EXHIBIT 99.1
------------
EXECUTION COPY
=======================
CWALT, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK GRANADA LLC,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2006
-----------------------------------
ALTERNATIVE LOAN TRUST 2006-OA22
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OA22
=======================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS........................................................7
SECTION
1.01. Defined
Terms...........................................7
SECTION
1.02. Certain
Interpretive Principles........................40
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES.....41
SECTION
2.01. Conveyance of
Mortgage Loans...........................41
SECTION
2.02. Acceptance by
Trustee of the Mortgage Loans............45
SECTION
2.03. Representations,
Warranties and Covenants of the
Sellers and Master Servicer............................47
SECTION
2.04. Representations
and Warranties of the Depositor as
to the Mortgage
Loans..................................50
SECTION
2.05. Delivery of
Opinion of Counsel in Connection with
Substitutions..........................................50
SECTION
2.06. Execution and
Delivery of Certificates.................51
SECTION
2.07. REMIC
Matters..........................................51
SECTION
2.08. Covenants of the
Master Servicer.......................51
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS..................52
SECTION
3.01. Master Servicer
to Service Mortgage Loans..............52
SECTION
3.02. Subservicing;
Enforcement of the Obligations of
Subservicers...........................................53
SECTION
3.03. Rights of the
Depositor, the NIM Insurer and the
Trustee in Respect of the Master Servicer..............53
SECTION
3.04. Trustee to Act
as Master Servicer......................54
SECTION
3.05. Collection of
Mortgage Loan Payments; Certificate
Account; Distribution Account; Carryover Reserve
Fund; Principal Reserve Fund...........................54
SECTION
3.06. Collection of
Taxes, Assessments and Similar
Items; Escrow Accounts.................................58
SECTION
3.07. Access to
Certain Documentation and Information
Regarding the Mortgage Loans...........................58
SECTION
3.08. Permitted
Withdrawals from the Certificate
Account; the Distribution Account, the Carryover
Reserve Fund and the Principal Reserve Fund............59
SECTION
3.09. Maintenance of
Hazard Insurance; Maintenance of
Primary Insurance Policies.............................61
SECTION
3.10. Enforcement of
Due-on-Sale Clauses; Assumption
Agreements.............................................62
SECTION
3.11. Realization Upon
Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans...................63
SECTION
3.12. Trustee to
Cooperate; Release of Mortgage Files........67
SECTION
3.13. Documents,
Records and Funds in Possession of
Master Servicer to be Held for the Trustee.............68
i
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SECTION
3.14. Servicing
Compensation.................................68
SECTION
3.15. Access to
Certain Documentation........................69
SECTION
3.16. Annual Statement
as to Compliance......................69
SECTION
3.17. Errors and
Omissions Insurance; Fidelity Bonds.........69
SECTION
3.18. Notification of
Adjustments............................70
SECTION
3.19.
[Reserved].............................................70
SECTION
3.20. Prepayment
Charges.....................................70
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE MASTER
SERVICER................72
SECTION
4.01.
Advances...............................................72
SECTION
4.02. Priorities of
Distribution.............................73
SECTION
4.03. Allocation of
Net Deferred Interest....................75
SECTION
4.04.
[Reserved].............................................76
SECTION
4.05.
[Reserved].............................................76
SECTION
4.06. Monthly
Statements to Certificateholders...............76
SECTION
4.07. Determination of
Pass-Through Rates for COFI
Certificates...........................................76
SECTION
4.08. Determination of
Pass-Through Rates for LIBOR
Certificates...........................................77
SECTION
4.09.
[Reserved].............................................79
ARTICLE V THE
CERTIFICATES..................................................80
SECTION
5.01. The
Certificates.......................................80
SECTION
5.02. Certificate
Register; Registration of Transfer and
Exchange of Certificates...............................81
SECTION
5.03. Mutilated,
Destroyed, Lost or Stolen Certificates......86
SECTION
5.04. Persons Deemed
Owners..................................86
SECTION
5.05. Access to List
of Certificateholders' Names and
Addresses..............................................86
SECTION
5.06. Maintenance of
Office or Agency........................87
ARTICLE VI THE DEPOSITOR AND THE MASTER
SERVICER............................88
SECTION
6.01. Respective
Liabilities of the Depositor and the
Master Servicer........................................88
SECTION
6.02. Merger or
Consolidation of the Depositor or the
Master Servicer........................................88
SECTION
6.03. Limitation on
Liability of the Depositor, the
Sellers, the Master Servicer, the NIM Insurer and
Others.................................................88
SECTION
6.04. Limitation on
Resignation of Master Servicer...........89
ARTICLE VII
DEFAULT.........................................................90
SECTION
7.01. Events of
Default......................................90
SECTION
7.02. Trustee to Act;
Appointment of Successor...............92
SECTION
7.03. Notification to
Certificateholders.....................93
ARTICLE VIII CONCERNING THE
TRUSTEE.........................................94
SECTION
8.01. Duties of
Trustee......................................94
SECTION
8.02. Certain Matters
Affecting the Trustee..................95
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SECTION
8.03. Trustee Not
Liable for Certificates or Mortgage
Loans..................................................96
SECTION
8.04. Trustee May Own
Certificates...........................96
SECTION
8.05. Trustee's Fees
and Expenses............................96
SECTION
8.06. Eligibility
Requirements for Trustee...................97
SECTION
8.07. Resignation and
Removal of Trustee.....................97
SECTION
8.08. Successor
Trustee......................................98
SECTION
8.09. Merger or
Consolidation of Trustee.....................99
SECTION
8.10. Appointment of
Co-Trustee or Separate Trustee..........99
SECTION
8.11. Tax
Matters...........................................101
SECTION
8.12. Monitoring of
Significance Percentage.................103
ARTICLE IX
TERMINATION.....................................................104
SECTION
9.01. Termination upon
Liquidation or Purchase of all
Mortgage Loans........................................104
SECTION
9.02. Final
Distribution on the Certificates................104
SECTION
9.03. Additional
Termination Requirements...................106
SECTION
9.04. Auction of the
Mortgage Loans and REO Properties......107
ARTICLE X MISCELLANEOUS
PROVISIONS.........................................111
SECTION
10.01.
Amendment.............................................111
SECTION
10.02. Recordation of Agreement;
Counterparts................112
SECTION
10.03. Governing
Law.........................................113
SECTION
10.04. Intention of
Parties..................................113
SECTION
10.05.
Notices...............................................114
SECTION 10.06.
Severability of Provisions............................115
SECTION
10.07.
Assignment............................................116
SECTION
10.08. Limitation on Rights of
Certificateholders............116
SECTION
10.09. Inspection and Audit
Rights...........................116
SECTION
10.10. Certificates Nonassessable and Fully
Paid.............117
SECTION
10.11.
[Reserved]............................................117
SECTION
10.12. Protection of
Assets..................................117
SECTION
10.13. Rights of NIM
Insurer.................................117
ARTICLE XI EXCHANGE ACT
REPORTING..........................................119
SECTION
11.01. Filing
Obligations....................................119
SECTION
11.02. Form 10-D
Filings.....................................119
SECTION
11.03. Form 8-K
Filings......................................120
SECTION
11.04. Form 10-K
Filings.....................................120
SECTION
11.05. Sarbanes-Oxley
Certification..........................121
SECTION
11.06. Form 15
Filing........................................121
SECTION
11.07. Report on Assessment of Compliance and
Attestation....122
SECTION
11.08. Use of Subservicers and
Subcontractors................123
SECTION
11.09.
