Contract
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.
§§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.
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(a)
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Prior
to printing the related Prospectus Supplement,
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(i)
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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:
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(A)
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The
Counterparty’s legal name (and any d/b/a);
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(B)
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the
organizational form of the Counterparty;
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(C)
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a
description of the general character of the business of the Counterparty;
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(D)
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a
description of any affiliation or relationship between the Counterparty
and any of the following parties:
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(1)
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CHL
(or any other sponsor identified to the Counterparty by
CHL);
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(2)
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the
related Depositor (as identified to the Counterparty by
CHL);
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(3)
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the
SPV;
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(4)
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Countrywide
Home Loans Servicing LP (or any other servicer or master servicer
identified to the Counterparty by
CHL);
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(5)
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The
Bank of New York (or any other trustee identified to the Counterparty
by
CHL);
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(6)
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any
originator identified to the Counterparty by
CHL;
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(7)
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any
enhancement or support provider identified to the Counterparty by
CHL;
and
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(8)
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any
other material transaction party identified to the Counterparty by
CHL.
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(ii)
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if
requested by the related Depositor for the purpose of compliance
with Item
1115(b) with respect to a Transaction, the Counterparty
shall:
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(A)
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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
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(B)
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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.
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(b)
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Following
the Closing Date with respect to a Transaction,
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(i)
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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);
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(ii)
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if
the Counterparty provided Company Financial Information to the related
Depositor for the Prospectus Supplement, within 5 Business Days of
the
release of any updated financial data, the Counterparty shall (1)
provide
current Company Financial Information as required under Item 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
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(iii)
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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.
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Section
3. Representations
and Warranties and Covenants of the Counterparty.
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(a)
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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:
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(i)
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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.
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(ii)
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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).
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(iii)
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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)
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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.
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(v)
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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.
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(vi)
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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.
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(b)
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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.
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(c)
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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.
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(d)
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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.
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Section
4.
Indemnification;
Remedies
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(a)
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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:
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(i)
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(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;
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(ii)
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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
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(iii)
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any
breach by the Counterparty of a representation or warranty set forth
in
Section 3(a) and made as of a date prior to the Closing Date, to
the
extent that such breach is not cured by the Closing Date, or any
breach by
the Counterparty of a representation or warranty pursuant to Section
3 to
the extent made as of a date subsequent to the Closing
Date.
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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.
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(b)
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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 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.
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(c)
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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
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.
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(d)
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Nothing
in this agreement shall be construed to allow the Indemnified Party
to
recover punitive damages or consequential damages from the indemnifying
party.
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(e)
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i)
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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).
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(ii)
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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
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).
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(iii)
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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.
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Section
5.
Miscellaneous.
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(a)
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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.
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(b)
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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.
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(c)
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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.
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(d)
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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.
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(e)
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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.
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(f)
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Counterparts.
This Agreement may be executed in one or more counterparts, each
of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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(g)
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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.
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(h)
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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.
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(i)
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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.
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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.
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CWABS,
INC.
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By:
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/s/
Xxxxxx Xxxxx
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Name:
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Xxxxxx
Xxxxx
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Title:
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Vice
President
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CWMBS,
INC.
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By:
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/s/
Xxxxxx Xxxxx
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Name:
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Xxxxxx
Xxxxx
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Title:
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Vice
President
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CWALT,
INC.
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By:
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/s/
Xxxxxx Xxxxx
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Name:
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Xxxxxx
Xxxxx
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Title:
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Vice
President
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CWHEQ,
INC.
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By:
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/s/
Xxxxxx Xxxxx
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Name:
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Xxxxxx
Xxxxx
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Title:
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Vice
President
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COUNTRYWIDE
HOME LOANS, INC.
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By:
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/s/
Xxxxxx Xxxxx
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Name:
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Xxxxxx
Xxxxx
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Title:
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Executive
Vice President
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BARCLAYS
BANK PLC
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By:
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/s/
Xxxxxxx Xxxx
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Name:
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Xxxxxxx
Xxxx
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Title:
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Managing
Director
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