EXHIBIT 99.4
------------
The Corridor Contract Administration Agreement.
CORRIDOR CONTRACT ADMINISTRATION AGREEMENT
This CORRIDOR CONTRACT ADMINISTRATION AGREEMENT, dated as of January 31,
2006 (this "Agreement"), among THE BANK OF NEW YORK ("BNY"), as corridor
contract administrator (in such capacity, the "Corridor Contract
Administrator"), as trustee under the Pooling and Servicing Agreement referred
to below (in such capacity, the "Trustee"), and UBS AG, LONDON ("UBS").
WHEREAS, UBS is a party to two interest rate corridor agreements (the
"Corridor Contracts") between UBS and Bear Xxxxxxx Financial Products Inc.
(the "Counterparty"), one with a Trade Date of January 30, 2006 and a
reference number of FXNEC7826 and one with a Trade Date of January 30, 2006
and a reference number of XXXXX0000, 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 January 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, UBS 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 the Corridor Contracts)), under each
Corridor Contract to the Corridor Contract Administrator, pursuant to the
Assignment Agreement, dated as of the date hereof (the "Assignment
Agreement"), among UBS, as assignor, the Corridor Contract Administrator, as
assignee, and the Counterparty;
WHEREAS, UBS desires that the Net Payments (as defined below) on each
Corridor 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 the Corridor Contract be
distributed to UBS Securities LLC, an affiliate of UBS;
WHEREAS, UBS and the Trustee desire to appoint the Corridor Contract
Administrator, and the Corridor Contract Administrator desires to accept such
appointment, to distribute funds received under each Corridor Contract to the
Trustee and to UBS 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 Group 2 Certificates and the Group 3
Certificates.
Calculation Period: With respect to each Corridor Contract and any
payment made under such Corridor Contract, the related "Calculation Period" as
defined in such Corridor Contract.
Controlling Party: As defined in Section 5.
Corridor Contract Account: The separate account created and maintained
by the Corridor Contract Administrator pursuant to Section 3 with a depository
institution in the name of the Corridor Contract Administrator for the benefit
of UBS and the Trustee on behalf of the Holders of the Benefited Certificates
and designated "The Bank of New York for UBS Securities LLC and certain
registered Holders of CWMBS, Inc., Mortgage Pass-Through Certificates, Series
2006-3". Funds in the Corridor Contract Account shall be held for UBS and the
Trustee on behalf of the Holders of the Benefited Certificates as set forth in
this Agreement.
Day Count Fraction: With respect to each Corridor Contract and any
Distribution Date, the "Floating Rate Day Count Fraction" specified for the
Calculation Period related to such Distribution Date in such Corridor
Contract.
Excess Payment: For any Distribution Date, (a) with respect to any
payment received by the Corridor Contract Administrator from the Counterparty
in respect of a Corridor Contract for such Distribution Date (other than any
payment in respect of an early termination of such Corridor 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
Corridor Contract Administrator from the Counterparty in respect of an early
termination of such Corridor 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 aggregate Class
Certificate Balance of the related Benefited Certificates is reduced to zero
prior to the termination of a Corridor Contract, the Excess Payment for any
Distribution Date following the Distribution Date on which the aggregate Class
Certificate Balance of the related Benefited Certificates is reduced to zero
shall be the entire payment received from the Counterparty.
LIBOR: With respect to each Corridor Contract, the "Floating Rate
Option" as defined in such Corridor Contract.
Net Payment: For any Distribution Date, (a) with respect to any payment
received by the Corridor Contract Administrator from the Counterparty in
respect of a Corridor Contract for such Distribution Date (other than any
payment in respect of an early termination of such Corridor 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 product of (1) the related
Notional Balance for such Distribution Date and (2) 250, and (y) the aggregate
Class Certificate Balance of the related Benefited Certificates immediately
prior to such Distribution Date and (iii) the Day Count Fraction, and (b) with
respect to any payment received by the Corridor Contract Administrator from
the Counterparty in respect of an early termination of a Corridor 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 product of (1) the related Notional Balance for the first
Distribution Date on or after the early termination of such Corridor Contract
and (2) 250, and (y) the aggregate Class Certificate Balance of the related
Benefited Certificates immediately prior to the first Distribution Date on or
after the early termination of such Corridor Contract, and the denominator of
which is equal to the product of (a) the related Notional Balance for the
first Distribution Date on or after the early termination of such Corridor
Contract and (b) 250, and (ii) the amount of such payment received in respect
of such early termination. Notwithstanding the foregoing, in the event that
the aggregate Class Certificate Balance of the related Benefited Certificates
is reduced to zero prior to the termination of a Corridor Contract, the Net
Payment for any Distribution Date following the Distribution Date on which the
aggregate Class Certificate Balance of the related Benefited Certificates is
reduced to zero shall be $0.
Notional Balance: With respect to each Corridor Contract and any
Distribution Date, the "Notional Amount" specified for the Calculation Period
related to such Distribution Date in such Corridor Contract.
Responsible Officer: When used with respect to the Corridor Contract
Administrator, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the Corridor 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 Corridor Contract and any Distribution
Date, the "Cap Rate" specified for the Calculation Period related to such
Distribution Date in such Corridor Contract.
2. Appointment of Corridor Contract Administrator.
UBS and the Trustee hereby appoint BNY to serve as Corridor Contract
Administrator pursuant to this Agreement. The Corridor Contract Administrator
accepts such appointment and acknowledges the transfer and assignment to it of
UBS's rights under the Corridor Contracts pursuant to the Assignment
Agreement. The Corridor Contract Administrator agrees to exercise the rights
referred to above for the benefit of UBS and the Trustee on behalf of the
Trust Fund and to perform the duties set forth in this Agreement.
