Exhibit 99.4
10
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of September 28, 2006 ("Assignment
Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW
YORK ("Assignee"), as Corridor Contract Administrator for CWHEQ, Inc. Home
Equity Loan Asset-Backed Certificates Series 2006-S5, pursuant to a Corridor
Contract Administration Agreement (the "Corridor Contract Administration
Agreement") dated as of September 28, 2006, and BEAR XXXXXXX FINANCIAL
PRODUCTS INC. ("Remaining Party").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, effective as of September 28 2006, Assignor desires to assign
all of its rights and delegate all of its duties and obligations to Assignee
under a certain Transaction (the "Assigned Transaction") as evidenced by a
Confirmation with a Trade Date of September 14, 2006, whose BEAR XXXXXXX
FINANCIAL PRODUCTS INC. reference number is FXNEC8682, (the "Confirmation"),
copy of which is attached hereto as Exhibit I;
WHEREAS, Assignor and Remaining Party executed and delivered the
Confirmation in connection with an ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement");
WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction and the Confirmation, including any modifications that may be
agreed to by Assignee and Remaining Party; and
WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party
desires to grant such consent in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Assignment and Assumption. Effective as of and from September 28,
2006 (the "Effective Date"), Assignor hereby assigns all of its rights and
delegates all of its duties and obligations to Assignee and Assignee hereby
assumes all Assignor's rights, duties, and obligations under the Assigned
Transaction and the Confirmation arising on or after the Effective Date.
2. Release. Effective as of and from the Effective Date, Remaining Party
and Assignor hereby release one another from all duties and obligations owed
under and in respect of the Assigned Transaction and the Confirmation, and
Assignor hereby terminates its rights under and in respect of the Assigned
Transaction; provided, that such release shall not affect Assignor's
obligation to pay the Fixed Amount in accordance with the terms of the
Assigned Transaction and the Confirmation.
3. Limitation on Liability. Assignor and Remaining Party agree to the
following: (a) The Bank of New York ("BNY") is entering into this Assignment
Agreement solely in its capacity as Corridor Contract Administrator under the
Corridor Contract Administration Agreement; and (b) in no case shall BNY (or
any person acting as successor Corridor Contract Administrator under the
Corridor Contract Administration Agreement) be personally liable for or on
account of any of the statements, representations, warranties, covenants or
obligations stated to be those of Assignee under the terms of the Assigned
Transaction, all such liability, if any, being expressly waived by Assignor
and Remaining Party and any person claiming by, through or under either such
party.
4. Consent and Acknowledgment of Remaining Party. Remaining Party hereby
consents to the assignment and delegation by Assignor to Assignee of all the
rights, duties, and obligations of Assignor under the Assigned Transaction
pursuant to this Assignment Agreement.
5. Governing Agreement. The Assigned Transaction and the Confirmation
shall form a part of, and be subject to, the ISDA Form Master Agreement, as if
Assignee and Remaining Party had executed such agreement on the trade date of
the Transaction (the "Assignee Agreement"). The Confirmation, together with
all other documents referring to the ISDA Form Master Agreement confirming the
transaction entered into between Assignee and Remaining Party, shall form a
part of, and be subject to, the Assignee Agreement. For the purposes of this
paragraph, capitalized terms used herein and not otherwise defined shall have
the meanings assigned in the ISDA Form Master Agreement.
6. Additional Provision. Each party hereby agrees that the Confirmation
and thus the Assigned Transaction are each hereby amended as follows:
(a) The following additional provision shall be added as a new Section
6:
"Regulation AB Compliance. BSFP and Counterparty agree that the
terms of the Item 1115 Agreement dated as of January 30, 2006 (the
"Regulation AB Agreement"), between Countrywide Home Loans, Inc.,
CWABS, INC., CWMBS, Inc., CWALT, Inc., CWHEQ, Inc. and Bear
Xxxxxxx Financial Products Inc. shall be incorporated by reference
into this Agreement so that Counterparty shall be an express third
party beneficiary of the Regulation AB Agreement. A copy of the
Regulation AB Agreement is attached hereto as Annex A."
7. Representations. Each party hereby represents and warrants to the
other parties as follows:
(a) It is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization or incorporation;
(b) It has the power to execute and deliver this Assignment Agreement; and
(c) Its obligations under this Assignment Agreement constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms.
