Exhibit 99.8
SWAP CONTRACT ADMINISTRATION AGREEMENT
This SWAP CONTRACT ADMINISTRATION AGREEMENT, dated as of September 8,
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 Xxxxxx Brothers Special Financing Inc. (the "Counterparty"), with a Trade
Date of August 29, 2006 and a reference number of Global Deal ID: 2643788 (the
"Swap Contract"), a copy of which is attached to this Agreement at Exhibit A;
WHEREAS, CHL is conveying certain mortgage loans and other related
assets to a trust fund (the "Trust Fund") created pursuant to a pooling and
servicing agreement, dated as of August 1, 2006 (the "Pooling and Servicing
Agreement"), among CWABS Inc., as depositor, CHL, 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 with respect to the
CWABS, Inc. Asset-Backed Certificates, Series 2006-14;
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 Additional Payment (as
defined in the Swap Contract)), under the Swap Contract to the Swap Contract
Administrator, pursuant to the 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, simultaneously with the execution and delivery of this
Agreement, Xxxxxx Brothers Holdings Inc. (the "Guarantor") is issuing a guaranty
dated as of the date hereof (the "Swap Guarantee") in favor of the Swap Contract
Administrator, a copy of which is attached to this Agreement at Exhibit B;
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 Net Payments (as defined below) payable
by the Counterparty on the Swap Contract and by the Guarantor under the Swap
Guarantee be distributed to the Trustee under the Pooling and Servicing
Agreement to be applied for the purposes specified in the Pooling and Servicing
Agreement and that the Excess Payments (as defined below) on the Swap Contract
and the Swap Guarantee be distributed to CHL;
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 and the Swap
Guarantee to the Trustee and to CHL as provided in this Agreement, and, in the
case of a NIM Issuance, to distribute Excess
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Payments in accordance with the related Swap Excess Assignment Agreement (each
as defined below).
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
1. Definitions. Capitalized terms used but not otherwise defined in this
Agreement shall have the respective meanings assigned thereto in the Pooling and
Servicing Agreement.
Benefited Certificates: The Class A Certificates and the Subordinate
Certificates.
Excess Payment: For any Distribution Date on or prior to the Swap
Contract Termination Date and as to which the Swap Contract or a replacement
swap contract is in effect, an amount equal to the excess, if any, of (i) the
Net Swap Payment (as defined in the Pooling and Servicing Agreement) received by
the Swap Contract Administrator from the Counterparty or from the Guarantor with
respect to such Distribution Date over (ii) the Net Payment for such
Distribution Date. For any Distribution Date on or prior to the Swap Contract
Termination Date but only if neither the Swap Contract nor a replacement swap
contract is in effect, zero. For any Distribution Date after the Swap Contract
Termination Date, an amount equal to all remaining funds on deposit in the Swap
Administration Account.
Indenture Trustee: With respect to a NIM Issuance (if any), the
indenture trustee under the indenture pursuant to which the notes related to
such NIM Issuance are issued.
Net Payment: With respect to any Distribution Date on or prior to the
Swap Contract Termination Date, an amount equal to the sum of (i) any Current
Interest and Interest Carry Forward Amounts in respect of the Benefited
Certificates, (ii) any Net Rate Carryover in respect of the Benefited
Certificates, (iii) any Unpaid Realized Loss Amounts in respect of the Benefited
Certificates and (iv) any Overcollateralization Deficiency Amount, in each case
remaining unpaid (or in the case of the Overcollateralization Deficiency Amount,
remaining) following the distribution to the Benefited Certificates of Excess
Cashflow and Credit Comeback Excess Cashflow pursuant to Section 4.04(c) of the
Pooling and Servicing Agreement. With respect to any Distribution Date after the
Swap Contract Termination Date, zero.
NIM Issuance: An issuance by a NIM Trust, on or after the date hereof,
of asset-backed notes secured by the Class C Certificates and/or Class P
Certificates.
NIM Trust: A Delaware statutory trust or other special-purpose entity
that is the issuer of the securities issued in connection with a NIM Issuance
(if any).
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.
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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, CHL and the Trustee on behalf of the Holders of the
Benefited Certificates and designated "The Bank of New York for Countrywide Home
Loans, Inc., Xxxxxx Brothers Special Financing Inc. and certain registered
Holders of CWABS, Inc., Asset-Backed Certificates, Series 2006-14". Funds in the
Swap Administration Account shall be held for the Counterparty, CHL and the
Trustee on behalf of the Holders of the Benefited Certificates as set forth in
this Agreement.
Swap Excess Assignment Agreement: With respect to a NIM Issuance (if
any), an agreement executed on or after the date hereof by CHL, the related NIM
Trust and the Swap Contract Administrator (in form and substance reasonably
satisfactory to the Swap Contract Administrator), pursuant to which rights to
receive certain portions of Excess Payments shall be assigned to such NIM Trust
and pursuant to which the Swap Contract Administrator shall agree to distribute
Excess Payments to the related Indenture Trustee and CHL (in accordance with the
terms of such agreement).
2. Appointment of Swap Contract Administrator.
CHL and the Trustee hereby appoint BNY to serve as Swap Contract
Administrator pursuant to this Agreement and pursuant to the related Swap Excess
Assignment Agreement (if any). The Swap Contract Administrator accepts such
appointment, acknowledges the transfer and assignment to it of CHL's rights and
obligations under the Swap Contract pursuant to the Assignment Agreement and
acknowledges receipt of the Swap Guarantee. The Swap Contract Administrator
agrees to exercise the rights referred to above for the benefit of CHL, the
Trustee and the Counterparty and to perform the duties set forth in this
Agreement. In the event of a NIM Issuance, the Swap Contract Administrator
further agrees to perform the duties set forth in the related Swap Excess
Assignment Agreement for the benefit of CHL, the related NIM Trust and the
related Indenture Trustee.
