EXHIBIT 99.2
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The Contract Administration Agreement
CONTRACT ADMINISTRATION AGREEMENT
This CONTRACT ADMINISTRATION AGREEMENT, dated as of May 30, 2006
(this "Agreement"), among THE BANK OF NEW YORK ("BNY"), as contract
administrator (in such capacity, the "Contract Administrator") and as trustee
under the Pooling and Servicing Agreement referred to below (in such capacity,
the "Trustee"), and CITIGROUP GLOBAL MARKETS INC. ("Citigroup").
WHEREAS, Citibank N.A., New York Branch, an affiliate of Citigroup,
is a party to two interest rate corridor agreements (the "Contracts") between
Citibank N.A., New York Branch and Bear Xxxxxxx Financial Products Inc. (the
"Counterparty"), one with respect to the Class A-4 Certificates with a Trade
Date of May 10, 2006 and a reference number of FXNCC8229 (the "Class A-4
Contract") and one with respect to the Class A-5 Certificates with a Trade
Date of May 19, 2006 and a reference number of FXNEC8279 (the "Class A-5
Contract"), copies of which are attached to this Agreement at Exhibit A;
WHEREAS, a trust fund (the "Trust Fund") was created pursuant to a
Pooling and Servicing Agreement, dated as of May 1, 2006 (the "Pooling and
Servicing Agreement"), among Countrywide Home Loans, Inc., 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, Citibank N.A., New York Branch, an affiliate of Citigroup, 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 each Contract)), under each Contract to the Contract
Administrator, pursuant to the Assignment Agreement, dated as of the date
hereof (the "Assignment Agreement"), among Citibank N.A., New York Branch, as
assignor, the Contract Administrator, as assignee, and the Counterparty;
WHEREAS, Citigroup desires that the Net Payments (as defined below)
on each 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 each Contract be
distributed to Citigroup;
WHEREAS, Citigroup and the Trustee desire to appoint the Contract
Administrator, and the Contract Administrator desires to accept such
appointment, to distribute funds received under each Contract to the Trustee
and to Citigroup 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: With respect to the Class A-4 Contract, the
Class A-4 Certificates and with respect to the Class A-5 Contract, the Class
A-5 Certificates.
Calculation Period: With respect to a Contract and any payment made
under such Contract, the related "Calculation Period" as defined in such
Contract.
Controlling Party: As defined in Section 5.
Contract Account: The separate account created and maintained by the
Contract Administrator pursuant to Section 3 with a depository institution in
the name of the Contract Administrator for the benefit of Citigroup and the
Trustee on behalf of the Holders of the Benefited Certificates and designated
"The Bank of New York for Citigroup Global Markets Inc. and certain registered
Holders of CWALT, Inc., Mortgage Pass-Through Certificates, Series 2006-21CB".
Funds in the Contract Account shall be held for Citigroup and the Trustee on
behalf of the Holders of the Benefited Certificates as set forth in this
Agreement.
Day Count Fraction: With respect to a Contract and any Distribution
Date, the "Floating Rate Day Count Fraction" specified for the Calculation
Period related to such Distribution Date in such Contract.
Excess Payment: For any Distribution Date, (a) with respect to any
payment received by the Contract Administrator from the Counterparty in
respect of a Contract for such Distribution Date (other than any payment in
respect of an early termination of such 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 Contract
Administrator from the Counterparty in respect of an early termination of a
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 Class Certificate Balance of the related
Class of Benefited Certificates is reduced to zero prior to the termination of
a Contract, the Excess Payment for any Distribution Date following the
Distribution Date on which the Class Certificate Balance of the such Class of
Benefited Certificates is reduced to zero shall be the entire payment received
from the Counterparty.
LIBOR: With respect to a Contract, the "Floating Rate Option" as
defined in such Contract.
Net Payment: For any Distribution Date, (a) with respect to any
payment received by the Contract Administrator from the Counterparty in
respect of a Contract for such Distribution Date (other than any payment in
respect of an early termination of such 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 Class Certificate Balance of the related Class
of Benefited Certificates immediately prior to such Distribution Date and
(iii) the Day Count Fraction, and (b) with respect to any payment received by
the Contract Administrator from the Counterparty in respect of an early
termination of a 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 such Contract and (y)
the Class Certificate Balance of the related Class of Benefited Certificates
immediately prior to the first Distribution Date on or after the early
termination of such 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 such Contract and (ii) the amount of such payment received in
respect of such early termination. Notwithstanding the foregoing, in the event
that the Class Certificate Balance of the related Benefited Certificates is
reduced to zero prior to the termination of a Contract, the Net Payment for
any Distribution Date following the Distribution Date on which the Class
Certificate Balance of the related Class of Benefited Certificates is reduced
to zero shall be $0.
Notional Balance: With respect to a Contract and any Distribution
Date, the "Notional Amount" specified for the Calculation Period related to
such Distribution Date in such Contract.
Responsible Officer: When used with respect to the Contract
Administrator, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the 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 a Contract and any Distribution Date,
the "Cap Rate" specified for the Calculation Period related to such
Distribution Date in such Contract.