Amendments............................................124
SECTION
11.10. Reconciliation of
Accounts............................124
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 C-P Certificate..........................C-2-1
Exhibit D:
Form of Notional Amount Certificate......................D-1
Exhibit E:
Form of Reverse of Certificates..........................E-1
Exhibit F-1: Form of
Initial Certification of Trustee...............F-1-1
Exhibit F-2:
[Reserved].............................................F-2-1
Exhibit G-1: Form of
Delay Delivery Certification of Trustee........G-1-1
Exhibit G-2:
[Reserved].............................................G-2-1
Exhibit H-1: Form of
Final Certification of Trustee.................H-1-1
Exhibit H-2:
[Reserved].............................................H-2-1
Exhibit I:
Form of Transfer Affidavit...............................I-1
Exhibit J-1: Form of
Transferor Certificate (Residual)..............J-1-1
Exhibit J-2: Form of
Transferor Certificate (Private)...............J-2-1
Exhibit K:
Form of Investment Letter [Non-Rule 144A]................K-1
Exhibit L-1: Form of
Rule 144A Letter...............................L-1-1
Exhibit L-2: Form of
ERISA Letter (Covered Certificates)............L-2-1
Exhibit M:
Form of Request for Release (for Trustee)................M-1
Exhibit N:
Form of Request for Release of Documents (Mortgage
Loan - Paid
in Full, Repurchased and Replaced).......................N-1
Exhibit O:
[Reserved]...............................................O-1
iv
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Exhibit P:
[Reserved]...............................................P-1
Exhibit Q:
Standard & Poor's LEVELS(R) Version 5.7 Glossary
Revised,
Appendix E...............................................Q-1
Exhibit R:
[Reserved]...............................................R-1
Exhibit S-1:
[Reserved].............................................S-1-1
Exhibit S-2:
[Reserved].............................................S-2-1
Exhibit T:
Form of Officer's Certificate with respect to
Prepayments..............................................T-1
Exhibit U:
Monthly 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 November 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.
1
<PAGE>
Subsidiary REMIC:
The
following table specifies the Class designation, interest rate,
and
principal amount for each Class of Subsidiary REMIC Interests:
Corresponding
Subsidiary
Initial Principal
Class of
REMIC Interests
Balance
Pass-Through 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-C-P
(1)
(2)(3)
Class C-P
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-P 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-C-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:
(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
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(2)
Prepayment Charge Amounts. All Prepayment Charge Amounts will
be
allocated
to the Class SR-C-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:
---------------------------------------------------------------------------
Class
Original Class
Pass-Through Rate
Certificate Balance
---------------------------------------------------------------------------
Class A-1
$206,716,000.00
(1)
---------------------------------------------------------------------------
Class A-2
$86,131,000.00
(1)
---------------------------------------------------------------------------
Class A-3
$51,678,000.00
(1)
---------------------------------------------------------------------------
Class M-1
$10,405,000.00
(1)
---------------------------------------------------------------------------
Class M-2
$7,515,000.00
(1)
---------------------------------------------------------------------------
Class M-3
$2,505,000.00
(1)
---------------------------------------------------------------------------
Class M-4
$5,395,000.00
(1)
---------------------------------------------------------------------------
Class M-5
$2,505,000.00
(1)
---------------------------------------------------------------------------
Class M-6
$1,927,000.00
(1)
---------------------------------------------------------------------------
Class M-7
$2,312,000.00
(1)
---------------------------------------------------------------------------
Class M-8
$1,927,000.00
(1)
---------------------------------------------------------------------------
Class M-9
$1,927,000.00
(1)
---------------------------------------------------------------------------
Class C-P
(2)
(3)(4)
---------------------------------------------------------------------------
Class A-R
$100.00
(5)
---------------------------------------------------------------------------
---------------
(1) Each Class
of Certificates will accrue interest at the related
Pass-Through Rate.
(2) For federal
income tax purposes, the Class C-P Certificate has an
Original
Class Certificate Balance equal to the Overcollateralized
Amount
as of the
Closing Date.
(3) For each
Interest Accrual Period the Class C-P Certificates are entitled
to the
"Class C-P 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 C-P 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.
3
<PAGE>
(4) For each
Distribution Date the Class C-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 Pass-Through
Designation
Principal 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
(other than the
Class A-1 Certificates) and the Private
Certificates; and any Certificate of a Class
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
<PAGE>
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-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 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 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 any Class of Certificates pursuant to this
Agreement,
which, in the case of the Subordinated Certificates, shall equal
the amount, if
any, by which the aggregate Class Certificate Balance of all Senior
and
Subordinated Certificates (after all distributions of principal on
such
Distribution Date) exceeds the aggregate Stated Principal Balance
of the
Mortgage Loans as of the Due Date in the month in which such
Distribution Date
occurs (after giving effect to Principal Prepayments and
Liquidation Proceeds
allocated to principal and Subsequent Recoveries received in the
related
Prepayment Period).
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
Determination 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-OA22, Mortgage Pass-Through
Certificates,
Series 2006-OA22." 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-OA22, Mortgage Pass-Through
Certificates
Series 2006-OA22."
Certificate Balance: With respect to any Certificate (other than
the
Class C-P 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-P
Distributable Amount:
As defined in the Preliminary
Statement.
Class
Certificate Balance: With respect to any Class of Certificates
other than the Class C-P 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-P Certificates and any
Distribution
Date, the excess, if any, of the aggregate Stated Principal Balance
of the
Mortgage Loans as of the Due Date in the prior calendar month
(after giving
effect to Principal Prepayments, the principal portion of any
Liquidation
Proceeds and any Subsequent Recoveries received in the Prepayment
Period
related to that prior Due Date) over the aggregate Class
Certificate Balance of
the Offered Certificates immediately prior to that Distribution
Date.
Closing
Date: December 11,
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.
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
10
<PAGE>
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-OA22, 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:
Distribution Date
Percentage
-----------------
----------
11
<PAGE>
Distribution Date
Percentage
-----------------
----------
December 2008 - November 2009... 0.20% with respect to December
2008, plus an
additional 1/12th of 0.25% for each month
thereafter through November 2009
December 2009 - November 2010... 0.45% with respect to December
2009, plus an
additional 1/12th of 0.30% for each month
thereafter through November 2010
December 2010 - November 2011... 0.75% with respect to December
2010, plus an
additional 1/12th of 0.35% for each month
thereafter through November 2011
December 2011 - November 2012... 1.10% with respect to December
2011, plus an
additional 1/12th of 0.40% for each month
thereafter through November 2012
December 2012 - November 2013... 1.50% with respect to December
2012, plus an
additional 1/12th of 0.15% for each month
thereafter through November 2013
December 2013 and thereafter.... 1.65%
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 November 1, 2006.
Cut-off
Date Pool Principal Balance: $385,374,187.
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.. 26.250%
33.000%
M-1........... 35.000%
44.250%
M-2...........
46.750%
58.750%
M-3........... 52.500%
66.000%
M-4........... 71.250%
89.500%
M-5........... 85.500%
107.500%
M-6........... 101.000%
127.000%
M-7........... 129.250%
162.500%
M-8........... 168.500%
212.000%
M-9........... 241.750%
304.000%
---------
(1) For any
Distribution Date occurring on or after the Distribution Date
occurring
in December 2009 and prior to the Distribution Date occurring
in
December 2012.
(2) For any
Distribution Date occurring on or after the Distribution Date
occurring
in December 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-OA22,
Mortgage Pass-Through Certificates, Series 2006-OA22." 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 December 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)(iii) 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).
Item 1119
Party: The Depositor, any Seller, the Master Servicer, the
Trustee, any Subservicer, any originator identified in the
Prospectus
Supplement and any other material transaction party, as identified
in Exhibit X
hereto, as updated pursuant to Section 11.04.
