Contract
Exhibit
99.4
Item
1115
Agreement dated as of March 26, 2007 (this “Agreement”), between COUNTRYWIDE
HOME LOANS, INC., a New York corporation (“CHL”), CWABS, INC., a Delaware
corporation (“CWABS”), CWMBS, Inc., a Delaware corporation (“CWMBS”), CWALT,
Inc., a Delaware corporation (“CWALT”), CWHEQ, Inc., a Delaware corporation
(“CWHEQ”) and UBS AG, as counterparty (the “Counterparty”).
RECITALS
WHEREAS,
CWABS, CWMBS, CWALT and CWHEQ each have filed Registration Statements on Form
S-3 (each, a “Registration Statement”) with the Securities and Exchange
Commission (the “Commission”) for purposes of offering mortgage backed or
asset-backed notes and/or certificates (the “Securities”) through special
purpose vehicles (each, an “SPV”).
WHEREAS,
from time to time, on the closing date (the “Closing Date”) of a transaction
pursuant to which Securities are offered (each, a “Transaction”), the
Counterparty and CHL or an underwriter or dealer with respect to the
Transaction, enter into certain derivative agreements (each, a “Derivative
Agreement”), including interest rate caps and interest rate or currency swaps,
for purposes of providing certain yield enhancements that are assigned to the
SPV or the related trustee on behalf of the SPV or a swap or corridor contract
administrator (each, an “Administrator”).
NOW,
THEREFORE, in consideration of the mutual agreements set forth herein and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereby agree as follows:
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Section
1.
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Definitions
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Company
Information: As defined in Section 4(a)(i).
Company
Financial Information: As defined in Section 2(a)(ii).
Counterparty
Guarantor: Any entity guaranteeing the obligations of the SPV or any
affiliate providing derivative instruments to the SPV.
Counterparty
Guarantor Condition: Any Counterparty Guarantor shall, upon providing
any guarantee, have executed and delivered the joinder agreement referred to
in
Section 5(d).
Depositor: Means
CWABS, CWMBS, CWALT or CWHEQ with respect to the related Registration Statement
for which the entity of the registrant.
GAAP: As
defined in Section 3(a)(v).
XXXXX: The
Commission’s Electronic Data Gathering, Analysis and Retrieval
system.
Exchange
Act: The Securities Exchange Act of 1934, as amended and the rules
and regulations promulgated thereunder.
Exchange
Act Reports: All Distribution Reports on Form 10-D, Current Reports
on Form 8-K and Annual Reports on Form 10-K that are to be filed with respect
to
the related SPV pursuant to the Exchange Act.
Indemnified
Party: As defined in Section 4(a).
Master
Agreement: The ISDA Master Agreement between the Counterparty and
SPV, or if no such Master Agreement exists, the ISDA Master Agreement assumed
to
apply to the Derivative Agreement pursuant to its terms.
Prospectus
Supplement: The prospectus supplement prepared in connection with the
public offering and sale of the related Securities.
Regulation
AB: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17
C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Securities
Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Significance
percentage: The “significance percentage”, as the term is defined and used in
Regulation AB.
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Section
2.
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Information
to be Provided by the Counterparty.
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(a)
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Prior
to printing the related Prospectus
Supplement,
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(i)
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the
Counterparty shall provide to the related Depositor such information
regarding the Counterparty (and any Counterparty Guarantor), as a
derivative instrument counterparty, as is reasonably requested by
the
related Depositor for the purpose of compliance with Item 1115(a)(1)
of
Regulation AB. Such information shall
include:
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(A)
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The
Counterparty’s legal name (and any
d/b/a);
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(B)
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the
organizational form of the
Counterparty;
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(C)
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a
description of the general character of the business of the
Counterparty;
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(ii)
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if
requested by the related Depositor (after the aggregate “significance
percentage”, determined absent manifest error, of all derivative
instruments provided by Counterparty and any of its affiliates to
the SPV
is 8.00% or more in respect of Item 1115(b)(1), or 18.00% or more
in
respect of Item 1115(b)(2)) for the purpose of compliance with Item
1115(b) with respect to a Transaction, the Counterparty
shall:
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2
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(A)
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provide
the relevant financial data required by Item 1115(b)(1) or (b)(2)
of
Regulation AB, as applicable (as specified by the related Depositor
to the
Counterparty), with respect to the Counterparty (which may comprise
all
branches of the Counterparty as a consolidated entity), any affiliated
entities providing derivative instruments to the SPV and any Counterparty
Guarantor (provided the Counterparty Guarantor Condition has been
satisfied) (the “Company Financial Information”), in a form appropriate
for use in the Prospectus Supplement and in an XXXXX-compatible form
(if
not incorporated by reference) and, unless otherwise instructed in
writing
by the Counterparty, hereby authorizes the related Depositor to
incorporate by reference the financial data required by Item 1115(b)(2)
of
Regulation AB; and
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(B)
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if
applicable, cause its accountants to issue their consent to the filing
or
the incorporation by reference of such financial statements in the
Registration Statement.