3. Receipt of Funds; Corridor Contract Account.
The Corridor Contract Administrator hereby agrees to receive, on behalf
of UBS and the Trustee on behalf of the Trust Fund, all amounts paid by the
Counterparty under each Corridor Contract. The Corridor Contract Administrator
shall establish and maintain a Corridor Contract Account into which the
Corridor Contract Administrator shall deposit or cause to be deposited on the
Business Day of receipt, all amounts payable by the Counterparty under the
Corridor Contract. All funds deposited in the Corridor Contract Account shall
be held for the benefit of UBS and the Trustee on behalf of the Holders of the
Benefited Certificates until withdrawn in accordance with Section 4. The
Corridor 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 Corridor 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 Corridor Contract Account shall remain uninvested.
The Corridor Contract Administrator shall give at least 30 days' advance
notice to UBS and the Trustee of any proposed change of location of the
Corridor Contract Account prior to any change thereof.
4. Calculations; Distribution of Payments; Delivery of Notices.
The Corridor Contract Administrator hereby agrees to perform the
calculations necessary to distribute payments in accordance with this Section
4. The Corridor 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 Corridor Contracts. The Corridor 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
Corridor Contract Administrator shall withdraw the amount of such payment from
the Corridor Contract Account and distribute such amounts sequentially, as
follows:
(a) first, to the Trustee for deposit into the Corridor Contract
Reserve Fund, the applicable Net Payments; and
(b) second, to UBS Securities LLC, the applicable Excess Payments,
in accordance with the following wiring instructions:
Bank: [Please Provide]
Account Name: [ ]
Account No: [ ]
ABA No: [ ]
REF: [ ]
The Corridor Contract Administrator shall prepare and deliver any
notices required to be delivered under the Corridor Contract.
5. Control Rights.
The Controlling Party shall have the right to direct the Corridor
Contract Administrator with respect to the exercise of any right under each
Corridor Contract (such as the right to designate an Early Termination Date
following an Event of Default (each such term as defined in the Corridor
Contract). For purposes of this Agreement, the "Controlling Party" shall
mean, (i) if the aggregate Class Certificate Balance of the related 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 product of (a) the related Notional
Balance as of such Distribution Date (or, prior to the first Distribution
Date, the original Notional Balance) and (b) 250, the Trustee, and (ii) if the
Class Certificate Balance of the 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 product of (a)
the related Notional Balance as of such Distribution Date (or, prior to the
first Distribution Date, the original Notional Balance) and (b) 250, UBS.
6. Representations and Warranties of the Corridor Contract Administrator. The
Corridor 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 Corridor Contract
Administrator under this Agreement.
(b) The execution, delivery and performance of this Agreement by BNY
as Corridor Contract Administrator has been duly authorized by
BNY.
(c) This Agreement has been duly executed and delivered by BNY as
Corridor 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 Corridor Contract Administrator.
(a) The Corridor 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
Corridor 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 Corridor Contract
Administrator shall be determined solely by the express
provisions of this Agreement, the Corridor Contract
Administrator shall not be liable, individually or as
Corridor 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 Corridor Contract
Administrator and the Corridor 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 Corridor 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 Corridor Contract Administrator shall not be liable,
individually or as Corridor Contract Administrator, for an
error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Corridor Contract
Administrator, unless the Corridor Contract Administrator
was grossly negligent or acted in bad faith or with willful
misfeasance; and
(iii) the Corridor Contract Administrator shall not be liable,
individually or as Corridor 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 Corridor Contract Administrator under this Agreement.
(c) Except as otherwise provided in Sections 7(a) and 7(b):
(i) the Corridor 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 Corridor 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 Corridor Contract Administrator shall not be liable,
individually or as Corridor 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 Corridor 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 UBS or the Trustee; provided, however, that if the
payment within a reasonable time to the Corridor 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 Corridor Contract Administrator not
reasonably assured to the Corridor Contract Administrator by
UBS and/or the Trustee, the Corridor Contract Administrator
may require reasonable indemnity against such expense, or
liability from UBS and/or the Trustee, as the case may be,
as a condition to taking any such action; and
(v) the Corridor 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) UBS covenants and agrees to pay or reimburse the Corridor Contract
Administrator, upon its request, for all reasonable expenses and
disbursements incurred or made by the Corridor 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 Corridor
Contract Administrator and any director, officer, employee or
agent of the Corridor Contract Administrator shall be indemnified
by UBS 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
Corridor 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 Corridor Contract Administrator's duties hereunder. Such
indemnity shall survive the termination of this Agreement or the
resignation of the Corridor Contract Administrator hereunder.
Notwithstanding anything to the contrary in this Section 7(a), any
expenses, disbursements, losses or liabilities of the Corridor
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 Corridor 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 Corridor Contract Administrator
hereunder and (ii) the Person that succeeds BNY as Trustee shall
be appointed as successor Corridor 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 Corridor 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 UBS 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 the
Corridor Contracts and the disbursement by the Corridor Contract
Administrator of all funds received under the Corridor Contracts
to UBS 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 Corridor Contract Administrator
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Assistant Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Assistant Vice President
UBS BANK AG
By: /s/ Xxxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxxx Xxxx
Title: Director
UBS BANK AG
By: /s/ Xxxxxxxx XxXxxxxx
--------------------------------------
Name: Xxxxxxxx XxXxxxxx
Title: Associate Director
EXHIBIT A
CORRIDOR CONTRACTS
A-1