Exhibit 99.8
Item 1115 Agreement dated as of January 30, 2006 (this "Agreement"),
between COUNTRYWIDE HOME LOANS, INC., a New York corporation ("CHL"), CWABS,
INC., a Delaware corporation ("CWABS"), CWMBS, Inc., a Delaware corporation
("CWMBS"), CWALT, Inc., a Delaware corporation ("CWALT"), CWHEQ, Inc., a
Delaware corporation ("CWHEQ") and BEAR XXXXXXX FINANCIAL PRODUCTS INC., as
counterparty (the "Counterparty").
RECITALS
WHEREAS, CWABS, CWMBS, CWALT and CWHEQ each have filed Registration
Statements on Form S-3 (each, a "Registration Statement") with the Securities
and Exchange Commission (the "Commission") for purposes of offering mortgage
backed or asset-backed notes and/or certificates (the "Securities") through
special purpose vehicles (each, an "SPV").
WHEREAS, from time to time, on the closing date (the "Closing Date")
of a transaction pursuant to which Securities are offered (each, a
"Transaction"), the Counterparty and CHL or an underwriter or dealer with
respect to the Transaction, enter into certain derivative agreements (each, a
"Derivative Agreement"), including interest rate or currency swaps, for
purposes of providing certain yield enhancements that are assigned to the SPV
or the related trustee on behalf of the SPV or a swap or corridor contract
administrator (each, an "Administrator").
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereby agree as follows:
Section 1. Definitions
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to
the related Registration Statement for which the entity of the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis
and Retrieval system.
Exchange Act: The Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder.
Exchange Act Reports: All Distribution Reports on Form 10-D,
Current Reports on Form 8-K and Annual Reports on Form 10-K that are to be
filed with respect to the related SPV pursuant to the Exchange Act.
Master Agreement: The ISDA Master Agreement between the
Counterparty and CHL, or if no such Master Agreement exists, the ISDA Master
Agreement assumed to apply to the Derivative Agreement pursuant to its terms.
Prospectus Supplement: The prospectus supplement prepared in
connection with the public offering and sale of the related Securities.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related
Depositor such information regarding the Counterparty,
as a derivative instrument counterparty, as is
reasonably requested by the related Depositor for the
purpose of compliance with Item 1115(a)(1) of
Regulation AB. Such information shall include, at a
minimum:
(A) The Counterparty's legal name (and any d/b/a);
(B) the organizational form of the Counterparty;
(C) a description of the general character of the
business of the Counterparty;
(D) a description of any material legal or governmental
proceedings pending (or known to be contemplated)
against the Counterparty which may have a material
impact on the Counterparty's ability to perform
under the related Derivative Agreement;
(E) a description of any affiliation or relationship
between the Counterparty and any of the following
parties:
(1) CHL (or any other sponsor identified to the
Counterparty by CHL);
(2) the related Depositor (as identified to the
Counterparty by CHL);
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(3) the SPV;
(4) Countrywide Home Loans Servicing LP (or any
other servicer or master servicer identified
to the Counterparty by CHL);
(5) The Bank of New York (or any other trustee
identified to the Counterparty by CHL);
(6) any originator identified to the Counterparty
by CHL;
(7) any enhancement or support provider
identified to the Counterparty by CHL; and
(8) any other material transaction party
identified to the Counterparty by CHL.
(ii) if requested by the related Depositor for the purpose
of compliance with Item 1115(b) with respect to a
Transaction, the Counterparty shall:
(A) provide the financial data required by Item
1115(b)(1) or (b)(2) of Regulation AB (as
specified by the related Depositor to the
Counterparty) with respect to the Counterparty
(or any entity that consolidates the
Counterparty) and any affiliated entities
providing derivative instruments to the SPV (the
"Company Financial Information"), in a form
appropriate for use in the Prospectus Supplement
and in an XXXXX-compatible form; and
(B) if applicable, cause its accountants to issue
their consent to the filing of such financial
statements in the Registration Statement.
