Exhibit 99.5
(Multicurrency-Cross Border)
SCHEDULE
to the
Master Agreement
dated as of June 28, 2006
between
BARCLAYS BANK PLC ("Party A"),
a public limited company registered in England and Wales
and
THE BANK OF NEW YORK, not in its individual or corporate capacity but
solely as Swap Contract Administrator for CWABS, Inc. Asset-Backed
Certificates Series 2006-8, 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
Series 2006-8 dated as of June 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, and The Bank of New York, as trustee (the "Pooling and Servicing
Agreement") and in the Swap Contract Administration Agreement dated as of June
28, 2006, among the Bank of New York, as Swap Contract Administrator (in such
capacity, the "Swap Contract Administrator") and as Trustee under the Pooling
and Servicing Agreement referred to below (in such capacity, the "Trustee"),
and Countrywide Home Loans, Inc.(the "Swap Contract Administration
Agreement").
Part 1: Termination Provisions
In this Agreement:-
(a) "Specified Entity" means in relation to Party A for the purpose of:-
Section 5(a)(v), Not applicable.
Section 5(a)(vi), Not applicable.
Section 5(a)(vii), Not applicable.
Section 5(b)(iv), Not applicable.
and in relation to Party B for the purpose of:-
Section 5(a)(v), Not applicable.
Section 5(a)(vi), Not applicable.
Section 5(a)(vii), Not applicable.
Section 5(b)(iv), Not applicable.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement.
(c) Events of Default.
(i) The "Breach of Agreement" provisions of Section 5(a)(ii) will not
apply to Party A and will not apply to Party B.
(ii) The "Credit Support Default" provisions of Section 5(a)(iii) will
apply to Party A and will not apply to Party B.
(iii) The "Misrepresentation" provisions of Section 5(a)(iv) will not
apply to Party A and will not apply to Party B.
(iv) The "Default under Specified Transaction" provisions of Section
5(a)(v) will not apply to Party A and will not apply to Party B.
(v) "Cross Default" provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
(vi) Clause (2) of the "Bankruptcy" provisions of Section 5(a)(vii) will
not apply to Party B with respect to either party's inability to pay its
subordinated debt.
(d) Termination Events.
(i) The "Tax Event Upon Merger" provisions of Section 5(b)(ii) will not
apply to Party A and will not apply to Party B.
(ii) 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, Market Quotation and the Second Method will apply.
(g) "Termination Currency" means USD.
(h) Additional Termination Events will apply. Each of the following shall
constitute an Additional Termination Event:
(A) Approved Ratings Threshold. Upon the occurrence of a Collateralization
Event (as defined below) Party A has not, within 30 days after such
ratings downgrade (unless, within 30 days after such downgrade, each such
Swap Rating Agency has reconfirmed the rating of the Swap Certificates
which was in effect immediately prior to such downgrade (determined
without regard to any financial guaranty insurance policy, if applicable),
unless the rating of the Swap Certificates were changed due to a
circumstance other than the downgrading of Party A's (or its Credit
Support Provider's) rating), complied with one of the four solutions
listed below, 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.
