EXHIBIT 99.4
(Multicurrency-Cross Border)
SCHEDULE
to the
Master Agreement
dated as of November 30,2006
between
XXXXXX BROTHERS SPECIAL FINANCING INC. ("Party A"),
a corporation organized under the laws of
the State of Delaware
and
THE BANK OF NEW YORK, not in its individual or corporate capacity but
solely as Swap Contract Administrator for CWABS, Inc. Asset-Backed
Certificates, Series 2006-22 pursuant to a Swap Contract
Administration Agreement ("Party B")
All terms used herein and not otherwise defined are given their meaning
in the Pooling and Servicing Agreement dated as of November 1, 2006 among
CWABS, Inc. as depositor, Park Monaco Inc., as a Seller, Park Sienna LLC,
as a Seller, Countrywide Home Loans, Inc. as a seller, Countrywide Home
Loans Servicing LP, as Master Servicer, The Bank of New York, as Trustee
and The Bank of New York Trust Company, N.A., as Co-Trustee (the "Pooling and
Servicing Agreement") and in the Swap Contract Administration Agreement
dated as of November 30, 2006, among the Bank of New York, as Swap Contract
Administrator (in such capacity, the "Swap Contract Administrator")
and as Trustee under the Pooling and Servicing Agreement referred to below
(in such capacity, the "Trustee"), and Countrywide Home Loans, Inc.(the
"Swap Contract Administration Agreement").
Part 1. Termination Provisions.
For the purposes of this Agreement:-
(a) "Specified Entity" will not apply to Party A or Party B for any purpose.
(b) "Specified Transaction" will not apply to Party A or Party B for any
purpose.
(c) Events of Default.
The statement below that an Event of Default will apply to a specific
party means that upon the occurrence of such an Event of Default with
respect to such party, the other party shall have the rights of a
Non-defaulting Party under Section 6 of this Agreement; conversely, the
statement below that such event will not apply to a specific party means
that the other party shall not have such rights.
(i) The "Failure to Pay or Deliver" provisions of Section 5(a)(i) will
apply to Party A and will apply to Party B; provided, however,
that Section 5(a)(i) is hereby amended by replacing the word
"third" with the word "first"; provided, further, that
notwithstanding anything to the contrary in Section 5(a)(i), any
failure by Party A to comply with or perform any obligation to be
complied with or performed by Party A under the Credit Support
Annex shall not constitute an Event of Default under Section
5(a)(i) unless (A) a Required Ratings Downgrade Event has occurred
and been continuing for 30 or more Local Business Days and (B)
such failure is not remedied on or before the third Local Business
Day after notice of such failure is given to Party A.
(ii) The "Breach of Agreement" provisions of Section 5(a)(ii) will
apply to Party A and will not apply to Party B.
(iii) The "Credit Support Default" provisions of Section 5(a)(iii) will
apply to Party A and will not apply to Party B except that Section
5(a)(iii)(1) will apply to Party B solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit Support Annex;
provided, however, that notwithstanding anything to the contrary
in Section 5(a)(iii)(1), any failure by Party A to comply with or
perform any obligation to be complied with or performed by Party A
under the Credit Support Annex shall not constitute an Event of
Default under Section 5(a)(iii) unless (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or more
Local Business Days and (B) such failure is not remedied on or
before the third Local Business Day after notice of such failure
is given to Party A.
(iv) The "Misrepresentation" provisions of Section 5(a)(iv) will apply
to Party A and will not apply to Party B.
(v) The "Default under Specified Transaction" provisions of Section
5(a)(v) will not apply to Party A and will not apply to Party B.
(vi) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and will not apply to Party B. For purposes of Section
5(a)(vi), solely with respect to Party A:
"Specified Indebtedness" will have the meaning specified in
Section 14.
"Threshold Amount" means three (3%) of the Shareholders' Equity of
Xxxxxx Brothers Holdings Inc. ("Xxxxxx Brothers Holdings Inc." or
"Holdings"), in the case of Party A (or its equivalent in any
other currency) or, if applicable, the Eligible Guarantor.
"Shareholders' Equity" means with respect to an entity, at any
time, the sum (as shown in the most recent annual audited
financial statements of such entity) of (i) its capital stock
(including preferred stock) outstanding, taken at par value, (ii)
its capital surplus and (iii) its retained earnings, minus (iv)
treasury stock, each to be determined in accordance with generally
accepted accounting principles.
(vii) The "Bankruptcy" provisions of Section 5(a)(vii) will apply to
Party A and will apply to Party B except that the provisions of
Section 5(a)(vii)(2), (6) (to the extent that such provisions
refer to any appointment contemplated or effected by the Pooling
and Servicing Agreement or any appointment to which Party B has
not become subject), (7) and (9) will not apply to Party B;
provided that, with respect to Party B only, (i) Section
5(a)(vii)(4) is hereby amended by adding after the words "against
it" the words "(excluding any proceeding or petition instituted or
presented by Party A or its Affiliates)", and (ii) Section
5(a)(vii)(8) is hereby amended by deleting the words "to (7)
inclusive" and inserting lieu thereof ", (3), (4) as amended, (5)
and (6) as amended".
(viii) The "Merger Without Assumption" provisions of Section 5(a)(viii)
will apply to Party A and will apply to Party B.
(d) Termination Events.
The statement below that a Termination Event will apply to a specific
party means that upon the occurrence of such a Termination Event, if
such specific party is the Affected Party with respect to a Tax Event,
the Burdened Party with respect to a Tax Event Upon Merger (except as
noted below) or the non-Affected Party with respect to a Credit Event
Upon Merger, as the case may be, such specific party shall have the
right to designate an Early Termination Date in accordance with Section
6 of this Agreement; conversely, the statement below that such an event
will not apply to a specific party means that such party shall not have
such right; provided, however, with respect to "Illegality" the
statement that such event will apply to a specific party means that upon
the occurrence of such a Termination Event with respect to such party,
either party shall have the right to designate an Early Termination Date
in accordance with Section 6 of this Agreement.
(i) The "Illegality" provisions of Section 5(b)(i) will apply to Party
A and will apply to Party B.
(ii) The "Tax Event" provisions of Section 5(b)(ii) will apply to Party
A, except that, for purposes of the application of Section
5(b)(ii), Section 5(b)(ii) is hereby amended by deleting the words
"(x) any action taken by a taxing authority, or brought in a court
of competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or
(y), and the "Tax Event" provisions of Section 5(b)(ii) will apply
to Party B.".
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(iii) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will
apply to Party A and will apply to Party B, provided that Party A
shall not be entitled to designate an Early Termination Date by
reason of a Tax Event upon Merger in respect of which it is the
Affected Party.
(iv) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to Party A and will not apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Party A and will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply, provided, however, that, in the event
of a Derivative Provider Trigger Event, the following provisions
will apply:
(A) The definition of Market Quotation in Section 14 shall be
deleted in its entirety and replaced with the following:
"Market Quotation" means, with respect to one or more
Terminated Transactions, a Firm Offer which is (1) made by a
Reference Market-maker that is an Eligible Replacement, (2)
for an amount that would be paid to Party B (expressed as a
negative number) or by Party B (expressed as a positive
number) in consideration of an agreement between Party B and
such Reference Market-maker to enter into a transaction (a
"Replacement Transaction"), and (3) made on the basis that
Unpaid Amounts in respect of the Terminated Transaction or
group of Transactions are to be excluded but, without
limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required
(assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be
included.