Latest
Possible Maturity Date: The Distribution Date following the
third
anniversary of the scheduled maturity date of the Mortgage Loan
having the
latest scheduled maturity date as of the Cut-off Date.
Lender PMI
Mortgage Loan: Certain Mortgage Loans as to which the lender
(rather than the 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)).
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
18
<PAGE>
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.
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
19
<PAGE>
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.
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.
20
<PAGE>
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 amount 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, 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.
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 Net Rate Cap, over (ii) the amount of interest accrued
on such
Class at the 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 Net
Rate Cap.
NIM
Insurer: Any insurer guarantying at the request of Countrywide
certain payments under notes backed or secured by the Class C-P
Certificates.
Non-Delay
Certificates: As
specified in the Preliminary
Statement.
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Master Servicer that, in the good faith
judgment of
the Master Servicer, will not be ultimately recoverable by the
Master Servicer
from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Notice of
Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Notional
Amount: Not
applicable.
Notional
Amount Certificates:
As specified in the Preliminary
Statement.
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,
23
<PAGE>
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.
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.
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<PAGE>
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 1.150% 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 December 2012, 2.875% and (y) for
any
Distribution Date on or after the Distribution Date in December
2012, 2.300%,
in each case of the aggregate Stated Principal Balance of the
Mortgage Loans as
of the Due Date in the month of applicable 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.
Overcollateralized Amount: For any Distribution Date, the amount,
if any,
by which (x) the aggregate Stated Principal Balance of the Mortgage
Loans as of
the Due Date in the month of that Distribution Date (after giving
effect to
Principal Prepayments, the principal portion of any Liquidation
Proceeds and
any Subsequent Recoveries received in the related Prepayment
Period) exceeds
(y) the aggregate Class Certificate Balance of the Offered
Certificates as of
such Distribution Date (after giving effect to distributions of the
Principal
Remittance Amount 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.
25
<PAGE>
Park
Monaco Mortgage Loans:
The Mortgage Loans identified as
such on the Mortgage Loan Schedule for which Park Monaco is the
applicable Seller.
Park
Sienna: Park Sienna LLC, a Delaware limited liability company,
and
its successors and assigns, in its capacity as the seller of the
Park Sienna
Mortgage Loans to the Depositor.
Park
Sienna Mortgage Loans:
The Mortgage Loans identified as
such on the Mortgage Loan Schedule for which Park Sienna is the
applicable Seller.
Pass-Through Margin: With respect to the Interest Accrual Period
for any
Distribution Date and Class of LIBOR Certificates, the per annum
rate indicated
in the following table:
----------------------------------------------------
Pass-Through Pass-Through
Class
Margin (1)
Margin (2)
----------------------------------------------------
Class A-1
0.160%
0.320%
----------------------------------------------------
Class A-2
0.210%
0.420%
----------------------------------------------------
Class A-3
0.240%
0.480%
----------------------------------------------------
Class M-1
0.380%
0.570%
----------------------------------------------------
Class M-2
0.400%
0.600%
----------------------------------------------------
Class M-3
0.420%
0.630%
----------------------------------------------------
Class M-4
0.550%
0.825%
----------------------------------------------------
Class M-5
0.600%
0.900%
----------------------------------------------------
Class M-6
0.700%
1.050%
----------------------------------------------------
Class M-7
1.150%
1.725%
----------------------------------------------------
Class M-8
1.450%
2.175%
----------------------------------------------------
Class M-9
2.250%
3.375%
----------------------------------------------------
(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 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
26
<PAGE>
respect to the Class C-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 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
27
<PAGE>
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 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.
28
<PAGE>
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.
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 C-P
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 December 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.
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<PAGE>
Prepayment
Period: As to any Distribution Date and the related Due Date,
the period from the 16th day of the calendar month immediately
preceding the
month in which the Distribution Date occurs (or, in the case of the
first
Distribution Date, from December 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.
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
30
<PAGE>
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: Not
Applicable.
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 December
8, 2006 relating to the Offered Certificates.
PUD:
Planned Unit
Development.
Purchase
Price: With respect to any Mortgage Loan required to be
purchased by the applicable Seller pursuant to Section 2.02 or 2.03
or
purchased at the option of the Master Servicer pursuant to Section
3.11, an
amount equal to the sum of (i) 100% of the unpaid principal balance
of the
Mortgage Loan on the date of such purchase, (ii) accrued interest
thereon at
the applicable Mortgage Rate (or at the applicable Adjusted
Mortgage Rate if
(x) the purchaser is the Master Servicer or (y) if the purchaser is
Countrywide
and Countrywide is an affiliate of the Master Servicer) from the
date through
which interest was last paid by the Mortgagor to the Due Date in
the month in
which the Purchase Price is to be distributed to Certificateholders
and (iii)
costs and damages incurred by the Trust Fund in connection with a
repurchase
pursuant to Section 2.03 that arises out of a violation of any
predatory or
abusive lending law with respect to the related Mortgage Loan.
Qualified
Bidder: With respect to any auction 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-P 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
31
<PAGE>
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 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.
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<PAGE>
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.
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;
33
<PAGE>
(e) the resignation, removal, replacement, substitution of the
Master
Servicer, any Subservicer or the Trustee;
(f) with respect to the Master Servicer only, if the Master
Servicer
becomes aware that (i) any material enhancement or support
specified
in Item 1114(a)(1) through (3) of Regulation AB or Item 1115 of
Regulation
AB that was previously applicable regarding one or more
Classes of
the Certificates has terminated other than by expiration of
the
contract on its stated termination date or as a result of all
parties
completing
their obligations under such agreement; (ii) any material
enhancement specified in Item 1114(a)(1) through (3) of Regulation
AB or
Item 1115
of Regulation AB has been added with respect to one or more
Classes of
the Certificates; or (iii) any existing material enhancement
or support
specified in Item 1114(a)(1) through (3) of Regulation AB or
Item 1115
of Regulation AB with respect to one or more Classes of the
Certificates has been materially amended or modified; and
(g) with respect to the Trustee, the Master Servicer and the
Depositor
only, a required distribution to Holders of the Certificates is
not made
as of the required Distribution Date under this Agreement.
Reporting
Subcontractor: With respect to the Master Servicer or the
Trustee, any Subcontractor determined by such Person pursuant to
Section
11.08(b) to be "participating in the servicing function" within the
meaning of
Item 1122 of Regulation AB. References to a Reporting Subcontractor
shall refer
only to the Subcontractor of such Person and shall not refer to
Subcontractors
generally.
Request
for Release: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits M
and N 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.
34
<PAGE>
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 have been
reduced to
zero, the sum of the Class Certificate Balances of the Senior
Certificates
immediately prior to such Distribution Date, or (ii) after the
Class
Certificate Balances of the Senior Certificates have been reduced
to zero, the
Class Certificate Balance of the most senior Class of 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 aggregate Class Certificate Balance of the
Senior
Certificates immediately prior to such Distribution Date, over (y)
the lesser
of (A) the product of (i) (x) 73.500% on any Distribution Date on
or after the
Stepdown Date and prior to the Distribution Date in December 2012
or (y)
78.800% on any Distribution Date on or after the Stepdown Date and
on or after
the Distribution Date in December 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
35
<PAGE>
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).
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 is reduced to zero,
and (2) the
later of (x) the Distribution Date in December 2009 and (y) the
first
Distribution Date on which the aggregate Class Certificate Balance
of the
Senior Certificates (after calculating anticipated distributions on
such
Distribution Date) is less than or equal to 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
36
<PAGE>
in the related Prepayment Period) and (y) either (i) prior to the
Distribution
Date in December 2012, 73.500% or (ii) on or after the Distribution
Date in
December 2012, 78.800%.
