Exhibit 99.3
CORRIDOR CONTRACT ADMINISTRATION AGREEMENT
This CORRIDOR CONTRACT ADMINISTRATION AGREEMENT, dated as of March
30, 2006 (this "Agreement"), among THE BANK OF NEW YORK ("BNY"), as Corridor
Contract Administrator (in such capacity, the "Corridor Contract
Administrator") and as Trustee under the Pooling and Servicing Agreement
referred to below (in such capacity, the "Trustee"), and COUNTRYWIDE HOME
LOANS, INC. ("Countrywide").
WHEREAS, Countrywide is a party to an interest rate corridor
agreement between Countrywide and Barclays Bank PLC (the "Counterparty"), with
a Trade Date of March 3, 2006 and a reference number of 1107840B / 1107842B
(the "Corridor Contract"), a copy of which is attached to this Agreement at
Exhibit A;
WHEREAS, Countrywide is conveying certain mortgage loans and other
related assets to a trust fund (the "Trust Fund") created pursuant to a
Pooling and Servicing Agreement, dated as of March 1, 2006 (the "Pooling and
Servicing Agreement"), among CWALT, Inc., as depositor, Countrywide, as a
seller, Park Granada LLC, as a seller, Park Monaco Inc., as a seller, Park
Sienna LLC, as a seller, Countrywide Home Loans Servicing LP, as master
servicer (the "Master Servicer") and the Trustee;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Countrywide is assigning all of its rights, and delegating all of
its duties and obligations (other than its obligation to pay the Fixed Amount
and any Fees, if applicable (as defined in the Corridor Contract)), under the
Corridor Contract to the Corridor Contract Administrator, pursuant to the
Assignment Agreement, dated as of the date hereof (the "Assignment
Agreement"), among Countrywide, as assignor, the Corridor Contract
Administrator, as assignee, and the Counterparty;
WHEREAS, Countrywide desires that the Net Payments (as defined
below) on the Corridor Contract be distributed to the Trustee on behalf of the
Trust Fund to be applied for the purposes specified in the Pooling and
Servicing Agreement and that the Excess Payments (as defined below) on the
Corridor Contract be distributed to Countrywide;
WHEREAS, Countrywide and the Trustee desire to appoint the
Corridor Contract Administrator, and the Corridor Contract Administrator
desires to accept such appointment, to distribute funds received under the
Corridor Contract to the Trustee and to Countrywide as provided in this
Agreement, and, in the case of a NIM Issuance, to distribute Excess Payments
in accordance with the related Corridor Excess Assignment Agreement (each as
defined below).
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 Pooling
and Servicing Agreement.
Benefited Certificates: The LIBOR Certificates.
Calculation Period: With respect to the Corridor Contract and any
payment made under the Corridor Contract, the related "Calculation Period" as
defined in the Corridor Contract.
Controlling Party: As defined in Section 5.
Corridor Contract Account: The separate account created and
maintained by the Corridor Contract Administrator pursuant to Section 3 with a
depository institution in the name of the Corridor Contract Administrator for
the benefit of Countrywide and the Trustee on behalf of the Holders of the
Benefited Certificates and designated "The Bank of New York for Countrywide
Home Loans, Inc. and certain registered Holders of CWALT, Inc., Mortgage
Pass-Through Certificates, Series 2006-OC2". Funds in the Corridor Contract
Account shall be held for Countrywide and the Trustee on behalf of the Holders
of the Benefited Certificates as set forth in this Agreement.
Corridor Excess Assignment Agreement: With respect to a NIM
Issuance (if any), an agreement executed on or after the date hereof by
Countrywide, the related NIM Trust and the Corridor Contract Administrator (in
form and substance reasonably satisfactory to the Corridor Contract
Administrator), pursuant to which rights to receive certain portions of Excess
Payments shall be assigned to such NIM Trust and pursuant to which the
Corridor Contract Administrator shall agree to distribute Excess Payments to
the related Indenture Trustee and Countrywide (in accordance with the terms of
such agreement).
Day Count Fraction: With respect to the Corridor Contract and any
Distribution Date, the "Floating Rate Day Count Fraction" specified for the
Calculation Period related to such Distribution Date in the Corridor Contract.
