EXHIBIT 99.4
(Multicurrency-Cross Border)
SCHEDULE
to the
Master Agreement
dated as of December 29, 2006
between
DEUTSCHE BANK AG, NEW YORK BRANCH ("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 Trust
2006-24, 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 for CWABS, Inc. Asset-Backed Certificates
Trust 2006-24, dated as of December 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").
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:
Section 5(a)(vi) is hereby amended by adding the following words
at the end thereof:
"provided, however, that, notwithstanding the foregoing, an
Event of Default shall not occur under either (1) or (2) above
if (A) (I) the default, or other similar event or condition
referred to in (1) or the failure to pay referred to in (2) is a
failure to pay or deliver caused by an error or omission of an
administrative or operational nature, and (II) funds or the
asset to be delivered were available to such party to enable it
to make the relevant payment or delivery when due and (III) such
payment or delivery is made within three (3) Local Business Days
following receipt of written notice from an interested party of
such failure to pay, or (B) such party was precluded from
paying, or was unable to pay, using reasonable means, through
the office of the party through which it was acting for purposes
of the relevant Specified Indebtedness, by reason of force
majeure, act of State, illegality or impossibility."
"Specified Indebtedness" will have the meaning specified in
Section 14, except that such term shall not include obligations
in respect of deposits received in the ordinary course of Party
A's banking business.
"Threshold Amount" means with respect to Party A an amount equal
to three percent (3%) of the Shareholders' Equity of Party A 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 in the country in which
Party A is organized.
(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
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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) to Party A, 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.
(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
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;
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(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 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) 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.
(D) 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)."
(E) At any time on or before the Latest Settlement Amount
Determination Day at which two or more Market Quotations
from Approved Replacements remain capable of becoming
legally binding upon acceptance, Party B shall be entitled
to accept only 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 Market Quotation expressed as a negative
number with the largest absolute value).
(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(c).
Part 2: Tax Representations
(a) Tax Representations.
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(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 "foreign person" within the meaning of the
applicable U.S. Treasury Regulations concerning
information reporting and backup withholding tax (as in
effect on January 1, 2001), unless Party A provides
written notice to Party B that it is no longer a foreign
person. In respect of any Transaction it enters into
through an office or discretionary agent in the United
States or which otherwise is allocated for United States
federal income tax purposes to such United States trade or
business, each payment received or to be received by it
under such Transaction will be effectively connected with
its conduct of a trade or business in the United States.
(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.
Part 3: Agreement to Deliver Documents
(a) Tax forms, documents or certificates to be delivered are:
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------------------------------------- ----------------------------------- -----------------------------------
Party required to deliver document Form/Document/Certificate Date by which to be delivered
------------------------------------- ----------------------------------- -----------------------------------
Party A and Party B Any document required or Promptly after the earlier of
reasonably requested to allow (i) reasonable demand by
the other party to make either party or (ii) within 30
payments under this Agreement days of the execution.
without any deduction or
withholding for or on the
account of any Tax or with
such deduction or withholding
at a reduced rate.
------------------------------------- ----------------------------------- -----------------------------------
(b) Other Documents to be delivered are:
------------------------- ------------------------------------ --------------------- ------------------------
Party required to Form/Document/Certificate Date by which to be Covered by Section
deliver document delivered 3(d) representation
------------------------- ------------------------------------ --------------------- ------------------------
Party A and Party B Any documents required or Upon execution. Yes
reasonably requested by the
receiving party to evidence
authority of the delivering
party or its Credit Support
Provider, if any, to execute and
deliver this Agreement, any
Confirmation, and any Credit
Support Documents to which it is
a party, and to evidence the
authority of the delivering
party to its Credit Support
Provider to perform its
obligations under this
Agreement, such Confirmation
and/or Credit Support Document,
as the case may be.
------------------------- ------------------------------------ --------------------- ------------------------
Party A and Party B A certificate of an authorized Upon execution Yes
officer of the party, as to the
incumbency and authority of the
respective officers of the party
signing this Agreement, any
relevant Credit Support Document,
or any Confirmation, as the case
may be.