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(b)
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Following
the Closing Date with respect to a
Transaction,
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(i)
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if
the Counterparty provided Company Financial Information to the related
Depositor for the Prospectus Supplement, within 5 Business Days of
the
release of any updated financial data, the Counterparty shall (1)
provide
current Company Financial Information (including Company Financial
Information of any Counterparty Guarantor) as required under Item
1115(b)
of Regulation AB to the related Depositor in an XXXXX-compatible
form (if
not incorporated by reference) and, unless otherwise instructed in
writing
by the Counterparty, hereby authorizes the related Depositor to
incorporate by reference the financial data required by Item 1115(b)(2)
of
Regulation AB, and (2) if applicable, cause its accountants (and,
if
applicable, the accountants of any Counterparty Guarantor) to issue
their
consent to filing or incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV;
and
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(ii)
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if
the related Depositor requests Company Financial Information from
the
Counterparty (after the aggregate “significance percentage”, determined
absent manifest error, of all derivative instruments provided by
Counterparty and any of its affiliates to the SPV is 8.00% or more
in
respect of Item 1115(b)(1), or 18.00% or more in respect of Item
1115(b)(2)), for the purpose of compliance with Item 1115(b) of Regulation
AB following the Closing Date, the Counterparty shall upon five Business
Days written notice either (A) comply with Regulation AB by, (1)
providing
current Company Financial Information (including Company Financial
Information of any Counterparty Guarantor) as required under
Item 1115(b) of Regulation AB to the related Depositor in an
XXXXX-compatible form (if not incorporated by reference), with the
understanding that, unless otherwise instructed in writing by the
Counterparty, the Counterparty hereby authorizes the related Depositor
to
incorporate by reference the financial data required by Item 1115(b)(2)
of
Regulation AB, (2) if applicable, causing its accountants (and, if
applicable, the accountants of any Counterparty Guarantor) to issue
their
consent to filing or incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV and (3) within
5
Business Days of the release of any updated financial data, provide
current Company Financial Information (including Company Financial
Information of any Counterparty Guarantor) as required under Item
1115(b)
of Regulation AB (in such a manner as complies with Regulation
AB) to the related Depositor in an XXXXX-compatible form and if
applicable, cause its accountants (and, if applicable, the accountants
of
any Counterparty Guarantor) to issue their consent to filing or
incorporation by reference of such financial statements in the Exchange
Act Reports of the SPV or (B) assign the Derivative Agreement as
provided
below.
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3
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Section
3.
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Representations
and Warranties and Covenants of the
Counterparty.
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(a)
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The
Counterparty represents and warrants to the related Depositor, as
of the
date on which information is first provided to the related Depositor
under
Section 2(a)(ii), Section 2(b)(ii) or Section 2(b)(iii)(A), that,
except
as disclosed by the Counterparty in writing to the related Depositor
prior
to such date:
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(i)
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The
Counterparty is required to file reports with the Commission pursuant
to
section 13(a) or 15(d) of the Exchange
Act.
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(ii)
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The
Counterparty has filed all reports and other materials required to
be
filed by such requirements during the preceding 12 months (or such
shorter
period that such party was required to file such reports and
materials).