In the event that (A) either (i) the unsecured, long-term senior debt
obligations of Party A (or its Credit Support Provider) are rated below
"A1" by Moody's or are rated "A1" by Moody's and such rating is on watch
for possible downgrade (but only for so long as it is on watch for
possible downgrade) or (ii) the unsecured, short-term debt obligations of
Party A (or its Credit Support Provider) are rated below "P-1" by Moody's
or are rated "P-1" by Moody's and such rating is on watch for possible
downgrade (but only for so long as it is on watch for possible downgrade),
(B) no short-term rating is available from Moody's and the unsecured,
long-term senior debt obligations of Party A (or its Credit Support
Provider) are rated below "Aa3" by Moody's or are rated "Aa3" by Moody's
and such rating is on watch for possible downgrade (but only for so long
as it is on watch for possible downgrade), or (C) either (i) the
unsecured, short-term debt obligations of Party A (or its Credit Support
Provider) are rated below "A-1" by S&P or (ii) if Party A (or its Credit
Support Provider) does not have a short-term rating from S&P, the
unsecured, long-term senior debt obligations of Party A (or its Credit
Support Provider) are rated below "A+" by S&P (such event, a
"Collateralization Event"), then, Party A, at its own cost and subject to
the Rating Agency Condition, shall within 30 days either (i) cause another
entity to replace Party A as party to this Agreement that satisfies the
Swap Counterparty Ratings Requirement and that is approved by the Trustee
(which approval shall not be unreasonably withheld) on terms substantially
similar to this Agreement; (ii) obtain a guaranty of, or a contingent
agreement of another person that satisfies the Swap Counterparty Ratings
Requirement, to honor Party A's obligations under this Agreement, provided
that such other person is approved by the Trustee such approval not to be
unreasonably withheld; (iii) post collateral in accordance with a Credit
Support Annex which satisfies the Rating Agency Condition; or (iv)
establish any other arrangement satisfactory to the applicable Swap Rating
Agency which will be sufficient to restore the immediately prior ratings
of the Swap Certificates (determined without regard to any financial
guaranty insurance policy, if applicable). All collateral posted by Party
A shall be returned to Party A immediately upon Party A securing a
substitute counterparty that satisfies the Swap Counterparty Ratings
Requirement.
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"Swap Counterparty Ratings Requirement" shall mean (a) either (i) the
unsecured, short-term debt obligations of the substitute counterparty (or
its Credit Support Provider) are rated at least "A-1" by S&P or (ii) if
the substitute counterparty does not have a short-term rating from S&P,
the unsecured, long-term senior debt obligations of the substitute
counterparty (or its Credit Support Provider) are rated at least "A+" by
S&P, and (b) either (i) the unsecured, long-term senior debt obligations
of such substitute counterparty (or its Credit Support Provider) are rated
at least "A1" by Moody's (and if rated "A1" by Moody's, such rating is not
on watch for possible downgrade) and the unsecured, short-term debt
obligations of such substitute counterparty (or its Credit Support
Provider) are rated at least "P-1" by Moody's (and if rated "P-1" by
Moody's, such rating is not on watch for possible downgrade and remaining
on watch for possible downgrade), or (ii) if such substitute counterparty
(or its Credit Support Provider) does not have a short-term debt rating
from Moody's, the unsecured, long-term senior debt obligations of such
substitute counterparty (or its Credit Support Provider) are rated at
least "Aa3" by Moody's (and if rated "Aa3" by Moody's, such rating is not
on watch for possible downgrade).
(B) Ratings Event. Upon the occurrence of a Ratings Event (as defined
below) Party A has not, within 10 days after such rating withdrawal or
downgrade (unless, within 10 days after such withdrawal or downgrade, each
such Swap Rating Agency has reconfirmed the rating of the Swap
Certificates which was in effect immediately prior to such withdrawal or
downgrade (determined without regard to any financial guaranty insurance
policy, if applicable), unless the rating of the Swap Certificates were
changed due to a circumstance other than the withdrawal or downgrading of
Party A's (or its Credit Support Provider's) rating), complied with one of
the solutions listed below, 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.
It shall be a ratings event ("Ratings Event") if at any time after the
date hereof Party A shall fail to satisfy the Swap Counterparty Ratings
Threshold. Swap Counterparty Ratings Threshold shall mean that both (A)
the unsecured, long-term senior debt obligations of Party A (or its Credit
Support Provider) are rated at least "BBB-" by S&P, and (B) either (i) the
unsecured, long-term senior debt obligations of Party A (or its Credit
Support Provider) are rated at least "A2" by Moody's (including if such
rating is on watch for possible downgrade) and the unsecured, short-term
debt obligations of Party A (or its Credit Support Provider) are rated at
least "P-1" by Moody's (including if such rating is on watch for possible
downgrade) or (ii) if Party A (or its Credit Support Provider) does not
have a short-term rating from Moody's, the unsecured, long-term senior
debt obligations of Party A (or its Credit Support Provider) are rated at
least "A1" by Moody's (including if such rating is on watch for possible
downgrade).
