepayment Amount
for such
Distribution Date, minus (b) the Trustee Fee for such Distribution
Date.
Interest
Remittance Amount: With respect to any Distribution Date, (x)
the sum, without duplication, of (i) all scheduled interest on the
Mortgage
Loans 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, other than Prepayment Interest Excess, (iii)
all
Advances relating to interest, (iv) all Compensating Interest and
(v) all
Liquidation Proceeds received 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.
Investment
Letter: As defined in Section 5.02(b).
ISDA
Master Agreement: The 1992 ISDA Master Agreement (Multicurrency
-
Cross Border), including the Schedule and Credit Support Annex
thereto, dated
November 15, 2006, between the Counterparty and the Swap
Contract
Administrator.
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.
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)).
18
<PAGE>
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-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.
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
rate
set forth in 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.
19
<PAGE>
Maximum
Negative Amortization: With respect to each Mortgage Loan, the
percentage set forth in the related Mortgage Note as the percentage
of the
original principal balance of Mortgage Note, that if exceeded due
to Deferred
Interest, will result in a recalculation of the Scheduled Payment
so that the
then unpaid principal balance of the Mortgage Note will be fully
amortized
over the Mortgage Loan's remaining term to maturity.
MERS:
Mortgage Electronic
Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or
any
successor 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
Auction Amount: 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.
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.
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.
20
<PAGE>
Mortgage
Index: As to each Mortgage Loan, the index from time to time in
effect for adjustment of the Mortgage Rate as set forth as such on
the related
Mortgage Note.
Mortgage
Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Master Servicer to reflect the addition of
Substitute Mortgage
Loans 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) [Reserved];
(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), (d) a two- to four-unit residential property
or
(e) a Cooperative Unit;
(xii) the Mortgage Rate in effect as of the Cut-off Date;
(xiii) the initial Payment Adjustment Date for each Mortgage
Loan;
(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;
21
<PAGE>
(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;
(xix) a code indicating whether the Mortgage Loan is a MERS
Mortgage Loan; and
(xx) with respect to each Mortgage Loan, the Gross Margin, the
Mortgage Index, the Maximum Mortgage Rate, the Minimum Mortgage
Rate, the first Adjustment Date, the Payment Adjustment Date
and
the Maximum Negative Amortization for such Mortgage Loan.
Such
schedule shall also set forth the total of the amounts
described
under (v) and (vi) above for all of the Mortgage Loans.
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
Deferred Interest: With respect to each Distribution Date, an
amount
equal to the excess, if any, of the Deferred Interest that accrued
on the
Mortgage Loans from the preceding Due Date to the Due Date related
to that
Distribution Date over the Principal Prepayment Amount for that
Distribution
Date.
22
<PAGE>
Net
Prepayment Interest Shortfalls: As to any Distribution Date,
the
excess of the aggregate Prepayment Interest Shortfalls for such
Distribution
Date over the Compensating Interest for such Distribution Date.
Net Rate
Cap: For each Distribution Date and the LIBOR Certificates
(including the Class A-1 Certificates if the Swap Contract is not
in effect),
the product of (1) the Weighted Average Adjusted Net Mortgage Rate
as of the
Due Date in the prior calendar month (after giving effect to
Principal
Prepayments in the Prepayment Period related to that prior Due
Date) and (2) a
fraction, the numerator of which is 30, and the denominator of
which is the
actual number of days that elapsed in the related Interest Accrual
Period. For
each Distribution Date with respect to the Class A-1 Certificates,
so long as
the Swap Contract remains in effect, (A) the product of (1) the
Weighted
Average Adjusted Net Mortgage Rate as of the Due Date in the prior
calendar
month (after giving effect to Principal Prepayments in the
Prepayment Period
related to that prior Due Date) and (2) a fraction, the numerator
of which is
30, and the denominator of which is the actual number of days that
elapsed in
the related Interest Accrual Period, minus (B) a fraction,
expressed as a
percentage (1) the numerator of which is equal to the product of
(i) the Swap
Fee payable to the Swap Counterparty under the Swap Contract with
respect to
such Distribution Date and (ii) a fraction, the numerator of which
is 360 and
the denominator of which is the actual number of days in the
related Interest
Accrual Period and (2) the denominator of which is equal to the
Class
Certificate Balance of the Class A-1 Certificates immediately prior
to such
Distribution Date.
Net Rate
Carryover: For any Class of LIBOR Certificates and any
Distribution Date, the sum of (A) the excess, if any, of (i) the
amount of
interest that such Class would otherwise have accrued for such
Distribution
Date had the applicable Pass-Through Rate for such Class not been
determined
based on the related Net Rate Cap, over (ii) the amount of interest
accrued on
such Class at the related 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 related 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 "Party B Floating Amount" (as defined in
the Swap
Contract) with respect to such Distribution Date over the "Party A
Floating
Amount" (as defined in the Swap Contract) with respect to such
Distribution
Date. With respect to the Swap Contract, any Distribution Date and
payment by
the Swap Counterparty to the Swap Contract Administrator, the
excess, if any,
of the "Party A Floating Amount" with respect to such Distribution
Date over
the "Party B Floating Amount" 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
23
<PAGE>
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.
OC Floor:
An amount equal to 0.50% of the Cut-off Date Pool Principal
Balance.
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
the Depositor, any Seller or the Master Servicer, including in
house counsel,
reasonably acceptable to the Trustee; provided, however, that with
respect to
the interpretation or application of the REMIC Provisions, such
counsel must
(i) in fact be independent of the Depositor, any Seller and the
Master
Servicer, (ii) not have any direct financial interest in the
Depositor, any
Seller or the Master Servicer or in any affiliate thereof, and
(iii) not be
connected with the Depositor, any Seller or the Master Servicer as
an officer,
employee, promoter, underwriter, trustee, partner, director or
person
performing similar functions.
Optional
Termination: The termination of the Trust Fund provided
hereunder pursuant to clause (a) of the first sentence of Section
9.01.
24
<PAGE>
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 aggregate Stated Principal Balance of the Mortgage
Loans as of
the Cut-off Date.
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.
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 on such Distribution Date).
Overcollateralization Reduction Amount: With respect to any
Distribution
Date, an amount equal to the lesser of (i) the Excess
Overcollateralization
Amount for such Distribution Date and (ii) the Principal Remittance
Amount for
such Distribution Date.
Overcollateralization Target Amount: With respect to any
Distribution
Date (a) prior to the Stepdown Date, an amount equal to 0.90% of
the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date and (b)
on or after the Stepdown Date, the greater of (i) (x) for any
Distribution
Date prior to the Distribution Date in November 2012, an amount
equal to 2.25%
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 received in the related Prepayment Period) and (y) for
any
Distribution Date on or after the Distribution Date in November
2012, an
amount equal to 1.80% 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 received in the
related
Prepayment Period) and (ii) the OC Floor; provided, however, that
if a Trigger
Event is in effect on any Distribution Date, the
Overcollateralization Target
Amount will be the Overcollateralization Target Amount as in effect
for the
prior Distribution Date.
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<PAGE>
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 sum of (i) the aggregate Class Certificate Balance
of the
Offered Certificates and (ii) the Swap Principal Amount, in each
case, as of
such Distribution Date and after giving effect to distributions of
the
Principal Remittance Amount 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.
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 A-1........
0.120%
0.240%
----------------------------------------------------
Class A-2........
0.240%
0.480%
----------------------------------------------------
Class A-3........
0.270%
0.540%
----------------------------------------------------
Class M-1........
0.390%
0.585%
----------------------------------------------------
Class M-2........
0.410%
0.615%
----------------------------------------------------
Class M-3........
0.430%
0.645%
----------------------------------------------------
Class M-4........
0.530%
0.795%
----------------------------------------------------
Class M-5........
0.600%
0.900%
----------------------------------------------------
Class M-6........
0.680%
1.020%
----------------------------------------------------
Class M-7........