(B) The definition of Settlement Amount shall be deleted in its
entirety and replaced with the following:
"Settlement Amount" means, with respect to any Early
Termination Date, an amount (as determined by Party B) equal
to:
(a) If a Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding on
or before the day falling ten Local Business Days
after the day on which the Early Termination Date is
designated, or such later day as Party B may specify
in writing to Party A, but in either case no later
than one Local Business Day prior to the Early
Termination Date (such day, the "Latest Settlement
Amount Determination Day"), the Termination Currency
Equivalent of the amount (whether positive or
negative) of such Market Quotation;
(b) If, on the Latest Settlement Amount Determination Day,
no Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions has
been accepted by Party B so as to become legally
binding and one or more Market Quotations from
Approved Replacements have been made and remain
capable of becoming legally binding upon acceptance,
the Settlement Amount shall equal the Termination
Currency Equivalent of the amount (whether positive or
negative) of the lowest of such Market Quotations (for
the avoidance of doubt, the lowest of such Market
Quotations shall be the lowest Market Quotation of
such Market Quotations expressed as a positive number
or, if any of such Market Quotations is expressed as a
negative number, the
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Market Quotation expressed as a negative number with
the largest absolute value); or
(c) If, on the Latest Settlement Amount Determination Day,
no Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding
and no Market Quotation from an Approved Replacement
remains capable of becoming legally binding upon
acceptance, the Settlement Amount shall equal Party
B's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for the relevant
Terminated Transaction or group of Terminated
Transactions.
(C) For the purpose of paragraph (4) of the definition of Market
Quotation, Party B shall determine in its sole discretion,
acting in a commercially reasonable manner, whether a Firm
Offer is made in respect of a Replacement Transaction with
commercial terms substantially the same as those of this
Agreement (save for the exclusion of provisions relating to
Transactions that are not Terminated Transactions).
(D) At any time on or before the Latest Settlement Amount
Determination Day at which two or more Market Quotations
remain capable of becoming legally binding upon acceptance,
Party B shall be entitled to accept only the lowest of such
Market Quotations.
(E) If Party B requests Party A in writing to obtain Market
Quotations, Party A shall use its reasonable efforts to do
so before the Latest Settlement Amount Determination Day.
(F) If the Settlement Amount is a negative number, Section
6(e)(i)(3) shall be deleted in its entirety and replaced
with the following:
"(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, (I) Party B shall pay to
Party A an amount equal to the absolute value of the
Settlement Amount in respect of the Terminated Transactions,
(II) Party B shall pay to Party A the Termination Currency
Equivalent of the Unpaid Amounts owing to Party A and (III)
Party A shall pay to Party B the Termination Currency
Equivalent of the Unpaid Amounts owing to Party B; provided,
however, that (x) the amounts payable under the immediately
preceding clauses (II) and (III) shall be subject to netting
in accordance with Section 2(c) of this Agreement and (y)
notwithstanding any other provision of this Agreement, any
amount payable by Party A under the immediately preceding
clause (III) shall not be netted-off against any amount
payable by Party B under the immediately preceding clause
(I)."
(ii) The Second Method will apply.
(g) "Termination Currency" means USD.
(h) Additional Termination Events. Additional Termination Events will apply
as provided in Part 5(e).
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Part 2. Tax Matters.
(a) Tax Representations.
(i) Payer Representations. For the purpose of Section 3(e) of this
Agreement:
(A) Party A makes the following representation(s):
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of
any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under
this Agreement. In making this representation, it may rely
on: the accuracy of any representations made by the other
party pursuant to Section 3(f) of this Agreement; (ii) the
satisfaction of the agreement contained in Section 4(a)(i)
or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement;
and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement, provided
that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does
not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial
position.
(B) Party B makes the following representation(s):
None.
(ii) Payee Representations. For the purpose of Section 3(f) of this
Agreement:
(A) Party A makes the following representation(s):
it is a corporation duly organized and validly existing
under the laws of the State of Delaware.
(B) Party B makes the following representation(s):
None.
(b) Tax Provisions.
(i) Gross Up. Section 2(d)(i)(4) shall not apply to Party B as X, and
Section 2(d)(ii) shall not apply to Party B as Y, in each case
such that Party B shall not be required to pay any additional
amounts referred to therein.
(ii) Indemnifiable Tax. The definition of "Indemnifiable Tax" in
Section 14 is deleted in its entirety and replaced with the
following:
"Indemnifiable Tax" means, in relation to payments by Party A, any
Tax and, in relation to payments by Party B, no Tax.
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Part 3. Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:-
(a) Tax forms, documents or certificates to be delivered are:
Party required to Form/Document/ Date by which
deliver document Certificate to be Delivered
----------------- ------------- ---------------
Party A and Party B Forms and/or documents described in Upon reasonable demand by the other
Section 4(a)(iii) of the Agreement. party.
(b) Other documents to be deliver are:
Covered by
Party required to Form/Document/ Date by which to Section 3(d)
deliver document Certificate be delivered Representation
Party A and Any documents required by Upon the execution and Yes
Party B the receiving party to delivery of this
evidence the authority of Agreement
the delivering party or its
Credit Support Provider, if
any, for it to execute and
deliver the Agreement and
any 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 the
Agreement, any Confirmation
and any Credit Support
Document, as the case may
be
Party A and A certificate of an Upon the execution and Yes
Party B authorized officer of the delivery of Party B this
party, as to the incumbency Agreement
and authority of the
respective officers of the
party signing the Agreement
and any relevant Credit
Support Document, as the
case may be
Party A Annual Report of Party A's Promptly upon becoming Yes
Credit Support Provider publicly available
containing consolidated
financial statements
certified by independent
certified public
accountants and prepared in
accordance with generally
accepted accounting
principles in the country
in which Party A is
organized
Party B Copy of any notice Upon availability. Yes
delivered under the Pooling
and Servicing Agreement
that impacts this
Agreement.
Party B Monthly Report At such time as each Yes
Monthly Report is
delivered to the Trustee.
Party A Quarterly Financial Promptly upon becoming Yes
Statements of Party A publicly available
containing unaudited,
consolidated financial
statements of
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Covered by
Party required to Form/Document/ Date by which to Section 3(d)
deliver document Certificate be delivered Representation
Party A's
fiscal quarter prepared in
accordance with generally
accepted accounting
principles in the country
in which Party A is
organized
Party A An opinion of counsel to Upon the execution and No
Party A, substantially in delivery of this Agreement
the form of Exhibit C to
this Schedule
Party B An opinion of counsel to
Party B, substantially in
the form of Exhibit B to
this Schedule
Party A A guarantee of Xxxxxx Upon the execution and No
Brothers Holdings Inc. delivery of this Agreement
("Holdings") substantially
in the form of Exhibit A to
this Schedule.
Part 4. Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: Xxxxxx Brothers Special Financing Inc.
c/x Xxxxxx Brothers Inc.
Corporate Advisory Division
Transaction Management Group
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Documentation Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
For all purposes.
Address for notices or communications to Party B:
Address: The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration MBS Administration,
CWABS, Series 2006-22
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
For all purposes.
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(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A; provided, however,
that if an Event of Default has occurred and is continuing with respect
to Party A, then the parties will mutually appoint a financial
institution acceptable to both parties which would qualify as a
Reference Market-maker to act as Calculation Agent until the earlier of
(i) a designation under Section 6(c)(ii), or (ii) the discontinuance of
such Event of Default with respect to Party A.
(f) Credit Support Document.
Party A: The Credit Support Annex, and a guarantee of
Party A's obligations hereunder substantially in
the form annexed hereto as Exhibit A to this
Schedule.
Party B: From and including the date of its execution,
the Pooling and Servicing Agreement and the Credit
Support Annex, solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit
Support Annex.
(g) Credit Support Provider.
Party A: The guarantor under any guarantee in support
of Party A's obligations under this Agreement.
Party B: None.
(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,
without regard to the conflict of law provisions thereof other than New
York General Obligations Law Sections 5-1401 and 5-1402.
(i) Netting of Payments. The parties agree that subparagraph (ii) of Section
2(c) will apply to each Transaction hereunder.