2
As of the Effective Date, each of Assignor and Remaining Party
represents that no event or condition has occurred that constitutes an Event
of Default, a Potential Event of Default or, to the party's knowledge, a
Termination Event (as such terms are defined in the Confirmation and Assignee
Agreement), with respect to the party, and no such event would occur as a
result of the party's entering into or performing its obligations under this
Assignment Agreement.
8. Indemnity. Each of Assignor and Remaining Party hereby agrees to
indemnify and hold harmless Assignee with respect to any and all claims
arising under the Assigned Transaction prior to the Effective Date. Each of
Assignee and Remaining Party (subject to the limitations set forth in
paragraph 3 above) hereby agrees to indemnify and hold harmless Assignor with
respect to any and all claims arising under the Assigned Transaction on or
after the Effective Date.
9. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
10. Notices. For the purposes of this Assignment Agreement and Section
12(a) of the ISDA Form Master Agreement of the Assigned Transaction, the
addresses for notices or communications are as follows: (i) in the case of
Assignor, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxx Xxxx XX-000,
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, with a copy to the same
address, Attention: Legal Department, or such other address as may be
hereafter furnished in writing to Assignee and Remaining Party; (ii) in the
case of Assignee, The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust MBS Administration, CWHEQ, Series 2006-S5 or
such other address as may be hereafter furnished in writing to Assignor and
Remaining Party; and (iii) in the case of Remaining Party,
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager - 36th Floor
Telex No. 000-000-0000
copy to: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx, 00000
Attention: Derivative Operations - 7th Floor
Telex No: 000-000-0000
such other address as may be hereafter furnished in writing to Assignor
and Assignee.
11. Payments. All payments (if any) remitted by Remaining Party under
the Assigned Transaction shall be made by wire transfer according to the
following instructions:
The Bank of New York
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: TAS A/C [580916]
Attn: Xxx Xxxxx Xxxxxxx 000-000-0000
Fax: 000-000-0000
3
12. Counterparts. This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission), each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
4
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
THE BANK OF NEW YORK, AS CORRIDOR
CONTRACT ADMINISTRATOR FOR CWHEQ, INC.
HOME EQUITY LOAN ASSET-BACKED
CERTIFICATES SERIES 2006-S5
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Treasurer
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Autorized Signatory
5
Exhibit I
BEAR XXXXXXX
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
000-000-0000
DATE: September 18, 2006
TO: Countrywide Home Loans, Inc.
ATTENTION: Xx. Xxxx Xxxxx
TELEPHONE: 0-000-000-0000
FACSIMILE: 0-000-000-0000 PAX: 0-000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: FXNEC8682
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Bear Xxxxxxx Financial Products Inc. ("BSFP") and
Countrywide Home Loans, Inc., ("Counterparty"). This Agreement, which
evidences a complete and binding agreement between BSFP and Counterparty to
enter into the Transaction on the terms set forth below, constitutes a
"Confirmation" as referred to in the "ISDA Form Master Agreement" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.
1. This Agreement is subject to and incorporates the 2000 ISDA Definitions
(the "Definitions"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA"). BSFP and Counterparty have
agreed to eater into this Agreement in lieu of negotiating a Schedule to
the 1992 ISDA Master Agreement (Multicurrency--Cross Border) form (the
"ISDA Form Master Agreement"). An ISDA Form Master Agreement shall be
deemed to have been executed by BSFP and Counterparty on the date we
entered into the Transaction. All provisions contained in, or
incorporated by reference to, the ISDA Form Master Agreement shall
govern the Transaction referenced in this Confirmation except as
expressly modified herein. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the ISDA Form Master
Agreement, this Agreement shall prevail for purposes of the Transaction.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Type of Transaction: Rate Cap
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 2 of 11
Notional Amount: With respect to any Calculation period, the
amount set forth for such period in the
Schedule of Notional Amounts and Cap Rates
attached hereto.
Trade Date: September 14, 2006
Effective Date: September 28, 2006
Termination Date: August 25, 2008, subject to adjustment in
accordance with the Business Day Convention.
Fixed Amount (Premium):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: September 18, 2006
Fixed Amount: USD 13,000
Floating Amounts:
Floating Rate Payer: BSFP
Cap Rate: With respect to any Calculation Period, the
rate set forth for such period in the
Schedule of Notional Amounts and Cap Rates
attached hereto.
Floating Rate Payer
Period End Dates: The 25th calendar day of each month during
the Term of this Transaction, commencing
October 25, 2006 and ending on the
Termination Date, subject to adjustment in
accordance with the Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. One
Business Day preceding each Floating Rate
Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA, provided, however, that if the
Floating Rate determined from such Floating
Rate Option for any Calculation Period is
greater than 9.00000% then the Floating Rate
for such calculation Period shall be deemed
to be 9.00000%.
