Exhibit 99.4
Item 1115 Agreement dated as of March 27, 2006 (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 BANK OF AMERICA, N.A., 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:
Section 1. Definitions
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Countrywide Indemnified Party: As defined in Section 4(a).
Counterparty Indemnified Party: As defined in Section 4(b).
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(b).
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. ss.ss.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.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related Depositor such
information regarding the Counterparty, 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,
at a minimum:
(A) The Counterparty's legal name (and any d/b/a);
(B) the organizational form of the Counterparty;
(C) a description of the general character of the business
of the Counterparty;
(ii) if requested by the related Depositor for the purpose of
compliance with Item 1115(b) with respect to a Transaction
prior to the related Depositor taking the steps necessary to
suspend its obligation to file Exchange Act Reports, with
respect to the SPV, under Sections 13 and 15(d) of the
Exchange Act, in accordance with the requirements of
Regulation AB, the Counterparty shall:
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(A) provide the financial data required by Item 1115(b)(1)
or (b)(2) of Regulation AB (as specified by the related
Depositor to the Counterparty) with respect to the
Counterparty and any affiliated entities providing
derivative instruments to the SPV (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 hereby
authorizes the related Depositor to incorporate by
reference the financial data required by Item 1115(b)(2)
of Regulation AB; and
(B) 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.
(b) Following the Closing Date and until the related Depositor takes the
steps necessary to suspend its obligation to file Exchange Act
Reports, with respect to the SPV, under Sections 13 and 15(d) of the
Exchange Act with respect to a Transaction,
(i) 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 as required under Item 1115(b) of Regulation AB to
the related Depositor in an XXXXX-compatible form (if not
incorporated by reference) and 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 to issue their consent to
filing or incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV; and
(ii) if the related Depositor requests Company Financial
Information from the Counterparty, 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), (1) provide current Company
Financial Information as required under Item 1115(b) of
Regulation AB to the related Depositor in an XXXXX-compatible
form (if not incorporated by reference) and hereby authorizes
the related Depositor to incorporate by reference the
financial data required by Item 1115(b)(2) of Regulation AB,
(2) if applicable, cause its accountants 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
as required under Item 1115(b) of Regulation AB to the related
Depositor in an XXXXX-compatible form and if applicable, cause
its accountants 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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Section 3. Representations and Warranties and Covenants of the Counterparty.
(a) 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)(i) or Section
2(b)(ii)(A), that, except as disclosed in writing the related
Depositor prior to such date:
(i) The Counterparty or the entity that consolidates the
Counterparty is required to file reports with the Commission
pursuant to section 13(a) or 15(d) of the Exchange Act.
(ii) The Counterparty or the entity that consolidates 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).
(iii) The reports filed by the Counterparty, or entity that
consolidates the Counterparty, include (or properly
incorporate by reference) the financial statements of the
Counterparty.
(iv) 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.
(v) If applicable, the financial statements included in the
Company Financial Information present fairly the consolidated
financial position of the Counterparty (or the entity that
consolidates 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 prepared in
conformity 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.
(vi) 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
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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.
(b) If the Counterparty has provided Company Financial Information that
is incorporated by reference into the Registration Statement of the
related Depositor, the Counterparty, so long as the related
Depositor is required to file Exchange Act Reports with respect to
the SPV, will file promptly all documents required to be filed with
the Commission pursuant to Section 13 or 14 of the Exchange Act. If
permitted by the Exchange Act, the related Depositor will take the
steps necessary to suspend its obligation to file Exchange Act
Reports, with respect to the SPV, under Sections 13 and 15(d) of the
Exchange Act.
(c) 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, and if
any Company Financial Information is required to be included in the
Registration Statement, or the Exchange Act Reports of the SPV, will
provide to the related Depositor such Company Financial Information
in XXXXX-compatible format no later than the 20th calendar day of
the month in which any of the representations or warranties in
Section 3(a)(i) through (iii) ceased to be correct.
(d) 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.
Section 4. Indemnification; Remedies
(a) The Counterparty shall indemnify CHL and the related Depositor, each
person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
SPV, or for execution of a certification pursuant to Rule 13a-14(d)
or Rule 15d-14(d) under the Exchange Act; 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, a "Countrywide 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:
(i) (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
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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; or
(ii) any breach by the Counterparty of a representation or warranty
set forth in Section 3(a) and made as of a date prior to the
Closing Date, to the extent that such breach is not cured by
the Closing Date, or any breach by the Counterparty of a
representation or warranty pursuant to Section 3 to the extent
made as of a date subsequent to the Closing Date.