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............... 19.750%
15.800%
Class M-2............... 14.875%
11.900%
Class M-3............... 13.250%
10.600%
Class M-4............... 9.750%
7.800%
Class M-5............... 8.125%
6.500%
Class M-6............... 6.875%
5.500%
Class M-7............... 5.375%
4.300%
Class M-8............... 4.125%
3.300%
Class M-9............... 2.875%
2.300%
---------
(1) For any
Distribution Date occurring on or after the Distribution Date
occurring in December 2009 and prior to the Distribution Date
occurring in
December 2012.
(2) For any
Distribution Date occurring on or after the Distribution Date
occurring in December 2012.
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 aggregate Class Certificate Balance of
the Senior
Certificates (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
37
<PAGE>
(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 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.
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.
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Tax
Matters Person Certificate: The Class A-R Certificate with
a
Denomination of $0.01.
Termination Price: As
defined in Section 9.01.
Terminator: As defined
in Section 9.01.
Transaction Documents:
This Agreement 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,
(x)
the portion of the aggregate Applied Realized Loss Amount
previously allocated
to that Class remaining unpaid from prior Distribution Dates minus
(y) any
increase in the Class Certificate Balance of
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<PAGE>
that Class due to the receipt of Subsequent Recoveries to the Class
Certificate
Balance of that Class pursuant to Section 4.02(h).
Voting
Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date
of
determination, (a) 1% of all Voting Rights shall be allocated to
each Class of
Notional Amount Certificates, if any (such Voting Rights to be
allocated among
the holders of Certificates of each such Class in accordance with
their
respective Percentage Interests), (b) 1% of all Voting Rights shall
be
allocated to each of the Class A-R, Class C-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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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
41
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(B) with
respect to any Lost Mortgage Note, a lost note
affidavit from Countrywide stating that the original Mortgage
Note
was lost or destroyed, together with a copy of such Mortgage
Note;
(ii) except as provided below and for each Mortgage Loan that
is
not a MERS Mortgage Loan, the original recorded Mortgage or a
copy
of such Mortgage, with recording information, (or, in the case of
a
Mortgage for which the related Mortgaged Property is located in
the
Commonwealth of Puerto Rico, a true copy of the Mortgage
certified
as such by the applicable notary) and in the case of each MERS
Mortgage Loan, the original Mortgage or a copy of such
mortgage,
with recording information, noting the presence of the MIN of
the
Mortgage Loans and either language indicating that the Mortgage
Loan is a MOM Loan if the Mortgage Loan is a MOM Loan or if the
Mortgage Loan was not a MOM Loan at origination, the original
Mortgage and the assignment thereof to MERS, with evidence of
recording indicated thereon, or a copy of the Mortgage certified
by
the public recording office in which such Mortgage has been
recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage or a
copy
of such assignment, with recording information, (which may be
included in a blanket assignment or assignments), together
with,
except as provided below, all interim recorded assignments of
such
mortgage or a copy of such assignment, with recording
information,
(each such assignment, when duly and validly completed, to be
in
recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which
the
assignment relates); provided that, if the related Mortgage has
not
been returned from the applicable public recording office, such
assignment of the Mortgage may exclude the information to be
provided by the recording office; provided, further, that such
assignment of Mortgage need not be delivered in the case of a
Mortgage for which the related Mortgaged Property is located in
the
Commonwealth of Puerto Rico;
(iv) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(v) except as provided below, the original or a copy of
lender's
title policy or a printout of the electronic equivalent and all
riders thereto; and
(vi) in the case of a Cooperative Loan, the originals of the
following documents or instruments:
(A) The Coop Shares, together with a stock power in blank;
(B) The executed Security Agreement;
(C) The executed Proprietary Lease;
(D) The executed Recognition Agreement;
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<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-OA22, 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
44
<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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<PAGE>
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
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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
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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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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.
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<PAGE>
SECTION
2.06. Execution and
Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the
Trust
Fund and, concurrently with such transfer and assignment, has
executed and
delivered to or upon the order of the Depositor, the Certificates
in authorized
denominations evidencing directly or indirectly the entire
ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise
the rights
referred to above for the benefit of all present and future Holders
of the
Certificates and to perform the duties set forth in this Agreement,
to the end
that the interests of the Holders of the Certificates may be
adequately and
effectively protected.
SECTION
2.07. REMIC
Matters.
The
Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all
interests
created hereby. The "Startup Day" for purposes of the REMIC
Provisions shall be
the Closing Date. The "tax matters person" with respect to each
REMIC hereunder
shall be the Trustee and the Trustee shall hold the Tax Matters
Person
Certificate. Each REMIC's fiscal year shall be the calendar
year.
SECTION
2.08. Covenants of the
Master Servicer.
The Master
Servicer hereby covenants to the Depositor and the Trustee as
follows:
(a) the
Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and
requirements of
the insurer under each Required Insurance Policy; and
(b) no
written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor,
any
affiliate of the Depositor or the Trustee and prepared by the
Master Servicer
pursuant to this Agreement will contain any untrue statement of a
material fact
or omit to state a material fact necessary to make such
information,
certificate, statement or report not misleading.
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<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION
3.01. Master Servicer
to Service Mortgage Loans.
For and on
behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with the
terms of this
Agreement and customary and usual standards of practice of prudent
mortgage
loan servicers. In connection with such servicing and
administration, the
Master Servicer shall have full power and authority, acting alone
and/or
through Subservicers as provided in Section 3.02, subject to the
terms of this
Agreement (i) to execute and deliver, on behalf of the
Certificateholders and
the Trustee, customary consents or waivers and other instruments
and documents,
(ii) to consent to transfers of any Mortgaged Property and
assumptions of the
Mortgage Notes and related Mortgages (but only in the manner
provided in this
Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation
Proceeds (which for the purpose of this Section 3.01 includes any
Subsequent
Recoveries), and (iv) to effectuate foreclosure or other conversion
of the
ownership of the Mortgaged Property securing any Mortgage Loan;
provided that
the Master Servicer shall not take any action that is inconsistent
with or
prejudices the interests of the Trust Fund or the
Certificateholders in any
Mortgage Loan or the rights and interests of the Depositor, the
Trustee and the
Certificateholders under this Agreement. The Master Servicer shall
represent
and protect the interests of the Trust Fund in the same manner as
it protects
its own interests in mortgage loans in its own portfolio in any
claim,
proceeding or litigation regarding a Mortgage Loan, and shall not
make or
permit any modification, waiver or amendment of any Mortgage Loan
which would
cause any REMIC created under this Agreement to fail to qualify as
a REMIC or
result in the imposition of any tax under section 860F(a) or
section 860G(d) of
the Code. Without limiting the generality of the foregoing, the
Master
Servicer, in its own name or in the name of the Depositor and the
Trustee, is
hereby authorized and empowered by the Depositor and the Trustee,
when the
Master Servicer believes it appropriate in its reasonable judgment,
to execute
and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or
any of them, any and all instruments of satisfaction or
cancellation, or of
partial or full release or discharge and all other comparable
instruments, with
respect to the Mortgage Loans, and with respect to the Mortgaged
Properties
held for the benefit of the Certificateholders. The Master Servicer
shall
prepare and deliver to the Depositor and/or the Trustee such
documents
requiring execution and delivery by either or both of them as are
necessary or
appropriate to enable the Master Servicer to service and administer
the
Mortgage Loans to the extent that the Master Servicer is not
permitted to
execute and deliver such documents pursuant to the preceding
sentence. Upon
receipt of such documents, the Depositor and/or the Trustee shall
execute such
documents and deliver them to the Master Servicer. The Master
Servicer further
is authorized and empowered by the Trustee, on behalf of the
Certificateholders
and the Trustee, in its own name or in the name of the Subservicer,
when the
Master Servicer or the Subservicer, as the case may be, believes it
appropriate
in its best judgment to register any Mortgage Loan on the MERS(R)
System, or
cause the removal from the registration of any Mortgage Loan on the
MERS(R)
System, to execute and deliver, on behalf of the Trustee and
the
Certificateholders or any of them, any and all instruments of
assignment and
other comparable instruments with respect to such assignment or
re-recording of
a Mortgage in the name of MERS, solely as nominee for the Trustee
and its
successors and assigns.
