EXHIBIT 99.8
The Item 1115 Agreement
Item 1115 Agreement dated as of February 24, 2006 (this "Agreement"),
between COUNTRYWIDE HOME LOANS, INC., a New York corporation ("CHL"), CWABS,
INC., a Delaware corporation ("CWABS"), CWMBS, Inc., a Delaware corporation
("CWMBS"), CWALT, Inc., a Delaware corporation ("CWALT"), CWHEQ, Inc., a
Delaware corporation ("CWHEQ") and XXXXXX BROTHERS SPECIAL FINANCING INC., as
counterparty (the "Counterparty").
RECITALS
WHEREAS, CWABS, CWMBS, CWALT and CWHEQ each have filed
Registration Statements on Form S-3 (each, a "Registration Statement") with
the Securities and Exchange Commission (the "Commission") for purposes of
offering mortgage backed or asset-backed notes and/or certificates (the
"Securities") through special purpose vehicles (each, an "SPV").
WHEREAS, from time to time, on the closing date (the "Closing
Date") of a transaction pursuant to which Securities are offered (each, a
"Transaction"), the Counterparty and CHL or an underwriter or dealer with
respect to the Transaction, enter into certain derivative agreements (each, a
"Derivative Agreement"), including interest rate caps and interest rate or
currency swaps, for purposes of providing certain yield enhancements that are
assigned to the SPV or the related trustee on behalf of the SPV or a swap or
corridor contract administrator (each, an "Administrator").
NOW, THEREFORE, in consideration of the mutual agreements set
forth herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereby agree as follows:
Section 1. Definitions
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to
the related Registration Statement for which the entity of the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Exchange Act: The Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder.
Exchange Act Reports: All Distribution Reports on Form 10-D,
Current Reports on Form 8-K and Annual Reports on Form 10-K that are to be
filed with respect to the related SPV pursuant to the Exchange Act.
Master Agreement: The ISDA Master Agreement between the
Counterparty and CHL, or if no such Master Agreement exists, the ISDA Master
Agreement assumed to apply to the Derivative Agreement pursuant to its terms.
Prospectus Supplement: The prospectus supplement prepared in
connection with the public offering and sale of the related Securities.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related Depositor such
information regarding the Counterparty, as a derivative
instrument counterparty, as is reasonably requested by the
related Depositor for the purpose of compliance with Item
1115(a)(1) of Regulation AB. Such information shall include,
at a minimum:
(A) The Counterparty's legal name (and any d/b/a);
(B) the organizational form of the Counterparty;
(C) a description of the general character of the business
of the Counterparty;
(D) a description of any affiliation or relationship (as
set forth in Item 1119) between the Counterparty and
any of the following parties:
(1) CHL (or any other sponsor identified to the
Counterparty by CHL);
(2) the related Depositor (as identified to the
Counterparty by CHL);
(3) the SPV;
(4) Countrywide Home Loans Servicing LP (or any
other servicer or master servicer identified to
the Counterparty by CHL);
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(5) The Bank of New York (or any other trustee
identified to the Counterparty by CHL);
(6) any originator identified to the Counterparty by
CHL;
(7) any enhancement or support provider identified
to the Counterparty by CHL; and
(8) any other material transaction party identified
to the Counterparty by CHL.
(ii) if requested by the related Depositor prior to the related
Depositor taking the steps necessary to suspend its obligation to
file Exchange Act Reports, with respect to the SPV, under Sections
13 and 15(d) of the Exchange Act, in accordance with the
requirements of Regulation AB, the Counterparty shall:
(A) provide the financial data required by Item 1115(b)(1) or
(b)(2) of Regulation AB (as specified by the related
Depositor to the Counterparty) with respect to the
Counterparty (or any entity that consolidates the
Counterparty) and any affiliated entities providing
derivative instruments to the SPV (the "Company Financial
Information"), in a form appropriate for use in the
Prospectus Supplement and in an XXXXX-compatible form (if
not incorporated by reference) and hereby authorizes the
related Depositor to incorporate by reference the financial
data required by Item 1115(b)(2) of Regulation AB; and
(B) if applicable, cause its accountants to issue their consent
to the filing or the incorporation by reference of such
financial statements in the Registration Statement.
