Exhibit 99.5
(Multicurrency-Cross Border)
SCHEDULE
to the
Master Agreement
dated as of September 25, 2006
between
SWISS RE FINANCIAL PRODUCTS CORPORATION ("Party A"),
a corporation organized under the laws of
the State of Delaware
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 2006-17, 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
2006-17 dated as of September 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 September 25, 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)(iii) 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 Xxxxx'x or are rated "A1" by Xxxxx'x 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 Xxxxx'x or are rated
"P-1" by Xxxxx'x 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 Xxxxx'x and the unsecured, long-term
senior debt obligations of Party A (or its Credit Support Provider) are
rated below "Aa3" by Xxxxx'x or are rated "Aa3" by Xxxxx'x and such rating
is on watch for possible downgrade (but only for so long as it is on watch
for possible downgrade), or (C) or 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
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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.
"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 Xxxxx'x (and if rated "A1" by Xxxxx'x, 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 Xxxxx'x (and if rated "P-1" by Xxxxx'x, 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 Xxxxx'x, the unsecured,
long-term senior debt obligations of such substitute counterparty (or its
Credit Support Provider) are rated at least "Aa3" by Xxxxx'x (and if rated
"Aa3" by Xxxxx'x, 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 (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 Xxxxx'x (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 Xxxxx'x (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 Xxxxx'x, the unsecured, long-term senior debt
obligations of Party A (or its Credit Support Provider) are rated at least
"A1" by Xxxxx'x (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 (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 Xxxxx'x, 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
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the Pooling and Servicing Agreement that could reasonably be expected to
have a material adverse effect on 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.
For the purpose of Section 3(f) of this Agreement, Party A represents that
it is a corporation duly organized and validly existing under the laws of
the State of Delaware and 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.
------------------------------------- ----------------------------------- -----------------------------------
(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
------------------------- ------------------------------------ --------------------- ------------------------
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------------------------- ------------------------------------ --------------------- ------------------------
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 The Guaranty of Swiss Reinsurance Upon execution No
Company, dated on or about the
date of this Agreement in the form
annexed hereto as Exhibit A.
------------------------- ------------------------------------ --------------------- ------------------------
Party A and Party B An opinion of Upon execution
counsel to such 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 (other than by
facsimile):-
Address: 00 Xxxx 00xx Xxxxxx Attention: (1) Head of Operations;
New York, New York (2) Legal Department
10055
(2) For the purpose of facsimile notices or communications under this
Agreement (other than a notice or communication under Section 5 or 6):-
Facsimile No.: (000) 000-0000
Attention: Operations
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with a copy to:
Facsimile No.: (000) 000-0000
Attention: Legal Department
Telephone number for oral confirmation of receipt of facsimile in
legible form: (000) 000-0000
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 2006-17
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: Not Applicable.
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 not a Multibranch Party. 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: The Guaranty of Swiss Reinsurance Company, dated
on or about the date of this Agreement in the form annexed hereto as
Exhibit A.
With respect to Party B: The Pooling and Servicing Agreement.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Swiss Reinsurance
Company.
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.
6
(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.
(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 illegal, 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 illegal, 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 to this Agreement.