Following a Ratings Event, Party A shall take the following actions at its
own expense and subject to the Rating Agency Condition, (A) immediately
post collateral in accordance with a Credit Support Annex which satisfies
the Rating Agency Condition (until such time as it has secured a
substitute counterparty or a guarantor that satisfies the Swap
Counterparty Ratings Requirement), and (B) not later than 10 days after
the occurrence of such a downgrade or withdrawal by S&P or Moody's, either
(I) assign all of its rights and obligations under the Transactions to a
counterparty that satisfies the Swap Counterparty Ratings Requirement or
whose guarantor satisfies the Swap Counterparty Ratings Requirement
pursuant to documentation substantially similar to the documentation then
in place and subject to prior notification to the Rating Agencies, or (II)
provide a guaranty from a guarantor that satisfies the Swap Counterparty
Ratings Requirement pursuant to documentation substantially similar to the
documentation then in place and subject to prior notification to the
Rating Agencies.
The occurrence of the Additional Termination Event described in Part
1(h)(A) and (B) shall have no effect on Party A's obligation to undertake
the steps set forth hereunder in the event Party B does not exercise its
right to terminate hereunder. Notwithstanding the foregoing, in the event
that S&P has other published criteria with respect to the downgrade of a
counterparty in effect at the time of such a downgrade of Party A, Party A
shall be entitled to elect to take such other measures specified in such
published criteria subject to the satisfaction of the Rating Agency
Condition.
(C) Supplemental Pooling and Servicing Agreement without Party A's Prior
Written Consent. 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
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Party A without the prior written consent of Party A. For the purpose of
the foregoing Termination Event, Party B shall be the sole Affected
Party.
Part 2: Tax Representations
(a) Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make the following representation:
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 Sections 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 (i) the accuracy of any
representation made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction(s) of the agreement of the other party
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) of this
Agreement by reason of material prejudice to its legal or commercial
position.
(b) Payee Tax Representations.
Party A Payee Tax Representations. For the purpose of Section 3(f), Party
A makes the following representations:
With respect to payments made to Party A which are not effectively
connected to the U.S.: It is a non-U.S. branch of a foreign person for
U.S. federal income tax purposes.
With respect to payments made to Party A which are effectively connected
to the U.S.: Each payment received or to be received by it in connection
with this Agreement will be effectively connected with its conduct of a
trade or business in the U.S.
Party B Payee Tax Representations. For the purpose of Section 3(f), Party
B makes the following representation:
Party B represents that it is a "United States person" as such term is
defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended.
Part 3: Agreement to Deliver Documents
(a) Tax forms, documents or certificates to be delivered are:
------------------------------------- ----------------------------------- -----------------------------------
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.
------------------------------------- ----------------------------------- -----------------------------------
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(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 and Party B An opinion of counsel to such Upon execution No
party reasonably satisfactory
in form and substance to the
other party.
------------------------- ------------------------------------ --------------------- ------------------------
Party B Executed copy of the Swap Upon execution Yes
Contract Administration
Agreement
------------------------- ------------------------------------ --------------------- ------------------------
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:-
Address: 5 Xxx Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx
X00 0XX
Facsimile: 00(00) 000 00000
Phone: 00(00) 000 00000
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Party B:
Address for notices or communications to Party B:-
Address: The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration MBS Administration, CWABS,
Series 2006-8
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: Barclays Bank PLC, New York
Branch.
Party B appoints as its Process Agent: Not Applicable.
(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 a Multibranch Party and may act through its London and New
York offices. Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A; provided however, if
an Event of Default occurs with respect to Party A, then the Calculation
Agent shall be Party B or Party B shall be entitled to appoint a
financial institution which would qualify, as a Reference Market-maker to
act as Calculation Agent.