(b) Following the Closing Date and until the related Depositor takes
the steps necessary to suspend its obligation to file Exchange Act
Reports, with respect to the SPV, under Sections 13 and 15(d) of
the Exchange Act, with respect to a Transaction,
(i) no later than the 25th calendar day of each month, the
Counterparty shall (1) notify the related Depositor in
writing of any affiliations or relationships that develop
following the Closing Date between the Counterparty and any
of the parties specified in Section 2(a)(i)(D) (and any
other parties identified in writing by the related
Depositor) and (2) provide to the related Depositor a
description of such proceedings, affiliations or
relationships as described in Section 2(b)(i)(1);
(ii) if the Counterparty provided Company Financial Information
to the related Depositor for the Prospectus Supplement,
within 5 Business Days of the release of any updated
financial data, the Counterparty shall (1)
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provide current Company Financial Information as required
under Item 1115(b) of Regulation AB to the related Depositor
in an XXXXX-compatible form (if not incorporated by
reference) and hereby authorizes the related Depositor to
incorporate by reference the financial data required by Item
1115(b)(2) of Regulation AB, and (2) if applicable, cause
its accountants to issue their consent to filing or
incorporation by reference of such financial statements in
the Exchange Act Reports of the SPV; and
(iii) if the related Depositor requests Company Financial
Information from the Counterparty, for the purpose of
compliance with Item 1115(b) of Regulation AB following the
Closing Date, the Counterparty shall upon five Business Days
written notice either (A), (1) provide current Company
Financial Information as required under Item 1115(b) of
Regulation AB to the related Depositor in an
XXXXX-compatible form (if not incorporated by reference) and
hereby authorizes the related Depositor to incorporate by
reference the financial data required by Item 1115(b)(2) of
Regulation AB, (2) if applicable, cause its accountants to
issue their consent to filing or incorporation by reference
of such financial statements in the Exchange Act Reports of
the SPV and (3) within 5 Business Days of the release of any
updated financial data, provide current Company Financial
Information as required under Item 1115(b) of Regulation AB
to the related Depositor in an XXXXX-compatible form and if
applicable, cause its accountants to issue their consent to
filing or incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV or (B)
assign the Derivative Agreement as provided below.
Section 3. Representations and Warranties and Covenants of the Counterparty.
(a) The Counterparty represents and warrants to the related Depositor,
as of the date on which information is first provided to the
related Depositor under Section 2(a)(ii), Section 2(b)(ii) or
Section 2(b)(iii)(A), that, except as disclosed in writing the
related Depositor prior to such date:
(i) The Counterparty or the entity that consolidates the
Counterparty is required to file reports with the Commission
pursuant to section 13(a) or 15(d) of the Exchange Act.
(ii) The Counterparty or the entity that consolidates the
Counterparty has filed all reports and other materials
required to be filed by such requirements during the
preceding 12 months (or such shorter period that such party
was required to file such reports and materials).
(iii) The reports filed by the Counterparty, or entity that
consolidates the Counterparty, include (or properly
incorporate by reference) the financial statements of the
Counterparty.
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(iv) The accountants who certify the financial statements and
supporting schedules included in the Company Financial
Information (if applicable) are independent registered
public accountants as required by the Securities Act.
(v) If applicable, the financial statements included in the
Company Financial Information present fairly the
consolidated financial position of the Counterparty (or the
entity that consolidates the Counterparty) and its
consolidated subsidiaries as at the dates indicated and the
consolidated results of their operations and cash flows for
the periods specified; except as otherwise stated in the
Company Financial Information, said financial statements
have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent
basis; and the supporting schedules included in the Company
Financial Information present fairly in accordance with GAAP
the information required to be stated therein. The selected
financial data and summary financial information included in
the Company Financial Information present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements of
the Counterparty.
(vi) The Company Financial Information and other Company
Information included or incorporated by reference in the
Registration Statement (including through filing on an
Exchange Act Report), at the time they were or hereafter are
filed with the Commission, complied in all material respects
with the requirements of Item 1115(b) of Regulation AB (in
the case of the Company Financial Information) and, did not
and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
(b) If the Counterparty has provided Company Financial Information
that is incorporated by reference into the Registration Statement
of the related Depositor, the Counterparty, so long as the related
Depositor is required to file Exchange Act Reports with respect to
the SPV, will file promptly all documents required to be filed
with the Commission pursuant to Section 13 or 14 of the Exchange
Act. If permitted by the Exchange Act, the related Depositor will
take the steps necessary to suspend its obligation to file
Exchange Act Reports, with respect to the SPV, under Sections 13
and 15(d) of the Exchange Act.
(c) If at any time, the Counterparty ceases to meet the requirements
of Item 1101(c)(1) of Regulation AB with respect to the
incorporation by reference of the financial information of third
parties, the Counterparty shall provide notice to the related
Depositor, and if any Company Financial Information is required to
be included in the Registration Statement, or the Exchange Act
Reports of the SPV, will provide to the related Depositor such
Company Financial Information in
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XXXXX-compatible format no later than the 25th calendar day of the
month following the date on which the Counterparty ceased to meet
the requirements.
(d) The Counterparty agrees that the terms of this Agreement shall be
incorporated by reference into any Derivative Agreement so that
each SPV who is a beneficiary of a Derivative Agreement shall be
an express third party beneficiary of this Agreement.