Excess Payment: For any Distribution Date, (a) with respect to any
payment received by the Corridor Contract Administrator from the Counterparty
in respect of the Corridor Contract for such Distribution Date (other than any
payment in respect of an early termination of the Corridor Contract), an
amount equal to the excess, if any, of such payment over the Net Payment for
such Distribution Date and (b) with respect to any payment received by the
Corridor Contract Administrator from the Counterparty in respect of an early
termination of the Corridor Contract received during the period from and
including the immediately preceding Distribution Date to and excluding the day
immediately preceding the current Distribution Date, an amount equal to the
excess, if any, of such payment over the Net Payment in respect of such
payment. Notwithstanding the foregoing, in the event that the aggregate Class
Certificate Balance of the Benefited Certificates is reduced to zero prior to
the termination of the Corridor Contract, the Excess Payment for any
Distribution Date following the Distribution Date on which the aggregate Class
Certificate Balance of the Benefited Certificates is reduced to zero shall be
the entire payment received from the Counterparty.
Indenture Trustee: With respect to a NIM Issuance (if any), the
indenture trustee under the indenture pursuant to which the notes related to
such NIM Issuance are issued.
LIBOR: With respect to the Corridor Contract, the "Floating Rate"
as defined in such Corridor Contract.
Net Payment: For any Distribution Date, (a) with respect to any
payment received by the Corridor Contract Administrator from the Counterparty
in respect of the Corridor Contract for such Distribution Date (other than any
payment in respect of an early termination of the Corridor 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 Distribution Date and (y) the aggregate Class Certificate Balance of
the Benefited Certificates immediately prior to such Distribution Date and
(iii) the Day Count Fraction, and (b) with respect to any payment received by
the Corridor Contract Administrator from the Counterparty in respect of an
early termination of the Corridor Contract received during the period from and
including the immediately preceding Distribution Date to and excluding the day
immediately preceding the current Distribution 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 Distribution Date on or after
the early termination of the Corridor Contract and (y) the aggregate Class
Certificate Balance of the Benefited Certificates immediately prior to the
first Distribution Date on or after the early termination of the Corridor
Contract, and the denominator of which is equal to the related Notional
Balance for the first Distribution Date on or after the early termination of
the Corridor Contract and (ii) the amount of such payment received in respect
of such early termination. Notwithstanding the foregoing, in the event that
the Benefited Certificates are retired prior to the termination of the
Corridor Contract, the Net Payment for any Distribution Date following the
Distribution Date on which the Benefited Certificates are retired shall be $0.
NIM Issuance: An issuance by a NIM Trust, on or after the date
hereof, of asset-backed notes secured by the Class C Certificates and/or Class
P Certificates.
NIM Trust: A Delaware statutory trust or other special-purpose
entity that is the issuer of the securities issued in connection with a NIM
Issuance (if any).
Notional Balance: With respect to the Corridor Contract and any
Distribution Date, the "Notional Amount" specified for the Calculation Period
related to such Distribution Date in the Corridor Contract.
Responsible Officer: When used with respect to the Corridor
Contract Administrator, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the Corridor Contract Administrator 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.
Strike Rate: With respect to the Corridor Contract and any
Distribution Date, the "Cap Rate" specified for the Calculation Period related
to such Distribution Date in the Corridor Contract.
2. Appointment of Corridor Contract Administrator.
Countrywide and the Trustee hereby appoint BNY to serve as Corridor
Contract Administrator pursuant to this Agreement and pursuant to the related
Corridor Excess
Assignment Agreement (if any). The Corridor Contract Administrator accepts
such appointment and acknowledges the transfer and assignment to it of
Countrywide's rights under the Corridor Contract pursuant to the Assignment
Agreement. The Corridor Contract Administrator agrees to exercise the rights
referred to above for the benefit of Countrywide and the Trustee on behalf of
the Trust Fund and to perform the duties set forth in this Agreement. In the
event of a NIM Issuance, the Corridor Contract Administrator further agrees to
perform the duties set forth in the related Corridor Excess Assignment
Agreement for the benefit of Countrywide, the related NIM Trust and the
related Indenture Trustee.