(f) Credit Support Document. Credit Support Document means
With respect to Party A: Following a Collateralization Event or Ratings
Event any Credit Support Annex or guaranty, if applicable.
With respect to Party B: The Pooling and Servicing Agreement.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Following a
Collateralization Event or Ratings Event any guarantor, if applicable.
Credit Support Provider means in relation to Party B: Not Applicable.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine other than Sections 5-1401 and 5-1402 of the New
York General Obligations Law).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to all Transactions (in each case starting from the date of
this Agreement).
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement, provided that Party B shall be deemed to have no Affiliates.
(k) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the
second line of subparagraph (i) thereof the word "non-": and (ii)
deleting the final paragraph thereof.
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(l) Waiver of Jury Trial. Each party waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of
any suit, action or proceeding relating to this Agreement or any Credit
Support Document. Each party certifies (i) that no representative, agent
or attorney of the other party or any Credit Support Provider has
represented, expressly or otherwise, that such other party would not, in
the event of such a suit, action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have
been induced to enter into this Agreement and provide for any Credit
Support Document, as applicable, by, among other things, the mutual
waivers and certifications in this Section.
(m) 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) for any
reason, the remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if this Agreement had been
executed with the invalid or unenforceable portion eliminated, so long as
this Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter
of this Agreement and the deletion of such portion of this Agreement will
not substantially impair the respective benefits or expectations of the
parties.
The parties shall endeavor to engage in good faith negotiations to
replace any invalid or unenforceable term, provision, covenant or
condition with a valid or enforceable term, provision, covenant or
condition, the economic effect of which comes as close as possible to
that of the invalid or unenforceable term, provision, covenant or
condition
Part 5: Other Provisions
(a) Section 3(a) of this Agreement is hereby amended to include the following
additional representations after paragraph 3(a)(v):
(vi) Eligible Contract Participant. It is an "eligible contract
participant" as defined in the U.S. Commodity Exchange Act.
(vii) Individual Negotiation. This Agreement and each Transaction
hereunder is subject to individual negotiation by the parties.
(viii) Relationship between Party A and Party B. Each of Party A and
Party B will be deemed to represent to the other on the date on which it
enters into a Transaction or an amendment thereof that (absent a written
agreement between Party A and Party B that expressly imposes affirmative
obligations to the contrary for that Transaction):
(1) Principal. It is acting as principal and not as agent when
entering into this Agreement and each Transaction.
(2) Non-Reliance. It is acting for its own account and it has made
its own independent decisions to enter into that Transaction and as
to whether that Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such advisors as it has
deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation
to enter into that Transaction; it being understood that information
and explanations related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to
enter into that Transaction. No communication (written or oral)
received from the other party shall be deemed to be an assurance or
guarantee as to the expected results of that Transaction.
(3) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks
of this Agreement and each Transaction hereunder. It is also capable
of assuming, and assumes, all financial and other risks of this
Agreement and each Transaction hereunder.
7
(4) Status of Parties. The other party is not acting as a fiduciary
or an advisor for it in respect of that Transaction.
(b) Additional Representations and Warranties of Party B. Party B represents
to Party A in accordance with Section 3 of the Agreement (which
representations will be deemed to be repeated by Party B at all times until
the termination of this Agreement) that all representations and warranties in
the Swap Contract Administration Agreement are incorporated hereby as if made
under this Agreement and all references to the Swap Contract Administration
Agreement are references to this Agreement.
(c) Third-Party Beneficiary. Party B agrees with Party A that Party A shall be
an express third-party beneficiary of the Pooling and Servicing Agreement and
the Swap Contract Administration Agreement.