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(iii)
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The
reports filed by the Counterparty, include (or incorporate by reference
in
conformity with Regulation AB) the financial statements of the
Counterparty.
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(iv)
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The
accountants who certify the financial statements and supporting schedules
included in the Company Financial Information (if applicable) are
independent registered public accountants as required by the Securities
Act.
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(v)
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If
applicable, with respect to the Counterparty, the financial statements
included in the Company Financial Information present fairly the
consolidated financial position of the Counterparty and its consolidated
subsidiaries as at the dates indicated and the consolidated results
of
their operations and cash flows for the periods specified; except
as
otherwise stated in the Company Financial Information, said financial
statements have been reconciled (in a manner consistent with Regulation
S-X) with generally accepted accounting principles (“GAAP”) applied on a
consistent basis; and the supporting schedules included in the Company
Financial Information present fairly in accordance with GAAP the
information required to be stated therein. The selected
financial data and summary financial information included in the
Company
Financial Information present fairly the information shown therein
and
have been compiled on a basis consistent with that of the audited
financial statements of the
Counterparty.
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4
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(vi)
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The
Company Financial Information and other Company Information included
or
incorporated by reference in the Registration Statement (including
through
filing on an Exchange Act Report), at the time they were or hereafter
are
filed with the Commission, complied in all material respects with
the
requirements of Item 1115(b) of Regulation AB (in the case of the
Company
Financial Information) and, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to
be stated therein or necessary in order to make the statements therein,
in
the light of the circumstances under which they were made, not
misleading.
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(b)
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If
at any time the representations and warranties set forth in 3(a)(i)
through (iii) are no longer true and correct, the Counterparty shall
provide notice to the related Depositor within a reasonable time
prior to
any Company Financial Information being required to be included in
the
Registration Statement, or the Exchange Act Reports of the
SPV.
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(c)
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The
Counterparty agrees that the terms of this Agreement shall be incorporated
by reference into any Derivative Agreement so that each SPV who is
a
beneficiary of a Derivative Agreement shall be an express third party
beneficiary of this Agreement; provided, however, that the representations
made in Section 3 of this Agreement shall not be deemed to be
representations under Section 3 of the Master
Agreement.
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Section
4.
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Indemnification;
Remedies
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(a)
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The
Counterparty shall indemnify CHL and the related Depositor, each
person
responsible for execution of a certification pursuant to Rule 13a-14(d)
or
Rule 15d-14(d) under the Exchange Act; each broker dealer acting
as
underwriter, each person who controls any of such parties (within
the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange
Act); and the respective present and former directors, officers,
employees
and agents of each of the foregoing (each, an “Indemnified Party”), and
shall hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related
costs,
judgments, and any other costs, fees and expenses that any of them
may
sustain arising out of or based
upon:
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5
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(i)
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(A)
any untrue statement of a material fact contained or alleged to be
contained in any information, report, accountants’ consent or other
material provided in written or electronic form under Section 2 by
or on
behalf of the Counterparty (collectively, the “Company Information”), or
(B) the omission or alleged omission to state in the Company
Information a material fact required to be stated in the Company
Information or necessary in order to make the statements therein,
in the
light of the circumstances under which they were made, not
misleading;
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(ii)
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if
any representation or warranty set forth in Section 3(a) is made
as of a
date prior to the Closing Date, any breach by the Counterparty of
such
representation or warranty, to the extent that such breach is not
cured by
the Closing Date, or if any representation or warranty pursuant to
Section
3 is required to be made as of a date subsequent to the Closing Date,
any
breach by the Counterparty of such representation or warranty, to
the
extent that such breach is not cured by the date required
hereunder;
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provided,
however that the foregoing shall not apply to any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses caused by the negligence or any willful
action of an Indemnified Party, including without limitation any failure to
make
any filings as and when required under Regulation AB.