3. Receipt of Funds; Corridor Contract Account.
The Corridor Contract Administrator hereby agrees to receive, on behalf
of Countrywide and the Trustee on behalf of the Trust Fund, all amounts paid
by the Counterparty under each Corridor Contract. The Corridor Contract
Administrator shall establish and maintain a Corridor Contract Account into
which the Corridor Contract Administrator shall deposit or cause to be
deposited on the Business Day of receipt, all amounts payable by the
Counterparty under the Corridor Contract. All funds deposited in the Corridor
Contract Account shall be held for the benefit of Countrywide and the Trustee
on behalf of the Holders of the Benefited Certificates until withdrawn in
accordance with Section 4. The Corridor Contract Account shall be an "Eligible
Account" as defined in the Pooling and Servicing Agreement and, if the Trust
Fund is terminated pursuant to the Pooling and Servicing Agreement prior to
the termination of this Agreement, the Corridor Contract Account shall be an
account that would otherwise qualify as an "Eligible Account" under the
Pooling and Servicing Agreement had the termination of the Trust Fund not
occurred.
Funds in the Corridor Contract Account shall remain uninvested.
The Corridor Contract Administrator shall give at least 30 days' advance
notice to Countrywide and the Trustee of any proposed change of location of
the Corridor Contract Account prior to any change thereof.
4. Calculations; Distribution of Payments; Delivery of Notices.
The Corridor Contract Administrator hereby agrees to perform the
calculations necessary to distribute payments in accordance with this Section
4. The Corridor Contract Administrator shall perform such calculations based
on (x) the Class Certificate Balances of the Benefited Certificates provided
by the Trustee pursuant to the Pooling and Servicing Agreement and (y) the
Notional Balances, Day Count Fractions and values of LIBOR provided by the
Counterparty pursuant to the Corridor Contract. The Corridor Contract
Administrator shall, absent manifest error, be entitled to rely on information
provided by the Trustee and the Counterparty.
On the Business Day of receipt of any payment from the Counterparty, the
Corridor Contract Administrator shall withdraw the amount of such payment from
the Corridor Contract Account and distribute such amounts sequentially, as
follows:
(a) first, to the Trustee for deposit into the Carryover Reserve Fund,
the applicable Net Payment; and
(b) second, to Countrywide, the applicable Excess Payment, in
accordance with the following wiring instructions:
Bank: Bank of New York
Account Name: Countrywide Home Loans
Account No: 8900038632
ABA No: 000000000
REF: CWALT 2006-OC2
The Corridor Contract Administrator shall prepare and deliver any
notices required to be delivered under the Corridor Contract.
5. Control Rights.
The Controlling Party shall have the right to direct the Corridor
Contract Administrator with respect to the exercise of any right under the
Corridor Contract (such as the right to designate an Early Termination Date
following an Event of Default (each such term as defined in the Corridor
Contract). For purposes of this Agreement, the "Controlling Party" shall mean,
with respect to the Corridor Contract, (i) if the aggregate Class Certificate
Balance of the Benefited Certificates immediately prior to the most recent
Distribution Date (or, prior to the first Distribution Date, the original
aggregate Class Certificate Balance) is equal to or greater than 50% of the
Notional Balance of the Corridor Contract as of such Distribution Date (or,
prior to the first Distribution Date, the original Notional Balance of the
Corridor Contract), the Trustee, and (ii) if the aggregate Class Certificate
Balance of the Benefited Certificates immediately prior to the most recent
Distribution Date (or, prior to the first Distribution Date, the original
aggregate Class Certificate Balance) is less than 50% of the Notional Balance
of the Corridor Contract as of such Distribution Date (or, prior to the first
Distribution Date, the original Notional Balance of the Corridor Contract),
Countrywide.
6. Representations and Warranties of the Corridor Contract Administrator. The
Corridor Contract Administrator represents and warrants as follows:
(a) BNY is duly organized and validly existing as a banking
corporation under the laws of the State of New York and has all
requisite power and authority to execute and deliver this
Agreement and to perform its obligations as Corridor Contract
Administrator under this Agreement.
(b) The execution, delivery and performance of this Agreement by BNY
as Corridor Contract Administrator has been duly authorized by
BNY.
(c) This Agreement has been duly executed and delivered by BNY as
Corridor 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 Corridor Contract Administrator.