2. Appointment of Contract Administrator.
Citigroup and the Trustee hereby appoint BNY to serve as Contract
Administrator pursuant to this Agreement. The Contract Administrator accepts
such appointment and acknowledges the transfer and assignment to it of
Citibank N.A., New York Branch's rights under the Contracts pursuant to the
Assignment Agreement. The Contract Administrator agrees to exercise the rights
referred to above for the benefit of Citigroup and the Trustee on behalf of
the Trust Fund and to perform the duties set forth in this Agreement.
3. Receipt of Funds; Contract Account.
The Contract Administrator hereby agrees to receive, on behalf of
Citigroup and the Trustee on behalf of the Trust Fund, all amounts paid by the
Counterparty under each Contract. The Contract Administrator shall establish
and maintain a Contract Account into which the Contract Administrator shall
deposit or cause to be deposited on the Business Day of receipt, all amounts
payable by the Counterparty under each Contract. All funds deposited in the
Contract Account shall be held for the benefit of Citigroup and the Trustee on
behalf of the Holders of the Benefited Certificates until withdrawn in
accordance with Section 4. The 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 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 Contract Account shall remain uninvested.
The Contract Administrator shall give at least 30 days' advance notice to
Citigroup and the Trustee of any proposed change of location of the Contract
Account prior to any change thereof.
4. Calculations; Distribution of Payments; Delivery of Notices.
The Contract Administrator hereby agrees to perform the calculations
necessary to distribute payments in accordance with this Section 4. The
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 Contracts. The 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
Contract Administrator shall withdraw the amount of such payment from the
Contract Account and distribute such amounts sequentially, as follows:
(a) first, to the Trustee for deposit into the Reserve Fund, the
applicable Net Payment; and
(b) second, to Citigroup, the applicable Excess Payment, in accordance
with the following wiring instructions:
Bank: [CITIGROUP PLEASE PROVIDE!]
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Account Name: [ ]
Account No: [ ]
ABA No: [ ]
REF: [ ]
The Contract Administrator shall prepare and deliver any notices required
to be delivered under each Contract.
5. Control Rights.
The Controlling Party shall have the right to direct the Contract
Administrator with respect to the exercise of any right under a Contract (such
as the right to designate an Early Termination Date following an Event of
Default (each such term as defined in such Contract). For purposes of this
Agreement, the "Controlling Party" under a Contract shall mean, (i) if the
Class Certificate Balance of the related Class of Benefited Certificates
immediately prior to the most recent Distribution Date (or, prior to the first
Distribution Date, the original Class Certificate Balance) is equal to or
greater than 50% of the related Notional Balance as of such
Distribution Date (or, prior to the first Distribution Date, the original
Notional Balance), the Trustee, and (ii) if the Class Certificate Balance of
the related Class of Benefited Certificates immediately prior to the most
recent Distribution Date (or, prior to the first Distribution Date, the
original Class Certificate Balance) is less than 50% of the related Notional
Balance as of such Distribution Date (or, prior to the first Distribution
Date, the original Notional Balance), Citigroup.
6. Representations and Warranties of the Contract Administrator. The 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 Contract Administrator under this Agreement.
(b) The execution, delivery and performance of this Agreement by BNY as
Contract Administrator has been duly authorized by BNY.
(c) This Agreement has been duly executed and delivered by BNY as
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 Contract Administrator.
(a) The 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
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 Contract Administrator shall
be determined solely by the express provisions of this
Agreement, the Contract Administrator shall not be liable,
individually or as 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
Contract Administrator and the 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 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 Contract Administrator shall not be liable, individually or
as Contract Administrator, for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of
the Contract Administrator, unless the Contract Administrator
was grossly negligent or acted in bad faith or with willful
misfeasance; and
(iii) the Contract Administrator shall not be liable, individually
or as 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 Contract Administrator
under this Agreement.
(c) Except as otherwise provided in Sections 7(a) and 7(b):
(i) the 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 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 Contract Administrator shall not be liable, individually
or as 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 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 to do so
by Citigroup or the Trustee; provided, however, that if the
payment within a reasonable time to the 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 Contract Administrator not reasonably assured to the
Contract Administrator by Citigroup and/or the Trustee, the
Contract Administrator may require reasonable indemnity against
such expense, or liability from Citigroup and/or the Trustee,
as the case may be, as a condition to taking any such action;
and
(v) the 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) Citigroup covenants and agrees to pay or reimburse the Contract
Administrator, upon its request, for all reasonable expenses and
disbursements incurred or made by the 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 Contract Administrator and any
director, officer, employee or agent of the Contract Administrator
shall be indemnified by Citigroup 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 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 Contract Administrator's duties hereunder. Such indemnity
shall survive the termination of this Agreement or the resignation
of the Contract Administrator hereunder. Notwithstanding anything to
the contrary in this Section 7(a), any expenses, disbursements,
losses or liabilities of the 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 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 Contract Administrator hereunder and
(ii) the Person that succeeds BNY as Trustee shall be appointed as
successor 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 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 Citigroup 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 all Contracts
and the disbursement by the Contract Administrator of all funds
received under the Contracts to Citigroup 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 Contract Administrator
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxxxxxx Xxxxxxxxx
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Name: Xxxxxxxx Xxxxxxxxx
Title: Vice President
EXHIBIT A
CONTRACTS
A-1
