EXHIBIT 99.4
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The Item 1115 Agreement
Item 1115 Agreement dated as of March 29, 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 UBS AG, 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, on the closing date (the "Closing Date") of each
transaction referenced in Exhibit A hereto (each, a "Transaction"), the
Counterparty and CHL or an underwriter or dealer with respect to the
Transaction, enter into certain derivative agreements (each, a "Derivative
Agreement"), including interest rate caps and interest rate or currency swaps,
for purposes of providing certain yield enhancements that are assigned to the
SPV or the related trustee on behalf of the SPV or a swap or corridor contract
administrator (each, an "Administrator").
NOW, THEREFORE, in consideration of the mutual agreements set
forth herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereby agree as follows:
Section 1. Definitions
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to
the related Registration Statement for which the entity of the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Exchange Act: The Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder.
Exchange Act Reports: All Distribution Reports on Form 10-D,
Current Reports on Form 8-K and Annual Reports on Form 10-K that are to be
filed with respect to the related SPV pursuant to the Exchange Act.
Indemnified Party: As defined in Section 4(a).
Master Agreement: The ISDA Master Agreement between the
Counterparty and SPV, or if no such Master Agreement exists, the ISDA Master
Agreement assumed to apply to the Derivative Agreement pursuant to its terms.
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.
Significance percentage: The "significance percentage", as the
term is defined and used in Regulation AB.
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:
(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;
(ii) if requested by the related Depositor (after the aggregate
"significance percentage", determined absent manifest error, of
all derivative instruments provided by Counterparty and any of
its affiliates to the SPV is 8.00% or more in respect of Item
1115(b)(1), or 18.00% or more in respect of Item 1115(b)(2))
for the purpose of compliance with Item 1115(b) with respect to
a Transaction, the Counterparty shall:
(A) provide the relevant financial data required by Item
1115(b)(1) or (b)(2) of Regulation AB, as applicable (as
specified by the related Depositor to the Counterparty)
with respect to the Counterparty (which may comprise all
branches of the Counterparty as a
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consolidated entity) 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, unless otherwise
instructed in writing by the Counterparty, 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) 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, unless otherwise instructed in
writing by the Counterparty, 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
(ii) if the related Depositor requests Company Financial Information
from the Counterparty (after the aggregate "significance
percentage", determined absent manifest error, of all
derivative instruments provided by Counterparty and any of its
affiliates to the SPV is 8.00% or more in respect of Item
1115(b)(1), or 18.00% or more in respect of Item 1115(b)(2)),
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) comply with Regulation
AB by, (1) providing 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), with the understanding that, unless otherwise
instructed in writing by the Counterparty, the Counterparty
hereby authorizes the related Depositor to incorporate by
reference the financial data required by Item 1115(b)(2) of
Regulation AB, (2) if applicable, causing its
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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 (in such a manner as complies with 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 incorporate by
reference in conformity with Regulation AB) the financial
statements of the Counterparty.
(iv) The accountants who certify the financial statements and
supporting schedules included in the Company Financial
Information (if applicable) are independent registered public
accountants as required by the Securities Act.
(v) If applicable, 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 reconciled (in a manner
consistent with Regulation S-X) 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
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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 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 within a
reasonable time prior to any Company Financial Information being
required to be included in the Registration Statement, or the
Exchange Act Reports of the SPV.
(c) The Counterparty agrees that the terms of this Agreement shall be
incorporated by reference into any Derivative Agreement so that each
SPV who is a beneficiary of a Derivative Agreement shall be an
express third party beneficiary of this Agreement; provided,
however, that the representations made in Section 3 of this
Agreement shall not be deemed to be representations under Section 3
of the Master 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 "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) if any representation or warranty set forth in Section 3(a) is
made as of a date prior to the Closing Date, any breach by the
Counterparty of such representation or warranty, to the extent
that such breach is not cured by the Closing Date, or if any
representation or warranty pursuant to Section
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3 is required to be made as of a date subsequent to the Closing
Date, any breach by the Counterparty of such representation or
warranty, to the extent that such breach is not cured by the
date required hereunder;
provided, however that the foregoing shall not apply to any
losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees
and expenses caused by the negligence or any willful action of an
Indemnified Party, including without limitation any failure to
make any filings as and when required under Regulation AB.