(b) Following the Closing Date with respect to a Transaction,
(i) no later than the 25th calendar day of each month, the
Counterparty shall (i) notify the related Depositor in
writing of (A) any material litigation or governmental
proceedings pending against the Counterparty which may
have a material impact on the Counterparty's ability
to perform under the related Derivative Agreement or
(B) any affiliations or relationships that develop
following the Closing Date between the Counterparty
and any of the parties specified in Section 2(a)(i)(E)
(and any other parties identified in writing by the
related Depositor) and (ii) provide to the related
Depositor a description of such proceedings,
affiliations or relationships as described in Section
2(b)(i)(I)(i); and
(ii) if the Counterparty provided Company Financial
Information to the related Depositor for the
Prospectus Supplement, within 5 Business Days of the
release of any updated financial data, the
Counterparty shall (1) provide current Company
Financial Information as required under Item
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1115(b) of Regulation AB to the related Depositor in an
XXXXX-compatible form, and (2) if applicable, cause
its accountants to issue their consent to filing or
incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV;
(iii) if the related Depositor requests Company Financial
Information from the Counterparty, for the purpose of
compliance with Item 1115(b) of Regulation AB
following the Closing Date, the Counterparty shall
upon five Business Days written notice either (A), (1)
provide current Company Financial Information as
required under Item 1115(b) of Regulation AB to the
related Depositor in an XXXXX-compatible form, (2) if
applicable, cause its accountants to issue their
consent to filing or incorporation by reference of
such financial statements in the Exchange Act Reports
of the SPV and (3) within 5 Business Days of the
release of any updated financial data, provide current
Company Financial Information as required under Item
1115(b) of Regulation AB to the related Depositor in
an XXXXX-compatible form and if applicable, cause its
accountants to issue their consent to filing or
incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV or
(B) assign the Derivative Agreement as provided below.
Section 3. Representations and Warranties and Covenants of the
Counterparty.
(a) The Counterparty represents and warrants to the
related Depositor, as of the date on which information
is first provided to the related Depositor under
Section 2(a)(ii), Section 2(b)(ii) or Section
2(b)(iii)(A), that, except as disclosed in writing the
related Depositor prior to such date:
(i) The accountants who certify the financial
statements and supporting schedules included in
the Company Financial Information (if
applicable) are independent registered public
accountants as required by the Securities Act.
(ii) If applicable, the financial statements included
in the Company Financial Information present
fairly the consolidated financial position of
the Counterparty (or the entity that
consolidates the Counterparty) and its
consolidated subsidiaries as at the dates
indicated and the consolidated results of their
operations and cash flows for the periods
specified; except as otherwise stated in the
Company Financial Information, said financial
statements have been prepared in conformity with
generally accepted accounting principles
("GAAP") applied on a consistent basis; and the
supporting schedules included in the Company
Financial Information present fairly in
accordance with GAAP the information required to
be stated therein. The selected financial data
and summary financial information included in
the Company Financial Information present fairly
the information shown therein and have been
compiled on a basis
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consistent with that of the audited financial
statements of the Counterparty.
(iii) The Company Financial Information and other
Company Information included or incorporated by
reference in the Registration Statement
(including through filing on an Exchange Act
Report), at the time they were or hereafter are
filed with the Commission, complied in all
material respects with the requirements of Item
1115(b) of Regulation AB (in the case of the
Company Financial Information) and, did not and
will not contain an untrue statement of a
material fact or omit to state a material fact
required to be stated therein or necessary in
order to make the statements therein, in the
light of the circumstances under which they were
made, not misleading.
(b) The Counterparty agrees that the terms of this Agreement shall
be incorporated by reference into any Derivative Agreement so
that each SPV who is a beneficiary of a Derivative Agreement
shall be an express third party beneficiary of this Agreement.
Section 4. Indemnification; Remedies
(a) The Counterparty shall indemnify CHL and the related
Depositor, each person responsible for the preparation,
execution or filing of any report required to be filed with
the Commission with respect to such SPV, or for execution of
a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act; each broker dealer acting as
underwriter, each person who controls any of such parties
(within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each
of the foregoing, and shall hold each of them harmless from
and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any
of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained
or alleged to be contained in any information, report,
certification, accountants' consent or other material
provided in written or electronic form under Section 2
by or on behalf of the Counterparty (collectively, the
"Company Information"), or (B) the omission or alleged
omission to state in the Company Information a
material fact required to be stated in the Company
Information or necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; or
(ii) any breach by the Counterparty of a representation or
warranty set forth in Section 3(a) and made as of a
date prior to the Closing Date, to the extent that
such breach is not cured by the Closing Date, or any
breach by the Counterparty of a representation or
warranty pursuant to Section 3 to the extent made as
of a date subsequent to the Closing Date.
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(b) (i) Any failure by the Counterparty to deliver any
information, report, certification, accountants'
consent or other material when and as required under
Section 2 or any breach by the Counterparty of a
representation or warranty set forth in Section 3 and
made as of a date prior to the Closing Date, to the
extent that such breach is not cured by the Closing
Date (or in the case of information needed for
purposes of printing the Prospectus Supplement, the
date of printing of the Prospectus Supplement), or any
breach by the Counterparty of a representation or
warranty pursuant to Section 3 to the extent made as
of a date subsequent to such closing date, shall,
except as provided in clause (ii) of this paragraph,
immediately and automatically, without notice or grace
period, constitute an Additional Termination Event (as
defined in the Master Agreement) with the Counterparty
as the sole Affected Party (as defined in the Master
Agreement) under the Derivative Agreement. Following
such termination, a termination payment (if any) shall
be payable by the applicable party as determined by
the application of Section 6(e)(ii) of the Master
Agreement, with Market Quotation and Second Method
being the applicable method for determining the
termination payment (notwithstanding anything in the
Derivative Agreement to the contrary).