(d) No Set-off. Notwithstanding any provision of this Agreement or any other
existing or future agreements, each of Party A and Party B irrevocably waives
as to itself any and all contractual rights it may have to set off, net,
recoup or otherwise withhold or suspend or condition its payment or
performance of any obligation to the other party under this Agreement against
any obligation of one party hereto to the other party hereto arising outside
of this Agreement (which Agreement includes without limitation, the Master
Agreement to which this Schedule is attached, this Schedule and the
Confirmation). Accordingly, the provisions for Set-Off in Section 6(e) of this
Agreement shall not apply for purposes of this Transaction.
(e) Transfer. Section 7 is hereby amended by adding at the end thereof the
sentence: "In addition, any transfer of this Agreement shall be subject to the
Rating Agency Condition." Party A and Party B hereby agree that they will
provide written notice to each Rating Agency of any transfer under Section
6(b)(ii).
(f) Amendments. Section 9(b) is hereby amended by adding at the end thereof
the sentence: "In addition, any amendment or modification of this Agreement
shall be subject to the Rating Agency Condition."
(g) Amendments to Operative Documents. Party B agrees that it will obtain
Party A's written consent (which consent shall not be unreasonably withheld)
prior to amending or supplementing the Pooling and Servicing Agreement (or any
other transaction document), if such amendment and/or supplement would: (a)
materially adversely affect any of Party A's rights or obligations hereunder;
or (b) modify the obligations of, or impact the ability of, Party B to fully
perform any of Party B's obligations hereunder.
(h) No Bankruptcy Petition. Party A agrees that it will not, until a period of
one year and one day or, if longer the applicable preference period, after the
payment in full of all of the Swap Certificates, acquiesce, petition, invoke
or otherwise cause Party B to invoke the process of any governmental authority
for the purpose of commencing or sustaining a case (whether voluntary or
involuntary) against Party B under any bankruptcy, insolvency or similar law
or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of Party B or any substantial part of
its property or ordering the winding-up or liquidation of the affairs of Party
B; provided, that this provision shall not restrict or prohibit Party A from
joining any other person, including, without limitation, the Trustee, in any
bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation
proceedings already commenced or other analogous proceedings already commenced
under applicable law. This Part 5(h) shall survive the termination of this
Agreement.
(j) Deduction or Withholding for Tax. The provisions of Section 2(d)(i)(4) and
2(d)(ii) will not apply to Party B and Party B shall not be required to pay
any additional amounts referred to therein.
(k) Additional Definitions. Section 14 is hereby amended by adding the
following definitions in their appropriate alphabetical order:
"Moody's" means Xxxxx'x Investors Service, Inc.
"Rating Agency Condition" means, with respect to any particular proposed
act or omission to act hereunder, that the party acting or failing to act
has consulted with each Rating Agency then providing a rating of any Swap
Certificates and has received from each Rating Agency a written
confirmation that the proposed action or inaction would not cause such
Rating Agency to downgrade or
8
withdraw its then-current rating of any Swap Certificates (determined
without regard to any financial guaranty insurance policy, if applicable).
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Swap Rating Agency" means Moody's and S&P.
"USD" means United States Dollars.
(l) Limited Liability. Party A and Party B agree to the following: (a) The
Bank of New York ("BNY") is entering into this Agreement not in its individual
or corporate capacity, but solely in its capacity as Swap Contract
Administrator under the Swap Contract Administration Agreement; (b) in no case
shall BNY (or any person acting as successor Swap Contract Administrator under
the Swap Contract Administration Agreement) be personally liable for or on
account of any of the statements, representations, warranties, covenants or
obligations stated to be those of Party B under the terms of this Agreement,
all such liability, if any, being expressly waived by Party A and any person
claiming by, through or under Party A; and (c) recourse against Party B shall
be limited to the assets available under the Swap Contract Administration
Agreement or the Pooling and Servicing Agreement. This Part 5(l) shall survive
the termination of this Agreement.