1.150%
1.725%
----------------------------------------------------
Class M-8........
1.450%
2.175%
----------------------------------------------------
Class M-9........
1.450%
2.175%
----------------------------------------------------
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<PAGE>
(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 applicable Pass-Through Margin for such Class and
Interest
Accrual Period and (y) the related Net Rate Cap for the related
Distribution
Date. With respect to any Interest Accrual Period and the Class
A-R
Certificates, the Weighted Average Adjusted Net Mortgage Rate for
the related
Distribution Date.
Payment
Adjustment Date: For each Mortgage Loan, the date specified in
the related Mortgage Note as the annual date on which the related
Scheduled
Payment will be adjusted.
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.
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
27
<PAGE>
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;
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
28
<PAGE>
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.
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.
29
<PAGE>
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 October 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 October 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.
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,
an amount equal to (1) the sum of: (a) the Principal Remittance
Amount for
such Distribution Date, less an amount equal to the lesser of (i)
the Deferred
Interest that accrued on the Mortgage Loans for the related Due
Period and
(ii) the Principal Prepayment Amount for the related Prepayment
Period and (b)
the Extra Principal Distribution Amount for such Distribution Date,
minus (2)
the amount of any Overcollateralization Reduction Amount for such
Distribution
Date.
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.
30
<PAGE>
Principal
Prepayment Amount: As to any Distribution Date, an amount
equal to the sum of all voluntary Principal Prepayments received
during the
related Prepayment Period and the amount of any Subsequent
Recoveries received
in the prior calendar month.
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, (x) the sum,
without duplication, of (a) the principal portion of each Scheduled
Payment
(without giving effect to any reductions thereof caused by any
Deficient
Valuations) due on each Mortgage Loan (other than a Liquidated
Mortgage Loan)
on the related Due Date, (b) the principal portion of the Purchase
Price of
each Mortgage Loan that was repurchased by the applicable Seller or
purchased
by the Master Servicer pursuant to this Agreement as of such
Distribution
Date, (c) the Substitution Adjustment Amount in connection with any
Deleted
Mortgage Loan received with respect to such Distribution Date, (d)
any
Insurance Proceeds or Liquidation Proceeds allocable to recoveries
of
principal of Mortgage Loans that are not yet Liquidated Mortgage
Loans
received during the calendar month preceding the month of such
Distribution
Date, (e) with respect to each Mortgage Loan that became a
Liquidated Mortgage
Loan during the 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 received during the related Prepayment Period and (g) any
Subsequent
Recoveries on the Mortgage Loans received during the related
Prepayment Period
minus (y) all Advances on the Mortgage Loans 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-OA18, Mortgage Pass-Through
Certificates,
Series 2006-OA18." 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 November 14, 2006 generally relating
to mortgage pass-through certificates to be sold by the
Depositor.
Prospectus
Supplement: The
prospectus supplement dated November 14,
2006 relating to the Offered Certificates.
PUD:
Planned Unit
Development.
31
<PAGE>
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 pursuant to Section 9.04,
any institution that is a regular purchaser and/or seller in the
secondary
market of residential mortgage loans as determined by the Trustee
(or any
advisor on its behalf), in its sole discretion, and any holder of
an interest
in the Class C Certificates; provided, however, that 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.
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
32
<PAGE>
been reduced, the difference between the principal balance of the
Mortgage
Loan outstanding immediately prior to such Deficient Valuation and
the
principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.
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
Certificates
other than the LIBOR Certificates, the last Business Day of the
month
preceding the month of a Distribution Date. With respect to any
Distribution
Date and the LIBOR 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, 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.
33
<PAGE>
Reportable
Event: Any event required to be reported on Form 8-K, and in
any event, the following:
(a) entry into a definitive agreement related to the Trust
Fund,
the
Certificates or the Mortgage Loans, or an amendment to a
Transaction
Document,
even if the Depositor is not a party to such agreement (e.g.,
a
servicing agreement with a servicer contemplated by Item 1108(a)(3)
of
Regulation
AB);
(b) termination of a Transaction Document (other than by
expiration
of the agreement on its stated termination date or as a
result of
all parties completing their obligations under such
agreement), even if the Depositor is not a party to such
agreement
(e.g., a
servicing agreement with a servicer contemplated by Item
1108(a)(3)
of Regulation AB);
(c) with respect to the Master Servicer only, if the Master
Servicer
becomes aware of any bankruptcy or receivership with respect to
Countrywide, the Depositor, the Master Servicer, any Subservicer,
the
Trustee,
any enhancement or support provider contemplated by Items
1114(b) or
1115 of Regulation AB, or any other material party
contemplated by Item 1101(d)(1) of Regulation AB;
(d) with respect to the Trustee, the Master Servicer and the
Depositor
only, the occurrence of an early amortization, performance
trigger or
other event, including an Event of Default under this
Agreement;
(e) the resignation, removal, replacement, substitution of the
Master
Servicer, any Subservicer or the Trustee;
(f) with respect to the Master Servicer only, if the Master
Servicer
becomes aware that (i) any material enhancement or support
specified
in Item 1114(a)(1) through (3) of Regulation AB or Item 1115
of
Regulation AB that was previously applicable regarding one or
more
Classes of
the Certificates has terminated other than by expiration of
the
contract on its stated termination date or as a result of all
parties
completing their obligations under such agreement; (ii) any
material
enhancement specified in Item 1114(a)(1) through (3) of
Regulation
AB or Item 1115 of Regulation AB has been added with respect
to one or
more Classes of the Certificates; or (iii) any existing
material
enhancement or support specified in Item 1114(a)(1) through (3)
of Regulation AB
or Item 1115 of Regulation AB with respect to one or
more
Classes of the Certificates has been materially amended or
modified;
and
(g) with respect to the Trustee, the Master Servicer and the
Depositor
only, a required distribution to Holders of the Certificates
is not
made as of the required Distribution Date under this Agreement.
Reporting
Subcontractor: With respect to the Master Servicer or the
Trustee, any Subcontractor determined by such Person pursuant to
Section
11.08(b) to be "participating in the servicing function" within the
meaning of
Item 1122 of Regulation AB. References to a Reporting Subcontractor
shall
refer only to the Subcontractor of such Person and shall not refer
to
Subcontractors generally.
34
<PAGE>
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.
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
or
after the Stepdown Date, the fraction (expressed as a percentage)
(1) the
numerator of which is the excess of (a) the aggregate Stated
Principal Balance
of the Mortgage Loans as of the Due Date occurring in the month
preceding the
month of that Distribution Date (after giving effect to Principal
Prepayments
in the Prepayment Period related to that prior Due Date) over (b)
(i) before
the Class Certificate Balances of the Senior Certificates and the
Swap
Principal Amount have been reduced to zero, the sum of the
aggregate Class
Certificate Balance of the Senior
35
<PAGE>
Certificates and the Swap Principal Amount, in each case,
immediately prior to
such Distribution Date, or (ii) after the Class Certificate
Balances of the
Senior Certificates and the Swap Principal Amount have been reduced
to zero,
the Class Certificate Balance of the most senior Class of
Subordinated
Certificates outstanding immediately prior to such Distribution
Date and (2)
the denominator of which is the aggregate Stated Principal Balance
of the
Mortgage Loans as of the Due Date occurring in the month preceding
the month
of that Distribution Date (after giving effect to Principal
Prepayments in the
Prepayment Period related to that prior Due Date).
Senior
Principal Distribution Target Amount: As to any Distribution
Date, the excess of (x) the sum of (i) the aggregate Class
Certificate Balance
of the Senior Certificates and (ii) the Swap Principal Amount, in
each case
immediately prior to such Distribution Date, over (y) the lesser of
(A) the
product of (i) (x) 77.875% on any Distribution Date on or after the
Stepdown
Date and prior to the Distribution Date in November 2012 or (y)
82.300% on any
Distribution Date on or after the Stepdown Date and on or after
the
Distribution Date in November 2012 and (ii) 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
received in
the related Prepayment Period) and (B) 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 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.