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<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
54
<PAGE>
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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<PAGE>
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)
[Reserved].
(d) The
Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall,
promptly upon
receipt, deposit in the Distribution Account and retain in the
Distribution
Account the following:
(i) the aggregate amount remitted by the Master Servicer to the
Trustee
pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Master Servicer or the
Depositor
pursuant
to Section 3.05(e) in connection with any losses on Permitted
Investments for which it is responsible; and
(iii) any other amounts deposited hereunder which are required
to
be
deposited in the Distribution Account.
In the
event that the Master Servicer shall remit any amount not
required
to be remitted, it may at any time direct the Trustee to withdraw
such amount
from the Distribution Account, any provision in this Agreement to
the contrary
notwithstanding. Such direction may be accomplished by delivering
an Officer's
Certificate to the Trustee which describes the amounts deposited in
error in
the Distribution Account. All funds deposited in the Distribution
Account shall
be held by the Trustee in trust for the Certificateholders until
disbursed in
accordance with this Agreement or withdrawn in accordance with
Section 3.08. In
no event shall the Trustee incur liability for withdrawals from
the
Distribution Account at the direction of the Master Servicer.
(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
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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-P
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-P Certificates. In the absence of such
written
direction, all funds in the Carryover Reserve Fund shall be
invested by the
Trustee in The Bank of New York cash reserves. Any net investment
earnings on
such amounts shall be retained therein until withdrawn as provided
in Section
3.08. Any losses incurred in the Carryover Reserve Fund in respect
of any such
investments shall be charged against amounts on deposit in the
Carryover
Reserve Fund (or such investments) immediately as realized. The
Trustee shall
not be liable for the amount of any loss incurred in respect of any
investment
or
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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-P
Certificates
shall evidence ownership of the Carryover Reserve Fund for federal
tax
purposes.
SECTION
3.06. Collection of
Taxes, Assessments and Similar
Items; Escrow Accounts.
(a) To the
extent required by the related Mortgage Note and not violative
of current law, the Master Servicer shall establish and maintain
one or more
accounts (each, an "Escrow Account") and deposit and retain therein
all
collections from the Mortgagors (or advances by the Master
Servicer) for the
payment of taxes, assessments, hazard insurance premiums or
comparable items
for the account of the Mortgagors. Nothing in this Agreement shall
require the
Master Servicer to compel a Mortgagor to establish an Escrow
Account in
violation of applicable law.
(b)
Withdrawals of amounts so collected from the Escrow Accounts may
be
made only to effect timely payment of taxes, assessments, hazard
insurance
premiums, condominium or PUD association dues, or comparable items,
to
reimburse the Master Servicer out of related collections for any
payments made
pursuant to Sections 3.01 (with respect to taxes and assessments
and insurance
premiums) and 3.09 (with respect to hazard insurance), to refund to
any
Mortgagors any sums determined to be overages, to pay interest, if
required by
law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on
balances in the Escrow Account or to clear and terminate the Escrow
Account at
the termination of this Agreement in accordance with Section 9.01.
The Escrow
Accounts shall not be a part of the Trust Fund.
(c) The
Master Servicer shall advance any payments referred to in
Section
3.06(a) that are not timely paid by the Mortgagors on the date when
the tax,
premium or other cost for which such payment is intended is due,
but the Master
Servicer shall be required so to advance only to the extent that
such advances,
in the good faith judgment of the Master Servicer, will be
recoverable by the
Master Servicer out of Insurance Proceeds, Liquidation Proceeds or
otherwise.
SECTION
3.07. Access to
Certain Documentation and Information
Regarding the Mortgage Loans.
The Master
Servicer shall afford each Seller, the Depositor, the NIM
Insurer and the Trustee reasonable access to all records and
documentation
regarding the Mortgage Loans and all accounts, insurance
information and other
matters relating to this Agreement, such access being afforded
without charge,
but only upon reasonable request and during normal business hours
at the office
designated by the Master Servicer.
Upon
reasonable advance notice in writing, the Master Servicer will
provide to each Certificateholder and/or Certificate Owner which is
a savings
and loan association, bank or insurance company certain reports and
reasonable
access to information and documentation regarding the Mortgage
Loans sufficient
to permit such Certificateholder and/or Certificate Owner to comply
with
applicable regulations of the OTS or other regulatory authorities
with
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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;
(vii) to reimburse the Sellers, the Master Servicer, the NIM
Insurer or
the Depositor for expenses incurred by any of them and
reimbursable pursuant to Section 6.03;
(viii) to withdraw any amount deposited in the Certificate
Account
and not
required to be deposited in the Certificate Account;
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<PAGE>
(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, in the manner specified in
this Agreement
(and to withhold from the amounts so withdrawn, the amount of any
taxes that it
is authorized to withhold pursuant to the third paragraph of
Section 8.11). In
addition, the Trustee may from time to time make withdrawals from
the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution
Date;
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to funds
in
the
Distribution Account;
(iii) to withdraw and return to the Master Servicer any amount
deposited
in the Distribution Account and not required to be deposited
therein;
(iv) to reimburse the Trustee for any unreimbursed Advances made
by
it
pursuant to Section 4.01(b) hereof, such right of reimbursement
pursuant
to this subclause (iv) being limited to (x) amounts received on
the
related Mortgage Loan(s) in respect of which any such Advance
was
made and
(y) amounts not otherwise reimbursed to the Trustee pursuant to
Section
3.08(a)(ii) hereof;
(v) to reimburse the Trustee for any Nonrecoverable Advance
previously
made by the Trustee pursuant to Section 4.01(b) hereof, such
right of
reimbursement pursuant to this subclause (v) being limited to
amounts
not otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(iii) hereof; and
(vi) to clear and terminate the Distribution Account upon
termination of 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:
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<PAGE>
(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.
SECTION
3.09. Maintenance of
Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The
Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is
at least
equal to the lesser of (i) the maximum insurable value of the
improvements
securing such Mortgage Loan or (ii) the greater of (y) the
outstanding
principal balance of the Mortgage Loan and (z) an amount such that
the proceeds
of such policy shall be sufficient to prevent the Mortgagor and/or
the
mortgagee from becoming a co-insurer. Each such policy of standard
hazard
insurance shall contain, or have an accompanying endorsement that
contains, a
standard mortgagee clause. Any amounts collected by the Master
Servicer under
any such policies (other than the amounts to be applied to the
restoration or
repair of the related Mortgaged Property or amounts released to the
Mortgagor
in accordance with the Master Servicer's normal servicing
procedures) shall be
deposited in the Certificate Account. Any cost incurred by the
Master Servicer
in maintaining any such insurance shall not, for the purpose of
calculating
monthly distributions to the Certificateholders or remittances to
the Trustee
for their benefit, be added to the principal balance of the
Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such
costs shall
be recoverable by the Master Servicer out of late payments by the
related
Mortgagor or out of the proceeds of liquidation of the Mortgage
Loan or
Subsequent Recoveries to the extent permitted by Section 3.08. It
is understood
and agreed that no earthquake or other additional insurance is to
be required
of any Mortgagor or maintained on property acquired in respect of a
Mortgage
other than pursuant to such applicable laws and regulations as
shall at any
time be in force and as shall require such additional insurance. If
the
Mortgaged Property is located at the time of origination of the
Mortgage Loan
in a federally designated special flood hazard area and such area
is
participating in the national flood insurance program, the Master
Servicer
shall cause flood insurance to be maintained with respect to such
Mortgage
Loan. Such flood insurance shall be in an amount equal to the least
of (i) the
outstanding principal balance of the related Mortgage Loan, (ii)
the
replacement value of the improvements which are part of such
Mortgaged
Property, and (iii) the maximum amount of such insurance available
for the
related Mortgaged Property under the national flood insurance
program.