(ii) If the Counterparty has failed to deliver any
information, report, certification or accountants'
consent when and as required under Section 2, which
continues unremedied for the lesser of ten calendar
days after the date on which such information, report,
certification or accountants' consent was required to
be delivered or such period in which the applicable
Exchange Act Report for which such information is
required can be timely filed (without taking into
account any extensions permitted to be filed), and the
Counterparty has not, at its own cost, within the
period in which the applicable Exchange Act Report for
which such information is required can be timely filed
caused another entity (which meets any ratings related
requirement of the applicable rating agencies at such
time) to replace the Counterparty as party to the
Derivative Agreement that (i) has signed an agreement
with CHL and the Depositors substantially in the form
of this Agreement, (ii) has agreed to deliver any
information, report, certification or accountants'
consent when and as required under Section 2 hereof
and (iii) is approved by the Depositor (which approval
shall not be unreasonably withheld and which approval
is not needed if such assignment is to a subsidiary of
The Bear Xxxxxxx Companies, Inc., provided the
Depositor is given notice) and any rating agency, if
applicable, on terms substantially similar to the
Derivative Agreement, then an Additional Termination
Event (as defined in the Master Agreement) shall have
occurred with the Counterparty as the sole Affected
Party. Following such termination, a termination
payment (if any) shall be payable by the applicable
party as determined by the application of Section
6(e)(ii) of the Master Agreement, with Market
Quotation and Second Method being the applicable
method for
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determining the termination payment (notwithstanding
anything in the Derivative Agreement to the contrary).
(iii) In the event that the Counterparty or the SPV has
found a replacement entity in accordance with Section
2(b)(ii), the Counterparty shall promptly reimburse
the SPV for all reasonable incidental expenses
incurred by the SPV, as such are incurred, in
connection with the termination of the Counterparty as
counterparty and the entry into a new Derivative
Instrument. The provisions of this paragraph shall not
limit whatever rights the SPV may have under other
provisions of this Agreement or otherwise, whether in
equity or at law, such as an action for damages,
specific performance or injunctive relief.
Section 5. Miscellaneous.
(a) Construction. Throughout this Agreement, as the context
requires, (a) the singular tense and number includes the
plural, and the plural tense and number includes the singular;
(b) the past tense includes the present, and the present tense
includes the past; and (c) references to parties, sections,
schedules, and exhibits mean the parties, sections,
schedules, and exhibits of and to this Agreement. The
section headings in this Agreement are inserted only as a
matter of convenience, and in no way define, limit, extend,
or interpret the scope of this Agreement or of any
particular section.
(b) Assignment. None of the parties may assign their rights
under this Agreement without the prior written consent of
the other parties. Subject to the foregoing, this Agreement
shall be binding on and inure to the benefit of the parties
and their respective successors and permitted assigns.
(c) No Third-Party Benefits Except as Specified. None of the
provisions of this Agreement are intended to benefit, or to
be enforceable by, any third-party beneficiaries except the
related SPV and any trustee of an SPV or any Administrator.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State
of New York without regard to the conflict of laws
principles thereof.
(e) Amendment and Waiver. This Agreement may not be modified or
amended except by an instrument in writing signed by the
parties hereto. No waiver of any provision of this Agreement
or of any rights or obligations of any party under this
Agreement shall be effective unless in writing and signed by
the party or parties waiving compliance, and shall be
effective only in the specific instance and for the specific
purpose stated in that writing.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
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(g) Additional Documents. Each party hereto agrees to execute
any and all further documents and writings and to perform
such other actions which may be or become necessary or
expedient to effectuate and carry out this Agreement.
(h) Severability. Any provision hereof which is prohibited or
unenforceable shall be ineffective only to the extent of
such prohibition or unenforceability without invalidating
the remaining provisions hereof.
(i) Integration. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof.
There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with
respect to the subject matter hereof other than those
expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings between
the parties with respect to its subject matter.
(j) CHL agrees to provide to the Counterparty prior to January
30, 2006 the methodology for its estimate of maximum
probable exposure represented by the Derivative Agreements
and then to provide notice of any changes to the
methodology.
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
CWABS, INC.
By: /S/ Xxxxx Xxxxxx
---------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWMBS, INC.
By: /S/ Xxxxx Xxxxxx
---------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWALT, INC.
By: /S/ Xxxxx Xxxxxx
---------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWHEQ, INC.
By: /S/ Xxxxx Xxxxxx
---------------------
Name: Xxxxx Xxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /S/ Xxxxx Xxxxxx
---------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: /S/ F. Xxxxx Xxxxxx
---------------------
Name: F. Xxxxx Xxxxxx
Title: DPC Manager
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