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).
36
<PAGE>
Startup
Day: The Closing
Date.
Stated
Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date
as
specified in the amortization schedule at the time relating thereto
(before
any adjustment to such amortization schedule by reason of any
moratorium or
similar waiver or grace period), plus any Deferred Interest added
to the
principal balance of that Mortgage Loan pursuant to the terms of
the related
Mortgage Note on or prior to that Due Date, minus the sum of: (i)
any previous
partial Principal Prepayments and the payment of principal due on
such Due
Date, irrespective of any delinquency in payment by the related
Mortgagor,
(ii) Liquidation Proceeds allocable to principal (other than with
respect to
any Liquidated Mortgage Loan) received in the prior calendar month;
(iii)
Principal Prepayments received through the last day of the related
Prepayment
Period, in each case, with respect to that Mortgage Loan and (iv)
any Realized
Loss previously incurred in connection with a Deficient Valuation.
The Stated
Principal Balance of any Mortgage Loan that becomes a Liquidated
Mortgage Loan
will be zero on each date following the Due Period in which such
Mortgage Loan
becomes a Liquidated Mortgage Loan.
Stepdown
Date: The earlier to occur of: (1) the Distribution Date
immediately following the Distribution Date on which the aggregate
Class
Certificate Balance of the Senior Certificates and the Swap
Principal Amount
are reduced to zero, and (2) the later of (x) the Distribution Date
in
November 2009 and (y) the first Distribution Date on which the sum
of (i) the
aggregate Class Certificate Balance of the Senior Certificates and
(ii) the
Swap Principal Amount (in each case, after calculating
anticipated
distributions on such Distribution Date) is less than or equal to
the product
of (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 in the related Prepayment Period) and (y)
either (i)
prior to the Distribution Date in November 2012, 77.875% or (ii) on
or after
the Distribution Date in November 2012, 82.300%.
Stepdown
Target Subordination Percentage: With respect to any Class of
Subordinated Certificates, the respective percentage indicated in
the
following table:
Stepdown Target
Stepdown Target
Subordination
Subordination
Percentage (1) Percentage (2)
---------------
---------------
Class M-1...............
16.375%
13.100%
Class M-2...............
12.125%
9.700%
Class M-3...............
10.750%
8.600%
Class M-4...............
8.500%
6.800%
Class M-5...............
7.250%
5.800%
Class M-6...............
6.000%
4.800%
Class M-7...............
4.750%
3.800%
Class M-8...............
3.501%
2.800%
Class M-9...............
2.250%
1.800%
---------
(1) For any
Distribution Date occurring on or after the Distribution Date
occurring
in November 2009 and prior to the Distribution Date occurring
in
November 2012.
(2) For any
Distribution Date occurring on or after the Distribution Date
occurring
in November 2012.
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Streamlined Documentation Mortgage Loan: Any Mortgage Loan
originated
pursuant to Countrywide's Streamlined Loan Documentation Program
then in
effect. For the purposes of this Agreement, a Mortgagor is eligible
for a
mortgage pursuant to Countrywide's Streamlined Loan Documentation
Program if
that Mortgagor is refinancing an existing mortgage loan that was
originated or
acquired by Countrywide where, among other things, the mortgage
loan has not
been more than 30 days delinquent in payment during the previous
twelve month
period.
Subcontractor:
Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly
understood
by participants in the mortgage-backed securities market) of
Mortgage Loans
but performs one or more discrete functions identified in Item
1122(d) of
Regulation AB with respect to 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,
the excess
of: (1) the sum of: (a) the sum of (i) the aggregate Class
Certificate Balance
of the Senior Certificates and (ii) the Swap Principal Amount (in
each case,
after taking into account the distribution of the Senior
Principal
Distribution Target 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 for such Distribution Date
and (b) the
aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution
Date minus the OC Floor; provided, however, that if 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.
Subsequent
Recoveries: As to any Distribution Date, with respect to a
Liquidated Mortgage Loan that resulted in a Realized Loss in a
prior calendar
month, unexpected amounts received by the Master Servicer (net of
any related
expenses permitted to be reimbursed pursuant to Section 3.08)
specifically
related to such Liquidated Mortgage Loan 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.
Subsidiary
REMIC: As defined in
the Preliminary Statement.
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
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<PAGE>
deduction of the principal portion of the Scheduled Payment due in
the month
of substitution, not in excess of, and not more than 10% less than
the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) be accruing
interest at a
rate no lower than and not more than 1% per annum higher than that
of the
Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher
than that of
the Deleted Mortgage Loan; (iv) have a remaining term to maturity
no greater
than (and not more than one year less than that of) the Deleted
Mortgage Loan;
(v) have a Maximum Mortgage Rate no lower than and not more than 1%
per annum
higher than the Maximum Mortgage Rate of the Deleted Mortgage Loan;
(vi) have
a Minimum Mortgage Rate no lower than and not more than 1% per
annum higher
than the Minimum Mortgage Rate of the Deleted Mortgage Loan; (vii)
have the
same Mortgage Index, reset period, payment cap and recast
provisions 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.
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 prior to the
termination
of the Swap Contract, a fraction, (A) the numerator of which is the
Swap Fee
payable to the Swap Counterparty under the Swap Contract with
respect to such
Distribution Date times a fraction, the numerator of which is 360
and the
denominator of which is the actual number of days in the related
Interest
Accrual Period and (B) the denominator of which is the Class
Certificate
Balance of the Class A-1 Certificates immediately prior to such
Distribution
Date.
Swap
Contract: The transaction evidenced by the confirmation (as
assigned to the Swap Contract Administrator pursuant to the Swap
Contract
Assignment Agreement), a form of which is attached hereto as
Exhibit 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 earlier of (i) the date on which
the
Class Certificate Balance of the Class A-1 Certificates has been
reduced to
zero or (ii) the Distribution Date in December 2046.
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<PAGE>
Swap
Counterparty: Deutsche
Bank AG, New York Branch and its
successors.
Swap
Counterparty Trigger Event: A Swap Termination Payment that is
triggered upon (i) an "Event of Default" under the ISDA Master
Agreement with
respect to which the Swap Counterparty is the sole "Defaulting
Party" (as
defined in the ISDA Master Agreement) or (ii) a "Termination Event"
(other
than an Illegality or a Tax Event (as such terms are defined in the
ISDA
Master Agreement)) or "Additional Termination Event" under the ISDA
Master
Agreement with respect to which the Swap Counterparty is the sole
"Affected
Party" (as defined in the ISDA Master Agreement).
Swap Fee:
For any Distribution Date prior to the termination of the Swap
Contract, the product of (i) 0.07% per annum for any Distribution
Date on or
before the Optional Termination Date or 0.14% per annum for any
Distribution
Date after the Optional Termination Date, (ii) the Class
Certificate Balance
of the Class A-1 Certificates immediately prior to such
Distribution Date and
(iii) the actual number of days in the related Interest Accrual
Period divided
by 360.
Swap
Principal Amount: With respect to any Distribution Date prior
to
the termination of the Swap Contract, the excess, if any, of (i)
the aggregate
amount of Net Deferred Interest otherwise allocable to the Class
A-1
Certificates in accordance with Section 4.03 in the absence of the
Swap
Contract over (ii) distributions in respect of the Swap Principal
Amount made
to the Swap Account pursuant to Sections 4.02(b) and (c) (before
giving effect
to distributions on such Distribution Date). With respect to any
Distribution
Date after the termination of the Swap Contract, zero.
Swap
Termination Payment: The payment payable to either party under
the
Swap Contract due to an early termination of the Swap Contract.
Swap
Trust: The trust fund
established by Section 4.09.