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 3 of 11
Designated Maturity: One month /
Floating Rate Day
Count Fraction: Acrual/36O
Reset Dates: The first day of each Calculation Period,
Compounding: Inapplicable
Business Days for payments: New York
Business Day Convention; Modified Following
3. Additional Provisions: Each party hereto is hereby advised and
acknowledges that the other party has engaged
in (or refrained from engaging in)
substantial financial transactions and has
taken (or refrained from taking) other
material actions in reliance upon the entry
by the parties into the Transaction being
entered into on the terms and conditions set
forth herein and in the Confirmation relating
to such Transaction, as applicable. This
paragraph shall be deemed repeated on the
trade date of each Transaction.
4. Provisions Deemed Incorporated in a Schedule to the ISDA Form Master
Agreement
I) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement w11 apply to any Transaction.
2) Termination Provisions. For purposes of the ISDA Form Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for any
purpose.
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for any
purpose, and, accordingly, Section 5(a)(v) of the ISDA Form Master Agreement
shall not apply to BSFP or Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA Form Master
Agreement will not apply to BSFP or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the ISDA
Form Master Agreement will not apply to BSFP or to Counterparty.
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 4 of 11
(e) The "Automatic Early Termination" provision of Section 6(a) of the ISDA
Form Master Agreement will not apply to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(c) of the ISDA
Form Master Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
3) Tax Representations. Not applicable
4) Limitation on Events of Default. Notwithstanding the terms of Sections 5
and 6 of the ISDA Form Master Agreement, if at any time and so long as the
Counterparty has satisfied in full all its payment obligations under Section
2(a)(i) of the ISDA Form Master Agreement and has at the time no future
payment obligations, whether absolute or contingent, under such Section, then
unless BSFP is required pursuant to appropriate proceedings to return to the
Counterparty or otherwise returns to the Counterparty upon demand of the
Counterparty any portion of any such payment, (a) the occurrence of an event
described in Section 5(a) of the ISDA Form Master Agreement with respect to
the Counterparty shall not constitute an Event of Default or Potential Event
of Default with respect to the Counterparty as Defaulting Party and (b) BSFP
shall be entitled to designate an Early Termination Date pursuant to Section 6
of the ISDA Form Master Agreement only as a result of the occurrence of a
Termination Event set forth in either Section 5(b)(i) or 5(b)(ii) of the ISDA
Form Master Agreement with respect to BSFP as the Affected Party or Section
5(3)(iii) with respect to BSFP as the Burdened Party.
5) Documents to be Delivered For the purpose of Section 4(a) of the ISDA Form
Master Agreement:
(1) Tax forms, documents, or certificates to be delivered are:
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 5 of 11
Party required to deliver Form/Document/ Date by which to
document Certificate be delivered
BSFP and Any document required or Promptly after the earlier of (i) reasonable
the Counterparty reasonably requested to demand by either party or (ii) learning
allow the other party to that such form or document is required
make payments under this
Agreement without any
deduction or withholding
for or on the account of
any Tax or with such
deduction or withholding
at a reduced rate
(2) Other documents to be delivered are:
Party required Form/Document/ Date by which to Covered by Section 3(d)
to deliver Certificate be delivered Representation
document
BSFP and Any documents Upon the execution and Yes
the Counterparty required by the delivery of this
receiving party to Agreement and such
evidence the authority Confirmation
of the delivering party
or its Credit Support
Provider, if any, for
it to execute and
deliver this Agreement,
any Confirmation , and
may Credit Support
Documents to which it
is a party, and to
evidence the authority
of the delivering party
or its Credit Support
Provider to perform its
obligations under this
Agreement, such
Confirmation and/or.
Credit Support
Document, as the case
may be
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 6 of 11
Party required Form/Document/ Date by which to Covered by Section 3(d)
to deliver Certificate be delivered Representation
document
BSFP and A certificate of an Upon the execution Yes
the Counterparty authorized officer of the and delivery of this
party, as to the Agreement and such
incumbency and Confirmation
authority of the
respective officers of the
party signing this
Agreement, any relevant
Credit Support
Document, or any
Confirmation, as the
case may be
6) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section I2(a) of the ISDA Form
Master Agreement:
Address for notices or communications to BSFP:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to the Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
21-Sep-2008 08:37am From-Treasury Dept. + T-401 P.007/011 F-138
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 7 of 11
(b) Process Agent. For the purpose of Section I3(c) of the ISDA Form Master
Agreement
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) of the ISDA Form Master
Agreement will not apply to this Agreement; neither 13SF? nor the
Counterparty have any Offices other than as set forth in the Notices
Section and 13SFP agrees that, for purposes of Section 6(b) of the ISDA
Form Master Agreement, it shall not in future have any Office other than
one in the United States.
