CAP CONTRACT ADMINISTRATION AGREEMENT
EXHIBIT
99.8
Exhibit
99.8
EXECUTION
COPY
This
CAP
CONTRACT ADMINISTRATION AGREEMENT, dated as of May 31, 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 May 25, 2007 and a reference number of 1504281 (the
“Cap
Contract”), a copy of which is attached to this Agreement at Exhibit
A;
WHEREAS,
CWHEQ Revolving Home Equity Loan Trust, Series 2007-D (the “Trust”) has
entered into an Indenture, dated as of May 31, 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-D”. 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 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.
3
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:
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(a)
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first,
to the Indenture Trustee, the applicable Net Payment;
and
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(b)
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second,
to CHL, the applicable Excess Payment, in accordance with the following
wiring instructions:
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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:
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(a)
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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.
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(b)
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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)
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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).
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7. Certain
Matters Concerning the Cap Contract Administrator.
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(a)
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The
Cap Contract Administrator shall undertake to perform such duties
and only
such duties as are specifically set forth in this
Agreement.
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(b)
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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:
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(i)
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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;
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(ii)
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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
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(iii)
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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.
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(c)
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Except
as otherwise provided in Sections 7(a) and
7(b):
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(i)
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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;
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(ii)
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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;
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(iii)
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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;
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(iv)
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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
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(v)
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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.
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(d)
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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 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.
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(e)
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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.
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8. Miscellaneous.
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(a)
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This
Agreement shall be governed by and construed in accordance with
the laws
of the State of New York.
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(b)
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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.
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(c)
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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.
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(d)
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This
Agreement may be amended, supplemented or modified in writing by
the
parties hereto.
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(e)
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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.
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(f)
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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)
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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.
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(h)
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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.
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[SIGNATURE
PAGE FOLLOWS]
8
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:
By:
Wilmington Trust Company, not
in
its individual capacity but solely
as
Owner Trustee
By: _/s/
X. Xxxxxxxxxxx Murphy__________
Name: J.
Xxxxxxxxxxx Xxxxxx
Title: Financial
Services
Officer
EXHIBIT
A
CAP
CONTRACT
A-1