(b)
[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
61
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Primary Insurance Policy for such canceled or non-renewed policy is
maintained
with a Qualified Insurer.
Except
with respect to any Lender PMI Mortgage Loans, the Master
Servicer
shall not be required to maintain any Primary Insurance Policy (i)
with respect
to any Mortgage Loan with a Loan-to-Value Ratio less than or equal
to 80% as of
any date of determination or, based on a new appraisal, the
principal balance
of such Mortgage Loan represents 80% or less of the new appraised
value or (ii)
if maintaining such Primary Insurance Policy is prohibited by
applicable law.
With respect to the Lender PMI Mortgage Loans, the Master Servicer
shall
maintain the Primary Insurance Policy for the life of such Mortgage
Loans,
unless otherwise provided for in the related Mortgage Note or
prohibited by
law.
The Master
Servicer agrees to effect the timely payment of the premiums
on each Primary Insurance Policy, and such costs not otherwise
recoverable
shall be recoverable by the Master Servicer from the related
proceeds of
liquidation and Subsequent Recoveries.
(d) In
connection with its activities as Master Servicer of the
Mortgage
Loans, the Master Servicer agrees to present on behalf of itself,
the Trustee
and Certificateholders, claims to the insurer under any Primary
Insurance
Policies and, in this regard, to take such reasonable action as
shall be
necessary to permit recovery under any Primary Insurance Policies
respecting
defaulted Mortgage Loans. Any amounts collected by the Master
Servicer under
any Primary Insurance Policies shall be deposited in the
Certificate Account.
SECTION
3.10. Enforcement of
Due-on-Sale Clauses; Assumption
Agreements.
(a) Except
as otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the
Master Servicer
shall to the extent that it has knowledge of such conveyance,
enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to
the extent
permitted under applicable law and governmental regulations, but
only to the
extent that such enforcement will not adversely affect or
jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing,
the Master
Servicer is not required to exercise such rights with respect to a
Mortgage
Loan if the Person to whom the related Mortgaged Property has been
conveyed or
is proposed to be conveyed satisfies the terms and conditions
contained in the
Mortgage Note and Mortgage related thereto and the consent of the
mortgagee
under such Mortgage Note or Mortgage is not otherwise so required
under such
Mortgage Note or Mortgage as a condition to such transfer. In the
event that
the Master Servicer is prohibited by law from enforcing any such
due-on-sale
clause, or if coverage under any Required Insurance Policy would be
adversely
affected, or if nonenforcement is otherwise permitted hereunder,
the Master
Servicer is authorized, subject to Section 3.10(b), to take or
enter into an
assumption and modification agreement from or with the person to
whom such
property has been or is about to be conveyed, pursuant to which
such person
becomes liable under the Mortgage Note and, unless prohibited by
applicable
state law, the Mortgagor remains liable thereon, provided that the
Mortgage
Loan shall continue to be covered (if so covered 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
62
<PAGE>
Person is substituted as Mortgagor and becomes liable under the
Mortgage Note.
Notwithstanding the foregoing, the Master Servicer shall not be
deemed to be in
default under this Section by reason of any transfer or assumption
which the
Master Servicer reasonably believes it is restricted by law from
preventing,
for any reason whatsoever.
(b)
Subject to the Master Servicer's duty to enforce any
due-on-sale
clause to the extent set forth in Section 3.10(a), in any case in
which a
Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such
Person is to enter into an assumption agreement or modification
agreement or
supplement to the Mortgage Note or Mortgage that requires the
signature of the
Trustee, or if an instrument of release signed by the Trustee is
required
releasing the Mortgagor from liability on the Mortgage Loan, the
Master
Servicer shall prepare and deliver or cause to be prepared and
delivered to the
Trustee for signature and shall direct, in writing, the Trustee to
execute the
assumption agreement with the Person to whom the Mortgaged Property
is to be
conveyed and such modification agreement or supplement to the
Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to
carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with
any
applicable laws regarding assumptions or the transfer of the
Mortgaged Property
to such Person. In connection with any such assumption, no material
term of the
Mortgage Note may be changed. In addition, the substitute Mortgagor
and the
Mortgaged Property must be acceptable to the Master Servicer in
accordance with
its underwriting standards as then in effect. Together with each
such
substitution, assumption or other agreement or instrument delivered
to the
Trustee for execution by it, the Master Servicer shall deliver an
Officer's
Certificate signed by a Servicing Officer stating that the
requirements of this
subsection have been met in connection therewith. The Master
Servicer shall
notify the Trustee that any such substitution or assumption
agreement has been
completed by forwarding to the Trustee the original of such
substitution or
assumption agreement, which in the case of the original shall be
added to the
related Mortgage File and shall, for all purposes, be considered a
part of such
Mortgage File to the same extent as all other documents and
instruments
constituting a part thereof. Any fee collected by the Master
Servicer for
entering into an assumption or substitution of liability agreement
will be
retained by the Master Servicer as additional servicing
compensation.
SECTION
3.11. Realization Upon
Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans.
(a) The
Master Servicer shall use reasonable efforts to foreclose upon
or
otherwise comparably convert the ownership of properties securing
such of the
Mortgage Loans as come into and continue in default and as to which
no
satisfactory arrangements can be made for collection of delinquent
payments. In
connection with such foreclosure or other conversion, the Master
Servicer shall
follow such practices and procedures as it shall deem necessary or
advisable
and as shall be normal and usual in its general mortgage servicing
activities
and meet the requirements of the insurer under any Required
Insurance Policy;
provided, however, that the Master Servicer shall not be required
to expend its
own funds in connection with any foreclosure or towards the
restoration of any
property unless it shall determine (i) that such restoration and/or
foreclosure
will increase the proceeds of liquidation of the Mortgage Loan
after
reimbursement 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
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<PAGE>
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
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
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period. Notwithstanding any other provision of this Agreement, no
Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed to
continue to
be rented) or otherwise used for the production of income by or on
behalf of
the Trust Fund in such a manner or pursuant to any terms that would
(i) cause
such Mortgaged Property to fail to qualify as "foreclosure
property" within the
meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC
hereunder
to the imposition of any federal, state or local income taxes on
the income
earned from such Mortgaged Property under Section 860G(c) of the
Code or
otherwise, unless the Master Servicer has agreed to indemnify and
hold harmless
the Trust Fund with respect to the imposition of any such
taxes.
In the
event of a default on a Mortgage Loan one or more of whose
obligor
is not a United States Person, as that term is defined in Section
7701(a)(30)
of the Code, in connection with any foreclosure or acquisition of a
deed in
lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan,
the Master Servicer will cause compliance with the provisions of
Treasury
Regulation Section 1.1445-2(d)(3) (or any successor thereto)
necessary to
assure that no withholding tax obligation arises with respect to
the proceeds
of such foreclosure except to the extent, if any, that proceeds of
such
foreclosure are required to be remitted to the obligors on such
Mortgage Loan.