(m) Regulation AB Compliance. Party A and Party B agree that the terms of the
Item 1115 Agreement dated as of February 16, 2006 (the "Regulation AB
Agreement"), between Countrywide Home Loans, Inc., CWABS, INC., CWMBS, Inc.,
CWALT, Inc., CWHEQ, Inc. and Barclays Bank PLC 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.
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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.
BARCLAYS BANK PLC THE BANK OF NEW YORK, not in its individual or
corporate capacity but solely as Swap Contract
Administrator for CWABS, Inc. Asset-Backed
Certificates Series 2006-8, pursuant to a Swap
Contract Administration Agreement
("Party A") ("Party B")
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxxx Xxxxxxx
--------------------- -----------------------------------------
Name: Xxxxx Xxxxx Name: Xxxxxxx Xxxxxxx
Title: Director Title: Assistant Treasurer
Date: June 28, 2006 Date: June 28, 2006
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EXHIBIT A
Item 1115 Agreement
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Item 1115 Agreement dated as of February 16, 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 BARCLAYS BANK PLC, 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).
Countrywide Indemnified Party: As defined in Section 4(a).
Counterparty Indemnified Party: As defined in Section 4(b).
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.
Indemnified Party: As defined in Section 4(b).
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 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);
2
(3) the SPV;
(4) Countrywide Home Loans Servicing
LP (or any other servicer or
master servicer identified to the
Counterparty by CHL);
(5) The Bank of New York (or any
other trustee identified to the
Counterparty by CHL);
(6) any originator identified to the
Counterparty by CHL;
(7) any enhancement or support
provider identified to the
Counterparty by CHL; and
(8) any other material transaction
party identified to the
Counterparty by CHL.
(ii) if requested by the related Depositor for the
purpose of compliance with Item 1115(b) with
respect to a Transaction, the Counterparty shall:
(A) provide the financial data required by
Item 1115(b)(1) or (b)(2) of Regulation AB
(as specified by the related Depositor to
the Counterparty) with respect to the
Counterparty (or any entity that
consolidates the Counterparty) and any
affiliated entities providing derivative
instruments to the SPV (the "Company
Financial Information"), in a form
appropriate for use in the Prospectus
Supplement and in an XXXXX-compatible form
(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 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)(E) (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)
3
provide current Company Financial Information as
required under Item 1115(b) of Regulation AB to the
related Depositor in an XXXXX-compatible form (if
not incorporated by reference) and hereby
authorizes the related Depositor to incorporate by
reference the financial data required by Item
1115(b)(2) of Regulation AB, and (2) if applicable,
cause its accountants to issue their consent to
filing or incorporation by reference of such
financial statements in the Exchange Act Reports of
the SPV; and
(iii) if the related Depositor requests Company Financial
Information from the Counterparty, for the purpose
of compliance with Item 1115(b) of Regulation AB
following the Closing Date, the Counterparty shall
upon five Business Days written notice either (A),
(1) provide current Company Financial Information
as required under Item 1115(b) of Regulation AB to
the related Depositor in an XXXXX-compatible form
(if not incorporated by reference) and hereby
authorizes the related Depositor to incorporate by
reference the financial data required by Item
1115(b)(2) of Regulation AB, (2) if applicable,
cause its accountants to issue their consent to
filing or incorporation by reference of such
financial statements in the Exchange Act Reports of
the SPV and (3) within 5 Business Days of the
release of any updated financial data, provide
current Company Financial Information as required
under Item 1115(b) of Regulation AB to the related
Depositor in an XXXXX-compatible form and if
applicable, cause its accountants to issue their
consent to filing or incorporation by reference of
such financial statements in the Exchange Act
Reports of the SPV or (B) assign the Derivative
Agreement as provided below.
Section 3. Representations and Warranties and Covenants of the
Counterparty.
(a) The Counterparty represents and warrants to the related
Depositor, as of the date on which information is first
provided to the related Depositor under Section 2(a)(ii),
Section 2(b)(ii) or Section 2(b)(iii)(A), that, except as
disclosed in writing the related Depositor prior to such
date:
(i) The Counterparty or the entity that consolidates
the Counterparty is required to file reports with
the Commission pursuant to section 13(a) or 15(d)
of the Exchange Act.
