Contract
Item
1115
Agreement dated as of February 24, 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 XXXXXX BROTHERS SPECIAL FINANCING INC., 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).
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.
§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 (as set forth in Item
1119)
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);
|
| (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 prior to the related Depositor
taking
the steps necessary to suspend its obligation to file Exchange Act
Reports, with respect to the SPV, under Sections 13 and 15(d) of
the
Exchange Act, in accordance with the requirements of Regulation AB,
the
Counterparty shall:
|
| (A) |
provide
the financial data required by Item 1115(b)(l) 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 and until the related Depositor takes the steps
necessary
to suspend its obligation to file Exchange Act Reports, with respect
to
the SPV, under Sections 13 and 15(d) of the Exchange Act, 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)(D)
(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)(l);
|
| (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 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.
|
| (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 Exchange Act. If permitted by the Exchange Act, the
related Depositor will take the steps necessary to suspend its obligation
to file Exchange Act Reports, with respect to the SPV,
under
Sections 13 and 15(d) of
the Exchange Act.
|
| (c) |
If
at any time, the Counterparty ceases to meet the requirements of
Item
1101(c)(1) of Regulation AB with respect to the incorporation by
reference
of the financial information of third parties, 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 following the date on which the Counterparty ceased
to
meet the requirements.
|
| (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, 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
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,
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), 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 often 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), or if the Counterparty has provided Company Information,
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,
and the Counterparty has not, at its own cost, within the period
in which
the applicable Exchange Act Report for which such information is
required
can be timely filed caused another entity (which meets any applicable
ratings threshold in the Derivative Agreement) to replace the Counterparty
as party to the Derivative Agreement that (i) has signed an agreement
with
CHL and the Depositors substantially in the form of this Agreement,
(ii)
has agreed to deliver any information, report, certification or
accountants’ consent when and as required under Section 2 hereof and (iii)
is approved by the Depositor (which approval shall not be unreasonably
withheld) and any rating agency, if applicable, on terms substantially
similar to the Derivative Agreement, then an Additional Termination
Event
(as defined in the Master Agreement) shall have occurred with the
Counterparty as the sole Affected Party. Following such termination,
a
termination payment (if any) shall be payable by the applicable party
as
determined by the application of Section 6(e)(ii) of the Master Agreement,
with Market Quotation and Second Method being the applicable method
for
determining the termination payment (notwithstanding anything in
the
Derivative Agreement to the
contrary).
|
| (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 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.
|
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.
|
| (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.
|
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:
|
Executive Vice President | |
|
CWMBS,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx | |
|
Name:
|
Xxxxxx Xxxxx | |
|
Title:
|
Executive Vice President | |
|
CWALT,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx | |
|
Name:
|
Xxxxxx Xxxxx | |
|
Title:
|
Executive Vice President | |
|
CWHEQ,
INC.
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx | |
|
Name:
|
Xxxxxx Xxxxx | |
|
Title:
|
Executive Vice President | |
|
COUNTRYWIDE
HOME LOANS, INC.
|
||
| |
|
|
| By: | /s/ Xxxxxx Xxxxx | |
|
Name:
|
Xxxxxx Xxxxx | |
|
Title:
|
Executive Vice President | |
|
XXXXXX
BROTHERS SPECIAL FINANCING
INC.
|
||
| |
|
|
| By: | /s/ Xxxxxxxxxx X. Xxxxxx | |
|
Name:
|
Xxxxxxxxxx X. Xxxxxx | |
|
Title:
|
Vice President | |
