Exhibit 99.8
CAP CONTRACT ADMINISTRATION AGREEMENT
This CAP CONTRACT ADMINISTRATION AGREEMENT, dated as of
March 30, 2007 (this "Agreement"), among THE BANK OF NEW YORK ("BNY"), as Cap
Contract Administrator (in such capacity, the "Cap Contract Administrator")
and as Indenture Trustee under the Indenture referred to below (in such
capacity, the "Indenture Trustee"), and COUNTRYWIDE HOME LOANS, INC. ("CHL").
WHEREAS, CHL is a party to an interest rate cap agreement
between CHL and Swiss Re Financial Products Corporation, as cap counterparty
(the "Counterparty") with a Trade Date of March 19, 2007 and a reference
number of 1360087 (the "Cap Contract"), a copy of which is attached to this
Agreement at Exhibit A;
WHEREAS, CWHEQ Revolving Home Equity Loan Trust, Series
2007-B (the "Trust") has entered into an Indenture, dated as of March 30, 2007
(the "Indenture"), between the Trust and the Indenture Trustee;
WHEREAS, simultaneously with the execution and delivery of
this Agreement, CHL is assigning all of its rights, and delegating all of its
duties and obligations (other than its obligation to pay the Fixed Amount (as
defined in the Cap Contract)), under the Cap Contract to the Cap Contract
Administrator, pursuant to the Assignment Agreement, dated as of the date
hereof (the "Assignment Agreement"), among CHL, as assignor, the Cap Contract
Administrator, as assignee, and the Counterparty;
WHEREAS, CHL desires that the Net Payments (as defined
below) on the Cap Contract be distributed to the Indenture Trustee for the
benefit of the Holders of the Benefited Notes to be applied for the purposes
specified in the Indenture and that the Excess Payments (as defined below) on
the Cap Contract be distributed to CHL; and
WHEREAS, CHL and the Indenture Trustee desire to appoint the
Cap Contract Administrator, and the Cap Contract Administrator desires to
accept such appointment, to distribute funds received under the Cap Contract
to the Indenture Trustee and to CHL as provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties agree
as follows:
1. Definitions. Capitalized terms used but not otherwise defined in this
Agreement shall have the respective meanings assigned thereto in the Master
Glossary of Defined Terms attached to the Indenture.
Benefited Notes: The Class A Notes.
Calculation Period: With respect to the Cap Contract and any
payment made under the Cap Contract, the related "Calculation Period" as
defined in the Cap Contract.
Controlling Party: As defined in Section 5.
Cap Contract Account: The separate account created and
maintained by the Cap Contract Administrator pursuant to Section 3 with a
depository institution in the name of the Cap Contract Administrator for the
benefit of CHL and the Indenture Trustee on behalf of the Holders of the
Benefited Notes and designated "The Bank of New York for Countrywide Home
Loans, Inc. and certain registered Holders of Revolving Home Equity Loan
Asset-Backed Notes, Series 2007-B". Funds in the Cap Contract Account shall be
held for CHL and for the Indenture Trustee for the benefit of the Holders of
the Benefited Notes as set forth in this Agreement.
Day Count Fraction: With respect to the Cap Contract and any
Payment Date, the "Floating Rate Day Count Fraction" specified for the
Calculation Period related to such Payment Date in the Cap Contract.
Excess Payment: For any Payment Date, (a) with respect to
any payment received by the Cap Contract Administrator from the Counterparty
in respect of the Cap Contract for such Payment Date (other than any payment
in respect of an early termination of the Cap Contract), an amount equal to
the excess, if any, of such payment over the Net Payment for such Payment Date
and (b) with respect to any payment received by the Cap Contract Administrator
from the Counterparty in respect of an early termination of the Cap Contract
received during the period from and including the immediately preceding
Payment Date to and excluding the day immediately preceding the current
Payment Date, an amount equal to the excess, if any, of such payment over the
Net Payment in respect of such Payment Date.
LIBOR: With respect to the Cap Contract, the "Floating Rate
Option" as defined in the Cap Contract.