The
decision of the Master Servicer to foreclose on a defaulted
Mortgage
Loan shall be subject to a determination by the Master Servicer
that the
proceeds of such foreclosure would exceed the costs and expenses of
bringing
such a proceeding. The income earned from the management of any REO
Properties,
net of reimbursement to the Master Servicer for expenses incurred
(including
any property or other taxes) in connection with such management and
net of
unreimbursed Master Servicing Fees, Advances and Servicing
Advances, shall be
applied to the payment of principal of and interest on the related
defaulted
Mortgage Loans (with interest accruing as though such Mortgage
Loans were still
current) and all such income shall be deemed, for all purposes in
this
Agreement, to be payments on account of principal and interest on
the related
Mortgage Notes and shall be deposited into the Certificate Account.
To the
extent the net income received during any calendar month is in
excess of the
amount attributable to amortizing principal and accrued interest at
the related
Mortgage Rate on the related Mortgage Loan for such calendar month,
such excess
shall be considered to be a partial prepayment of principal of the
related
Mortgage Loan.
The
proceeds from any liquidation of a Mortgage Loan, as well as
any
income from an REO Property, will be applied in the following order
of
priority: first, to reimburse the Master Servicer for any related
unreimbursed
Servicing Advances and Master Servicing Fees; second, to reimburse
the Master
Servicer or the Trustee for any unreimbursed Advances; third, to
reimburse the
Certificate Account for any Nonrecoverable Advances (or portions
thereof) that
were previously withdrawn by the Master Servicer or the Trustee
pursuant to
Section 3.08(a)(iii) that related to such Mortgage Loan; fourth, to
accrued and
unpaid interest (to the extent no Advance has been made for such
amount or any
such Advance has been reimbursed) on the Mortgage Loan or related
REO Property,
at the Adjusted Net Mortgage Rate to the Due Date occurring in the
month in
which such amounts are required to be distributed; and fifth, as a
recovery of
principal of the Mortgage Loan. Excess Proceeds, if any, from the
liquidation
of a Liquidated Mortgage Loan will be retained by the Master
Servicer as
additional servicing compensation pursuant to Section 3.14.
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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
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
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the Trust Fund established hereunder as a result of any
modification of a
Mortgage Loan effected pursuant to this subsection (b), any holding
of a
Modified Mortgage Loan by the Trust Fund or any purchase of a
Modified Mortgage
Loan by Countrywide (but such obligation shall not prevent
Countrywide or any
other appropriate Person from in good faith contesting any such tax
in
appropriate proceedings and shall not prevent Countrywide from
withholding
payment of such tax, if permitted by law, pending the outcome of
such
proceedings). Countrywide shall have no right of reimbursement for
any amount
paid pursuant to the foregoing indemnification, except to the
extent that the
amount of any tax, interest, and penalties, together with interest
thereon, is
refunded to the Trust Fund or Countrywide.
SECTION
3.12. Trustee to
Cooperate; Release of Mortgage Files.
Upon the
payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be
escrowed in a
manner customary for such purposes, the Master Servicer will
immediately notify
the Trustee by delivering, or causing to be delivered a "Request
for Release"
substantially in the form of Exhibit N of this Agreement. Upon
receipt of such
request, the Trustee shall promptly release the related Mortgage
File to the
Master Servicer, and the Trustee shall at the Master Servicer's
direction
execute and deliver to the Master Servicer the request for
reconveyance, deed
of reconveyance or release or satisfaction of mortgage or such
instrument
releasing the lien of the Mortgage in each case provided by the
Master
Servicer, together with the Mortgage Note with written evidence of
cancellation
on the Mortgage Note. The Master Servicer is authorized to cause
the removal
from the registration on the MERS(R) System of such Mortgage and to
execute and
deliver, on behalf of the Trustee and the Certificateholders or any
of them,
any and all instruments of satisfaction or cancellation or of
partial or full
release. Expenses incurred in connection with any instrument of
satisfaction or
deed of reconveyance shall be chargeable to the related Mortgagor.
From time to
time and as shall be appropriate for the servicing or foreclosure
of any
Mortgage Loan, including for such purpose, collection under any
policy of flood
insurance, any fidelity bond or errors or omissions policy, or for
the purposes
of effecting a partial release of any Mortgaged Property from the
lien of the
Mortgage or the making of any corrections to the Mortgage Note or
the Mortgage
or any of the other documents included in the Mortgage File, the
Trustee shall,
upon delivery to the Trustee of a Request for Release in the form
of Exhibit M
signed by a Servicing Officer, release the Mortgage File to the
Master
Servicer. Subject to the further limitations set forth below, the
Master
Servicer shall cause the Mortgage File or documents so released to
be returned
to the Trustee when the need therefor by the Master Servicer no
longer exists,
unless the Mortgage Loan is liquidated and the proceeds thereof are
deposited
in the Certificate Account, in which case the Master Servicer shall
deliver to
the Trustee a Request for Release in the form of Exhibit N, signed
by a
Servicing Officer.
If the
Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by
this
Agreement, the Master Servicer shall deliver or cause to be
delivered to the
Trustee, for signature, as appropriate, any court pleadings,
requests for
trustee's sale or other documents necessary to effectuate such
foreclosure or
any legal action brought to obtain judgment against the Mortgagor
on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or
to enforce
any other remedies or rights provided by the Mortgage Note or the
Mortgage or
otherwise available at law or in equity.
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SECTION
3.13. Documents,
Records and Funds in Possession of
Master Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Master
Servicer shall transmit to the Trustee as required by this
Agreement all
documents and instruments in respect of a Mortgage Loan coming into
the
possession of the Master Servicer from time to time and shall
account fully to
the Trustee for any funds received by the Master Servicer or which
otherwise
are collected by the Master Servicer as Liquidation Proceeds,
Insurance
Proceeds or Subsequent Recoveries in respect of any Mortgage Loan.
All Mortgage
Files and funds collected or held by, or under the control of, the
Master
Servicer in respect of any Mortgage Loans, whether from the
collection of
principal and interest payments or from Liquidation Proceeds and
any Subsequent
Recoveries, including but not limited to, any funds on deposit in
the
Certificate Account, shall be held by the Master Servicer for and
on behalf of
the Trustee and shall be and remain the sole and exclusive property
of the
Trustee, subject to the applicable provisions of this Agreement.
The Master
Servicer also agrees that it shall not create, incur or subject any
Mortgage
File or any funds that are deposited in the Certificate Account,
Distribution
Account or any Escrow Account, or any funds that otherwise are or
may become
due or payable to the Trustee for the benefit of the
Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment
or other
encumbrance, or assert by legal action or otherwise any claim or
right of
setoff against any Mortgage File or any funds collected on, or in
connection
with, a Mortgage Loan, except, however, that the Master Servicer
shall be
entitled to set off against and deduct from any such funds any
amounts that are
properly due and payable to the Master Servicer under this
Agreement.
SECTION
3.14. Servicing
Compensation.
As
compensation for its activities hereunder, the Master Servicer
shall
be entitled to retain or withdraw from the Certificate Account an
amount equal
to the Master Servicing Fee; provided, that the aggregate Master
Servicing Fee
with respect to any Distribution Date shall be reduced (i) by an
amount equal
to the aggregate of the Prepayment Interest Shortfalls, if any,
with respect to
such Distribution Date, but not by more than the Compensating
Interest for that
Distribution Date, and (ii) with respect to the first Distribution
Date, an
amount equal to any amount to be deposited into the Distribution
Account by the
Depositor pursuant to Section 2.01(a) and not so deposited.
