EXHIBIT 99.3
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The Swap Contract Administration Agreement
SWAP CONTRACT ADMINISTRATION AGREEMENT
This SWAP CONTRACT ADMINISTRATION AGREEMENT, dated as of November
15, 2006 (this "Agreement"), among THE BANK OF NEW YORK ("BNY"), as Swap
Contract Administrator (in such capacity, the "Swap Contract Administrator")
and not in its individual or corporate capacity but solely as Trustee under
the Pooling and Servicing Agreement referred to below (in such capacity, the
"Trustee"), and COUNTRYWIDE HOME LOANS, INC. ("CHL").
WHEREAS, CHL is a party to an interest rate swap agreement between
CHL and Deutsche Bank AG, New York Branch ("Deutsche Bank" and, the
"Counterparty"), with a Trade Date of November 3, 2006 and a reference number
of Global No. N530435N (the "Swap Contract"), a copy of which is attached to
this Agreement as Exhibit A;
WHEREAS, CWALT, Inc. is conveying certain mortgage loans and other
related assets to a trust fund, Alternative Loan Trust 0000-XX00 (xxx "Xxxxx
Xxxx") created pursuant to a Pooling and Servicing Agreement, dated as of
October 1, 2006 (the "Pooling and Servicing Agreement"), among CWALT, Inc., as
depositor, CHL, 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, CHL is assigning all of its rights, and delegating all of its
duties and obligations, under the Swap Contract to the Swap Contract
Administrator, pursuant to an assignment agreement dated as of the date hereof
(the "Assignment Agreement") among CHL, as assignor, the Swap Contract
Administrator, as assignee, and the Counterparty;
WHEREAS, the parties hereto desire that the Trustee make
remittances to the Swap Contract Administrator as contemplated by and to the
extent provided in the Pooling and Servicing Agreement to cover payments due
to the Counterparty under the Swap Contract;
WHEREAS, CHL desires that the payments from payable by the
Counterparty on the Swap Contract be distributed to the Trustee under the
Pooling and Servicing Agreement to be applied for the purposes specified in
the Pooling and Servicing Agreement;
WHEREAS, CHL and the Trustee desire to appoint the Swap Contract
Administrator, and the Swap Contract Administrator desires to accept such
appointment, to distribute funds received under the Swap Contract to the
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 Pooling
and Servicing Agreement.
Benefited Certificates: The Class A-1 Certificates.
ISDA Master Agreement: The 1992 ISDA Master Agreement
(Multicurrency - Cross Border), including the Schedule and Credit Support
Annex thereto, dated November 15, 2006, between the Counterparty and the Swap
Contract Administrator.
Responsible Officer: When used with respect to the Swap Contract
Administrator, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the Swap 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.
Swap Administration Account: The separate account created and
maintained by the Swap Contract Administrator pursuant to Section 3 with a
depository institution in the name of the Swap Contract Administrator for the
benefit of the Counterparty and the Trustee on behalf of the Holders of the
Benefited Certificates and designated "The Bank of New York for Deutsche Bank
AG, New York Branch and certain registered Holders of CWALT, Inc., Mortgage
Pass-Through Certificates, Series 2006-OA18". Funds in the Swap Administration
Account shall be held for the Counterparty and the Trustee on behalf of the
Holders of the Benefited Certificates as set forth in this Agreement.
2. Appointment of Swap Contract Administrator.
CHL and the Trustee hereby appoint BNY to serve as Swap Contract
Administrator pursuant to this Agreement. The Swap Contract Administrator
accepts such appointment and acknowledges the transfer and assignment to it of
CHL's rights and obligations under the Swap Contract pursuant to the
Assignment Agreement. The Swap Contract Administrator agrees to exercise the
rights referred to above for the benefit of the Trustee and the Counterparty
and to perform the duties set forth in this Agreement.
3. Receipt of Funds; Swap Administration Accounts.
The Swap Contract Administrator hereby agrees to receive (i) on behalf
of the Trustee, all amounts paid by the Counterparty under the Swap Contract
and (ii) on behalf of the Counterparty, all amounts remitted by the Trustee
pursuant to the Pooling and Servicing Agreement for payment to the
Counterparty.