(j) Affiliate. "Affiliate" shall have the meaning assigned thereto in
Section 14; provided, however, that Party B shall be deemed to have no
Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii) and provided, however, that with respect to Party A,
such definition shall be understood to exclude Xxxxxx Brothers
Derivative Products Inc. and Xxxxxx Brothers Financial Products Inc.
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Part 5. Others Provisions.
(a) Definitions. Unless otherwise specified in a Confirmation, this
Agreement and each Transaction under this Agreement are subject to the
2000 ISDA Definitions as published and copyrighted in 2000 by the
International Swaps and Derivatives Association, Inc. (the
"Definitions"), and will be governed in all relevant respects by the
provisions set forth in the Definitions, without regard to any amendment
to the Definitions subsequent to the date hereof. The provisions of the
Definitions are hereby incorporated by reference in and shall be deemed
a part of this Agreement, except that (i) references in the Definitions
to a "Swap Transaction" shall be deemed references to a "Transaction"
for purposes of this Agreement, and (ii) references to a "Transaction"
in this Agreement shall be deemed references to a "Swap Transaction" for
purposes of the Definitions.
(b) Amendments to ISDA Master Agreement.
(i) Single Agreement. Section 1(c) is hereby amended by the adding the
words "including, for the avoidance of doubt, the Credit Support
Annex" after the words "Master Agreement".
(ii) Conditions Precedent. Section 2(a)(iii) is hereby amended by
adding the following at the end thereof:
Notwithstanding anything to the contrary in Section 2(a)(iii)(1),
if an Event of Default with respect to Party B or Potential Event
of Default with respect to Party B has occurred and been
continuing for more than 30 Local Business Days and no Early
Termination Date in respect of the Affected Transactions has
occurred or been effectively designated by Party A, the
obligations of Party A under Section 2(a)(i) shall cease to be
subject to the condition precedent set forth in Section
2(a)(iii)(1) with respect to such specific occurrence of such
Event of Default or such Potential Event of Default (the "Specific
Event"); provided, however, for the avoidance of doubt, the
obligations of Party A under Section 2(a)(i) shall be subject to
the condition precedent set forth in Section 2(a)(iii)(1) (subject
to the foregoing) with respect to any subsequent occurrence of the
same Event of Default with respect to Party B or Potential Event
of Default with respect to Party B after the Specific Event has
ceased to be continuing and with respect to any occurrence of any
other Event of Default with respect to Party B or Potential Event
of Default with respect to Party B that occurs subsequent to the
Specific Event.
(iii) Change of Account. Section 2(b) is hereby amended by the addition
of the following after the word "delivery" in the first line
thereof:
"to another account in the same legal and tax jurisdiction as the
original account".
(iv) Representations. Section 3 is hereby amended by adding at the end
thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Nonreliance. (i) 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 and (ii) it has consulted with
its own legal, regulatory, tax, business, investment,
financial and accounting advisors to the extent it has
deemed necessary, and it has made its own investment,
hedging and trading decisions based upon its own judgment
and upon any advice from such advisors as it has deemed
necessary and not upon any view expressed by the other
party.
(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
subject to Section 6(n) of this Agreement to enter into the
Transaction and (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.
9
(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) Status of Parties. The other party is not acting as an
agent, fiduciary or advisor for it in respect of the
Transaction.
(5) Eligible Contract Participant. It is an "eligible swap
participant" as such term is defined in, Section 35.1(b)(2)
of the regulations (17 C.F.R. 35) promulgated under, and an
"eligible contract participant" as defined in Section
1(a)(12) of the Commodity Exchange Act, as amended."
(6) No Agency. It is entering into this Agreement, any Credit
Support Document to which it is a party, and each
Transaction, and any other documentation relating to this
Agreement or any Transaction, as principal (and not as agent
or in any other capacity, fiduciary or otherwise).
(v) Transfer to Avoid Termination Event. Section 6(b)(ii) is hereby
amended by (i) deleting the words "or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party," and (ii) by
deleting the words "to transfer" and inserting the words "to
effect a Permitted Transfer" in lieu thereof.
(vi) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in
the second line of subparagraph (i) thereof the word "non-", (ii)
deleting "; and" from the end of subparagraph 1 and inserting "."
in lieu thereof, and (iii) deleting the final paragraph thereof.
(vii) Local Business Day. The definition of Local Business Day in
Section 14 is hereby amended by the addition of the words "or any
Credit Support Document" after "Section 2(a)(i)" and the addition
of the words "or Credit Support Document" after "Confirmation".
(c) Additional Representations and Warranties of Party B. Party B represents
to Party A in accordance with Section 3 of the Agreement (which
representations will be deemed to be repeated by Party B at all times
until the termination of this Agreement) that:
(i) Constitutional Documents. Party B is in compliance, in all
material respects, with its constitutional documents (including,
but not limited to, the Pooling and Servicing Agreement, as
amended from time-to-time, and any and all resolutions, investment
policies, guidelines, procedures or restrictions), and each
Transaction contemplated hereunder is and will be an authorized
and permitted transaction thereunder and an Authorizing Resolution
is in full force and effect.
(ii) Compliance with Laws. Party B is in compliance, in all respects,
with all applicable laws, rules, regulations, interpretations,
guidelines, procedures, and policies of applicable regulatory
authorities affecting Party B, this Agreement, the Transactions,
or the performance of Party B's obligations hereunder.
(d) Third-Party Beneficiary. Party B agrees with Party A that Party A shall
be an express third-party beneficiary of the Pooling and Servicing
Agreement and the Swap Contract Administration Agreement.
(e) Additional Termination Events. The following Additional Termination
Events will apply:
(i) First Rating Trigger Collateral. If (A) it is not the case that a
Moody's Second Trigger Ratings Event has occurred and been
continuing for 30 or more Local Business Days and (B) Party A has
failed to comply with or perform any obligation to be complied
with or performed by Party A in accordance with the Credit Support
Annex, then an Additional Termination Event shall have occurred
with respect to Party A and Party A shall be the sole Affected
Party with respect to such Additional Termination Event.
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(ii) Second Rating Trigger Replacement. If (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or more
Local Business Days and (B) (i) at least one Eligible Replacement
has made a Firm Offer to be the transferee of all of Party A's
rights and obligations under this Agreement (and such Firm Offer
remains an offer that will become legally binding upon such
Eligible Replacement upon acceptance by the offeree) and/or (ii)
an Eligible Guarantor has made a Firm Offer to provide an Eligible
Guarantee (and such Firm Offer remains an offer that will become
legally binding upon such Eligible Guarantor immediately upon
acceptance by the offeree), then an Additional Termination Event
shall have occurred with respect to Party A and Party A shall be
the sole Affected Party with respect to such Additional
Termination Event.
(iii) Amendment of Pooling and Servicing Agreement. If, without the
prior written consent of Party A where such consent is required
under the Pooling and Servicing Agreement (such consent not to be
unreasonably withheld), an amendment is made to the Pooling and
Servicing Agreement which amendment could reasonably be expected
to have a material adverse effect on the interests of Party A
under this Agreement, an Additional Termination Event shall have
occurred with respect to Party B and Party B shall be the sole
Affected Party with respect to such Additional Termination Event.
(f) Required Ratings Downgrade Event. In the event that no Relevant Entity
has credit ratings at least equal to the Required Ratings Threshold
(such event, a "Required Ratings Downgrade Event"), then Party A shall,
as soon as reasonably practicable and so long as a Required Ratings
Downgrade Event is in effect, at its own expense, using commercially
reasonable efforts, procure either (A) a Permitted Transfer or (B) an
Eligible Guarantee from an Eligible Guarantor.
(g) Item 1115 Agreement. Party A and Party B agree that the terms of the
Item 1115 Agreement dated as of February 24, 2006, as amended from time
to time (the "Regulation AB Agreement"), between Countrywide Home Loans,
Inc., CWABS, INC., CWMBS, Inc., CWALT, Inc., CWHEQ, Inc. and Xxxxxx
Brothers Special Financing Inc. shall be incorporated by reference into
this Agreement so that Party B shall be an express third party
beneficiary of the Regulation AB Agreement. A copy of the Item 1115
Agreement is annexed hereto at Annex D.