------------------------- ------------------------------------ --------------------- ------------------------
Party A Annual Report of Party A Annually, after Yes
containing consolidated financial becoming publicly
statements certified by available
independent certified public
accountants and prepared in
accordance with generally accepted
accounting principles in the
country in which Party A is
organized and delivered via
internet at xxxx://xxx.xx.xxx/
------------------------- ------------------------------------ --------------------- ------------------------
Party A Quarterly Financial Statements of Quarterly, after Yes
Party A containing unaudited, becoming publicly
consolidated financial statements available
of Party A's fiscal quarter
prepared in accordance with
generally
6
------------------------- ------------------------------------ --------------------- ------------------------
accepted accounting principles in
the country in which Party A is
organized and delivered via
internet at xxxx://xxx.xx.xxx/
------------------------- ------------------------------------ --------------------- ------------------------
Party A An opinion of counsel to such Upon execution No
party reasonably satisfactory in
form and substance to the other
party regarding the enforceability
of this Agreement, any
Confirmation, and any Credit
Support Documents to which it is a
party.
------------------------- ------------------------------------ --------------------- ------------------------
Party B Executed copy of the Pooling and Upon execution Yes
Servicing Agreement
------------------------- ------------------------------------ --------------------- ------------------------
------------------------- ------------------------------------ --------------------- ------------------------
Part 4: Miscellaneous
(a) Addresses for Notices. For the purposes of Section 12(a) of this
Agreement:
Party A:
(1) Address for notices or communications to Party A in respect of
Section 5(a)(i) shall be sent to:-
Deutsche Bank AG, New York Branch
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
In addition, with respect to Party A, all notices under Sections 5 or 6 of
this Agreement (other than notices under Section 5(a)(i)) shall be sent to:
Deutsche Bank AG, Head Office
Xxxxxxxxxxxx 00
00000 Xxxxxxxxx
Xxxxxxx
Attention: Legal Department
Telex No: 411836 or 416731 or 41233
Answerback: DBF-D
Party B:
Address for notices or communications to Party B:-
Address: The Bank of New York
000 Xxxxxxx Xxxxxx - 0X Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration MBS Administration,
CWABS Inc., Series 2006-24
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) Process Agent. For the purposes of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
7
(c) Offices. The provisions of Section 10(a) will not 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,
if an Event of Default occurs and is continuing with respect to Party A,
then Party B shall be entitled to appoint a financial institution which
would qualify as a Reference Market-maker to act as Calculation Agent,
the cost for which shall be borne by Party A.
(f) Credit Support Document. Credit Support Document means
Party A: The Credit Support Annex, and any guarantee in support of
Party A's obligations under this Agreement.
Party B: 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. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to all Transactions.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement, 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).
Part 5: Other 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:
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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.
(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."
(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)
9
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 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.
(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) Supplemental Pooling and Servicing Agreement Without Party A's
Prior Written Consent. If Party B enters into an amendment and
or supplement to the Pooling and Servicing Agreement or other
modification to the Pooling and Servicing Agreement that could
reasonably be expected to have a material adverse effect on
Party A (excluding, for the avoidance of doubt, any amendment to
the Pooling and Servicing Agreement that is entered into solely
for the purpose of appointing a successor master servicer or
trustee) without the prior written consent (such consent not to
be unreasonably withheld) of Party A where such consent is
required, then 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. Party B agrees with Party A that Party A shall be an
express third-party beneficiary of the Pooling and Servicing
Agreement.
(iv) [Reserved]
(v) [Reserved]
(d) 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.
(e) Regulation AB Compliance. Party A and Party B hereby agree that the
terms of the Item 1115 Agreement dated as of April 27, 2006 (the
"Regulation AB Agreement"), between Countrywide Home Loans, Inc., CWABS,
Inc., CWMBS, Inc., CWALT, Inc., CWHEQ, Inc. and Deutsche Bank AG, New
York Branch 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 Regulation AB Agreement is
attached hereto as Exhibit A.
10
(f) Transfers.
(i) Section 7 is hereby amended to read in its entirety as follows:
"Subject to Section 6(b)(ii), Part 5(d) and the Regulation
AB Agreement, neither Party A nor Party B is permitted to
assign, novate or transfer (whether by way of security or
otherwise) as a whole or in part any of its rights,
obligations or interests under the Agreement or any
Transaction without (a) the prior written consent of the
other party and (b) satisfaction of the Rating Agency
Condition with respect to S&P."
(ii) 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.