Swap
Trustee: The Bank of New York, a New York banking corporation,
not
in its individual capacity, but solely in its capacity as trustee
for the
benefit of the Holders of the Class A-1 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.
Successful
Auction: An auction held pursuant to Section 9.04 at which at
least three Qualified Bidders submitted bids and at least one of
those bids
was an Acceptable Bid Amount.
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.
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<PAGE>
Terminator: As defined
in Section 9.01.
Transaction Documents: This Agreement, the Swap Contract, the
Swap
Contract Administration Agreement and any other document or
agreement entered
into in connection with the Trust Fund, the Certificates or the
Mortgage
Loans.
Transfer:
Any direct or indirect transfer or sale of any Ownership
Interest in a 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.
Trustee
Fee Rate: With respect to each Mortgage Loan, 0.009% per annum.
Underwriter: 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 Offered Certificates or
the Swap Principal Amount, as applicable, (x) the portion of the
aggregate
Applied Realized Loss Amount previously allocated to that Class or
the Swap
Principal Amount, as applicable, remaining unpaid from prior
Distribution
Dates minus (y) any increase in the Class Certificate Balance of
that Class or
the Swap Principal Amount, as applicable, due to the receipt of
Subsequent
Recoveries allocated to the Class Certificate Balance of that Class
or the
Swap Principal Amount, as applicable, pursuant to Section
4.02(h).
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<PAGE>
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 weighted average of the Adjusted Net Mortgage Rates on
the Mortgage
Loans, weighted on the basis of the Stated Principal Balance of
each such
Mortgage Loan as of the Due Date occurring in the calendar month
preceding the
month of that Distribution Date (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 that bids the highest price.
SECTION
1.02. Certain Interpretive Principles.
All terms
defined in this Agreement shall have the defined meanings when
used in any certificate, agreement or other document delivered
pursuant hereto
unless otherwise defined therein. For purposes of this Agreement
and all such
certificates and other documents, unless the context otherwise
requires: (a)
accounting terms not otherwise defined in this Agreement, and
accounting terms
partly defined in this Agreement to the extent not defined, shall
have the
respective meanings given to them under generally accepted
accounting
principles; (b) the words "hereof," "herein" and "hereunder" and
words of
similar import refer to this Agreement (or the certificate,
agreement or other
document in which they are used) as a whole and not to any
particular
provision of this Agreement (or such certificate, agreement or
document); (c)
references to any Section, Schedule or Exhibit are references to
Sections,
Schedules and Exhibits in or to this Agreement, and references to
any
paragraph, subsection, clause or other subdivision within any
Section or
definition refer to such paragraph, subsection, clause or other
subdivision of
such Section or definition; (d) the term "including" means
"including without
limitation"; (e) references to any law or regulation refer to that
law or
regulation as amended from time to time and include any successor
law or
regulation; (f) references to any agreement refer to that agreement
as amended
from time to time; (g) references to any Person include that
Person's
permitted successors and assigns; and (h) a Mortgage Loan is "30
days
delinquent" if any Scheduled Payment has not been received by the
close of
business on the day immediately preceding the Due Date on which the
next
Scheduled Payment is due. Similarly for "60 days delinquent," "90
days
delinquent" and so on.
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<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 or
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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<PAGE>
(B) with respect to any Lost Mortgage Note, a lost note
affidavit from Countrywide stating that the original Mortgage
Note
was lost or destroyed, together with a copy of such Mortgage
Note;
(ii) except as provided below and for each Mortgage Loan that
is
not a MERS
Mortgage Loan, the original recorded Mortgage or a copy of
such
Mortgage, with recording information, (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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<PAGE>
(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
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<PAGE>
documents required to be delivered by the Depositor or the Master
Servicer to
the Trustee. In the event that the original Mortgage is not
delivered and in
connection with the payment in full of the related Mortgage Loan
and the
public recording office requires the presentation of a "lost
instruments
affidavit and indemnity" or any equivalent document, because only a
copy of
the Mortgage can be delivered with the instrument of satisfaction
or
reconveyance, the Master Servicer shall execute and deliver or
cause to be
executed and delivered such a document to the public recording
office. In the
case where a public recording office retains the original recorded
Mortgage or
in the case where a Mortgage is lost after recordation in a public
recording
office, Countrywide shall deliver to the Trustee a copy of such
Mortgage
certified by such public recording office to be a true and complete
copy of
the original recorded Mortgage.
As
promptly as practicable subsequent to such transfer and
assignment,
and in any event, within one hundred twenty (120) days thereafter,
the Trustee
shall (A) as the assignee thereof, affix the following language to
each
assignment of Mortgage: "CWALT, Inc., Series 2006-OA18, 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
46
<PAGE>
reasonable efforts to effect a substitution, rather than a
repurchase of, such
Deleted Mortgage Loan and provided further that the cure period
provided for
in Section 2.02 or in Section 2.03 shall not apply to the initial
delivery of
the Mortgage File for such Delay Delivery Mortgage Loan, but
rather
Countrywide (on its own behalf and on behalf of Park Granada, Park
Monaco and
Park Sienna) shall have five (5) Business Days to cure such failure
to
deliver. At the end of such thirty (30) day period the Trustee
shall send a
Delay Delivery Certification for the Delay Delivery Mortgage Loans
delivered
during such thirty (30) day period in accordance with the
provisions of
Section 2.02.
(d) Neither the Depositor nor the Trust will acquire or hold any
Mortgage Loan
that would violate the representations made by Countrywide set
forth in
clauses (50) or (51) 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 (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. 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 (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 (a
"Final Certification"), with any applicable exceptions noted
thereon.
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If, in the
course of such review, the Trustee finds any document
constituting a part of a Mortgage File that does not meet the
requirements of
Section 2.01, the Trustee shall list such as an exception in the
Final
Certification; provided, however that the Trustee shall not make
any
determination as to whether (i) any endorsement is sufficient to
transfer all
right, title and interest of the party so endorsing, as noteholder
or assignee
thereof, in and to that Mortgage Note or (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
48
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Countrywide (on its own behalf and on behalf of Park Granada, Park
Monaco and
Park Sienna) or its designee and shall cause such Mortgage to be
removed from
registration on the MERS(R) System in accordance with MERS' rules
and
regulations or (ii) cause MERS to designate on the MERS(R) System
Countrywide
(on its own behalf and on behalf of Park Granada, Park Monaco and
Park Sienna)
or its designee as the beneficial holder of such Mortgage Loan.
(b)
[Reserved].
(c)
[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
49
<PAGE>
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.
(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 and the NIM
Insurer.
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.
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
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<PAGE>
the Mortgage Loan Schedule for the benefit of the
Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the
substitution of the
Substitute Mortgage Loan or Loans and the Master Servicer shall
deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the
Substitute Mortgage Loan or Loans shall be subject to the terms of
this
Agreement in all respects, and the related Seller shall be deemed
to have made
with respect to such Substitute Mortgage Loan or Loans, as of the
date of
substitution, the representations and warranties made pursuant to
Section
2.03(a) with respect to such Mortgage Loan. Upon any such
substitution and the
deposit to the Certificate Account of the amount required to be
deposited
therein in connection with such substitution as described in the
following
paragraph, the Trustee shall release the Mortgage File held for the
benefit of
the Certificateholders relating to such Deleted Mortgage Loan to
the related
Seller and shall execute and deliver at such Seller's direction
such
instruments of transfer or assignment prepared by Countrywide (on
its own
behalf and on behalf of Park Granada, Park Monaco and Park Sienna),
in each
case without recourse, as shall be necessary to vest title in that
Seller, or
its designee, the Trustee's interest in any Deleted Mortgage Loan
substituted
for pursuant to this Section 2.03.