11
(h) Transfers.
(i) Transfer and Assignment. Notwithstanding anything to the contrary
in Section 7 and Section 6(b)(ii) of the Agreement, Party A may
assign its rights and obligations under the Agreement, in whole or
in part, to any Affiliate of Holdings effective upon delivery to
Party B of the guarantee by Holdings, in favor of Party B, of the
obligations of such Affiliate, such guarantee to be identical
(except for necessary factual changes as to the identity of the
new counterparty and the effective date of the assignment) as the
guarantee then in effect of the obligations of the transferor.
Party A will provide prior written notice to each Swap Rating
Agency of any such assignment. Any transfer pursuant to the
foregoing or Section 7 of this Agreement shall meet the following
requirements:
1. No Event of Default nor Termination Event would occur
immediately as a result of such transfer;
2. Party A delivers to Party B both (a) an executed acceptance and
assumption by the Assignee of this Agreement and all Transactions
(the "Transferred Obligations") and (b) an executed guarantee from
Party A's Credit Support Provider on behalf of the Assignee, with
respect to the Transferred Obligations, substantially and in all
material respects in the form of the guaranty provided hereunder;
3. As a result of the Transfer, on the next scheduled payment date
Party B is not required to make payments (tax or otherwise) that
are more than or receive payments (tax or otherwise) that are less
than the payments that Party B would be required to make or
receive under the Transactions or the Agreement had the transfer
not occurred;
4. The Transferee is an Eligible Replacement;
5. Party B shall determine in its sole discretion, acting in a
commercially reasonable manner, whether or not a transfer relates
to all or substantially all of Party A's rights and obligations
under this Agreement.
On the Effective Date, (1) Party A shall be released from all
obligations and liabilities arising under the Transferred
Obligations; (2) the Assignee shall assume all obligations and
liabilities under the Transferred Obligations; and (3) the
Transferred Obligations shall cease to be Transaction(s) under
this Agreement and shall be deemed to be Transaction(s) under the
master agreement between Assignee and Party B.
In addition, any transfer pursuant to Section 7 of this Agreement
other than the foregoing shall be subject to Rating Agency
Condition and Party A and Party B will provide prior written
notice to each Swap Rating Agency of any transfer under Section
6(b)(ii).
(ii) Eligible Replacement. If an Eligible Replacement has made a Firm
Offer (which remains an offer that will become legally binding
upon acceptance by Party B) to be the transferee pursuant to a
Permitted Transfer, Party B shall, at Party A's written request
and at Party A's expense, take any reasonable steps required to be
taken by Party B to effect such transfer.
(i) Non-Recourse. Party A acknowledges and agrees that, notwithstanding any
provision in this Agreement to the contrary, the obligations of Party B
hereunder are limited recourse obligations of Party B, payable solely
from the assets available under the Swap Contract Administration
Agreement or the Pooling and Servicing Agreement, in accordance with the
priority of payments and other terms of the Pooling and Servicing
Agreement and that Party A will not have any recourse to any of the
directors, officers, employees, shareholders or affiliates of Party B
with respect to any claims, losses, damages, liabilities, indemnities or
other obligations in connection with any transactions contemplated
hereby. In the event that these assets should be insufficient to satisfy
all claims outstanding, any claims against or obligations of Party B
under the ISDA Master Agreement or any other confirmation thereunder
still outstanding shall be extinguished and thereafter not revive. This
provision will survive the termination of this Agreement.
(j) Rating Agency Notifications. Notwithstanding any other provision of this
Agreement, no Early Termination Date shall be effectively designated
hereunder by Party B and no transfer of any rights or obligations under
12
this Agreement shall be made by either party unless each Swap Rating
Agency has been given prior written notice of such designation or
transfer.
(k) No Set-off. Except as expressly provided for in Section 2(c), Section 6
or Part 1(f)(i)(D) hereof, or Paragraph 8(a) or 8(b) of the Credit
Support Annex, and notwithstanding any other provision of this Agreement
or any other existing or future agreement, each party irrevocably waives
any and all rights it may have to set off, net, recoup or otherwise
withhold or suspend or condition payment or performance of any
obligation between it and the other party hereunder against any
obligation between it and the other party under any other agreements.
Section 6(e) shall be amended by deleting the following sentence: "The
amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off."
(l) Amendment. Notwithstanding any provision to the contrary in this
Agreement, no amendment of either this Agreement or any Transaction
under this Agreement shall be permitted by either party unless each of
the Swap Agencies has been provided prior written notice of the same and
S&P confirms in writing (including by facsimile transmission) that it
will not downgrade, withdraw or otherwise modify its then-current
ratings of the Certificates or the Notes.
(m) Amendments to Operative Documents. Party B agrees that it will obtain
Party A's written consent (which consent shall not be unreasonably
withheld) at least ten (10) Business Days prior to amending or
supplementing the Pooling and Servicing Agreement (or any other
transaction document), if such amendment and/or supplement would: (a)
materially adversely affect any of Party A's rights or obligations
hereunder; or (b) modify the obligations of, or impact the ability of,
Party B to fully perform any of Party B's obligations hereunder.
(n) Proceedings. No Relevant Entity shall institute against, or cause any
other person to institute against, or join any other person in
instituting against the trust formed pursuant to the Pooling and
Servicing Agreement, in any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other proceedings under any
federal or state bankruptcy or similar law for a period of one year (or,
if longer, the applicable preference period) and one day following
payment in full of the Certificates and any Notes; provided, that this
provision shall not restrict or prohibit Party A from joining any other
person, including, without limitation, the Trustee, in any
bankruptcy, reorganization, arrangement, insolvency, moratorium or
liquidation proceedings already commenced or other analogous proceedings
already commenced under applicable law. This provision will survive the
termination of this Agreement.
(o) Limited Liabilities. Party A and Party B agree to the following: (a) The
Bank of New York ("BNY") is entering into this Agreement not in its
individual or corporate capacity, but solely in its capacity as Swap
Contract Administrator under the Swap Contract Administration Agreement;
(b) in no case shall BNY (or any person acting as successor Swap
Contract Administrator under the Swap 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 Party B under the terms of this Agreement, all such liability, if
any, being expressly waived by Party A and any person claiming by,
through or under Party A; and (c) recourse against Party B shall be
limited to the assets available under the Swap Contract Administration
Agreement or the Pooling and Servicing Agreement.
(p) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance,
shall be held to be invalid or unenforceable (in whole or in part) in
any respect, 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 Agreement and the deletion of such portion of
this Agreement will not substantially impair the respective benefits or
expectations of the parties; provided, however, that this severability
provision shall not be applicable if any provision of Section 2, 5, 6,
or 13 (or any definition or provision in Section 14 to the extent it
relates to, or is used in or in connection with any such Section) shall
be so held to be invalid or unenforceable.
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
13
economic effect of which comes as close as possible to that of the
invalid or unenforceable term, provision, covenant or condition.
(q) Escrow Payments. If (whether by reason of the time difference between
the cities in which payments are to be made or otherwise) it is not
possible for simultaneous payments to be made on any date on which both
parties are required to make payments hereunder, either Party may at its
option and in its sole discretion notify the other Party that payments
on that date are to be made in escrow. In this case deposit of the
payment due earlier on that date shall be made by 2:00 pm (local time at
the place for the earlier payment) on that date with an escrow agent
selected by the notifying party, accompanied by irrevocable payment
instructions (i) to release the deposited payment to the intended
recipient upon receipt by the escrow agent of the required deposit of
any corresponding payment payable by the other party on the same date
accompanied by irrevocable payment instructions to the same effect or
(ii) if the required deposit of the corresponding payment is not made on
that same date, to return the payment deposited to the party that paid
it into escrow. The party that elects to have payments made in escrow
shall pay all costs of the escrow arrangements.
