EXHIBIT 99.14
The Barclays Item 1115 Agreement
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.
N-5
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:
CWMBS, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title:
CWALT, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title:
CWHEQ, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title:
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title:
11
BARCLAYS BANK PLC
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxx Xxxx
Title: Managing Director
12