For any
month in which a Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer
will determine the amount (if any) by which the aggregate principal
balance of
all Substitute Mortgage Loans sold to the Depositor by that Seller
as of the
date of substitution is less than the aggregate Stated Principal
Balance of
all Deleted Mortgage Loans repurchased by that Seller (after
application of
the scheduled principal portion of the monthly payments due in the
month of
substitution). The amount of such shortage (the "Substitution
Adjustment
Amount") plus an amount equal to the aggregate of any unreimbursed
Advances
with respect to such Deleted Mortgage Loans shall be deposited in
the
Certificate Account by Countrywide (on its own behalf and on behalf
of Park
Granada, Park Monaco and Park Sienna) on or before the Distribution
Account
Deposit Date for the Distribution Date in the month succeeding the
calendar
month during which the related Mortgage Loan became required to be
purchased
or replaced hereunder.
In the
event that a Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate
Account pursuant
to Section 3.05 on or before the Distribution Account Deposit Date
for the
Distribution Date in the month following the month during which
that Seller
became obligated hereunder to repurchase or replace such Mortgage
Loan and
upon such deposit of the Purchase Price, the delivery of the
Opinion of
Counsel required by Section 2.05 and receipt of a Request for
Release in the
form of Exhibit N hereto, the Trustee shall release the related
Mortgage File
held for the benefit of the Certificateholders to such Person, and
the Trustee
shall execute and deliver at such Person's direction such
instruments of
transfer or assignment prepared by such Person, in each case
without recourse,
as shall be necessary to transfer title from the Trustee. It is
understood and
agreed that the obligation under this Agreement of any Person to
cure,
repurchase or replace any Mortgage Loan as to which a breach has
occurred and
is continuing shall constitute the sole remedy against such Persons
respecting
such breach available to Certificateholders, the Depositor or the
Trustee on
their behalf.
The
representations and warranties made pursuant to this Section
2.03
shall survive delivery of the respective Mortgage Files to the
Trustee for the
benefit of the Certificateholders.
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<PAGE>
SECTION
2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans.
The
Depositor hereby represents and warrants to the Trustee with
respect
to each Mortgage Loan as of the date of this Agreement or such
other date set
forth in this Agreement that as of the Closing Date, and following
the
transfer of the 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.
52
<PAGE>
SECTION
2.06. Execution and Delivery of Certificates.
The Trustee
acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has
executed and
delivered to or upon the order of the Depositor, the Certificates
in
authorized denominations evidencing directly or indirectly the
entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust
Fund and
exercise the rights referred to above for the benefit of all
present and
future Holders of the Certificates and to perform the duties set
forth in this
Agreement, 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.
53
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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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<PAGE>
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
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Trustee, the NIM Insurer or the Depositor shall have any
responsibility or
liability for any action or failure to act by the Master Servicer
nor shall
the Trustee or the Depositor be obligated to supervise the
performance of the
Master Servicer 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
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required for any waiver of Prepayment Charges or for the extension
of the due
dates for payments due on a Mortgage Note, if the aggregate number
of
outstanding Mortgage Loans that have been granted such waivers or
extensions
exceeds 5% of the aggregate number of 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.
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In
addition, with respect to any Mortgage Loan that is subject to
a
buydown agreement, on each Due Date for such Mortgage Loan, in
addition to the
monthly payment remitted by the Mortgagor, the Master Servicer
shall cause
funds to be deposited into the Certificate Account in an amount
required to
cause an amount of interest to be paid with respect to such
Mortgage Loan
equal to the amount of interest that has accrued on such Mortgage
Loan from
the preceding Due Date at the Mortgage Rate net of the related
Master
Servicing Fee.
The
foregoing requirements for remittance by the Master Servicer
shall
be exclusive, it being understood and agreed that, without limiting
the
generality of the foregoing, payments in the nature of late payment
charges or
assumption fees, if collected, need not be remitted by the Master
Servicer. In
the event that the Master Servicer shall remit any amount not
required to be
remitted, it may at any time withdraw or direct the institution
maintaining
the Certificate Account to withdraw such amount from the
Certificate Account,
any provision 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.
(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
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this Agreement or withdrawn in accordance with Section 3.08. In no
event shall
the Trustee incur liability for withdrawals from the Distribution
Account at
the direction of the Master Servicer.
(e) Each
institution at which the Certificate Account or the
Distribution Account is maintained shall invest the funds therein
as directed
in writing by the Master Servicer in Permitted Investments, which
shall mature
not later than (i) in the case of the Certificate Account, the
second Business
Day next preceding the related Distribution Account Deposit Date
(except that
if such Permitted Investment is an obligation of the institution
that
maintains such account, then such Permitted Investment shall mature
not later
than the Business Day next preceding such Distribution Account
Deposit Date)
and (ii) in the case of the Distribution Account, the Business Day
next
preceding the Distribution Date (except that if such Permitted
Investment is
an obligation of the institution that maintains such fund or
account, then
such Permitted Investment shall mature not later than such
Distribution Date)
and, in each case, shall not be sold or disposed of prior to its
maturity. All
such Permitted Investments shall be made in the name of the
Trustee, for the
benefit of the Certificateholders. All income and gain net of any
losses
realized from any such investment of funds on deposit in the
Certificate
Account, or the Distribution Account shall be for the benefit of
the Master
Servicer as servicing compensation and shall be remitted to it
monthly as
provided 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,
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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 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.
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Upon
reasonable advance notice in writing, the Master Servicer will
provide to each Certificateholder and/or Certificate Owner which is
a savings
and loan association, bank or insurance company certain reports and
reasonable
access to information and documentation regarding the Mortgage
Loans
sufficient to permit such Certificateholder and/or Certificate
Owner to comply
with applicable regulations of the OTS or other regulatory
authorities with
respect to investment in the Certificates; provided that the Master
Servicer
shall be entitled to be reimbursed by each such Certificateholder
and/or
Certificate Owner for actual expenses incurred by the Master
Servicer in
providing such reports and access. 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;
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(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;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw
an amount equal to the 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
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(vi) to clear and terminate the Distribution Account upon
termination of this Agreement pursuant to Section 9.01.
(c) The
Trustee shall withdraw funds from the Carryover Reserve Fund
for
distribution to the LIBOR Certificates in the manner specified in
Section
4.02(c)(vi) (and to withhold from the amounts so withdrawn the
amount of any
taxes that it is authorized to retain pursuant to the third
paragraph of
Section 8.11). In addition, the Trustee may from time to time make
withdrawals
from the Carryover Reserve Fund for the following purposes:
(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
distribution 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 the proceeds of liquidation of the
Mortgage Loan
or Subsequent Recoveries to the extent permitted by Section 3.08.
It is
understood and agreed that no earthquake or other additional
insurance is to
be required of any Mortgagor or maintained on property acquired in
respect of
a Mortgage other than pursuant to such applicable laws and
regulations as
shall at any time be in force and as shall require such additional
insurance.
If the Mortgaged Property is located at the time of origination of
the
Mortgage Loan in a federally designated special flood hazard area
and such
area is participating in the national flood insurance program, the
Master
Servicer shall cause flood insurance to be maintained with respect
to such
Mortgage Loan. Such flood insurance
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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].
(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
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Mortgage Note or Mortgage is not otherwise so required under such
Mortgage
Note or Mortgage as a condition to such transfer. In the event that
the Master
Servicer is prohibited by law from enforcing any such due-on-sale
clause, or
if coverage under any Required Insurance Policy would be adversely
affected,
or if nonenforcement is otherwise permitted hereunder, the Master
Servicer is
authorized, subject to Section 3.10(b), to take or enter into an
assumption
and modification agreement from or with the person to whom such
property has
been or is about to be conveyed, pursuant to which such person
becomes liable
under the Mortgage Note and, unless prohibited by applicable state
law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan
shall
continue to be covered (if so covered before the Master Servicer
enters such
agreement) by the applicable Required Insurance Policies. The
Master Servicer,
subject to Section 3.10(b), is also authorized with the prior
approval of the
insurers under any Required Insurance Policies to enter into a
substitution of
liability agreement with such Person, pursuant to which the
original Mortgagor
is released from liability and such Person is substituted as
Mortgagor and
becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the
Master Servicer shall not be deemed to be in default under this
Section by
reason of any transfer or assumption which the Master Servicer
reasonably
believes it is restricted by law from preventing, for any reason
whatsoever.