(r) 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 trading, marketing, and operations
personnel of the parties and their Affiliates, waives any further notice
of such monitoring or recording,. Promptly upon the request by a party,
the other party will provide a copy of such recording to the party
making the request.
(s) Waiver of Jury Trial. Each party waives any right it may have to a trial
by jury in respect of any in respect of any suit, action or proceeding
relating to this Agreement or any Credit Support Document.
(t) Payment Instructions. Party A hereby agrees that, unless notified in
writing by Party B of other payment instructions, any and all amounts
payable by Party A to Party B under this Agreement shall be paid to the
account specified in Item 4 of this Confirmation, below.
(u) Accuracy of Specified Information. Section 3(d) is hereby amended by
inserting in the third line thereof after the words "in every material
respect" and before the period the phrase "or, in the case of audited or
unaudited financial statements, a fair presentation, in all material
respects, of the financial condition of the relevant person."
(v) Acknowledgements.
(i) Substantial financial transactions. Each party hereto is hereby
advised and acknowledges as of the date hereof 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 Pooling and Servicing
Agreement relating to such Transaction, as applicable. This
paragraph shall be deemed repeated on the trade date of each
Transaction.
(ii) Bankruptcy Code. Subject to Part 5(n), without limiting the
applicability if any, of any other provision of the U.S.
Bankruptcy Code as amended (the "Bankruptcy Code") (including
without limitation Sections 362, 546, 556, and 560 thereof and the
applicable definitions in Section 101 thereof), the parties
acknowledge and agree that all Transactions entered into hereunder
will constitute "forward contracts" or "swap agreements" as
defined in Section 101 of the Bankruptcy Code or "commodity
contracts" as defined in Section 761 of the Bankruptcy Code, that
the rights of the parties under Section 6 of this Agreement will
constitute contractual rights to liquidate Transactions, that any
margin or collateral provided under any margin, collateral,
security, pledge, or similar agreement related hereto will
constitute a "margin payment" as defined in Section 101 of the
Bankruptcy Code, and that the parties are entities entitled to the
rights under, and protections afforded by, Sections 362, 546, 556,
and 560 of the Bankruptcy Code.
(w) Additional Definitions.
As used in this Agreement, the following terms shall have the meanings
set forth below, unless the context clearly requires otherwise:
14
"Approved Ratings Threshold" means each of the S&P Approved
Ratings Threshold and the Moody's First Trigger Ratings Threshold.
"Approved Replacement" means, with respect to a Market Quotation,
an entity making such Market Quotation, which entity would satisfy
conditions (a), (b), (c) and (e) of the definition of Permitted
Transfer (as determined by Party B in its sole discretion, acting
in a commercially reasonable manner) if such entity were a
Transferee, as defined in the definition of Permitted Transfer.
"Derivative Provider Trigger Event" means (i) an Event of Default
with respect to which Party A is a Defaulting Party, (ii) a Tax
Event Upon Merger with respect to which Party A is the sole
Affected Party or (iii) an Additional Termination Event with
respect to which Party A is the sole Affected Party.
"Eligible Guarantee" means an unconditional and irrevocable
guarantee, which is identical, mutatis mutandis, to the exhibit
attached as Exhibit A, of all present and future obligations (for
the avoidance of doubt, not limited to payment obligations) of
Party A or an Eligible Replacement to Party A under this Agreement
that is provided by an Eligible Guarantor as principal debtor
rather than surety and that is directly enforceable by Party B,
the form and substance of which guarantee are provided in advance
to S&P and Fitch, and either (A) a law firm has given a legal
opinion confirming that none of the guarantor's payments to Party
B under such guarantee will be subject to Tax collected by
withholding or (B) such guarantee provides that, in the event that
any of such guarantor's payments to Party B are subject to Tax
collected by withholding, such guarantor is required to pay such
additional amount as is necessary to ensure that the net amount
actually received by Party B (free and clear of any Tax collected
by withholding) will equal the full amount Party B would have
received had no such withholding been required.
"Eligible Guarantor" means an entity that (A) has credit ratings
at least equal to the Approved Ratings Threshold or (B) has credit
ratings at least equal to the Required Ratings Threshold,
provided, for the avoidance of doubt, that an Eligible Guarantee
of an Eligible Guarantor with credit ratings below the Approved
Ratings Threshold will not cause a Collateral Event (as defined in
the Credit Support Annex) not to occur or continue.
"Eligible Replacement" means an entity (A) (i) that has credit
ratings at least equal to the Approved Ratings Threshold, (ii) has
credit ratings at least equal to the Required Ratings Threshold,
provided, for the avoidance of doubt, that an Eligible Guarantee
of an Eligible Guarantor with credit ratings below the Approved
Ratings Threshold will not cause a Collateral Event (as defined in
the Credit Support Annex) not to occur or continue, or (iii) the
present and future obligations (for the avoidance of doubt, not
limited to payment obligations) of which entity to Party B under
this Agreement are guaranteed pursuant to an Eligible Guarantee
provided by an Eligible Guarantor and (B) that has executed an
Item 1115 Agreement with the Depositor.
"Firm Offer" means (A) with respect to an Eligible Replacement, a
quotation from such Eligible Replacement (i) in an amount equal to
the actual amount payable by or to Party B in consideration of an
agreement between Party B and such Eligible Replacement to replace
Party A as the counterparty to this Agreement by way of novation
or, if such novation is not possible, an agreement between Party B
and such Eligible Replacement to enter into a Replacement
Transaction (assuming that all Transactions hereunder become
Terminated Transactions), and (ii) that constitutes an offer by
such Eligible Replacement to replace Party A as the counterparty
to this Agreement or enter a Replacement Transaction that will
become legally binding upon such Eligible Replacement upon
acceptance by Party B, and (B) with respect to an Eligible
Guarantor, an offer by such Eligible Guarantor to provide an
Eligible Guarantee that will become legally binding upon such
Eligible Guarantor upon acceptance by the offeree.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
thereto.
"Moody's First Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee or an Eligible
Replacement, (i) if such entity has a short-term unsecured and
unsubordinated debt rating from Moody's, a long-term unsecured and
unsubordinated debt rating or
15
counterparty rating from Moody's of "A2" and a short-term
unsecured and unsubordinated debt rating from Moody's of
"Prime-1", or (ii) if such entity does not have a short-term
unsecured and unsubordinated debt rating or counterparty rating
from Moody's, a long-term unsecured and unsubordinated debt rating
or counterparty rating from Moody's of "A1".
"Moody's Second Trigger Ratings Event" means that no Relevant
Entity has credit ratings from Moody's at least equal to the
Moody's Second Trigger Rating Threshold.
"Moody's Second Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee or an Eligible
Replacement, (i) if such entity has a short-term unsecured and
unsubordinated debt rating from Moody's, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's of
"A3" and a short-term unsecured and unsubordinated debt rating
from Moody's of "Prime-2", or (ii) if such entity does not have a
short-term unsecured and unsubordinated debt rating from Moody's,
a long-term unsecured and unsubordinated debt rating or
counterparty rating from Moody's of "A3".