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 to read in its entirety as follows:
Except as stated under Section 6(b)(ii), in this Section 7, and Part 5(e) of
the Schedule, neither Party A nor Party B is permitted to assign, novate or
transfer (whether by way of security or otherwise) as a whole or in part any
of its rights, obligations or interests under this Agreement or any
Transaction without the prior written consent of the other party; provided,
however, that (i) Party A may make such a transfer of this Agreement
pursuant to a consolidation or amalgamation with, or merger with or into, or
transfer of substantially all of its assets to, another entity, or an
incorporation, reincorporation or reconstitution, and (ii) Party A may
transfer this Agreement to any Person, including, without limitation,
another of Party A's offices, branches or affiliates (any such Person,
office, branch or affiliate, a "Transferee") on at least five Business Days'
prior written notice to Party B; provided that, with respect to clause (ii),
(A) as of the date of such transfer the Transferee will not be required to
withhold or deduct on account of a Tax from any payments under this
Agreement unless the Transferee will be required to make payments of
additional amounts pursuant to Section 2(d)(i)(4) of this Agreement in
respect of such Tax (B) a Termination Event or Event of Default does not
occur under this Agreement as a result of such transfer; (C) such notice is
accompanied by a written instrument pursuant to which the Transferee
acquires and assumes the rights and obligations of Party A so transferred;
and (D) Party A will be responsible for any costs or expenses incurred in
connection with such transfer. Party B will execute such documentation as is
reasonably deemed necessary by Party A for the effectuation of any such
transfer. Notwithstanding the foregoing, no such transfer or assignment
shall be made unless it satisfies the Rating Agency Condition.
(f) Notices. For the purposes of subsections (iii) and (v) of Section 12(a), the
date of receipt shall be presumed to be the date sent if sent on a Local
Business Day or, if not sent on a Local Business Day, the date of receipt shall
be presumed to be the first Local Business Day following the date sent.
(g) 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."
(h) 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.
(i) 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
8
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.
(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 Investor Services, 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 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 XxXxxx-Xxxx,
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.
(m) Regulation AB Compliance. Party A and Party B agree that the terms of the
Item 1115 Agreement dated as of January 26, 2006 (the "Regulation AB
Agreement"), between Countrywide Home Loans, Inc., CWABS, INC., CWMBS, Inc.,
CWALT, Inc., CWHEQ, Inc. and Swiss Re Financial Products Corporation 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 B.
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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.
THE BANK OF NEW YORK, not in its
individual or corporate capacity
SWISS RE FINANCIAL PRODUCTS but solely as Swap Contract
CORPORATION Administrator for CWABS, Inc.
Asset-Backed Certificates Series
2006-17, pursuant to a Swap
Contract Administration Agreement
("Party A") ("Party B")
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxx
------------------------------- -------------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxx Xxxxxx
Title: Senior Vice President Title: Assistant Vice President
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EXHIBIT A
The Guaranty of Swiss Reinsurance Company
[Filed as Ex. 99.6 herein.]
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EXHIBIT B
Item 1115 Agreement dated as of January 26, 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 SWISS RE FINANCIAL PRODUCTS CORPORATION,
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 or currency swaps, for
purposes of providing certain yield enhancements that are assigned to the SPV
or the related trustee on behalf of the SPV or a swap or corridor contract
administrator (each, an "Administrator").
NOW, THEREFORE, in consideration of the mutual agreements set
forth herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereby agree as follows:
Section 1. Definitions
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to
the related Registration Statement for which the entity of the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Exchange Act: The Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder.
Exchange Act Reports: All Distribution Reports on Form 10-D,
Current Reports on Form 8-K and Annual Reports on Form 10-K that are to be
filed with respect to the related SPV pursuant to the Exchange Act.
Master Agreement: The ISDA Master Agreement between the
Counterparty and CHL, or if no such Master Agreement exists, the ISDA Master
Agreement assumed to apply to the Derivative Agreement pursuant to its terms.
Prospectus Supplement: The prospectus supplement prepared in
connection with the public offering and sale of the related Securities.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related Depositor such
information regarding the Counterparty, as a derivative
instrument counterparty, as is reasonably requested by the
related Depositor for the purpose of compliance with Item
1115(a)(1) of Regulation AB. Such information shall include,
at a minimum:
(A) The Counterparty's legal name (and any d/b/a);
(B) the organizational form of the Counterparty;
(C) a description of the general character of the business
of the Counterparty;
(D) a description of any material legal or governmental
proceedings pending (or known to be contemplated)
against the Counterparty which may have a material
impact on the Counterparty's ability to perform under
the related Derivative Agreement;
(E) 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);
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(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; and
(B) if applicable, cause its accountants to issue their
consent to the filing of such financial statements in
the Registration Statement.