3. Receipt of Funds; Swap Administration Account.
The Swap Contract Administrator hereby agrees to receive (i) on behalf
of CHL and the Trustee, all amounts paid by the Counterparty under the Swap
Contract and by the Guarantor under the Swap Guarantee 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 and by the Guarantor under the Swap
Guarantee. All funds deposited in the Swap Administration Account shall be held
for the benefit of the Counterparty, CHL and the Trustee on behalf of the
Holders of the Benefited Certificates until withdrawn in accordance with this
Section 3. 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.
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The Swap Contract Administrator shall give at least 30 days' advance
notice to the Counterparty, CHL 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 or
the Guarantor, the Swap Contract Administrator shall withdraw the amount of such
payment from the Swap Administration Account and distribute such amounts
sequentially, as follows:
(a) first, to the Trustee for deposit into the Swap Account, the
applicable Net Payment; and
(b) second, to CHL, the applicable Excess Payment, in accordance
with the following wiring instructions:
Bank: Bank of New York
Account Name: Countrywide Home Loans
Account No: 8900038632
ABA No: 000000000
REF: CWABS 2006-14 X'S SwapPyt
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
amounts 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; 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
(such as the right to designate an Early Termination Date following an Event of
Default (each such term as defined in the Swap Contract)) or under the Swap
Guarantee.
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Upon the Trustee obtaining actual knowledge of a Failure to Pay or
Deliver (as defined in the Swap Contract), the Swap Contract Administrator, at
the direction of the Trustee, shall demand payment under the Swap Guarantee.
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 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, then (i) if that
upfront amount is not received prior to the Distribution Date on which any Swap
Termination Payment was due to the Counterparty under the original Swap
Contract, that upfront amount shall be held in the Swap Administration Account
and distributed as provided in Section 4, and (ii) if that upfront amount is
received prior to the Distribution Date on which any Swap Termination Payment is
due to the Counterparty under the original Swap Contract, the Swap Contract
Administrator shall remit to the Trustee, to be included in Interest Funds for
Loan Group 1 and Loan Group 2, the portion of such upfront amount equal to the
lesser of (x) such upfront amount and (y) the amount of the Swap Termination
Payment due to the Counterparty under the Original Swap Contract, to be
allocated between Loan Group 1 and Loan Group 2 pro rata based on their
respective Interest Funds for that Distribution Date. Any upfront amount paid by
a replacement counterparty that is not remitted by the Swap Contract
Administrator to the Trustee pursuant to clause (ii) of the preceding sentence
shall be distributed to CHL.
6. Monitoring of Significance Percentage. With respect to each
Distribution Date, the Swap Contract Administrator shall calculate the
"significance percentage" (as defined in Item 1115 of Subpart 229.1100 - Asset
Backed Securities (Regulation AB), 17 C.F.R. xx.xx. 229.1100-229.1123) of the
Swap Contract based on the aggregate Certificate Principal Balance of the
Benefited Certificates for such Distribution Date (after all distributions to be
made thereon on such Distribution Date) and based on the methodology provided in
writing by or on behalf of CHL no later than the fifth Business Day preceding
such Distribution Date. On each Distribution Date, the Swap Contract
Administrator shall provide to CHL a written report (which written report may
include similar information with respect to other derivative instruments
relating to securitization transactions sponsored by CHL) specifying the
"significance percentage" of the Swap Contract for that Distribution Date. If
the "significance percentage" of the Swap Contract exceeds 7.0% with respect to
any Distribution Date, the Swap Contract Administrator shall make a separate
notation thereof in the written report described in the preceding sentence. Such
written report may contain such assumptions and disclaimers as are deemed
necessary and appropriate by the Swap Contract Administrator.
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7. 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).
(d) The execution, delivery and performance of this Agreement by
BNY as Swap Contract Administrator will not result in a breach
of the organizational documents of BNY and will not violate
any applicable law, rule or regulation of the United States or
the State of New York.
8. 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 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 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;
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(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 Controlling Party, or exercising any
power conferred upon the Swap Contract Administrator
under this Agreement.
(c) Except as otherwise provided in Sections 8(a) and 8(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;
(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
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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; and
(vi) the Swap Contract Administrator shall not be liable,
individually or as Swap Contract Administrator, with
respect to or in connection with errors or omissions
contained in the report to be provided pursuant to
Section 6 hereof, to the extent such errors or
omissions are the result of inaccuracies in the
methodology or other information provided to the Swap
Contract Administrator by CHL.
(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, the Swap Guarantee 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, the Swap Guarantee and the Assignment
Agreement. Notwithstanding anything to the contrary in this
Section 8(d), 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(a)(9) 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(a)(9) 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.
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(f) In the event of a NIM Issuance, nothing in this Section 8
shall limit or otherwise modify or affect the rights, duties
or obligations of the Swap Contract Administrator under the
related Swap Excess Assignment Agreement.
9. 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
and the Swap Guarantee 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.
[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.
THE BANK OF NEW YORK,
as Swap Contract Administrator
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
THE BANK OF NEW YORK,
not in its individual or corporate capacity
but solely as Trustee
By: /s/ Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Executive Vice President
EXHIBIT A
SWAP CONTRACT
[Filed as Ex. 99.2 herein]
A-1
EXHIBIT B
SWAP GUARANTEE
[Filed as Ex. 99.6 herein]
B-1