"Permitted Transfer" means a transfer by novation by Party A to a
transferee (the "Transferee") of all, but not less than all, of
Party A's rights, liabilities, duties and obligations under this
Agreement, with respect to which transfer each of the following
conditions is satisfied: (a) the Transferee is an Eligible
Replacement that is a recognized dealer in interest rate swaps
organized under the laws of the United States of America or a
jurisdiction located in the United States of America (or another
jurisdiction reasonably acceptable to Party B), (b) an Event of
Default or Termination Event would not occur as a result of such
transfer, (c) pursuant to a written instrument (the "Transfer
Agreement"), the Transferee acquires and assumes all rights and
obligations of Party A under the Agreement and the relevant
Transaction, (d) Party B shall have determined, in its sole
discretion, acting in a commercially reasonable manner, that such
Transfer Agreement is effective to transfer to the Transferee all,
but not less than all, of Party A's rights and obligations under
the Agreement and all relevant Transactions; (e) Party A will be
responsible for any costs or expenses incurred in connection with
such transfer (including any replacement cost of entering into a
replacement transaction), (f) Moody's and S&P have been given
prior written notice of such transfer, (g) such transfer otherwise
complies with the terms of the Pooling and Servicing Agreement and
(h) the Swap Contract is identical, mutatis mutandis, to the
existing Swap Contract.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder and each Swap Rating
Agency specified in connection with such proposed act or omission,
that the party acting or failing to act must consult with each of
the specified Swap Rating Agencies and receive from each such Swap
Rating Agency a prior written confirmation that the proposed
action or inaction would not cause a downgrade or withdrawal of
the then-current rating of any Certificates or Notes.
"Relevant Entity" means Party A and, to the extent applicable, a
guarantor under an Eligible Guarantee.
"Replacement Transaction" means, with respect to any Terminated
Transaction or group of Terminated Transactions, a transaction or
group of transactions that (i) would have the effect of preserving
for Party B the economic equivalent of any payment or delivery
(whether the underlying obligation was absolute or contingent and
assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated
Transaction or group of Terminated Transactions that would, but
for the occurrence of the relevant Early Termination Date, have
been required after that Date, and (ii) has terms which are
substantially the same as this Agreement, including, without
limitation, rating triggers, Regulation AB compliance, and credit
support documentation, save for the exclusion of provisions
relating to Transactions that are not Terminated Transactions, as
determined by Party B in its sole discretion, acting in a
commercially reasonable manner.
"Required Ratings Downgrade Event" shall have the meaning assigned
thereto in Part 5(f).
16
"Required Ratings Threshold" means each of the S&P Required
Ratings Threshold and the Xxxxx'x Second Trigger Ratings
Threshold.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"S&P Approved Ratings Threshold" means, with respect to Party A,
the guarantor under an Eligible Guarantee or an Eligible
Replacement, a short-term unsecured and unsubordinated debt rating
from S&P of "A-1", or, if such entity does not have a short-term
unsecured and unsubordinated debt rating from S&P, a long-term
unsecured and unsubordinated debt rating from S&P of "A+".
"S&P Required Ratings Threshold" means, with respect to Party A,
the guarantor under an Eligible Guarantee or an Eligible
Replacement, a long-term unsecured and unsubordinated debt rating
from S&P of "BBB+".
"Swap Rating Agencies" means, with respect to any date of
determination, each of S&P and Xxxxx'x, to the extent that each
such rating agency is then providing a rating for any of the
Series 2006-22 Asset-Backed Certificates (the "Certificates") or
any notes backed by the Certificates (the "Notes").
[Remainder of this page intentionally left blank.]
17
The parties executing this Schedule have executed the Master Agreement and
have agreed as to the contents of this Schedule.
XXXXXX BROTHERS THE BANK OF NEW YORK, not in its individual or
SPECIAL FINANCING INC. corporate capacity but solely as Swap Contract
Administrator for CWABS, Inc., Asset-Backed
Certificates, Series 2006-22, pursuant to a Swap
Contract Administration Agreement
Party A Party B
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxx Xxxxxx
------------------------------ ----------------------------------
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxxx Xxxxxx
Title: Senior Vice President Title: Assistant Vice President
Date: November 30, 2006 Date: November 30, 2006
18
EXHIBIT A to Schedule
GUARANTEE OF XXXXXX BROTHERS HOLDINGS INC.
[Filed as Ex. 99.6 herein.]
A-1
EXHIBIT B to Schedule
[Form of Opinion of Counsel for Party B]
[Date]
Xxxxxx Brothers Special Financing Inc.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
XXX
Re: CWABS, Inc.
Asset-Backed Certificates, Series 2006-22
-----------------------------------------
Ladies and Gentlemen:
We have acted as special counsel for CWABS, Inc., a Delaware corporation
(the "Depositor"), in connection with the issuance of the CWABS, Inc.
Asset-Backed Certificates of the above-referenced Series (the "Certificates").
The Certificates represent the entire beneficial ownership interest in a trust
fund (the "Trust Fund") created pursuant to a Pooling and Servicing Agreement,
dated as of November 1, 2006 (the "Pooling and Servicing Agreement") among the
Depositor, as depositor, Countrywide Home Loans Inc. ("CHL"), as a seller,
Park Monaco Inc., as a seller, Park Sienna LLC, as a seller, Countrywide Home
Loans Servicing LP, as Master Servicer, and The Bank of New York ("BNY"), as
trustee. The assets of the Trust Fund will consist [primarily of a pool of
conventional, credit-blemished mortgage loans secured by first liens on one-
to four-family residential properties.]
In connection with the issuance of the Certificates, we have also acted
as special counsel to the Depositor in connection with the execution and
delivery of the following documents relating to the Certificates: (i) the Swap
Contract Administration Agreement, dated as of November 30, 2006 (the "Swap
Contract Administration Agreement"), between BNY, in its capacity as swap
contract administrator (in such capacity, the "Swap Contract Administrator")
and in its capacity as Trustee under the Pooling and Servicing Agreement, and
CHL, (ii) a confirmation with a reference number of 2747129 and a trade date
of November 14, 2006 (the "Confirmation") between CHL and Xxxxxx Brothers
Special Financing Inc. (the "Swap Counterparty"), (iii) the ISDA Master
Agreement, Schedule and Credit Support Annex dated as of November 30, 2006
(collectively, the "Master Agreement"), between the Swap Counterparty and the
Swap Contract Administrator and (iv) the Swap Contract Assignment Agreement,
dated as of November 30, 2006 (the "Swap Contract Assignment Agreement"),
between CHL, the Swap Counterparty and the Swap Contract Administrator. The
Master Agreement and the transaction evidenced by the Confirmation, taken
together with the applicable provisions of the Swap Contract Assignment
Agreement, are referred to herein collectively as the "Swap Agreement".
Capitalized terms not otherwise defined herein have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
In arriving at the opinion expressed below, we have examined and relied
on originals or copies of the Pooling and Servicing Agreement, the Swap
Contract Administration Agreement, the Swap Contract Assignment Agreement, the
Master Agreement and the Confirmation (collectively, the "Agreements"). In
addition, we have made such investigations of law as we have deemed
appropriate as a basis for the opinion expressed below.
Based upon the foregoing, and having regard to legal considerations
which we deem relevant, subject to the assumptions, qualifications and
limitations set forth herein, we are of the opinion that the Swap
B-1
Agreement constitutes the valid and binding obligation of the Swap Contract
Administrator, enforceable against the Swap Contract Administrator in
accordance with its terms.
The opinion set forth above is subject to certain qualifications,
assumptions and exceptions as set out below.
In rendering the foregoing opinion, we have assumed, without any
independent investigation or verification, the following: (a) the authenticity
of original documents, the legal capacity of all individuals and the
genuineness of all signatures; (b) the conformity to the originals of all
documents submitted to us as certified, conformed or photostatic copies; (c)
the truth, accuracy and completeness of the information, representations and
warranties made in conference or contained in the records, documents,
instruments and certificates we have reviewed; (d) the due organization of the
parties to the Agreements and the power and authority of the parties to the
Agreements to enter into and perform all of their obligations thereunder; (e)
the due authorization, execution and delivery of the Agreements on behalf of
the respective parties thereto; (f) except as expressly covered in the opinion
set forth above, the legal, valid, and binding effect of the Agreements and
the enforceability thereof (in accordance with their terms) against the
respective parties thereto; (g) that the parties have complied and will comply
with all material provisions of the Agreements; (h) the absence of any
evidence extrinsic to the provisions of the written agreements between the
parties that the parties intended a meaning contrary to that expressed by
those provisions; (i) the absence of any agreement or understanding among the
parties other than those contained in the Agreements (or referred to therein
or incidental thereto); (j) that the terms and provisions of the Agreements do
not, and the execution, delivery and performance of the Agreements by any
party thereto does not and will not, violate the organizational documents of
such party or any law, rule, regulation, order or decree of any court,
administrative agency or other governmental authority or agency applicable to
such party, or result in the breach of or a default under any contract or
undertaking to which it is a party or by which it or its property is bound;
and (k) that there is nothing in the laws or public policy of any relevant
jurisdiction (other than the State of New York or the United States of
America) that would affect the opinion set forth above.