(ii) The Counterparty or the entity that consolidates
the Counterparty has filed all reports and other
materials required to be filed by such requirements
during the preceding 12 months (or such shorter
period that such party was required to file such
reports and materials).
(iii) The reports filed by the Counterparty, or entity
that consolidates the Counterparty, include (or
properly incorporate by reference) the financial
statements of the Counterparty.
4
(iv) The accountants who certify the financial
statements and supporting schedules included in the
Company Financial Information (if applicable) are
independent registered public accountants as
required by the Securities Act.
(v) If applicable, the financial statements included in
the Company Financial Information present fairly
the consolidated financial position of the
Counterparty (or the entity that consolidates the
Counterparty) and its consolidated subsidiaries as
at the dates indicated and the consolidated results
of their operations and cash flows for the periods
specified; except as otherwise stated in the
Company Financial Information, said financial
statements have been prepared in conformity with
generally accepted accounting principles ("GAAP")
applied on a consistent basis; and the supporting
schedules included in the Company Financial
Information present fairly in accordance with GAAP
the information required to be stated therein. The
selected financial data and summary financial
information included in the Company Financial
Information present fairly the information shown
therein and have been compiled on a basis
consistent with that of the audited financial
statements of the Counterparty.
(vi) The Company Financial Information and other Company
Information included or incorporated by reference
in the Registration Statement (including through
filing on an Exchange Act Report), at the time they
were or hereafter are filed with the Commission,
complied in all material respects with the
requirements of Item 1115(b) of Regulation AB (in
the case of the Company Financial Information) and,
did not and will not contain an untrue statement of
a material fact or omit to state a material fact
required to be stated therein or necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
(b) If the Counterparty has provided Company Financial
Information that is incorporated by reference into the
Registration Statement of the related Depositor, the
Counterparty, so long as the related Depositor is required
to file Exchange Act Reports with respect to the SPV, will
file promptly all documents required to be filed with the
Commission pursuant to Section 13 or 14 of the 1934 Act.
(c) 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 25th calendar day of the month in
which any of the representations or warranties in Section
3(a)(i) through (iii) ceased to be correct.
5
(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 (each, a "Countrywide 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 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 failure by the Counterparty to deliver any
information, certification, accountants' consent or
other material or to assign the Derivative
Agreement when and as required under Section 2; or
(iii) 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.
In the case of any failure of performance described in
clause (a)(ii) of this Section, the Counterparty shall
promptly reimburse the related Depositor and each Person
responsible for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with
respect to the SPV, for all costs reasonably incurred by
each such party in order to obtain the information, report,
certification, accountants' consent or other material not
delivered as required by the Counterparty.
(b) The Depositor shall indemnify the Counterparty, each of its
officers and directors and each person who controls the
Counterparty (within the meaning of Section 15
6
of the Securities Act and Section 20 of the Exchange Act)
(each, a "Counterparty Indemnified Party"; and each of the
Countrywide Indemnified Party and the Counterparty
Indemnified Party shall be referred to as the "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 any untrue statement or
alleged untrue statement of any material fact contained in
the Prospectus Supplement or any free writing prospectus
with respect to the related Securities or the omission or
alleged omission to state a material fact necessary in order
to make the statements therein not misleading; provided,
however, that the indemnity set forth in this Section 4(b)
shall not apply insofar as such losses, claims, expenses,
damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the
Company Information or the omission or alleged omission to
state in the Company Information a material fact necessary
in order to make the statements therein not misleading
and/or (ii) a breach of the representations set forth in
Sections 3(a) above.