(d) Multibranch Party. For the purpose of Section 10(c) of the ISDA Form
Master Agreement:
BSFP is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP; provided, however,
that if an Event of Default occurs with respect to BSFP, then the
Counterparty shall be entitled to appoint a financial institution which
would qualify as a Reference Market-maker to act as Calculation Agent.
(f) Credit Support Document Not applicable for either BSFP or the
Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law
of the State of New York shall govern their rights and duties in whole.
(i) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shell. be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue
in full force and effect as if this Agreement had been executed with the
invalid or unenforceable portion eliminated, so long as this Agreement as so
modified continues to express, without material change, the original
intentions of the parties as to the subject matter of this
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 8 of 11
Agreement and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid
or enforceable term, provision, covenant or condition, the economic effect of
which comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
(j) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and
all communications between officers or employees of the parties, waives any
further notice of such monitoring or recording, and agrees to notify its
officers and employees of such monitoring or recording.
(k) Waiver of Jury Trial. Each party waives any right it may have to a trial
by jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(1) BSFP will not unreasonably withhold or delay its consent to an assignment
of this Agreement to any other third party.
(m) Set-off. The provisions for Set-off set forth in Section 6(e) of the ISDA
Form Master Agreement shall not apply for purposes of this Transaction.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form
Master Agreement, provided that BSFP shall not be deemed to have any
Affiliates for purposes of this Agreement, including for purposes of Section
6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):
"(g) Relationship Between Parties.
-----------------------------
Each party represents to the other party on each date when
it enters into a Transaction that
(1) Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction (whether written
or oral), other than the representations expressly made in this Agreement or
the Confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or through
independent professional advice) the Transaction and has made its own decision
to enter into the Transaction; and
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 9 of 11
(ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and conditions and
to assume those risks, financially and otherwise.
(3) Purpose. It is entering into the Transaction for the purposes
of managing its borrowings or investments, hedging its underlying assets or
liabilities or in connection with a line of business.
(4) Principal, It is entering into the Transaction as principal,
and not as agent or in any other capacity, fiduciary or otherwise."
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE
OF THE BEAR XXXXXXX COMPANIES INC. OTHER THAN BSFP IS AN OBLIGOR OR A
CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
5. Account Details and
Settlement Information: Payments to BSFP:
Citibank, N.A., New York
ABA Number: 000-0000-00, for the account of
Bear, Steams Securities Corp.
Account Number: 0925-3186, for further credit to
Bear Xxxxxxx Financial Products Inc.
Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
Payments to Counterparty;
Please provide
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S. Transactions, please
contact Derivatives Documentation by telephone at 000-000-0000. For all other
inquiries please contact Derivatives Documentation by telephone at
000-0-000-0000. Originals will be provided for your execution upon your
request.
Reference Number: EXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 10 of 11
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By:
-----------------------------
Name: XXXX XXX EVITZ
Title: AUTHORIZED SIGNATORY
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By:
-----------------------------
As authorized agent or officer for Countrywide Home Loans, Inc.