The Swap Contract Administrator shall establish and maintain a Swap
Administration Account into which the Swap Contract Administrator shall
deposit or cause to be deposited on the Business Day of receipt, (x) all
amounts remitted by the Trustee for payment to the Counterparty pursuant to
the Swap Contract and (y) all amounts payable by the Counterparty under the
Swap Contract. All funds deposited in the Swap Administration Account shall be
held for the benefit of the Counterparty and the Trustee on behalf of the
Holders of the Class of Benefited Certificates until withdrawn in accordance
with Section 4.
The Swap Administration Account shall be an "Eligible Account" as
defined in the Pooling and Servicing Agreement. Funds in the Swap
Administration Account shall remain uninvested.
The Swap Contract Administrator shall give at least 30 days advance
notice to the Counterparty and the Trustee of any proposed change of location
of the Swap Administration Account prior to any change thereof.
4. Calculations; Distribution of Payments; Delivery of Notices.
The Swap Contract Administrator hereby agrees to make payments based on
the information provided by the Trustee and the Counterparty, and the Swap
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
Swap Contract Administrator shall withdraw the amount of such payment from the
Swap Administration Account and distribute such amounts to the Trustee for
deposit into the Swap Account.
On the Business Day of receipt of any payment from the Trustee for
payment to the Counterparty, the Swap Contract Administrator shall withdraw
the amount of such payment from the Swap Administration Account and distribute
such amount to the Counterparty in accordance with the wiring instructions
specified in the Swap Contract.
The Swap Contract Administrator shall prepare and deliver any notices
required to be delivered under the Swap Contract.
On the Business Day of receipt of any notices, information or reports
received by the Swap Contract Administrator from the Counterparty, the Swap
Contract Administrator shall provide the same to the Trustee, including
without limitation information regarding any Net Swap Payment or Swap
Termination Payment that will be payable by the Swap Contract Administrator to
the Counterparty with respect to the next Distribution Date.
5. Control Rights; Delivery Amounts; Replacement Swap Contract.
The Trustee shall have the right to direct the Swap Contract
Administrator with respect to the exercise of any right under the Swap
Contract and the ISDA Master Agreement (such as the right to designate an
Early Termination Date following an Event of Default or Termination Event
(each such term as defined in the ISDA Master Agreement)).
Upon the Swap Contract Administrator or the Trustee obtaining actual
knowledge of the rating of the Counterparty falling below the Approved Ratings
Threshold or the Required Ratings Threshold (as defined in the ISDA Master
Agreement), the Swap Contract Administrator, at the direction of the Trustee,
shall demand payment of the Delivery Amount from the Counterparty, (as defined
in the ISDA Master Agreement) on each Valuation Date (as defined in the ISDA
Master Agreement) and perform its other obligations in accordance with the
ISDA Master Agreement or (ii) take such other action required under the ISDA
Master
Agreement. If a Delivery Amount is demanded, the Swap Contract Administrator
shall establish an account to hold cash or other eligible investments pledged
under the ISDA Master Agreement. Any such account shall be an "Eligible
Account" as defined in the Pooling and Servicing Agreement. Any cash or other
Eligible Collateral (as defined in the ISDA Master Agreement) pledged under
the ISDA Master Agreement shall not be part of the Swap Administration Account
unless they are applied in accordance with the ISDA Master Agreement to make a
payment due to the Swap Contract Administrator pursuant to the Swap Contract.
In the event that the Swap Contract is terminated, CHL shall assist the
Swap Contract Administrator in procuring a replacement swap contract with
terms approximating those of the original Swap Contract, and the Swap Contract
Administrator shall enter into a replacement swap contract procured by CHL or
the Counterparty and continue to serve as Swap Contract Administrator pursuant
to the terms hereof. Any Swap Termination Payment received from the
Counterparty shall be used to pay any upfront amount required under any
replacement swap contract, and any excess shall be distributed to CHL. In the
event that a replacement swap contract cannot be procured, any Swap
Termination Payment received from the Counterparty in respect of the
termination of the original Swap Contract shall be held in the Swap
Administration Account and distributed as provided in Section 4.