(c) Promptly after the Indemnified Party receives notice of the
commencement of any such action, the Indemnified Party will,
if a claim in respect thereof is to be made pursuant to this
Agreement, promptly notify the indemnifying party in writing
of the commencement thereof. In case any such action is
brought against the Indemnified Party, and it notifies the
indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's
expense to represent the Indemnified Party in any action for
which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by
the Indemnified Party except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory
to the Indemnified Party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the
Indemnified Party in an action, the Indemnified Party shall
have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party
to represent the Indemnified Party would present such
counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action
include both the Indemnified Party and the indemnifying
party, and the Indemnified Party shall have reasonably
concluded that there may be legal defenses available to it
that are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of the institution of such
action or (iv) the indemnifying party shall authorize the
Indemnified Party to employ separate counsel at the expense
of the indemnifying party. The indemnifying party will not,
without the prior written consent of the Indemnified Party,
settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action,
suit or proceeding in respect of which
7
indemnification or contribution may be sought hereunder
(whether or not the Indemnified Party is an actual or
potential party to such claim or action) unless such
settlement, compromise or consent includes an unconditional
release of each Indemnified Party from all liability arising
out of such claim, action, suit or proceeding. In addition,
for so long as the indemnifying party is covering all costs
and expenses of the Indemnified Party as provided herein, no
Indemnified Party will settle or compromise or consent to
the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought
hereunder without the consent of the indemnifying party,
which consent shall not be unreasonably withheld.
(d) Nothing in this agreement shall be construed to allow the
Indemnified Party to recover punitive damages or
consequential damages from the indemnifying party.
(e) (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), or any breach by the
Counterparty of a representation or warranty
pursuant to Section 3 to the extent made as of a
date subsequent to such closing date, shall, except
as provided in clause (ii) of this paragraph,
immediately and automatically, without notice or
grace period, constitute an Additional Termination
Event (as defined in the Master Agreement) with the
Counterparty as the sole Affected Party (as defined
in the Master Agreement) under the Derivative
Agreement. Following such termination, a
termination payment (if any) shall be payable by
the applicable party as determined by the
application of Section 6(e)(ii) of the Master
Agreement, with Market Quotation and Second Method
being the applicable method for determining the
termination payment (notwithstanding anything in
the Derivative Agreement to the contrary).
(ii) If the Counterparty has failed to deliver any
information, report, 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,
or accountants' consent was required to be
delivered or such period in which the applicable
Exchange Act Report for which such information is
required can be timely filed (without taking into
account any extensions permitted to be filed), and
the Counterparty has not, at its own cost, within
the period in which the applicable Exchange Act
Report for which such information is required can
be timely filed caused another entity (which meets
any 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
8
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 Instrument. The provisions of this
paragraph shall not limit whatever rights the SPV
may have under other provisions of this Agreement
or otherwise, whether in equity or at law, such as
an action for damages, specific performance or
injunctive relief.
Section 5. Miscellaneous.
(a) Construction. Throughout this Agreement, as the context
requires, (a) the singular tense and number includes the
plural, and the plural tense and number includes the
singular; (b) the past tense includes the present, and the
present tense includes the past; and (c) references to
parties, sections, schedules, and exhibits mean the parties,
sections, schedules, and exhibits of and to this Agreement.
The section headings in this Agreement are inserted only as
a matter of convenience, and in no way define, limit,
extend, or interpret the scope of this Agreement or of any
particular section.
(b) Assignment. None of the parties may assign their rights
under this Agreement without the prior written consent of
the other parties. Subject to the foregoing, this Agreement
shall be binding on and inure to the benefit of the parties
and their respective successors and permitted assigns.
(c) No Third-Party Benefits Except as Specified. None of the
provisions of this Agreement are intended to benefit, or to
be enforceable by, any third-party beneficiaries except the
related SPV and any trustee of an SPV or any Administrator.
9
(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 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.
10
IN WITNESS WHEREOF, the parties hereto have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
CWABS, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWMBS, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWALT, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWHEQ, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
11
BARCLAYS BANK PLC
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: Managing Director
12