Name:
Title:
er
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 11 of 11
SCHEDULE OF NOTIONAL AMOUNTS AND CAP RATES
(all such dates subject to adjustment in accordance with the Business Day
Convention)
From and including To but excluding Notional Amount Cap Rate
------------------ ---------------- --------------- --------
(USD)
-----
Effective Date 25-Oct-2006 374,864,000.00 7.9030%
25-Oct-2006 25-Nov-2006 365,097,258.00 6.8690%
25-Nov-2006 25-Dec-2006 354,064,044.00 7,1020%
25-Dec-2006 25-Jan-2007 341,790,684.00 6,8690%
2S-Jan-2007 25-Feb-2007 328,307,047.00 6.8690%
25-Feb-2007 25-Mar-2007 313,648,648.00 7.6160%
25-Mar-2007 25-Apr-2007 297,856,358.00 6.8680%
25-Apr-2007 25-May-2007 280,369,134.00 7.1010%
25-May-2007 25-Jun-2007 261,842,807.00 6.8680%
25-Jun-2007 25-Jul-2007 242,335,575.00 7.1010%
25-Jul-2007 25-Aug-2007 221,909,190.00 6.8680%
25-Aug-2007 25-Sep-2007 200,718,415.00 6.8680%
25-Sep-2007 25-Oct-2007 179,611,537,00 7.1010%
25-Oct-2007 25-Nov-2007 159,069,368.00 6.8680%
25-Nov-2007 25-Dec-2007 139,544,129.00 7.1010%
25-Dec-2007 25-Jan-2008 120,723,753.00 6.8690%
25-Jan-2008 25-Feb-2008 102,426,601.00 6.8690%
25-Feb-2008 25-Mar-2008 84,638,243,00 7.3510%
25-Mar-2008 25-Apr-2008 67,344,646.00 6.8700%
25-Apr-2008 25-May-2008 50,532,160.00 7.1030%
25-May-2008 25-Jun-2008 34,187,513.00 6.8700%
25-Jun-2008 25-Jul-2008 18,297,792.00 7.1030%
25-Jul-2008 Termination Date 2,850,442.00 6.8710%
Exhibit II
Item 1115 Agreement dated as of January 30, 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 BEAR XXXXXXX FINANCIAL
PRODUCTS INC., 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 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).
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.
Master Agreement: The ISDA Master Agreement between the
Counterparty and CHL, 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;
(D) a description of any material legal or governmental
proceedings pending (or known to be contemplated)
against the Counterparty which may have a material
impact on the Counterparty's ability to perform under
the related Derivative Agreement;
(E) a description of any affiliation or relationship
between the Counterparty and any of the following
parties:
(1) CHL (or any other sponsor identified to the
Counterparty by CHL);
(2) the related Depositor (as identified to the
Counterparty by CHL);
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(3) the SPV;
(4) Countrywide Home Loans Servicing LP (or any
other servicer or master servicer identified to
the Counterparty by CHL);
(5) The Bank of New York (or any other trustee
identified to the Counterparty by CHL);
(6) any originator identified to the Counterparty by
CHL;
(7) any enhancement or support provider identified
to the Counterparty by CHL; and
(8) any other material transaction party identified
to the Counterparty by CHL.
(ii) if requested by the related Depositor for the purpose of
compliance with Item 1115(b) with respect to a Transaction,
the Counterparty shall:
(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 (or any entity that consolidates 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; and
(B) if applicable, cause its accountants to issue their
consent to the filing of such financial statements in
the Registration Statement.
(b) Following the Closing Date with respect to a Transaction,
(i) no later than the 25th calendar day of each month, the
Counterparty shall (i) notify the related Depositor in writing of
(A) any material litigation or governmental proceedings pending
against the Counterparty which may have a material impact on the
Counterparty's ability to perform under the related Derivative
Agreement or (B) any affiliations or relationships that develop
following the Closing Date between the Counterparty and any of the
parties specified in Section 2(a)(i)(E) (and any other parties
identified in writing by the related Depositor) and (ii) provide
to the related Depositor a description of such proceedings,
affiliations or relationships as described in Section
2(b)(i)(I)(i); and
(ii) 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
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1115(b) of Regulation AB to the related Depositor in an
XXXXX-compatible form, 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;
(iii) 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, (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.
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)(ii) or Section 2(b)(iii)(A), that,
except as disclosed in writing the related Depositor prior to such date:
(i) 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.
(ii) 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
4
consistent with that of the audited financial statements of the
Counterparty.
(iii) 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.
(b) 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 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, 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, certification,
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; 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.
5
(b) (i) Any failure by the Counterparty to deliver any information,
report, certification, accountants' consent or other material when
and 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), 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 such closing date, 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,
certification or accountants' consent when and as required under
Section 2, which continues unremedied for the lesser of ten
calendar days after the date on which such information, report,
certification 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 ratings related requirement of the applicable rating agencies
at such time) 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 which approval is not needed if such
assignment is to a subsidiary of The Bear Xxxxxxx Companies, Inc.,
provided the Depositor is given notice) 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. 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
6
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 2(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 Instrument. 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) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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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(g) 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 necessary or expedient to
effectuate and carry out this Agreement.
(h) 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.
(i) 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.
(j) CHL agrees to provide to the Counterparty prior to January 30,
2006 the methodology for its estimate of maximum probable exposure
represented by the Derivative Agreements and then to provide
notice of any changes to the methodology.
8
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: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWMBS, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWALT, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWHEQ, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: /s/ F. Xxxxx Xxxxxx
-------------------------------------
Name: F. Xxxxx Xxxxxx
Title: DPC Manager