Our opinion is qualified as to:
(i) limitations imposed by any applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or
other similar law of general application affecting the enforcement of
creditors' or secured creditors' rights generally;
(ii) general principles of equity including, without limitation,
concepts of materiality and fair dealing, the possible unavailability of
specific performance or injunctive relief, and other similar doctrines
affecting the enforceability of agreements generally (regardless of whether
considered in a proceeding in equity or at law);
(iii) rights to indemnification or contribution which may be limited by
applicable law or equitable principles or otherwise unenforceable as against
public policy,
(iv) the effect of any other limitations imposed by public policy,
although (except as noted in sub-paragraph (iii) above and sub-paragraphs (v)
through (viii) below) we are not aware of any limitation that would be
relevant to such enforcement;
(v) the effect of any requirement conditioning enforcement on the party
seeking enforcement having acted in a commercially reasonable manner and in
good faith in performing its obligations and exercising its rights and
remedies thereunder;
(vi) the discretion of a court to invalidate or decline to enforce any
right, remedy or provision of the Swap Agreement, determined by it, in any
such case, to be a penalty;
(vii) the unenforceability of any provision requiring the payment of
attorney's fees, except to the extent that a court determines such fees to be
reasonable; and
(viii) the effect of any requirement that a claim (or a foreign currency
judgment in respect of such claim) be converted into United States dollars at
a rate of exchange prevailing on a date determined pursuant to applicable law.
B-2
Without in any way limiting the effect of sub-paragraph (viii) above, we
note that a judgment for money in an action in a federal or state court in the
United States ordinarily would be enforced in the United States only in United
States dollars. The date used to determine the rate of conversion of a foreign
currency into United States dollars will depend upon various factors,
including which court renders the judgment. By way of example, under Section
27 of the New York Judiciary Law, a state court in the State of New York
rendering a judgment on an obligation required to be paid in a foreign
currency will be required to render such judgment in such foreign currency,
and such judgment would be converted into United States dollars at the
exchange rate prevailing on the date of entry of the judgment.
Certain of the remedial provisions of the Swap Agreement may be limited
or rendered ineffective or unenforceable in whole or in part, but the
inclusion of such provisions does not make the remedies provided by such
Agreement inadequate for the practical realization of the respective rights
and benefits purported to be provided thereby (except for the economic
consequences of procedural or other delay, as to which we express no opinion).
We express no opinion:
(a) as to any provision in the Swap Agreement to the extent that such
provision refers to, or incorporates by reference, the provisions of any
agreement other than the Swap Agreement;
(b) regarding any severability provision;
(c) with respect to the creation, perfection or priority of any security
interest or as to the effect thereof or the rights and remedies or obligations
of any party to the Swap Agreement in respect thereof;
(d) as to the effect of: (i) the compliance or non-compliance of Xxxxxx
Brothers Special Financing Inc. with any United States state or federal laws
or regulations or any other laws or regulations applicable to Xxxxxx Brothers
Special Financing Inc., including limitations or restrictions that apply to
financial institutions; or (ii) the failure of Xxxxxx Brothers Special
Financing Inc. to be duly authorized to conduct business in any jurisdiction;
(e) with respect to any federal or state securities, "blue sky" or other
similar laws;
(f) as to the enforceability of any rights to specific performance
provided for in the Swap Agreement; or
(g) as to whether a federal court of the United States of America or a
state court outside the State of New York would give effect to the choice of
New York law provided for in the Swap Agreement.
Our opinion herein, as it pertains to the enforceability of provisions
contained in the Swap Agreement pursuant to which the parties thereto agree to
submit to the jurisdiction of the United States federal courts referred to
herein, is subject to the power of such courts to transfer actions pursuant to
28 U.S.C. ss. 1404(a) or to dismiss such actions or proceedings on the ground
that such a federal court is an inconvenient forum for such an action or
proceeding and we note that such issues may be raised by the court sua sponte.
In addition, we express no opinion as to the subject matter jurisdiction of
any United States federal court to adjudicate any action relating to the
Agreements where jurisdiction based on diversity of citizenship under 27
U.S.C. ss. 1332 does not exist.
As noted above, the conclusions set forth herein are subject to the
accuracy of the factual assumptions described above and the absence of
additional facts that would materially affect the validity of the assumptions
set forth herein. Our conclusions as to any legal matters in this letter speak
only as of the date hereof. We assume no obligation to revise or supplement
this letter should such factual matters change or should such laws or
regulations be changed by legislative or regulatory action, judicial decision
or otherwise, and we hereby express no opinion as to the effect any such
changes may have on the foregoing opinion. We do not express any opinion,
either implicitly or otherwise, on any issue not expressly addressed in the
third paragraph of this letter.
To the extent our opinion herein pertains to the enforceability of Part
4(h) of the Schedule to the Master Agreement pursuant to which the Trust and
the Swap Counterparty have agreed that the laws of the State of New York shall
govern the Agreement, we have relied on Section 5-1401 of the New York General
Obligations Law, which states in pertinent part: "The parties to any contract,
agreement or undertaking,
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contingent or otherwise, in consideration of, or relating to any obligation
arising out of a transaction covering in the aggregate not less than two
hundred fifty thousand dollars . . . may agree that the law of this state
shall govern their rights and duties in whole or in part, whether or not such
contract, agreement or undertaking bears a reasonable relation to this state."
We express no opinion as to matters of law other than the law of the
State of New York and the federal law of the United States of America. In
rendering the foregoing opinion we have assumed that enforcement of the Swap
Agreement in accordance with New York law would not violate any provision of
any law of any jurisdiction (other than the State of New York) or any public
policy of any jurisdiction that bears a reasonable relation to the Agreements
or the transaction in which the Swap Agreement is being executed and delivered
by the parties thereto.
The opinion expressed herein is solely for your benefit in connection
with the transactions contemplated by the Agreements and may not be relied on
in any manner or for any purpose by any other individual, partnership,
corporation or other governmental or non-governmental entity (each a
"Person"), nor may any copies thereof be published, communicated, filed with
or otherwise made available in whole or in part to any other Person without
our specific prior written consent. By accepting this letter, each Person to
whom this letter is addressed (other than the Depositor) recognizes and
acknowledges that (i) no attorney-client relationship exists or has existed
between the lawyers in our firm representing the Depositor and such Person in
connection with the execution of the Agreements or by virtue of this letter,
(ii) in order to permit reliance by such Person on this letter, the lawyers in
our firm representing the Depositor conducted no activities in addition to
those undertaken or conducted for the purpose of rendering this letter to the
Depositor as one of the addressees hereof and (iii) this letter may not be
appropriate or sufficient for such Person's purposes.
Very truly yours,
B-4
EXHIBIT C to Schedule
[Form of Opinion of Counsel for
Xxxxxx Brothers Special Financing Inc. and
Xxxxxx Brothers Holdings Inc.]