Additional
servicing compensation in the form of Excess Proceeds,
Prepayment Interest Excess, assumption fees, late payment charges
and all
income and gain net of any losses realized from Permitted
Investments shall be
retained by the Master Servicer to the extent not required to be
deposited in
the Certificate Account pursuant to Section 3.05. The Master
Servicer shall be
required to pay all expenses incurred by it in connection with its
master
servicing activities hereunder (including payment of any premiums
for hazard
insurance and any Primary Insurance Policy and maintenance of the
other forms
of insurance coverage required by this Agreement) and shall not be
entitled to
reimbursement therefor except as specifically provided in this
Agreement.
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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
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
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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. [Reserved].
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 C-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.
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(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.
(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 C-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) concurrently, to each Class of Senior Certificates, the
Current
Interest
and Interest Carry Forward Amount for each such Class and
Distribution Date, pro rata, based on their respective
entitlements;
(ii) 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
(iii) 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:
(A) sequentially:
(a) to the Class A-R Certificates, until its Class
Certificate Balance is reduced to zero; and
(b) 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:
(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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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, 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;
(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, 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 in the
following order of priority, in each case to the extent of
remaining Excess
Cashflow:
(i) 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 to the related Classes of
Certificates as part of the Principal Distribution Amount pursuant
to
Section
4.02(b) hereof;
(ii) sequentially, to the Class A-1, Class A-2 and Class A-3
Certificates, in that order, in an amount up to the Unpaid Realized
Loss
Amount for
each such Class;
(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, in each case, first in an amount up to
any
remaining
Current Interest and Interest Carry Forward Amount for each
such Class
and Distribution Date and then in an amount up to the Unpaid
Realized
Loss Amount for such Class;
(iv) to the Carryover Reserve Fund and then from the Carryover
Reserve
Fund, concurrently, to the Classes of LIBOR Certificates, pro
rata based
on their respective Class Certificate Balances to the extent
needed to
pay any unpaid Net Rate Carryover for each such Class; and then
any Excess
Cashflow remaining after such allocation to pay Net Rate
Carryover
based on Class Certificate Balances of the LIBOR Certificates
will be
distributed to each Class of LIBOR Certificates with respect to
which
there remains
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any unpaid
Net Rate Carryover, pro rata, based on the amount of such
unpaid Net
Rate Carryover;
(v) to the Class C-P Certificateholders, in an amount up to the
Class C-P
Distributable Amount for such Distribution Date; and
(vi) to the Class A-R Certificates.
(d)
[Reserved.]
(e) To the
extent that a Class of LIBOR Certificates receives interest in
excess of the related Net Rate Cap, such interest shall be deemed
to have been
paid to the Carryover Reserve Fund and then paid by the Carryover
Reserve Fund
to those Certificateholders. For purposes of the Code, amounts
deemed deposited
in the Carryover Reserve Fund shall be deemed to have first been
distributed to
the Class C-P Certificates.
(f) On
each Distribution Date, the Prepayment Charge Amount shall be
allocated and paid to the Class C-P Certificates.
(g)
Application of Applied Realized Loss Amounts. On each
Distribution
Date, the Trustee shall allocate the Applied Realized Loss Amount
to reduce the
applicable Class Certificate Balances in the following order of
priority: (1)
sequentially, to the Class M-9, Class M-8, Class M-7, Class M-6,
Class M-5,
Class M-4, Class M-3, Class M-2 and Class M-1 Certificates, in that
order,
until their respective Class Certificate Balances are reduced to
zero; (2) to
the Class A-3 Certificates until its Class Certificate Balance is
reduced to
zero; (3) to the Class A-2 Certificates until its Class Certificate
Balance is
reduced to zero and (4) to the Class A-1 Certificates until its
Class
Certificate Balance is reduced to zero.
(h)
Application of Subsequent Recoveries. If Subsequent Recoveries
have
been received with respect to a Liquidated Mortgage Loan, the
amount of such
Subsequent Recoveries will be applied to increase the applicable
Class
Certificate Balances in the following order of priority: (1)
sequentially, to
the Class A-1, Class A-2 and Class A-3 Certificates, in that order,
in an
amount up to their respective Unpaid Realized Loss Amounts; and
(2)
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
an amount up to their respective Unpaid Realized Loss Amounts.
Holders of
such Certificates will not be entitled to any payment in
respect of Current Interest on the amount of such increases for any
Interest
Accrual Period preceding the Distribution Date on which such
increase occurs.
Any such increases shall be applied pro rata to the Certificate
Balance of each
Certificate of such Class.
SECTION
4.03. Allocation of
Net Deferred Interest.
(a) For
any Distribution Date, Net Deferred Interest will be allocated
among the Classes of interest-bearing Certificates in an amount
equal to the
excess, if any, of (i) the amount of interest that accrued on such
Class of
Certificates at its respective Pass-Through Rate during the
Interest Accrual
Period related to that Distribution Date over (ii) the amount of
interest that
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accrued on such Class of Certificates at its respective Adjusted
Cap Rate
during the Interest Accrual Period related to that Distribution
Date.
(b) Any
Net Deferred Interest allocated to a Class of Certificates will
be added to the Class Certificate Balance of such Class of
Certificates.
SECTION
4.04. [Reserved].
SECTION
4.05. [Reserved].
SECTION
4.06. Monthly
Statements to Certificateholders.
(a)
Concurrently with each distribution on a Distribution Date, the
Trustee will forward by mail to each Rating Agency and make
available to
Certificateholders on the Trustee's website
(http://www.bnyinvestorreporting.com) a statement generally setting
forth the
information contained in Exhibit U.
(b) The
Trustee's responsibility for disbursing the above information
to
the Certificateholders is limited to the availability, timeliness
and accuracy
of the information provided by the Master Servicer.
(c) On or
before the fifth Business Day following the end of each
Prepayment Period (but in no event later than the third Business
Day prior to
the related Distribution Date), the Master Servicer shall deliver
to the
Trustee (which delivery may be by electronic data transmission) a
report in
substantially the form set forth as Schedule VI hereto.
(d) Within
a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at
any time
during the calendar year was a Certificateholder, a statement
containing the
information set forth in items (1), (2) and (7) of Exhibit U
aggregated for
such calendar year or applicable portion thereof during which such
Person was a
Certificateholder. Such obligation of the Trustee shall be deemed
to have been
satisfied to the extent that substantially comparable information
shall be
provided by the Trustee pursuant to any requirements of the Code as
from time
to time in effect.
SECTION
4.07. Determination of
Pass-Through Rates for COFI
Certificates.
The
Pass-Through Rate for each Class of COFI Certificates for each
Interest Accrual Period after the initial Interest Accrual Period
shall be
determined by the Trustee as provided below on the basis of the
Index and the
applicable formulae appearing in footnotes corresponding to the
COFI
Certificates in the table relating to the Certificates in the
Preliminary
Statement.
Except as
provided below, with respect to each Interest Accrual Period
following the initial Interest Accrual Period, the Trustee shall
not later than
two Business Days prior to such Interest Accrual Period but
following the
publication of the applicable Index determine the Pass-Through Rate
at which
interest shall accrue in respect of the COFI Certificates during
the related
Interest Accrual Period.
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Except as
provided below, the Index to be used in determining the
respective Pass-Through Rates for the COFI Certificates for a
particular
Interest Accrual Period shall be COFI for the second calendar month
preceding
the Outside Reference Date for such Interest Accrual Period. If at
the Outside
Reference Date for any Interest Accrual Period, COFI for the second
calendar
month preceding such Outside Refere