(g) 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 Swap Trust and the proceeds thereof, 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 the 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 the Swap Trust and the proceeds thereof,
should be insufficient to satisfy all claims outstanding and following
the realization of the account held by the Swap Trust and the proceeds
thereof, 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. Party B shall not have
liability for any failure or delay in making a payment hereunder to
Party A due to any failure or delay in receiving amounts in the account
held by the Swap Trust from the Trust created pursuant to the Pooling
and Servicing Agreement.
(h) Timing of Payments by Party B upon Early Termination. Notwithstanding
anything to the contrary in Section 6(d)(ii), to the extent that all or
a portion (in either case, the "Unfunded Amount") of any amount that is
calculated as being due in respect of any Early Termination Date under
Section 6(e) from Party B to Party A will be paid by Party B from
amounts other than any upfront payment paid to Party B by an Eligible
Replacement that has entered a Replacement Transaction with Party B,
then such Unfunded Amount shall be due on the next subsequent
Distribution Date following the date on which the payment would have
been payable as determined in accordance with Section 6(d)(ii), and on
any subsequent Distribution Dates until paid in full (or if such Early
Termination Date is the final Distribution Date, on such final
Distribution Date); provided, however, that if the date on which the
payment would have been payable as determined in accordance with Section
6(d)(ii) is a Distribution Date, such payment will be payable on such
Distribution Date.
(i) 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
this Agreement shall be made by either party unless each Swap Rating
Agency has been given prior written notice of such designation or
transfer.
(j) No Set-off. Except as expressly provided for in Section 2(c), Section 6,
Paragraph 8 of the Credit Support Annex or Part 1(f)(i)(D) hereof, 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.".
11
(k) 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 Rating 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.
(l) Notice of Certain Events or Circumstances. Each Party agrees, upon
learning of the occurrence or existence of any event or condition that
constitutes (or that with the giving of notice or passage of time or
both would constitute) an Event of Default or Termination Event with
respect to such party, promptly to give the other Party and to each Swap
Rating Agency notice of such event or condition; provided that failure
to provide notice of such event or condition pursuant to this Part 5(l)
shall not constitute an Event of Default or a Termination Event.
(m) Proceedings. No Relevant Entity shall institute against, or cause any
other person to institute against, or join any other person in
instituting against Party B, the Swap Trust, or 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. This
provision will survive the termination of this Agreement.
(n) Swap Contract Administrator Liability Limitations. 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 for CWABS, Inc.
Asset-Backed Certificates Trust 2006-24; (b) in no case shall BNY (or
any person acting as successor Swap Contract Administrator for CWABS,
Inc. Asset-Backed Certificates Trust 2006-24) 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 Pooling and Servicing Agreement. This Part 5(n) shall survive the
termination of this Agreement.
(o) 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 economic effect of which comes as close as possible to
that of the invalid or unenforceable term, provision, covenant or
condition.
(p) [Reserved]
(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
12
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, and agrees to notify such personnel of
such monitoring or recording.
(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) [Reserved]
(u) [Reserved]
(v) Additional representations.
(i) Capacity. Party A represents to Party B on the date on which
Party A enters into this Agreement that it is entering into the
Agreement and the Transaction as principal and not as agent of
any person. Party B represents to Party A on the date on which
Party B enters into this Agreement it is entering into the
Agreement and the Transaction in its capacity as Swap Contract
Administrator.
(w) 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(m), 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.
(x) [Reserved]
(y) [Reserved]
(z) Additional Definitions.
As used in this Agreement, the following terms shall have the meanings
set forth below, unless the context clearly requires otherwise:
"Approved Ratings Threshold" means each of the S&P Approved Ratings
Threshold and the Moody's First Trigger Ratings Threshold.
13
"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 Termination Event
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 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 subject to the
Rating Agency Condition with respect to S&P, 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 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".
14
"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 has been
given prior written notice of such transfer and the Rating Agency
Condition is satisfied with respect to S&P and (g) such transfer
otherwise complies with the terms of the Pooling and Servicing
Agreement.
"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.
"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(d).
"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
15
"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 Certificates.
16
IN WITNESS WHEREOF, the parties have executed this document by their duly
authorized officers with effect from the date so specified on the first page
hereof.
THE BANK OF NEW YORK, not in its
individual or corporate capacity
but solely as Swap Contract
Administrator for CWABS, Inc.