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(b)
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(i) If
the Counterparty is required to provide Company Information under
the
terms of Item 1115 of Regulation AB as of the Closing Date and the
Counterparty or any Counterparty Guarantor fails to take such actions
as
are necessary to comply with the requirements of Item 1115 of Regulation
AB as and when required, to the extent that such breach is not cured
by
the Closing Date (or in the case of information needed for purposes
of
printing the Prospectus Supplement, the date of printing of the Prospectus
Supplement), or any breach by the Counterparty or any Counterparty
Guarantor of a representation or warranty pursuant to Section 3 to
the
extent made as of a date prior to the Closing Date, then such failure
shall, except as provided in clause (ii) or (iii) of this Section
4,
constitute an Additional Termination Event (as defined in the Master
Agreement) with the Counterparty as the sole Affected Party (as defined
in
the Master Agreement) under the Derivative Agreement. In the
event that an Early Termination Date is designated in connection
with such
Additional Termination Event, a termination payment (if any) shall
be
payable as of the Early Termination Date by the applicable party
as
determined by the application of Section 6(e)(ii) of the Master Agreement,
with Market Quotation and Second Method being the applicable method
for
determining the termination payment (notwithstanding anything in
the
Derivative Agreement to the
contrary).
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(ii)
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If
the Counterparty or any Counterparty Guarantor has received written
notice
from the Depositor that the Counterparty or any Counterparty Guarantor
is
required to provide Company Financial Information under the terms
of Item
1115 of Regulation AB as of a specified date and the Counterparty
or any
Counterparty Guarantor fails to take such actions as are necessary
to
comply with the requirements of Item 1115 of Regulation AB as and
when
required, and if such failure continues unremedied for the lesser
of ten
calendar days after the date on which such information, report, or
accountants’ consent was required to be delivered or such period in which
the applicable Exchange Act Report for which such information is
required
can be timely filed (without taking into account any extensions permitted
to be filed), and the Counterparty has not, at its own cost, within
the
period in which the applicable Exchange Act Report for which such
information is required can be timely filed, caused another entity
(which
meets any applicable ratings threshold in the Derivative Agreement)
to
replace the Counterparty as party to the Derivative Agreement, in
each
case to or from, as applicable, an entity that (i) has signed an
agreement
with CHL and the Depositors substantially in the form of this Agreement,
(ii) has agreed to deliver any information, report, certification
or
accountants’ consent when and as required under Section 2 hereof and (iii)
meets the rating conditions applicable to a derivative counterparty
for
the relevant asset-backed securities of each applicable rating agency,
if
applicable, then (unless the Counterparty has taken the actions in
clause
(iii) of this Section), an Additional Termination Event (as defined
in the
Master Agreement) shall have occurred with the Counterparty as the
sole
Affected Party. In the event that an Early Termination
Date is designated in connection with such Additional Termination
Event, a
termination payment (if any) shall be payable by the applicable party
as
of the Early Termination Date as determined by the application of
Section
6(e)(ii) of the Master Agreement, with Market Quotation and Second
Method
being the applicable method for determining the termination payment
(notwithstanding anything in the Derivative Agreement to the
contrary).
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(iii)
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At
any time that the Counterparty has failed to meet its obligations
under
Item 1115 and has failed to transfer any applicable Transaction pursuant
to clause (ii) of this Section, then on or prior to any Early Termination
Date, the Counterparty may elect to designate a date as an Early
Termination Date (an “Elective Termination Date”), and the termination
payment referenced in clause (i) or (ii) above, as applicable, shall
be
calculated and paid as provided in such applicable
clause.
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(iv)
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In
the event that the Counterparty or the SPV has found a replacement
entity
in accordance with Section 4(b)(ii), the Counterparty shall promptly
reimburse the SPV for all reasonable incidental expenses incurred
by the
SPV, as such are incurred, in connection with the termination of
the
Counterparty as counterparty and the entry into a new Derivative
Agreement. The provisions of this paragraph shall not limit
whatever rights the SPV may have under other provisions of this Agreement
or otherwise, whether in equity or at law, such as an action for
damages,
specific performance or injunctive
relief.
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7
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Section
5.
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Miscellaneous.