(b) (i) If the Counterparty is required to provide Company
Information under the terms of Item 1115 of Regulation AB
as of the Closing Date and the Counterparty fails to take
such actions as are necessary to comply with the
requirements of Item 1115 of Regulation AB as and when
required, 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
prior to the Closing Date, then such failure shall, except
as provided in clause (ii) or (iii) of this Section 4,
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. In the event that an Early
Termination Date is designated in connection with such
Additional Termination Event, a termination payment (if
any) shall be payable as of the Early Termination Date 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 received written notice from the
Depositor that the Counterparty is required to provide
Company Financial Information under the terms of Item 1115
of Regulation AB as of a specified date and the
Counterparty fails to take such actions as are necessary
to comply with the requirements of Item 1115 of Regulation
AB as and when required, and if such failure 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)
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has agreed to deliver any information, report,
certification or accountants' consent when and as required
under Section 2 hereof and (iii) meets the rating
conditions applicable to a derivative counterparty for the
relevant asset-backed securities of each applicable rating
agency, if applicable, then (unless the Counterparty has
taken the actions in clause (iii) of this Section), an
Additional Termination Event (as defined in the Master
Agreement) shall have occurred with the Counterparty as
the sole Affected Party. In the event that an Early
Termination Date is designated in connection with such
Additional Termination Event, a termination payment (if
any) shall be payable by the applicable party as of the
Early Termination Date as determined by the application of
Section 6(e)(ii) of the Master Agreement, with Market
Quotation and Second Method being the applicable method
for determining the termination payment (notwithstanding
anything in the Derivative Agreement to the contrary).
(iii) At any time that the Counterparty has failed to meet its
obligations under Item 1115 and has failed to transfer any
applicable Transaction pursuant to clause (ii) of this
Section, then on or prior to any Early Termination Date,
the Counterparty may elect to designate a date as an Early
Termination Date (an "Elective Termination Date"), and the
termination payment referenced in clause (i) or (ii)
above, as applicable, shall be calculated and paid as
provided in such applicable clause.
(iv) In the event that the Counterparty or the SPV has found a
replacement entity in accordance with Section 4(b)(ii),
the Counterparty shall promptly reimburse the SPV for all
reasonable incidental expenses incurred by the SPV, as
such are incurred, in connection with the termination of
the Counterparty as counterparty and the entry into a new
Derivative Agreement. The provisions of this paragraph
shall not limit whatever rights the SPV may have under
other provisions of this Agreement or otherwise, whether
in equity or at law, such as an action for damages,
specific performance or injunctive relief.
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Section 5. Miscellaneous.
(a) Company Financial Information. Notwithstanding anything to the
contrary contained herein, if Regulation AB is amended, or the
Commission has issued interpretive guidance uniformly applicable to
registrants of Asset-Backed Securities allowing the presentation of
the financial information required by Item 1115 of Regulation AB
with respect to an affiliate of the Counterparty rather than the
Counterparty and any affiliated entities providing derivatives to
the SPV, "Company Financial Information" shall be deemed to refer to
the financial information of such permitted entity provided the
Counterparty has received written confirmation from CHL that no
amendment to this Agreement is necessary. The parties shall
reasonably cooperate with respect to any amendments to this
Agreement to reflect such amendment or interpretation.
(b) Construction. Throughout this Agreement, as the context requires,
(a) the singular tense and number includes the plural, and the
plural tense and number includes the singular; (b) the past tense
includes the present, and the present tense includes the past; and
(c) references to parties, sections, schedules, and exhibits mean
the parties, sections, schedules, and exhibits of and to this
Agreement. The section headings in this Agreement are inserted only
as a matter of convenience, and in no way define, limit, extend, or
interpret the scope of this Agreement or of any particular section.
(c) Assignment. None of the parties may assign their rights under this
Agreement without the prior written consent of the other parties.
Subject to the foregoing, this Agreement shall be binding on and
inure to the benefit of the parties and their respective successors
and permitted assigns.
(d) No Third-Party Benefits Except as Specified. None of the provisions
of this Agreement are intended to benefit, or to be enforceable by,
any third-party beneficiaries except the related SPV and any trustee
of an SPV or any Administrator.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without
regard to the conflict of laws principles thereof.
(f) Amendment and Waiver. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto. No
waiver of any provision of this Agreement or of any rights or
obligations of any party under this Agreement shall be effective
unless in writing and signed by the party or parties waiving
compliance, and shall be effective only in the specific instance and
for the specific purpose stated in that writing.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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(h) Additional Documents. Each party hereto agrees to execute any and
all further documents and writings and to perform such other actions
which may be or become reasonably necessary or expedient to
effectuate and carry out this Agreement.
(i) Severability. Any provision hereof which is prohibited or
unenforceable shall be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof.
(j) Integration. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof. There are no
restrictions, agreements, promises, representations, warranties,
covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between
the parties with respect to its subject matter.
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IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
CWABS, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxxxx
Title: Vice President
CWMBS, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxxxx
Title: Vice President
CWALT, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxxxx
Title: Vice President
CWHEQ, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
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By: /s/ Xxxxxxx Xxxxxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxxxxx
Title: Managing Director
UBS AG
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Director and Counsel,
Legal Americas Region,
Fixed Income Section
By: /s/ Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
Title: Region Americas Legal,
Fixed Income Section
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EXHIBIT A
Transaction(s) covered by this Agreement
1. CWALT, Inc. Alternative Loan Trust 2006-12CB
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