EXHIBIT 99.2
CAP CONTRACT ADMINISTRATION AGREEMENT
This CAP CONTRACT ADMINISTRATION AGREEMENT, dated as of June 30,
2006 (this "Agreement"), among JPMORGAN CHASE BANK, N.A. ("JPMorgan"), 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 Bear Xxxxxxx Financial Products Inc., as cap counterparty (the
"Counterparty"), with a Trade Date of June 28, 2006 and a reference number of
FXNCC8477 (the "Cap Contract"), a copy of which is attached to this Agreement
at Exhibit A;
WHEREAS, CWHEQ Revolving Home Equity Loan Trust, Series 2006-F (the
"Trust") has entered into an Indenture, dated as of June 30, 2006 (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 2-A-1A Notes.
Calculation Period: With respect to the Cap Contract and any payment
made under such Cap Contract, the related "Calculation Period" as defined in
such 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 "JPMorgan Chase Bank, N.A. for Countrywide Home Loans, Inc. and
certain registered Holders of Revolving Home Equity Loan Asset-Backed Notes,
Series 2006-F". 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
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Payment Date following the Payment Date on which the Note Principal Balance of
the Benefited Notes is reduced to zero shall be zero.
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 JPMorgan 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.
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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 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) JPMorgan 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
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this Agreement and to perform its obligations as Cap Contract
Administrator under this Agreement.
(b) The execution, delivery and performance of this Agreement by
JPMorgan as Cap Contract Administrator has been duly authorized by
JPMorgan.
(c) This Agreement has been duly executed and delivered by JPMorgan as
Cap Contract Administrator and is enforceable against JPMorgan 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 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 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
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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 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
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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 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 JPMorgan as Indenture Trustee in accordance
with the Indenture, (i) JPMorgan shall resign and be discharged from
its duties as Cap Contract Administrator hereunder and (ii) the
Person that succeeds JPMorgan 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 JPMorgan 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
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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]
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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.
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Cap Contract Administrator
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Attorney-In-Fact
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Attorney-In-Fact
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 2006-F
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By: /s/ Xxxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
EXHIBIT A
CAP CONTRACT
[See Exhibit I]
A-1