Net Payment: For any Payment Date, (a) with respect to any
payment received by the Cap Contract Administrator from the Counterparty in
respect of the Cap Contract for such Payment Date (other than any payment in
respect of an early termination of the Cap Contract), an amount equal to the
product of (i) the excess, if any, of (x) LIBOR, over (y) the related Strike
Rate, (ii) the lesser of (x) the related Notional Balance for such Payment
Date and (y) the Note Principal Balance of the Benefited Notes immediately
prior to such Payment Date and (iii) the Day Count Fraction, and (b) with
respect to any payment received by the Cap Contract Administrator from the
Counterparty in respect of an early termination of the Cap Contract received
during the period from and including the immediately preceding Payment Date to
and excluding the day immediately preceding the current Payment Date, an
amount equal to the product of (i) a fraction, the numerator of which is equal
to the lesser of (x) the related Notional Balance for the first Payment Date
on or after the early termination of the Cap Contract and (y) the Note
Principal Balance of the Benefited Notes immediately prior to the first
Payment Date on or after the early termination of the Cap Contract, and the
denominator of which is equal to the related Notional Balance for the first
Payment Date on or after the early termination of the Cap Contract and (ii)
the amount of such payment received in respect of such early termination.
Notwithstanding the foregoing, in the event that the Note Principal Balance of
the Benefited Notes is reduced to zero prior to the termination of the Cap
Contract, the Net Payment for any Payment Date following the Payment Date on
which the Note Principal Balance of the Benefited Notes is reduced to zero
shall be zero.
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Notional Balance: With respect to the Cap Contract and any
Payment Date, the "Notional Amount" specified for the Calculation Period
related to such Payment Date in the Cap Contract.
Responsible Officer: When used with respect to the Cap
Contract Administrator, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the Cap Contract Administrator with direct responsibility for the transactions
contemplated hereby 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.
Strike Rate: With respect to the Cap Contract and any
Payment Date, the "Cap Rate" specified for the Calculation Period related to
such Payment Date in the Cap Contract.
2. Appointment of Cap Contract Administrator.
CHL and the Indenture Trustee hereby appoint BNY to serve as Cap
Contract Administrator pursuant to this Agreement. The Cap Contract
Administrator accepts such appointment and acknowledges the assignment to it
of CHL's rights under the Cap Contract pursuant to the Assignment Agreement.
The Cap Contract Administrator agrees to exercise the rights referred to above
for the benefit of CHL and the Indenture Trustee on behalf of the Holders of
the Benefited Notes and to perform the duties set forth in this Agreement.
3. Receipt of Funds; Cap Contract Account.
The Cap Contract Administrator hereby agrees to receive, on behalf of
CHL and on behalf of the Indenture Trustee for the benefit of the Holders of
the Benefited Notes, all amounts paid by the Counterparty under the Cap
Contract. The Cap Contract Administrator shall establish and maintain a Cap
Contract Account into which the Cap Contract Administrator shall deposit or
cause to be deposited on the Business Day of receipt, all amounts payable by
the Counterparty under the Cap Contract. All funds deposited in the Cap
Contract Account shall be held for the benefit of CHL and for the Indenture
Trustee for the benefit of the Holders of the Benefited Notes until withdrawn
in accordance with Section 4. The Cap Contract Account shall be an "Eligible
Account" as defined in the Indenture and, if the Indenture is satisfied and
discharged in accordance with its terms prior to the termination of this
Agreement, the Cap Contract Account shall be an account that would otherwise
qualify as an "Eligible Account" under the Indenture had such satisfaction and
discharge not occurred.
Funds in the Cap Contract Account shall remain uninvested.
The Cap Contract Administrator shall give at least 30 days' advance
notice to CHL and the Indenture Trustee of any proposed change of location of
the Cap Contract Account prior to any change thereof.
4. Calculations; Distribution of Payments; Delivery of Notices.
The Cap Contract Administrator hereby agrees to perform the
calculations necessary to distribute payments in accordance with this Section
4. The Cap Contract Administrator shall
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perform such calculations based on (x) the Note Principal Balance of the
Benefited Notes provided by the Indenture Trustee pursuant to the Indenture
and (y) the Notional Balances, Day Count Fractions and values of LIBOR
provided by the Counterparty pursuant to the Cap Contract. The Cap Contract
Administrator shall, absent manifest error, be entitled to rely on information
provided by the Indenture Trustee and the Counterparty.