In the event that a replacement swap is procured and the replacement
counterparty pays an upfront amount to the Swap Contract Administrator in
connection with the execution of the replacement swap contract, the Swap
Contract Administrator shall remit to the Trustee such upfront amount (based
on information provided by the Trustee) to be included in Interest Funds and
the Principal Distribution Amount for the following Distribution Date to the
extent that a Swap Termination Payment is payable to the Counterparty in
connection with the termination of the original Swap Contract (or was
previously paid to the Counterparty and Interest Funds and the Principal
Distribution Amount for one or more preceding Distribution Dates were used to
cover such Swap Termination Payment). Any upfront amount paid by a replacement
counterparty that is not remitted by the Swap Contract Administrator to the
Trustee to cover any Swap Termination Payment payable or previously paid to
the Counterparty in respect of the original Swap Contract for the following
Distribution Date shall be distributed to CHL.
6. Representations and Warranties of the Swap Contract Administrator. The
Swap 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 Swap Contract
Administrator under this Agreement.
(b) The execution, delivery and performance of this Agreement by BNY
as Swap Contract Administrator has been duly authorized by BNY.
(c) This Agreement has been duly executed and delivered by BNY as Swap
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 Swap Contract Administrator.
(a) The Swap 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
Swap 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 Swap Contract
Administrator shall be determined solely by the express
provisions of this Agreement, the Swap Contract
Administrator shall not be liable, individually or as Swap
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 Swap Contract
Administrator and the Swap 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 Swap 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 Swap Contract Administrator shall not be liable,
individually or as Swap Contract Administrator, for an error
of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Swap Contract Administrator,
unless the Swap Contract Administrator was grossly negligent
or acted in bad faith or with willful misfeasance; and
(iii) the Swap Contract Administrator shall not be liable,
individually or as Swap 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
Trustee or CHL, or exercising any power conferred upon the
Swap Contract Administrator under this Agreement.
(c) Except as otherwise provided in Sections 7(a) and 7(b):
(i) the Swap 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 Swap 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 Swap Contract Administrator shall not be liable,
individually or as Swap 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 Swap 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 the Counterparty, CHL or the Trustee; provided,
however, that if the payment within a reasonable time to the
Swap 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 Swap Contract
Administrator not reasonably assured to the Swap Contract
Administrator by the Counterparty, CHL and/or the Trustee,
the Swap Contract Administrator may require reasonable
indemnity against such expense, or liability from the
Counterparty, CHL and/or the Trustee, as the case may be, as
a condition to taking any such action; and
(v) the Swap 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 Swap Contract
Administrator, upon its request, for all reasonable expenses and
disbursements incurred or made by the Swap 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 Swap Contract
Administrator and any director, officer, employee or agent of the
Swap 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, the
Swap Contract or the Assignment Agreement, or in connection with
the performance of any of the Swap Contract Administrator's
duties hereunder or thereunder, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Swap Contract
Administrator's duties hereunder or thereunder. Such indemnity
shall survive the termination of this Agreement or the
resignation of the Swap Contract Administrator hereunder and
under the Swap Contract and the Assignment Agreement.
Notwithstanding anything to the contrary in this Section 7, any
expenses, disbursements, losses or liabilities of the Swap
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
NIM Insurer or 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 Swap Contract Administrator
by the Trustee shall be payable by the Trustee out of the security
or indemnity provided by any NIM Insurer or 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 Swap Contract Administrator
hereunder and (ii) the Person that succeeds BNY as Trustee shall
be appointed as successor Swap 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 Swap 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.
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) The Counterparty shall be an express third party beneficiary of
this Agreement for the purpose of enforcing the provisions hereof
to the extent of the Counterparty's rights explicitly specified
herein as if a party hereto.
(d) This Agreement shall terminate upon the termination of the Swap
Contract and the disbursement by the Swap Contract Administrator
of all funds received under the Swap Contract to CHL and the
Trustee on behalf of the Holders of the Benefited Certificates.
(e) This Agreement may be amended, supplemented or modified in writing
by the parties hereto, provided that no amendment shall adversely
affect in any material respect the Counterparty without the prior
written consent of the Counterparty, which consent shall not be
unreasonably withheld.
(f) 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.
(g) 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.
(h) 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.
(i) 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.
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 Swap Contract Administrator
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK,
not in its individual or corporate capacity but
solely as Trustee
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Assistant Treasurer
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxxxx
Title: Senior Vice President
EXHIBIT A
SWAP CONTRACT
A-1