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(a)
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Company
Financial Information. Notwithstanding anything to the contrary
contained herein, if Regulation AB is amended, or the Commission
has
issued interpretive guidance uniformly applicable to registrants
of
Asset-Backed Securities allowing the presentation of the financial
information required by Item 1115 of Regulation AB with respect to
an
affiliate of the Counterparty rather than the Counterparty and any
affiliated entities providing derivatives to the SPV, "Company Financial
Information" shall be deemed to refer to the financial information
of such
permitted entity provided the Counterparty has received written
confirmation from CHL that no amendment to this Agreement is
necessary. The parties shall reasonably cooperate with respect
to any amendments to this Agreement to reflect such amendment or
interpretation.
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(b)
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Construction. Throughout
this Agreement, as the context requires, (i) the singular tense and
number
includes the plural, and the plural tense and number includes the
singular; (ii) the past tense includes the present, and the present
tense
includes the past; (iii) references to parties, sections, schedules,
and
exhibits mean the parties, sections, schedules, and exhibits of and
to
this Agreement; and (iv) “including” and its variations shall be deemed to
be followed by “without limitation.” The section headings in this
Agreement are inserted only as a matter of convenience, and in no
way
define, limit, extend, or interpret the scope of this Agreement or
of any
particular section.
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(c)
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Assignment. None
of the parties may assign their rights under this Agreement without
the
prior written consent of the other parties. Subject to the foregoing,
this
Agreement shall be binding on and inure to the benefit of the parties
and
their respective successors and permitted
assigns.
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(d)
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Counterparty
Guarantor. The Counterparty shall cause any Counterparty
Guarantor to execute a joinder agreement in the form attached hereto
as
Exhibit A acknowledging its rights and obligations under this Agreement
and setting forth certain additional obligations with respect to
such
Counterparty Guarantor.
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(e)
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No
Third-Party Benefits Except as Specified. None of the
provisions of this Agreement are intended to benefit, or to be enforceable
by, any third-party beneficiaries except the related SPV and any
trustee
of an SPV or any Administrator and any Counterparty
Guarantor.
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8
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(f)
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Governing
Law. This Agreement shall be governed by and construed in accordance
with
the internal laws of the State of New York without regard to the
conflict
of laws principles thereof.
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(g)
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Amendment
and Waiver. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto.
No waiver
of any provision of this Agreement or of any rights or obligations
of any
party under this Agreement shall be effective unless in writing and
signed
by the party or parties waiving compliance, and shall be effective
only in
the specific instance and for the specific purpose stated in that
writing.
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(h)
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Counterparts. This
Agreement may be executed in one or more counterparts, each of which
shall
be deemed an original, but all of which together shall constitute
one and
the same instrument.
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(i)
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Additional
Documents. Each party hereto agrees to execute any and all
further documents and writings and to perform such other actions
which may
be or become reasonably necessary or expedient to effectuate and
carry out
this Agreement.
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(j)
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Severability. Any
provision hereof which is prohibited or unenforceable shall be ineffective
only to the extent of such prohibition or unenforceability without
invalidating the remaining provisions
hereof.
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(k)
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Integration. This
Agreement contains the entire understanding of the parties with respect
to
the subject matter hereof. There are no restrictions, agreements,
promises, representations, warranties, covenants or undertakings
with
respect to the subject matter hereof other than those expressly set
forth
or referred to herein. This Agreement supersedes all prior agreements
and
understandings between the parties with respect to its subject
matter.
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9
IN
WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto
by their respective officers thereunto duly authorized as of the day and year
first above written.
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CWABS,
INC.
By:
/s/ Xxxxxx
Xxxxx
Name:
Title:
CWMBS,
INC.
By:
/s/ Xxxxxx
Xxxxx
Name:
Title:
CWALT,
INC.
By:
/s/ Xxxxxx
Xxxxx
Name:
Title:
By:
/s/ Xxxxxx
Xxxxx
Name:
Title:
By:
/s/ Xxxxxx
Xxxxx
Name:
Title:
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| UBS
AG
By:
/s/ Xxxxxxx X.
Xxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxx
Title:
Director and Counsel
Region
Americas Legal
Fixed
Income Section
By:
/s/ Raha
Ramezam
Name: Raha
Ramezam
Title: Director
Region Americas Legal
Fixed
Income Section
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