DEUTSCHE BANK AG, NEW YORK Asset-Backed Certificates Trust 2006-24,
BRANCH pursuant to a Swap Contract
Administration Agreement
("Party A") ("Party B")
By: /s/ Xxxxxxxx Xxxx By: /s/ Xxxxxxxx Xxxxxx
------------------ --------------------
Name: Xxxxxxxx Xxxx Name: Xxxxxxxx Xxxxxx
Title: Vice President Title: Vice President
By: /s/ Xxxxxxx Xxxx
---------------------
Name: Xxxxxxx Xxxx
Title: Legal Counsel
17
EXHIBIT A
Regulation AB Agreement
18
Item 1115 Agreement dated as of April 27, 2006 (this "Agreement"),
between COUNTRYWIDE HOME LOANS, INC., a New York corporation ("CHL"), CWABS,
INC., a Delaware corporation ("CWABS"), CWMBS, Inc., a Delaware corporation
("CWMBS"), CWALT, Inc., a Delaware corporation ("CWALT"), CWHEQ, Inc., a
Delaware corporation ("CWHEQ") and DEUTSCHE BANK AG, NEW YORK BRANCH, 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 the SPV, 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
to the SPV or the related trustee on behalf of the SPV or a swap or corridor
contract administrator (each, an "Administrator").
WHEREAS, the Counterparty is a foreign private issuer currently
subject to the periodic reporting requirements of Section 13(a) of the
Securities Exchange Act of 1934, as amended and the rules and regulations
promulgated thereunder (the "Exchange Act"). Pursuant to such requirements, it
files an Annual Report on Form 20-F with the SEC. The Counterparty publishes
Interim Reports for each of the first three quarters of its fiscal year, each
containing unaudited interim financial statements for such quarter. Pursuant
to the Exchange Act, it submits such Interim Reports to the SEC on Reports on
Form 6-K. The Counterparty transmits its Annual Reports on Form 20-F and
Reports on Form 6-K to the SEC via the SEC's XXXXX System, and such reports
are available on the SEC's XXXXX internet site under File Number 001-15242.
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
with respect to any Transaction with respect to which the terms of this
Agreement are incorporated by reference:
Section 1. Definitions
Company Information: As defined in Section 5(a)(i).
Company Financial Information: As defined in the definition of
"Pre-Closing Termination Event".
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to the
related Registration Statement for which the entity is the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Exchange Act: Has the meaning set forth in the recitals.
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.
IFRS: Has the meaning set forth in Section 3(a)(v).
Indemnified Party: As defined in Section 5(a).
IRC: The requirements of Section 1100(c) of Regulation AB, the
Securities Act and the Exchange Act with respect to incorporation by
reference.
Master Agreement: The ISDA Master Agreement between the
Counterparty and SPV, or if no such Master Agreement exists, the ISDA Master
Agreement assumed to apply to the Derivative Agreement pursuant to its terms.
Pre-Closing Termination Event: Prior to printing the related
Prospectus Supplement, any of the following occurs:
(i) the Counterparty shall fail to 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; or
(ii) the Counterparty shall fail to take the actions set forth
below if reasonably requested by the related Depositor for
the purpose of compliance with Item 1115(b) with respect to
a Transaction:
(A) either (1) authorize the related Depositor to
incorporate by reference the financial data required
by Item 1115(b)(1) or (b)(2) of Regulation AB (as
specified by the related Depositor to the
Counterparty) with respect to the Counterparty and any
affiliated entities providing derivative instruments
to the SPV (the "Company Financial Information") or
(2) provide the Company
2
Financial Information, in a form appropriate for use
in the Prospectus Supplement and in an XXXXX-compatible
form (and in any event to provide such XXXXX-compatible
form if the IRC are not satisfied); 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.
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.
Regulation S-X: 17 C.F.R. ss.210.1-01, as such may be amended from
time to time.