(b)
Subject to the Master Servicer's duty to enforce any
due-on-sale
clause to the extent set forth in Section 3.10(a), 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.
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(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 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 of such costs and expenses 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 one-mile radius of any site listed
in the
Expenditure Plan for the Hazardous Substance Clean Up Bond Act of
1984 or
other site with environmental or hazardous waste risks known to the
Master
Servicer, the Master Servicer will, prior to acquiring the
Mortgaged Property,
consider such risks and only take action in accordance with its
established
environmental review procedures.
With
respect to any REO Property, the deed or certificate of sale
shall
be taken in the name of the Trustee for the benefit of the
Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's
name shall
be placed on the title to such REO Property solely as the Trustee
hereunder
and not in its individual capacity. The Master Servicer shall
ensure that the
title to such REO Property references the Pooling and Servicing
Agreement and
the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO
Property, the Master Servicer shall either itself or through an
agent selected
by the Master Servicer protect and conserve such REO Property in
the same
manner and to such extent as is customary in the locality where
such REO
Property is located and may, incident to its conservation and
protection of
the interests of the Certificateholders, rent the same, or any part
thereof,
as the Master Servicer deems to be in the best interest of the
Certificateholders for the period prior to the sale of such REO
Property. The
Master Servicer shall prepare for and deliver to the Trustee a
statement with
respect to each REO Property that has been rented showing the
aggregate rental
income received and all expenses incurred in connection with the
maintenance
of such REO Property at such times as is necessary to enable the
Trustee to
comply with the reporting requirements of the REMIC Provisions. The
net
monthly rental income, if any, from such REO Property shall be
deposited in
the Certificate Account no later than the close of business on
each
Determination Date. The Master Servicer shall perform the tax
reporting and
withholding required by Sections 1445 and 6050J of the Code with
respect to
foreclosures and abandonments, the tax reporting required by
Section 6050H of
the Code with respect to the receipt of mortgage interest from
individuals and
any tax reporting required by Section 6050P of the Code with
respect to the
cancellation of indebtedness by certain
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financial entities, by preparing such tax and information returns
as may be
required, in the form required, and delivering the same to the
Trustee for
filing.
In the
event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent
default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged
Property as
soon as practicable in a manner that maximizes the Liquidation
Proceeds
thereof, but in no event later than three years after its
acquisition by the
Trust Fund. In that event, the Trustee shall have been supplied
with an
Opinion of Counsel to the effect that the holding by the Trust Fund
of such
Mortgaged Property subsequent to a three-year period, if
applicable, will not
result in the imposition of taxes on "prohibited transactions" of
any REMIC
hereunder as defined in Section 860F of the Code or cause any REMIC
hereunder
to fail to qualify as a REMIC at any time that any Certificates
are
outstanding, and that the Trust Fund may continue to hold such
Mortgaged
Property (subject to any conditions contained in such Opinion of
Counsel)
after the expiration of such three-year period. Notwithstanding any
other
provision of this Agreement, no Mortgaged Property acquired by the
Trust Fund
shall be rented (or allowed to continue to be rented) or otherwise
used for
the production of income by or on behalf of the Trust Fund in such
a manner or
pursuant to any 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.
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The
proceeds from any liquidation of a Mortgage Loan, as well as
any
income from an REO Property, will be applied in the following order
of
priority: first, to reimburse the Master Servicer for any related
unreimbursed
Servicing Advances and Master Servicing Fees; second, to reimburse
the Master
Servicer or the Trustee for any unreimbursed Advances; third, to
reimburse the
Certificate Account for any Nonrecoverable Advances (or portions
thereof) that
were previously withdrawn by the Master Servicer or the Trustee
pursuant to
Section 3.08(a)(iii) that related to such Mortgage Loan; fourth, to
accrued
and unpaid interest (to the extent no Advance has been made for
such amount or
any such Advance has been reimbursed) on the Mortgage Loan or
related REO
Property, at the Adjusted Net Mortgage Rate to the Due Date
occurring in the
month in which such amounts are required to be distributed; and
fifth, as a
recovery of principal of the Mortgage Loan. Excess Proceeds, if
any, from the
liquidation of a Liquidated Mortgage Loan will be retained by the
Master
Servicer as additional servicing compensation pursuant to Section
3.14.
The Master
Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust Fund any Mortgage Loan
which is
151 days or more delinquent at a price equal to the Purchase Price;
provided,
however, that the Master Servicer may only exercise this right on
or before
the next to the last day of the calendar month 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 the related 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,
(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
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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
Servicer
shall deposit the Purchase Price for any Modified Mortgage Loan in
the
Certificate Account pursuant to Section 3.05 within one Business
Day after the
purchase of the Modified Mortgage Loan. Upon receipt by the Trustee
of written
notification of any such deposit signed by a Servicing Officer, the
Trustee
shall release to Countrywide the related Mortgage File and shall
execute and
deliver such instruments of transfer or assignment, in each case
without
recourse, as shall be necessary to vest in Countrywide any Modified
Mortgage
Loan previously transferred and assigned pursuant 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
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Master Servicer shall cause the Mortgage File or documents so
released to
be returned to the Trustee when the need therefor by the Master
Servicer no
longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof
are deposited in the Certificate Account, in which case the Master
Servicer
shall deliver to the Trustee a Request for Release in the form of
Exhibit N,
signed by a Servicing Officer.
If the
Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by
this
Agreement, the Master Servicer shall deliver or cause to be
delivered to the
Trustee, for signature, as appropriate, any court pleadings,
requests for
trustee's sale or other documents necessary to effectuate such
foreclosure or
any legal action brought to obtain judgment against the Mortgagor
on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or
to enforce
any other remedies or rights provided by the Mortgage Note or the
Mortgage or
otherwise available at law or in equity.
SECTION
3.13. Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Master
Servicer shall transmit to the Trustee as required by this
Agreement all
documents and instruments in respect of a Mortgage Loan coming into
the
possession of the Master Servicer from time to time and shall
account fully to
the Trustee for any funds received by the Master Servicer or which
otherwise
are collected by the Master Servicer as Liquidation Proceeds,
Insurance
Proceeds or Subsequent Recoveries in respect of any Mortgage Loan.
All
Mortgage Files and funds collected or held by, or under the control
of, the
Master Servicer in respect of any Mortgage Loans, whether from the
collection
of principal and interest payments or from Liquidation Proceeds and
any
Subsequent Recoveries, including but not limited to, any funds on
deposit in
the Certificate Account, shall be held by the Master Servicer for
and on
behalf of the Trustee and shall be and remain the sole and
exclusive property
of the Trustee, subject to the applicable provisions of this
Agreement. The
Master Servicer also agrees that it shall not create, incur or
subject any
Mortgage File or any funds that are deposited in the Certificate
Account,
Distribution Account or any Escrow Account, or any funds that
otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest,
judgment, levy,
writ of attachment or other encumbrance, or assert by legal action
or
otherwise any claim or right of setoff against any Mortgage File or
any funds
collected on, or in connection with, a Mortgage Loan, except,
however, that
the Master Servicer shall be entitled to set off against and deduct
from any
such funds any amounts that are properly due and payable to the
Master
Servicer under this Agreement.
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
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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.
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.
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
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fulfill any such obligation in any material respect, specifying
each such
failure known to such officer and the nature and status
thereof.
(c) The
Trustee shall forward a copy of each such statement to each
Rating Agency.