(a) The Corridor 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
Corridor Contract Administrator from liability for its own grossly
negligent action, its own gross negligent failure to act or its
own 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 Corridor Contract
Administrator shall be determined solely by the express
provisions of this Agreement, the Corridor Contract
Administrator shall not be liable, individually or as
Corridor 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 Corridor Contract
Administrator and the Corridor 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 Corridor 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 Corridor Contract Administrator shall not be liable,
individually or as Corridor Contract Administrator, for an
error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Corridor Contract
Administrator, unless the Corridor Contract Administrator
was grossly negligent or acted in bad faith or with willful
misfeasance; and
(iii) the Corridor Contract Administrator shall not be liable,
individually or as Corridor 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 Corridor Contract Administrator under this Agreement.
(c) Except as otherwise provided in Sections 7(a) and 7(b):
(i) the Corridor Contract Administrator may request and rely
upon and shall be protected in acting or refraining from
acting upon any resolution, officer's 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 Corridor 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 Corridor Contract Administrator shall not be liable,
individually or as Corridor 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 Corridor 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 Countrywide or the Trustee; provided, however, that if
the payment within a reasonable time to the Corridor
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 Corridor Contract
Administrator not reasonably assured to the Corridor
Contract Administrator by Countrywide and/or the Trustee,
the Corridor Contract Administrator may require reasonable
indemnity against such expense, or liability from
Countrywide and/or the Trustee, as the case may be, as a
condition to taking any such action; and
(v) the Corridor 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) Countrywide covenants and agrees to pay or reimburse the Corridor
Contract Administrator, upon its request, for all reasonable
expenses and disbursements incurred or made by the Corridor
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
Corridor Contract Administrator and any director, officer,
employee or agent of the Corridor Contract Administrator shall be
indemnified by Countrywide 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 Corridor 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 Corridor Contract Administrator's duties hereunder.
Such indemnity shall survive the termination of this Agreement or
the resignation of the Corridor Contract Administrator hereunder.
Notwithstanding anything to the contrary in this Section 7(a), any
expenses, disbursements, losses or liabilities of the Corridor
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 of the Certificateholders made to the
Trustee as contemplated by Section 8.02(ix) of the Pooling and
Servicing Agreement and
consequently made to the Corridor Contract Administrator by the
Trustee shall be payable by the Trustee out of the security or
indemnity provided by such Certificateholders pursuant to Section
8.02(ix) of the Pooling and Servicing Agreement.
(e) Upon the resignation of BNY as Trustee in accordance with the
Pooling and Servicing Agreement, (i) BNY shall resign and be
discharged from its duties as Corridor Contract Administrator
hereunder and (ii) the Person that succeeds BNY as Trustee shall
be appointed as successor Corridor Contract Administrator
hereunder upon its execution, acknowledgement and delivery of the
instrument accepting such appointment in accordance with Section
8.08 of the Pooling and Servicing Agreement, whereupon the duties
of the Corridor Contract Administrator hereunder shall pass to
such Person. In addition, upon the appointment of a successor
Trustee under the Pooling and Servicing Agreement, such successor
Trustee shall succeed to the rights of the Trustee hereunder.
(f) In the event of a NIM Issuance, nothing in this Section 7 shall
limit or otherwise modify or affect the rights, duties or
obligations of the Corridor Contract Administrator under the
related Corridor Excess Assignment Agreement.
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 Countrywide 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
Corridor Contract and the disbursement by the Corridor Contract
Administrator of all funds received under the Corridor Contract to
Countrywide and the Trustee on behalf of the Holders of the
Benefited Certificates.
(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.
(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]
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,
as Corridor Contract Administrator
By:/s/ XxxXxxxx Xxxxxxx
--------------------
Name: XxxXxxxx Xxxxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK,
as Trustee
By:/s/ XxxXxxxx Xxxxxxx
--------------------
Name: XxxXxxxx Xxxxxxx
Title: Assistant Treasurer
COUNTRYWIDE HOME LOANS, INC.
By:/s/ Xxxxxxx Xxxxxxxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
Title: Senior Vice President
EXHIBIT A
CORRIDOR CONTRACTS
A-1