On the Business Day of receipt of any payment from the Counterparty,
the Cap Contract Administrator shall withdraw the amount of such payment from
the Cap Contract Account and distribute such amounts sequentially, as follows:
(a) first, to the Indenture Trustee, the applicable Net Payment;
and
(b) second, to CHL, the applicable Excess Payment, in accordance
with the following wiring instructions:
Beneficiary Account: BANK OF AMERICA NA-SAN FRANCISCO
FFED: 000000000
Beneficiary: COUNTRYWIDE HOME LOANS, INC.
A/C: 12352 06200
The Cap Contract Administrator shall prepare and deliver any notices
required to be delivered under the Cap Contract.
5. Control Rights.
The Controlling Party shall have the right, but not the obligation,
to direct the Cap Contract Administrator with respect to the exercise of any
right under the Cap Contract (such as the right to designate an Early
Termination Date following an Event of Default (each such term as defined in
the Cap Contract)). For purposes of this Agreement, the "Controlling Party"
shall mean, (i) if the Note Principal Balance of the Benefited Notes
immediately prior to the most recent Payment Date (or, prior to the first
Payment Date, the original Note Principal Balance) is equal to or greater than
50% of the Notional Balance as of such Payment Date (or, prior to the first
Payment Date, the original Notional Balance), the Indenture Trustee, and (ii)
if the Note Principal Balance of the Benefited Notes immediately prior to the
most recent Payment Date (or, prior to the first Payment Date, the original
Note Principal Balance) is less than 50% of the Notional Balance as of such
Payment Date (or, prior to the first Payment Date, the original Notional
Balance), CHL.
6. Representations and Warranties of the Cap Contract Administrator. The
Cap Contract Administrator represents and warrants as follows:
(a) BNY is duly organized and validly existing under the laws of
the jurisdiction of its organization and has all requisite
power and authority to execute and deliver this Agreement
and to perform its obligations as Cap Contract Administrator
under this Agreement.
(b) The execution, delivery and performance of this Agreement by
BNY as Cap Contract Administrator has been duly authorized
by BNY.
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(c) This Agreement has been duly executed and delivered by BNY
as Cap Contract Administrator and is enforceable against BNY
in accordance with its terms, except as enforceability may
be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a
proceeding in equity or at law).
7. Certain Matters Concerning the Cap Contract Administrator.
(a) The Cap Contract Administrator shall undertake to perform
such duties and only such duties as are specifically set
forth in this Agreement.
(b) No provision of this Agreement shall be construed to relieve
the Cap Contract Administrator from liability for its own
grossly negligent action, its own grossly negligent failure
to act or its own willful misconduct, its grossly negligent
failure to perform its obligations in compliance with this
Agreement, or any liability that would be imposed by reason
of its willful misfeasance or bad faith; provided that:
(i) the duties and obligations of the Cap Contract Administrator
shall be determined solely by the express provisions of this
Agreement, the Cap Contract Administrator shall not be
liable, individually or as Cap Contract Administrator,
except for the performance of such duties and obligations as
are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement
against the Cap Contract Administrator and the Cap Contract
Administrator may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Cap Contract Administrator and conforming to the
requirements of this Agreement that it reasonably believed
in good faith to be genuine and to have been duly executed
by the proper authorities respecting any matters arising
hereunder;
(ii) the Cap Contract Administrator shall not be liable,
individually or as Cap Contract Administrator, for an error
of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Cap Contract Administrator,
unless the Cap Contract Administrator was grossly negligent
or acted in bad faith or with willful misfeasance; and
(iii) the Cap Contract Administrator shall not be liable,
individually or as Cap Contract Administrator, with respect
to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of the
Controlling Party, or exercising any power conferred upon
the Cap Contract Administrator under this Agreement.