Section 4. Indemnification; Remedies
(a) The Counterparty shall indemnify CHL and the related Depositor,
each person responsible for execution of a certification pursuant
to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act; each
broker dealer acting as underwriter, each person who controls any
of such parties (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees and
agents of each of the foregoing, and shall hold each of them
harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments,
and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
accountants' consent or other material provided in written
or electronic form under Section 2 by or on behalf of the
Counterparty (collectively, the "Company Information"), or
(B) the omission or alleged omission to state in the Company
Information a material fact required to be stated in the
Company Information or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) any breach by the Counterparty of a representation or
warranty set forth in Section 3(a) and made as of a date
prior to the Closing Date, to the extent that such breach is
not cured by the Closing Date, or any breach by the
Counterparty of a representation or warranty pursuant to
Section 3 to the extent made as of a date subsequent to the
Closing Date.
(b) (i) Any failure by the Counterparty to deliver any information,
report, accountants' consent or other material when and in
any case only as required under Section 2 or any breach by
the Counterparty of a representation or warranty set forth
in Section 3 and made as of a date prior to the Closing
Date, to the extent that such breach is not cured by the
Closing Date (or in the case of information needed for
purposes of printing the Prospectus Supplement, the date of
printing of the Prospectus Supplement), shall, except as
provided in clause (ii) of this paragraph, immediately and
automatically, without notice or grace period, constitute an
Additional Termination Event (as defined in the Master
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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), or if the
Counterparty has provided Company Information, any breach by
the Counterparty of a representation or warranty pursuant to
Section 3 to the extent made as of a date subsequent to such
closing date, and the Counterparty has not, at its own cost,
within the period in which the applicable Exchange Act
Report for which such information is required can be timely
filed caused another entity (which meets any applicable
ratings threshold in the Derivative Agreement) to replace
the Counterparty as party to the Derivative Agreement that
(i) has signed an agreement with CHL and the Depositors
substantially in the form of this Agreement, (ii) has agreed
to deliver any information, report, certification or
accountants' consent when and as required under Section 2
hereof and (iii) is approved by the Depositor (which
approval shall not be unreasonably withheld) and any rating
agency, if applicable, on terms substantially similar to the
Derivative Agreement, then an Additional Termination Event
(as defined in the Master Agreement) shall have occurred
with the Counterparty as the sole Affected Party. Following
such termination, a termination payment (if any) shall be
payable by the applicable party as determined by the
application of Section 6(e)(ii) of the Master Agreement,
with Market Quotation and Second Method being the applicable
method for determining the termination payment
(notwithstanding anything in the Derivative Agreement to the
contrary).
(iii) In the event that the Counterparty or the SPV has found a
replacement entity in accordance with Section 2(b)(ii), the
Counterparty shall promptly reimburse the SPV for all
reasonable incidental expenses incurred by the SPV, as such
are incurred, in connection with the termination of the
Counterparty as counterparty and the entry into a new
Derivative Agreement. The provisions of this paragraph shall
not limit whatever rights the SPV may have under other
provisions of this Agreement or otherwise, whether in equity
or at law, such as an action for damages, specific
performance or injunctive relief.
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Section 5. Miscellaneous.
(a) Construction. Throughout this Agreement, as the context requires,
(a) the singular tense and number includes the plural, and the
plural tense and number includes the singular; (b) the past tense
includes the present, and the present tense includes the past; and
(c) references to parties, sections, schedules, and exhibits mean
the parties, sections, schedules, and exhibits of and to this
Agreement. The section headings in this Agreement are inserted
only as a matter of convenience, and in no way define, limit,
extend, or interpret the scope of this Agreement or of any
particular section.
(b) Assignment. None of the parties may assign their rights under this
Agreement without the prior written consent of the other parties.
Subject to the foregoing, this Agreement shall be binding on and
inure to the benefit of the parties and their respective
successors and permitted assigns.
(c) No Third-Party Benefits Except as Specified. None of the
provisions of this Agreement are intended to benefit, or to be
enforceable by, any third-party beneficiaries except the related
SPV and any trustee of an SPV or any Administrator.
(d) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York
without regard to the conflict of laws principles thereof.
(e) Amendment and Waiver. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties
hereto. No waiver of any provision of this Agreement or of any
rights or obligations of any party under this Agreement shall be
effective unless in writing and signed by the party or parties
waiving compliance, and shall be effective only in the specific
instance and for the specific purpose stated in that writing.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(g) Additional Documents. Each party hereto agrees to execute any and
all further documents and writings and to perform such other
actions which may be or become reasonably necessary or expedient
to effectuate and carry out this Agreement.
(h) Severability. Any provision hereof which is prohibited or
unenforceable shall be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof.
(i) Integration. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof. There are
no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to
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the subject matter hereof other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to its subject
matter.
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IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
CWABS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWMBS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWALT, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWHEQ, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
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XXXXXX BROTHERS SPECIAL FINANCING INC.
By: /s/ Xxxxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxxxx X. Xxxxxx
Title: Vice President
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