Required Substitution: Causing 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 as required by Item 1115(b)(1) or (b)(2) of Regulation
AB 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.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
Section 2. Counterparty Actions. 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 for which the Counterparty has agreed to act as
derivative counterparty,
(a) if the Counterparty provided Company Financial Information to the
related Depositor for the Prospectus Supplement and the
Counterparty does not, within 5 Business Days of the release of
any updated financial data on Form 6-K or 20-F, (1) either
authorize the related Depositor to incorporate by reference
current Company Financial Information as required under Item
1115(b) of Regulation AB or provide such information to the
related Depositor in an XXXXX-compatible form (and in any event to
provide such XXXXX-compatible form if the IRC are not satisfied),
and (2) if applicable, cause its accountants to issue their
consent to filing or incorporation by reference of such financial
statements in the Exchange
3
Act Reports of the SPV, then the Counterparty shall, at its own
cost, make a Required Substitution; and
(b) 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, and the
Counterparty does not upon five Business Days written notice, (1)
either authorize the related Depositor to incorporate by reference
current Company Financial Information as required under Item
1115(b) of Regulation AB or provide such information to the
related Depositor in an XXXXX-compatible form (and in any event to
provide such XXXXX-compatible form if the IRC are not satisfied),
(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, either
authorize the related Depositor to incorporate by reference
current Company Financial Information as required under Item
1115(b) of Regulation AB or provide such information to the
related Depositor in an XXXXX-compatible form (and in any event to
provide such XXXXX-compatible form if the IRC are not satisfied)
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, then the Counterparty
shall, at its own cost, make a Required Substitution.
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 pursuant to this Agreement that, except as
disclosed in writing the related Depositor prior to such date:
(i) The Counterparty is a foreign private issuer as defined in
Rule 2b-4 of the Exchange Act and is currently subject to
the periodic reporting requirements of Section 13(a) of
the Exchange Act.
(ii) 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 include (or properly
incorporate by reference) the financial statements of the
Counterparty.
(iv) The accountants who certify the financial statements and
supporting schedules included in the Company Financial
Information (if applicable) are independent registered
public accountants as required by the Securities Act.
(v) If applicable, (A) either (I) the financial statements
included in the Company Financial Information present
fairly the consolidated financial
4
position of the Counterparty and its consolidated
subsidiaries as at the dates indicated and the
consolidated results of their operations and cash flows
for the periods specified; except as otherwise stated in
the Company Financial Information, said financial
statements have been 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 or (II) if the Company has adopted International
Financial Reporting Standards and International Accounting
Standards (collectively "IFRS") for the purpose of
preparing its financial statements, the Company Financial
Information present fairly the consolidated financial
position of the Counterparty and its consolidated
subsidiaries as at the dates indicated and the
consolidated results of their operations and cash flows
for the periods specified; except as otherwise stated in
the Company Financial Information, said financial
statements have been prepared in conformity with IFRS
applied on a consistent basis; and the supporting
schedules included in the Company Financial Information
present fairly in accordance with IFRS the information
required to be stated therein and such Company Financial
Information has been reconciled with GAAP to the extent
required by Regulation AB.
(vi) 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
(vii) 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 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.
(viii) The Counterparty is a "Foreign Business" as defined in
Regulation S-X.
(b) If at any time the representations and warranties set forth in
3(a)(i) through (iii) are no longer true and correct, the
Counterparty shall provide notice to the related Depositor, and if
any Company Financial Information is required to be included in
the Registration Statement, or the Exchange Act Reports of the
SPV, will provide to the related Depositor such Company Financial
Information in XXXXX-compatible format no later than the 20th
calendar day of the month in which any
5
of the representations or warranties in Section 3(a)(i) through
(iii) ceased to be correct.
(c) 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.
(d) If the Counterparty has provided Company Information, upon any
breach by the Counterparty of a representation or warranty
pursuant to this Section 3 to the extent made as of a date
subsequent to such closing date, the Counterparty shall, at its
own cost, make a Required Substitution.
Section 4. Representations and Warranties and Covenants of the Depositor.
(a) 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.
(b) If the related Depositor requests Company Financial Information
from the Counterparty, it agrees to provide to the Counterparty
the methodology and calculation for its estimate of maximum
probable exposure represented by the Derivative Agreements.
Section 5. 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 (each, a "Indemnified Party"), and
shall hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses
and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based
upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
accountants' consent or other material provided in written
or electronic form under this Agreement 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
6
(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) Nothing in this agreement shall be construed to allow the
Indemnified Party to recover punitive, consequential, incidental,
exemplary or special damages or lost profits from the indemnifying
party.
(c) (i) Any Pre-Closing Termination Event 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 Pre-Closing Termination Event or
breach is not cured by the Closing Date (or in the case of
information needed for purposes of printing the Prospectus
Supplement, the date of printing of the Prospectus
Supplement), shall, except as provided in clause (ii) of
this paragraph, immediately and automatically, without
notice or grace period, constitute an Additional
Termination Event (as defined in the Master Agreement)
with the Counterparty as the sole Affected Party (as
defined in the Master Agreement) under the Derivative
Agreement. Following such termination, a termination
payment (if any) shall be payable by the applicable party
as determined by the application of Section 6(e)(ii) of
the Master Agreement, with Market Quotation and Second
Method being the applicable method for determining the
termination payment (notwithstanding anything in the
Derivative Agreement to the contrary).