(c) Except as otherwise provided in Sections 7(a) and 7(b):
(i) the Cap Contract Administrator may request and rely upon and
shall be protected in acting or refraining from acting upon
any resolution, officer's
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certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or
document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) the Cap Contract Administrator may consult with counsel and
any opinion of counsel shall be full and complete
authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in
accordance with such opinion of counsel;
(iii) the Cap Contract Administrator shall not be liable,
individually or as Cap Contract Administrator, for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv) the Cap Contract Administrator shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to
do by CHL or the Indenture Trustee; provided, however, that
if the payment within a reasonable time to the Cap Contract
Administrator of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is,
in the opinion of the Cap Contract Administrator not
reasonably assured to the Cap Contract Administrator by CHL
and/or the Indenture Trustee, the Cap Contract Administrator
may require reasonable indemnity against such expense, or
liability from CHL and/or the Indenture Trustee, as the case
may be, as a condition to taking any such action; and
(v) the Cap Contract Administrator shall not be required to
expend its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
liability is not assured to it.
(d) CHL covenants and agrees to pay or reimburse the Cap Contract
Administrator, upon its request, for all reasonable expenses and
disbursements incurred or made by the Cap Contract Administrator
in accordance with any of the provisions of this Agreement
except any such expense or disbursement as may arise from its
negligence, bad faith or willful misconduct. The Cap Contract
Administrator and any director, officer, employee or agent of
the Cap Contract Administrator shall be indemnified by CHL and
held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement, or
in connection with the performance of any of the Cap Contract
Administrator's duties hereunder, other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of any of the Cap Contract
Administrator's duties hereunder. Such indemnity shall survive
the
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termination of this Agreement or the resignation of the Cap
Contract Administrator hereunder. Notwithstanding anything to the
contrary in this Section 7(d), any expenses, disbursements,
losses or liabilities of the Cap Contract Administrator or any
director, officer, employee or agent thereof that are made or
incurred as a result of any request, order or direction of any
Noteholders made to the Indenture Trustee as contemplated by
Section 5.12 of the Indenture and consequently made to the Cap
Contract Administrator by the Indenture Trustee shall be payable
by the Indenture Trustee out of the security or indemnity
provided by any such Noteholders pursuant to Section 6.01(c)(v)
of the Indenture.
(e) Upon the resignation of BNY as Indenture Trustee in accordance
with the Indenture, (i) BNY shall resign and be discharged from
its duties as Cap Contract Administrator hereunder and (ii) the
Person that succeeds BNY as Indenture Trustee shall be appointed
as successor Cap Contract Administrator hereunder upon its
execution, acknowledgement and delivery of the instrument
accepting such appointment in accordance with Section 6.11 of the
Indenture, whereupon the duties of the Cap Contract Administrator
hereunder shall pass to such Person. In addition, upon the
appointment of a successor Indenture Trustee under the Indenture,
such successor Indenture Trustee shall succeed to the rights of
the Indenture Trustee hereunder.
8. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(b) Each of BNY and CHL hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by
jury in any legal proceedings arising out of or relating to this
Agreement.
(c) This Agreement shall terminate upon the termination of the Cap
Contract and the disbursement by the Cap Contract Administrator
of all funds received under the Cap Contract to CHL and the
Indenture Trustee for the benefit of the Holders of the Benefited
Notes.
(d) This Agreement may be amended, supplemented or modified in
writing by the parties hereto.
(e) This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including
by facsimile transmission), and all such counterparts taken
together shall be deemed to constitute one and the same
instrument.
(f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
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(g) The representations and warranties made by the parties to this
Agreement shall survive the execution and delivery of this
Agreement. No act or omission on the part of any party hereto
shall constitute a waiver of any such representation or warranty.
(h) The article and section headings in this Agreement are for
convenience of reference only, and shall not limit or otherwise
affect the meaning of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Cap Contract Administrator
By: /s/ Xxxxxxxx Xxxxxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ Xxxxxxxx Xxxxxxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
ACKNOWLEDGED AND AGREED:
CWHEQ REVOLVING HOME EQUITY LOAN TRUST, Series 2007-B
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By: /s/ W. Xxxxx Xxxxxxxxxx
-----------------------------------
Name: W. Xxxxx Xxxxxxxxxx
Title: Vice President
EXHIBIT A
CAP CONTRACT
A-1
