Exhibit 99.8
SWAP CONTRACT ADMINISTRATION AGREEMENT
This SWAP CONTRACT ADMINISTRATION AGREEMENT, dated as of June 28th,
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 Barclays Bank PLC (the "Counterparty"), with a Trade Date of May 4,
2006 and a reference number of 1187069B (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 June 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 2006-8;
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 Upfront Amount
(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, 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 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:
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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 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.
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., Barclays Bank PLC and certain registered Holders
of CWABS, Inc., Asset-Backed Certificates, Series 2006-8". Funds in the Swap
Administration Account
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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.
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.
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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 2006-8 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.
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.
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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/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK,
not in its individual or corporate capacity
but solely as Trustee
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Treasurer
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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EXHIBIT A
SWAP CONTRACT
A-1