(ii) If the Counterparty has failed to make a Required
Substitution 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, 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 failed to make a
Required Substitution as required under Section 3 within
the period in which the applicable Exchange Act Report for
which such information is required can be timely filed,
then an Additional Termination Event (as defined in the
Master Agreement) shall have occurred with the
Counterparty as the sole Affected Party. In the event that
an Early Termination Date is designated in connection with
such Additional Termination Event, a termination payment
(if any) shall be payable by the applicable party as of
the Early Termination Date as determined by the
application of Section 6(e)(ii) of the Master Agreement,
with Market Quotation and Second Method being the
applicable method for determining the termination payment
(notwithstanding anything in the Derivative Agreement to
the contrary).
7
(iii) In the event that the Counterparty or the SPV has found a
replacement entity in accordance with a Required
Substitution, the Counterparty shall promptly reimburse
the SPV for all reasonable incidental expenses incurred by
the SPV, as such are incurred, in connection with the
termination of the Counterparty as counterparty and the
entry into a new Derivative Agreement. The provisions of
this paragraph shall not limit whatever rights the SPV may
have under other provisions of this Agreement or
otherwise, whether in equity or at law, such as an action
for damages, specific performance or injunctive relief.
Section 6. Miscellaneous.
(a) Company Financial Information. Notwithstanding anything to the
contrary contained herein, if Regulation AB is amended, or the
Commission has issued interpretive guidance uniformly applicable
to registrants of Asset-Backed Securities allowing the
presentation of the financial information required by Item 1115 of
Regulation AB with respect to an affiliate of the Counterparty
rather than the Counterparty and any affiliated entities providing
derivatives to the SPV, "Company Financial Information" shall be
deemed to refer to the financial information of such permitted
entity provided the Counterparty has received written confirmation
from CHL that no amendment to this Agreement is necessary. The
parties shall reasonably cooperate with respect to any amendments
to this Agreement to reflect such amendment or interpretation.
(b) Construction. Throughout this Agreement, as the context requires,
(a) the singular tense and number includes the plural, and the
plural tense and number includes the singular; (b) the past tense
includes the present, and the present tense includes the past; and
(c) references to parties, sections, schedules, and exhibits mean
the parties, sections, schedules, and exhibits of and to this
Agreement. The section headings in this Agreement are inserted
only as a matter of convenience, and in no way define, limit,
extend, or interpret the scope of this Agreement or of any
particular section.
(c) Assignment. None of the parties may assign their rights under this
Agreement without the prior written consent of the other parties.
Subject to the foregoing, this Agreement shall be binding on and
inure to the benefit of the parties and their respective
successors and permitted assigns.
(d) No Third-Party Benefits Except as Specified. None of the
provisions of this Agreement are intended to benefit, or to be
enforceable by, any third-party beneficiaries except the related
SPV and any trustee of an SPV or any Administrator.
(e) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York
without regard to the conflict of laws principles thereof.
8
(f) Amendment and Waiver. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties
hereto. No waiver of any provision of this Agreement or of any
rights or obligations of any party under this Agreement shall be
effective unless in writing and signed by the party or parties
waiving compliance, and shall be effective only in the specific
instance and for the specific purpose stated in that writing.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(h) Additional Documents. Each party hereto agrees to execute any and
all further documents and writings and to perform such other
actions which may be or become reasonably necessary or expedient
to effectuate and carry out this Agreement.
(i) Severability. Any provision hereof which is prohibited or
unenforceable shall be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof.
(j) Integration. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof. There are
no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject
matter hereof other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject
matter.
(k) Signatory. The parties hereto agree that while the signatory to
this Agreement is Deutsche Bank AG, New York Branch, the New York
branch of Deutsche Bank AG is not for securities law purposes
treated as a separate entity from Deutsche Bank
Aktiengesellschaft, the Exchange Act registrant and thus the
Company Financial Information to be provided hereunder will be
that of Deutsche Bank Aktiengesellschaft.
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/ 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
10
DEUTSCHE BANK AG, NEW YORK BRANCH
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title:Director
By: /s/ Xxxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxxx Xxxx
Title:Vice President
11