(b) CHL shall indemnify the Counterparty, each of its officers and
directors and each person who controls the Counterparty (within the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) (each, a "Counterparty Indemnified Party"; and each of
the Countrywide Indemnified Party and the Counterparty Indemnified
Party shall be referred to as the "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 any untrue statement
or alleged untrue statement of any material fact contained in the
Prospectus Supplement or any free writing prospectus with respect to
the related Securities or the omission or alleged omission to state
a material fact necessary in order to make the statements therein
not misleading; provided, however, that the indemnity set forth in
this Section 4(b) shall not apply insofar as such losses, claims,
expenses, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Company
Information or the omission or alleged omission to state in the
Company Information a material fact necessary in order to make the
statements therein not misleading and/or (ii) a breach of the
representations set forth in Sections 3(a) above.
(c) Promptly after the Indemnified Party receives notice of the
commencement of any such action, the Indemnified Party will, if a
claim in respect thereof is to be made pursuant to this Agreement,
promptly notify the indemnifying party in writing of the
commencement thereof. In case any such action is brought against the
Indemnified Party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the Indemnified Party in
any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the Indemnified
Party except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the Indemnified Party.
Notwithstanding the indemnifying party's election to appoint counsel
to represent the Indemnified Party in an action, the Indemnified
Party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the indemnifying party to represent the
Indemnified Party would present such counsel
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with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the Indemnified
Party and the indemnifying party, and the Indemnified Party shall
have reasonably concluded that there may be legal defenses available
to it that are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after
notice of the institution of such action or (iv) the indemnifying
party shall authorize the Indemnified Party to employ separate
counsel at the expense of the indemnifying party. The indemnifying
party will not, without the prior written consent of the Indemnified
Party, settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may
be sought hereunder (whether or not the Indemnified Party is an
actual or potential party to such claim or action) unless such
settlement, compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising out of such
claim, action, suit or proceeding. In addition, for so long as the
indemnifying party is covering all costs and expenses of the
Indemnified Party as provided herein, no Indemnified Party will
settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may
be sought hereunder without the consent of the indemnifying party,
which consent shall not be unreasonably withheld.
(d) Nothing in this agreement shall be construed to allow the
Indemnified Party to recover punitive damages or consequential
damages from the indemnifying party.
(e) (i) Any failure by the Counterparty to deliver any information,
report, accountants' consent or other material when and in any
case only as required under Section 2 or any breach by the
Counterparty of a representation or warranty set forth in
Section 3 and made as of a date prior to the Closing Date, 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), shall, except as provided in clause
(ii) of this paragraph, immediately and automatically, without
notice or grace period, 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. Following
such termination, a termination payment (if any) shall be
payable 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).
(ii) If the Counterparty has failed to deliver any information,
report, or accountants' consent when and as required under
Section 2, which
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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), or if the Counterparty
has provided Company Information any breach by the
Counterparty of a representation or warranty pursuant to
Section 3 to the extent made as of a date subsequent to such
closing date, 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 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) is
approved by the Depositor (which approval shall not be
unreasonably withheld) and any rating agency, if applicable,
on terms substantially similar to the Derivative Agreement,
then 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).
(iii) In the event that the Counterparty or the SPV has found a
replacement entity in accordance with Section 4(e)(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.
Section 5. Miscellaneous.
(a) 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
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information of such permitted entity provided the Counterparty
has received written confirmation from CHL that such amendment
or interpretive guidance can be relied upon.
(b) Construction. Throughout this Agreement, as the context
requires, (a) the singular tense and number includes the
plural, and the plural tense and number includes the singular;
(b) the past tense includes the present, and the present tense
includes the past; and (c) references to parties, sections,
schedules, and exhibits mean the parties, sections, schedules,
and exhibits of and to this Agreement. 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
(g) 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.
(h) 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.
(i) 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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(j) 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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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.
CWABS, INC.
By:
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Name:
Title:
CWMBS, INC.
By:
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Name:
Title:
CWALT, INC.
By:
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Name:
Title:
CWHEQ, INC.
By:
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Name:
Title:
COUNTRYWIDE HOME LOANS, INC.
By:
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Name:
Title:
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BANK OF AMERICA, N.A.
By:
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Name:
Title:
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