November 30, 0000
XXX XXXX XX XXX XXXX,
not in its individual or corporate capacity
but solely as Swap Contract Administrator for
CWABS Inc., Asset-Backed Certificates, Series 2006-22
pursuant to a Swap Contract Administration Agreement
x/x Xxx Xxxx xx Xxx Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration MBS Administration,
CWABS, Series 2006-22
Ladies and Gentlemen:
I have acted as counsel to Xxxxxx Brothers Special Financing Inc., a
Delaware corporation ("Party A") and Xxxxxx Brothers Holdings Inc., a Delaware
corporation ("Guarantor"), and am familiar with matters pertaining to the
execution and delivery of the Master Agreement (the "Master Agreement") dated
as of November 30, 2006 between Party A and THE BANK OF NEW YORK, not in its
individual or corporate capacity but solely as Swap Contract Administrator for
CWABS Inc., Asset-Backed Certificates, Series 2006-22, pursuant to a Swap
Contract Administration Agreement and the guarantee of Guarantor (the
"Guarantee") delivered in connection with the Master Agreement.
In connection with this opinion, I have examined, or have had examined
on my behalf, an executed copy of the Master Agreement and the Guarantee,
certificates and statements of public officials and officers of Party A and
Guarantor and such other agreements, instruments, documents and records as I
have deemed necessary or appropriate for the purposes of this opinion.
Except as expressly set forth herein, no independent investigation
(including, without limitation, conducting any review, search or investigation
of any public files, records or dockets) has been undertaken to determine the
existence or absence of the facts that are material to my opinions, and no
inference as to my knowledge concerning such facts should be made.
When used herein the phrase "to my knowledge" means to my actual
knowledge without independent investigation.
References in this letter to "Applicable Laws" are to those laws, rules
and regulations of the State of New York which, in my experience, are normally
applicable to transactions of the type contemplated by the Master Agreement
and the Guarantee. References in this letter to "Governmental Authorities" are
to executive, legislative, judicial, administrative or regulatory bodies of
the State of New York. References in this letter to "Governmental Approval"
are to any consent, approval, license, authorization or validation of, or
filing, recording or registration with, any Governmental Authority pursuant to
Applicable Laws.
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Based on the foregoing but subject to the assumptions, exceptions,
qualifications and limitations hereinafter expressed, I am of the opinion
that:
(i) Each of Party A and Guarantor is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware.
(ii) The execution, delivery and performance of the Master Agreement in
the case of Party A, and the Guarantee, in the case of Guarantor,
are within its corporate power, have been duly authorized by all
corporate action and do not conflict with any provision of its
certificate of incorporation or by-laws.
(iii) The Master Agreement, in the case of Party A, and the Guarantee,
in the case of Guarantor, have been duly executed and delivered
and each constitutes a legal, valid and binding obligation,
enforceable against it in accordance with its respective terms.
(iv) To the best of my knowledge, no Governmental Approval is required
in connection with the execution, delivery and performance of the
Master Agreement in the case of Party A, or the Guarantee, in the
case of Guarantor, except those that have been obtained and, to my
knowledge, are in effect.
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
A. My opinion in paragraph 3 above is subject to: (i) bankruptcy,
insolvency, reorganization, receivership, moratorium or similar laws affecting
creditors' rights generally (including, without limitation, the effect of
statutory or other laws regarding fraudulent or other similar transfers or
conveyances); (ii) general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law; (iii) laws
and considerations of public policy that may limit the enforceability of
provisions (a) regarding the termination and close-out methodology under the
Master Agreement, including but not limited to Section 6(e), (b) regarding
indemnification and contribution rights and obligations, (c) regarding the
waiver or limitation of rights to trial by jury, oral amendments to written
agreements or rights of setoff, (d) relating to submission to jurisdiction,
venue or service of process, and (e) purporting to prohibit or restrict, or
require the consent of the "account debtor" (as defined in Section 9-102 of
the Uniform Commercial Code as in effect in the State of New York (the "NYUCC"
)) for, the creation, perfection or enforcement of a security interest in
"accounts" or "general intangibles" (in each case, as defined in Section 9-102
of the NYUCC).
B. I am a member of the Bar of the State of New York and render no
opinion on the laws of any jurisdiction other than the laws of the State of
New York and the General Corporation Law of the State of Delaware. Except as
described, I have not examined, or had examined on my behalf, and I do not
express any opinion with respect to, Delaware law.
C. My opinions are limited to the present laws and to the facts as they
presently exist, and no opinion is to be inferred or implied beyond the
matters expressly so stated. I assume no obligation to revise or supplement
this opinion should the present laws of the jurisdictions referred to in
paragraph B above be changed by legislative action, judicial decision or
otherwise.
D. This letter is rendered solely to you solely for your benefit in
connection with the Master Agreement and the Guarantee and the transactions
related thereto and may not be relied upon by any other person, entity or
agency or by you in any other context or for any other purpose. This letter
may not be circulated, used or quoted in whole or in part, nor may copies
thereof be furnished or delivered to any other person, without the prior
written consent of Xxxxxx Brothers Holdings Inc., except that you may furnish
copies hereof (i) to your independent auditors and attorneys, (ii) to any
United States, state or local authority having jurisdiction over you or over
Party A or Guarantor, (iii) pursuant to the order of any legal
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process of any court of competent jurisdiction or any governmental agency, and
(iv) in connection with any legal action arising out of the Master Agreement or
the Guarantee.
E. I have assumed with your permission (i) the genuineness of all
signatures by each party other than Party A or Guarantor, (ii) the
authenticity of documents submitted to me as originals and the conformity to
authentic original documents of all documents submitted to me as copies, (iii)
the accuracy of the matters set forth in the documents, agreements and
instruments I reviewed, (iv) that each party other than Party A and Guarantor
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, (v) the due execution and delivery, pursuant to
due authorization, of the Master Agreement by each party other than Party A,
and (vi) that the Master Agreement is the legal, valid, binding and
enforceable obligation of each party other than Party A, enforceable against
each such party in accordance with its terms.
F. My opinion in paragraph 3 is subject to the qualification that
certain provisions contained in the Agreement and the Guarantee may not be
enforceable, but such unenforceability will not render the Agreement or the
Guarantee invalid as a whole or substantially interfere with the practical
realization of the principal benefits provided thereby.
The foregoing opinions are given on the express understanding that the
undersigned is an officer of Xxxxxx Brothers Inc. and shall in no event incur
any personal liability in connection with said opinions.
Very truly yours,
C-3
EXHIBIT D to Schedule
---------------------
[REGULATION AB AGREEMENT]
-------------------------
Item 1115 Agreement dated as of February 24, 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 XXXXXX BROTHERS SPECIAL FINANCING 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 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).
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.
D-1
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 affiliation or
relationship (as set forth in Item 1119)
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);
(3) the SPV;
(4) Countrywide Home Loans Servicing LP (or
any other servicer or master servicer
identified to the Counterparty by CHL);
D-2
(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 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:
(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 (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) no later than the 25th calendar day of each month, the
Counterparty shall (1) notify the related Depositor in
writing of any affiliations or relationships that develop
following the Closing Date between the Counterparty and any
of the parties specified in Section 2(a)(i)(D) (and any
other parties identified in writing by the related
Depositor) and (2) provide to the related Depositor a
description of such proceedings, affiliations or
relationships as described in Section 2(b)(i)(1);
(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)
D-3
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
(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 (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.
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 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.
D-4
(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 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 Counterparty ceases to meet the requirements
of Item 1101(c)(1) of Regulation AB with respect to the
incorporation by reference of the financial information of third
parties, 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
D-5
XXXXX-compatible format no later than the 25th calendar day of the
month following the date on which the Counterparty ceased to meet
the requirements.
(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 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,
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;
(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) (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
D-6
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), 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. 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).
(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 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.
D-7
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.
(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 reasonably 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
D-8
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.
D-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.
CWABS, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWMBS, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWALT, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWHEQ, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
D-10
XXXXXX BROTHERS SPECIAL FINANCING INC.
By: /s/ Xxxxxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxxxxx X. Xxxxxx
Title: Vice President
D-11