SECTION
3.17. Errors and Omissions Insurance; Fidelity Bonds.
The Master
Servicer shall for so long as it acts as master servicer
under this Agreement, obtain and maintain in force (a) a policy or
policies of
insurance covering errors and omissions in the performance of its
obligations
as Master Servicer hereunder and (b) a fidelity bond in respect of
its
officers, employees and agents. Each such policy or policies and
bond shall,
together, comply with the requirements from time to time of FNMA or
FHLMC for
persons performing servicing for mortgage loans purchased by FNMA
or FHLMC. In
the event that any such policy or bond ceases to be in effect, the
Master
Servicer shall obtain a comparable replacement policy or bond from
an insurer
or issuer, meeting the requirements set forth above as of the date
of such
replacement.
SECTION
3.18. Notification of Adjustments.
On each
Adjustment Date, the Master Servicer shall make interest rate
and scheduled payment 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 and/or monthly payment adjustments. The
Master
Servicer also shall provide timely notification to the Trustee of
all
applicable data and information regarding such interest rate or
monthly
payment adjustments and the Master Servicer's methods of
implementing such
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 and/or
principal loss
caused thereby without reimbursement therefor; provided, however,
the Master
Servicer shall be held harmless with respect to any interest rate
and/or
monthly payment 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
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amounts received on behalf of the Swap Trustee from time to time
with respect
to the Swap Contract into the Swap Account.
Upon the
Swap Contract Administrator obtaining actual knowledge of the
rating of the Swap Counterparty falling below the Approved Ratings
Threshold
(as defined in the ISDA Master Agreement) or upon the Swap
Contract
Administrator obtaining actual knowledge of the rating of the
Swap
Counterparty falling below the Required Ratings Threshold (as
defined in the
ISDA Master Agreement), the Swap Trustee shall direct the Swap
Contract
Administrator to (i) demand payment of the Delivery Amount (as
defined in the
ISDA Master Agreement) from the Swap Counterparty on each Valuation
Date (as
defined in the ISDA Master Agreement) and to perform its other
obligations in
accordance with the ISDA Master Agreement or (ii) take such other
action
required under the ISDA Master Agreement. If a Delivery Amount is
demanded,
the Swap Contract Administrator, in accordance with the Swap
Contract
Administration Agreement, shall establish an account to hold cash
and other
eligible investments pledged under the ISDA Master Agreement. Any
cash or
other Eligible Collateral (as defined in the ISDA Master Agreement)
pledged
under the ISDA Master Agreement shall not be part of the
Distribution Account
or the Swap Account unless remitted to such accounts by the Swap
Contract
Administrator in accordance with the Swap Contract Administration
Agreement.
If Eligible Collateral (as defined in the ISDA Master Agreement)
with a value
equal to the Delivery Amount is not delivered to the Swap
Contract
Administrator by the Swap Counterparty, 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 ISDA Master Agreement) or Termination Event (as
defined in
the ISDA Master Agreement) for which the Swap Contract
Administrator has the
right to designate an Early Termination Date (as defined in the
ISDA Master
Agreement), 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 ISDA Master
Agreement
and consistent with the terms hereof.
Any Swap
Termination Payment received from the Swap Counterparty shall
be used to pay any upfront amount required under any replacement
swap contract
and any excess shall be distributed to Countrywide and will not be
available
to make distributions in respect of any Class of Certificates. In
the event
that a replacement swap contract cannot be procured, any Swap
Termination
Payment received from the Swap Counterparty in respect of the
termination of
the original Swap Contract shall, in accordance with the Swap
Contract
Administration Agreement, be held in the Swap Administration
Account and
distributed to the Swap Trustee on future Distribution Date for
deposit into
the Swap Account to the extent necessary to make distributions on
the Class
A-1 Certificates.
In the
event that a replacement swap is procured and the replacement
counterparty pays an upfront amount to the Swap Contract
Administrator in
connection with the execution of the
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replacement swap contract, the Swap Contract Administrator, in
accordance with
the Swap Contract Administration Agreement, shall remit to the Swap
Trustee
such upfront amount to be included in Interest Funds and the
Principal
Distribution Amount for the following Distribution Date to the
extent that a
Swap Termination Payment is payable to the Swap Counterparty in
connection
with the termination of the original Swap Contract (or was
previously paid to
the Swap Counterparty and Interest Funds and the Principal
Distribution Amount
for one or more preceding Distribution Dates were used to cover
such Swap
Termination Payment). Any upfront amount paid by a replacement
counterparty
that is not remitted by the Swap Contract Administrator to the Swap
Trustee to
cover any Swap Termination Payment payable or previously paid to
the Swap
Counterparty in respect of the original Swap Contract for the
following
Distribution Date shall be distributed to Countrywide and will not
be
available to make distributions in respect of any Class of
Certificates. The
Trustee shall provide the Swap Contract Administrator with all
information
necessary to make payments to the Swap Trustee pursuant to this
paragraph.
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 S no later than
the third
Business Day following the immediately succeeding Determination
Date with a
copy to the Class P Certificateholders. If the Master Servicer has
waived or
does not collect all or a portion of a Prepayment Charge relating
to a
Principal Prepayment in full or in part due to any action or
omission of the
Master Servicer, other than as provided above, the Master Servicer
shall
deliver to the Trustee, together with the Principal Prepayment in
full or in
part, the amount of such Prepayment Charge (or such portion thereof
as had
been waived) for deposit into the Certificate Account (not later
than 1:00
p.m. Pacific time on the immediately succeeding Master Servicer
Advance Date,
in the case of such Prepayment Charge) for distribution in
accordance with the
terms of this Agreement.
(b) Upon
discovery by the Master Servicer or a Responsible Officer of
the Trustee of a breach of the foregoing subsection (a), the party
discovering
the breach shall give prompt written notice to the other
parties.
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(c)
Countrywide represents and warrants to the Depositor and the
Trustee, as of the Closing Date, that the information in the
Prepayment Charge
Schedule (including the attached prepayment charge summary) is
complete and
accurate in all material respects at the dates as of which the
information is
furnished and each Prepayment Charge is permissible and enforceable
in
accordance with its terms under applicable state law, except as
the
enforceability thereof is limited due to acceleration in connection
with a
foreclosure or other involuntary payment.
(d) Upon
discovery by the Master Servicer or a Responsible Officer of
the Trustee of a breach of the foregoing clause (c) that materially
and
adversely affects the right of the Holders of the Class P
Certificates to any
Prepayment Charge, the party discovering the breach shall give
prompt written
notice to the other parties. Within 60 days of the earlier of
discovery by the
Master Servicer or receipt of notice by the Master Servicer of
breach, the
Master Servicer shall cure the breach in all material respects or
shall pay
into the Certificate Account the amount of the Prepayment Charge
that would
otherwise be due from the Mortgagor, less any amount representing
such
Prepayment Charge previously collected and paid by the Master
Servicer into
the Certificate Account.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION
4.01. Advances.
(a) The
Master Servicer shall determine on or before each Master
Servicer Advance Date whether it is required to make an Advance
pursuant to
the definition thereof. If the Master Servicer determines it is
required to
make an Advance, it shall, on or before the Master Servicer Advance
Date,
either (i) deposit into the Certificate Account an amount equal to
the Advance
or (ii) make an appropriate entry in its records relating to the
Certificate
Account that any Amount Held for Future Distribution has been used
by the
Master Servicer in discharge of its obligation to make any such
Advance. Any
funds so applied shall be replaced by the Master Servicer by
deposit in the
Certificate Account no later than the close of business on the next
Master
Servicer Advance Date. The Master Servicer shall be entitled to be
reimbursed
from the Certificate Account for all Advances of its own funds made
pursuant
to this Section as provided in Section 3.08. The obligation to make
Advances
with respect to any Mortgage Loan shall continue if such Mortgage
Loan has
been foreclosed or otherwise terminated and the related Mortgaged
Property has
not been liquidated.