(b) Following the Closing Date with respect to a Transaction,
(i) (I) no later than the 25th calendar day of each month, the
Counterparty shall (i) notify the related Depositor in
writing of (A) any material litigation or governmental
proceedings pending against the Counterparty which may have
a material impact on the Counterparty's ability to perform
under the related Derivative Agreement or (B) 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 (ii)
provide to the related Depositor a description of such
proceedings, affiliations or relationships as described in
Section 2(b)(i)(I)(i); and
(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) provide current
Company Financial Information as required under Item
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1115(b) of Regulation AB to the related Depositor in an
XXXXX-compatible form, 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;
(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, (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.
(c) Prior to printing of any Prospectus Supplement, CHL and Depositor
will inform the Counterparty of the scope and extent of the
information that they need to receive from the Counterparty for
use in the related Prospectus Supplement for the purpose of
compliance with Item 1115 of Regulation AB (the "Scope of
Information"). CHL and the Depositor acknowledge that the
Counterparty need not undertake any review of the related
Prospectus Supplement (other than with respect to the Company
Information and/or the Company Financial Information) in
connection with its provision of the Company Information and/or
the Company Financial Information.
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 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.
(ii) 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
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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.
(iii) 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) 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 the preparation, execution or filing
of any report required to be filed with the Commission with
respect to such SPV, or for execution of a certification pursuant
to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act; each
person who controls any of such parties (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange
Act); and the respective present and former directors, officers,
employees and agents of each of the foregoing, and shall hold each
of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them
may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
certification, 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
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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; or
(ii) any breach by the Counterparty of a representation or
warranty set forth in Section 3(a) and made as of a date
prior to the Closing Date, to the extent that such breach is
not cured by the Closing Date, or any breach by the
Counterparty of a representation or warranty pursuant to
Section 3 to the extent made as of a date subsequent to the
Closing Date.
(b) (i) Any failure by the Counterparty to deliver any information,
report, certification, accountants' consent or other
material when and 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, certification or accountants' consent when and as
required under Section 2, which continues unremedied for the
lesser of ten calendar days after the date on which such
information, report, certification or accountants' consent
was required to be delivered or such period in which the
applicable Exchange Act Report for which such information is
required can be timely filed (without taking into account
any extensions permitted to be filed), 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
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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.
(c) CHL and the related Depositor shall indemnify the Counterparty,
each person who controls the Counterparty (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange
Act); and the respective present and former directors, officers,
employees and agents of each of the foregoing, and shall hold each
of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them
may sustain arising out of or based upon (A) any untrue statement
of a material fact contained or alleged to be contained in the
related Prospectus Supplement (other than the Company
Information), or (B) the omission or alleged omission to state in
related Prospectus Supplement (other than the Company Information)
a material fact required to be stated in the Prospectus Supplement
or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
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
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Agreement shall be binding on and inure to the benefit of the
parties and their respective successors and permitted assigns.
(c) No Third-Party Benefits Except as Specified. None of the
provisions of this Agreement are intended to benefit, or to be
enforceable by, any third-party beneficiaries except the related
SPV and any trustee of an SPV or any Administrator.
(d) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York
without regard to the conflict of laws principles thereof.
(e) Amendment and Waiver. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties
hereto. No waiver of any provision of this Agreement or of any
rights or obligations of any party under this Agreement shall be
effective unless in writing and signed by the party or parties
waiving compliance, and shall be effective only in the specific
instance and for the specific purpose stated in that writing.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(g) Additional Documents. Each party hereto agrees to execute any and
all further documents and writings and to perform such other
actions which may be or become 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.
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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/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWMBS, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWALT, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
CWHEQ, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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SWISS RE FINANCIAL PRODUCTS CORPORATION
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: President
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