(b) If the
Master Servicer determines that it will be unable to comply
with its obligation to make the Advances as and when described in
the second
sentence of Section 4.01(a), it shall use its best efforts to give
written
notice thereof to the Trustee (each such notice a "Trustee Advance
Notice";
and such notice may be given by telecopy), not later than 3:00
P.M., New York
time, on the Business Day immediately preceding the related Master
Servicer
Advance Date, specifying the amount that it will be unable to
deposit (each
such amount an "Advance Deficiency") and certifying that such
Advance
Deficiency constitutes an Advance hereunder and is not a
Nonrecoverable
Advance. If the Trustee receives a Trustee Advance Notice on or
before 3:30
P.M., New York time on a Master Servicer Advance Date, the Trustee
shall, not
later than 3:00 P.M., New York time, on the related Distribution
Date, deposit
in the Distribution Account an amount equal to the Advance
Deficiency
identified in such Trustee Advance Notice unless it is prohibited
from so
doing by applicable law. Notwithstanding the foregoing, the Trustee
shall not
be required to make such deposit if the Trustee shall have received
written
notification from the Master Servicer that the Master Servicer has
deposited
or caused to be deposited in the Certificate Account an amount
equal to such
Advance Deficiency. All Advances made by the Trustee pursuant to
this Section
4.01(b) shall accrue interest on behalf of the Trustee at the
Trustee Advance
Rate from and including the date such Advances are made to but
excluding the
date of repayment, with such interest being an obligation of the
Master
Servicer and not the Trust Fund. The Master Servicer shall
reimburse the
Trustee for the amount of any Advance made by the Trustee pursuant
to this
Section 4.01(b) together with accrued interest, not later than the
fifth day
following the related Master Servicer Advance Date. In the event
that the
Master Servicer does not reimburse the Trustee in accordance with
the
requirements of the preceding sentence, the Trustee shall have the
right, but
not the obligation, to immediately (a) terminate all of the rights
and
obligations of the Master Servicer under this Agreement in
accordance with
Section 7.01 and (b) subject to the limitations set forth in
Section 3.04,
assume all of the rights and obligations of the Master Servicer
hereunder.
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(c) The
Master Servicer shall, not later than the close of business on
the second Business Day immediately preceding each Distribution
Date, deliver
to the Trustee a report (in form and substance reasonably
satisfactory to the
Trustee) that indicates (i) the Mortgage Loans with respect to
which the
Master Servicer has determined that the related Scheduled Payments
should be
advanced and (ii) the amount of the related Scheduled Payments. The
Master
Servicer shall deliver to the Trustee on the related Master
Servicer Advance
Date an Officer's Certificate of a Servicing Officer indicating the
amount of
any proposed Advance determined by the Master Servicer to be a
Nonrecoverable
Advance.
SECTION
4.02. Priorities of Distribution.
(a)
Distributions of Interest Funds. On each Distribution Date, the
Interest Funds for such Distribution Date shall be allocated by the
Trustee
from the Distribution Account in the following order of
priority:
(i) to the Swap Account, the amount of the Swap Fee payable to
the
Swap
Counterparty under the Swap Contract with respect to such
Distribution Date;
(ii) concurrently, to each Class of Senior Certificates, the
Current
Interest and Interest Carry Forward Amount for each such Class
and
Distribution Date and, prior to the termination of the Swap
Contract,
to the Swap Account, interest on the Swap Principal Amount at
the
Pass-Through Rate for the Class A-1 Certificates for the
related
Interest
Accrual Period (without giving effect to the Net Rate Cap), pro
rata based
on their respective entitlements; provided, however, that,
prior to
the termination of the Swap Contract, any amounts of Current
Interest
and Interest Carry Forward Amount that would be distributed to
the Class
A-1 Certificates in the absence of the Swap Contract will
instead be
distributed to the Swap Account and, provided further, if a
Swap
Termination Payment (other than a Swap Termination Payment due to
a
Swap
Counterparty Trigger Event) is due to the Swap Counterparty,
then
any
amounts of Current Interest and Interest Carry Forward Amount
that
would be
distributed to the Class A-1 Certificates in the absence of
such Swap
Termination Payment will instead be distributed, up to the
amount of
such Swap Termination Payment, to the Swap Account;
(iii) sequentially, to the Class M-1, Class M-2, Class M-3,
Class
M-4, Class
M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates, in that order, the Current Interest for each such
Class
and
Distribution Date; and
(iv) any remainder as part of the Excess Cashflow.
(b)
Distributions of Principal Distribution Amount. On each
Distribution
Date, the Principal Distribution Amount for such Distribution Date
shall be
allocated by the Trustee from the Distribution Account in the
following order
of priority (with the Principal Distribution Amount exclusive of
the portion
thereof consisting of the Extra Principal Distribution Amount being
applied
first and the Extra Principal Distribution Amount being applied
thereafter):
(i) For each Distribution Date prior to the Stepdown Date or on
which a
Trigger Event is in effect, sequentially:
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(A) sequentially:
(a) to the Class A-R Certificates, until its Class
Certificate Balance is reduced to zero; and
(b) pro rata based on (1) the Swap Principal Amount
immediately prior to such Distribution Date and (2) the
aggregate Class Certificate Balance of the Class A-1, Class
A-2 and Class A-3 Certificates immediately prior to such
Distribution Date, concurrently as follows:
(i) to the Swap Account, in an amount up to the
Swap Principal Amount; and
(ii) concurrently, to the Class A-1, Class A-2
and Class A-3 Certificates, pro rata, until their
respective Class Certificate Balances are reduced to
zero; and
(B) from the remaining Principal Distribution Amount, in the
following order of priority:
(i) sequentially, to the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
and Class M-9 Certificates, in that order, until their
respective Class Certificate Balances are reduced to zero;
and
(ii) any remainder as part of the Excess Cashflow.
(ii) For each Distribution Date on or after the Stepdown Date
and
so long as
a Trigger Event is not in effect, sequentially:
(A) from the Principal Distribution Amount, in an amount up
to the Senior Principal Distribution Target Amount, pro rata
based
on (1) the Swap Principal Amount immediately prior to such
Distribution Date and (2) the aggregate Class Certificate
Balance
of the Class A-1, Class A-2 and Class A-3 Certificates
immediately
prior to such Distribution Date, concurrently as follows:
(i) to the Swap Account, in an amount up to the Swap
Principal Amount; and
(ii) concurrently, to the Class A-1, Class A-2 and
Class A-3 Certificates, pro rata, until their respective
Class Certificate Balances are reduced to zero; and
(B) from the remaining Principal Distribution Amount, in
the following order of priority:
(i) sequentially, to the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
and Class M-9
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<PAGE>
Certificates, in that order, the Subordinated Class
Principal Distribution Target Amount for each such Class, in
each case until its Class Certificate Balance is reduced to
zero; and
(ii) any remainder as part of the Excess Cashflow.
(c)
Distributions of Excess Cashflow. With respect to any
Distribution
Date, any Excess Cashflow will be paid to the Classes of
Certificates and
deposited in the Swap Account in the following order of priority,
in each case
to the extent of remaining Excess Cashflow:
(i) concurrently, to the Swap Account up to the Swap
Principal Amount and to the Classes of Offered Certificates
then
entitled to receive distributions in respect of principal, in
an
aggregate amount equal to the Extra Principal Distribution
Amount
payable as part of the Principal Distribution Amount pursuant
to
Section 4.02(b) hereof;
(ii) concurrently, to the Class A-1 Certificates and to the
Swap Account, pro rata based on the Unpaid Realized Loss Amount
for the Class A-1 Certificates and the Swap Principal Amount,
respectively, in an amount up to the Unpaid Realized Loss
Amount
allocated to such Class and such amount, respectively;
(iii) to the Class A-2 Certificates, in an amount up to the
Unpaid Realized Loss Amount for such Class; and
(iv) to the Class A-3 Certificates, in an amount up to the
Unpaid Realized Loss Amount for such Class;
(v) sequentially, to the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class
M-9 Certificates, in that order, in ea
