Contract
Item
1115
Agreement dated as of April 27, 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 DEUTSCHE BANK AG, NEW YORK BRANCH, 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 the SPV, 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 to the SPV or the related
trustee on behalf of the SPV or a swap or corridor contract administrator (each,
an “Administrator”).
WHEREAS,
the Counterparty is a foreign private issuer currently subject to the periodic
reporting requirements of Section 13(a) of the Securities Exchange Act of 1934,
as amended and the rules and regulations promulgated thereunder (the “Exchange
Act”). Pursuant to such requirements, it files an Annual Report on Form 20-F
with the SEC. The Counterparty publishes Interim Reports for each of the first
three quarters of its fiscal year, each containing unaudited interim financial
statements for such quarter. Pursuant to the Exchange Act, it submits such
Interim Reports to the SEC on Reports on Form 6-K. The Counterparty transmits
its Annual Reports on Form 20-F and Reports on Form 6-K to the SEC via the
SEC’s
XXXXX System, and such reports are available on the SEC’s XXXXX internet site
under File Number 001-15242.
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 with respect to any
Transaction with respect to which the terms of this Agreement are incorporated
by reference:
| Section 1. |
Definitions
|
Company
Information: As defined in Section 5(a)(i).
Company
Financial Information: As defined in the definition of “Pre-Closing Termination
Event”.
Depositor:
Means CWABS, CWMBS, CWALT or CWHEQ with respect to the related Registration
Statement for which the entity is the registrant.
GAAP:
As
defined in Section 3(a)(v).
XXXXX:
The Commission’s Electronic Data Gathering, Analysis and Retrieval
system.
Exchange
Act: Has the meaning set forth in the recitals.
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.
IFRS:
Has
the meaning set forth in Section 3(a)(v).
Indemnified
Party: As defined in Section 5(a).
IRC:
The
requirements of Section 1100(c) of Regulation AB, the Securities Act and the
Exchange Act with respect to incorporation by reference.
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.
Pre-Closing
Termination Event: Prior to printing the related Prospectus Supplement, any
of
the following occurs:
| (i) |
the
Counterparty shall fail to 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;
or
|
| (ii) |
the
Counterparty shall fail to take the actions set forth below if reasonably
requested by the related Depositor for the purpose of compliance with
Item
1115(b) with respect to a Transaction:
|
| (A) |
either
(1) authorize the related Depositor to incorporate by reference 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 and any affiliated entities providing derivative
instruments to the SPV (the “Company Financial Information”) or (2)
provide the Company Financial Information, in a form appropriate for
use
in the Prospectus Supplement and in an XXXXX-compatible form (and in
any
event to provide such XXXXX-compatible form if the IRC are not satisfied);
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.
|
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.
Regulation
S-X: 17 C.F.R. §210.1-01, as such may be amended from time to time.
Required
Substitution: Causing 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 as
required by Item 1115(b)(1) or (b)(2) of Regulation AB 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.
Securities
Act: The Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
| Section 2. |
Counterparty
Actions. 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 for which the Counterparty
has
agreed to act as derivative counterparty,
|
| (a) |
if
the Counterparty provided Company Financial Information to the related
Depositor for the Prospectus Supplement and the Counterparty does not,
within 5 Business Days of the release of any updated financial data
on
Form 6-K or 20-F, (1) either authorize the related Depositor to
incorporate by reference current Company Financial Information as required
under Item 1115(b) of Regulation AB or provide such information to
the
related Depositor in an XXXXX-compatible form (and in any event to
provide
such XXXXX-compatible form if the IRC are not satisfied), 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, then the Counterparty shall, at its own cost,
make
a Required Substitution; and
|
| (b) |
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, and the Counterparty does
not
upon five Business Days written notice, (1) either authorize the related
Depositor to incorporate by reference current Company Financial
Information as required under Item 1115(b) of Regulation AB or provide
such information to the related Depositor in an XXXXX-compatible form
(and
in any event to provide such XXXXX-compatible form if the IRC are not
satisfied), (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, either
authorize the related Depositor to incorporate by reference current
Company Financial Information as required under Item 1115(b) of Regulation
AB or provide such information to the related Depositor in an
XXXXX-compatible form (and in any event to provide such XXXXX-compatible
form if the IRC are not satisfied) 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,
then
the Counterparty shall, at its own cost, make a Required Substitution.
|
| 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
pursuant to this Agreement that, except as disclosed in writing the
related Depositor prior to such date:
|
| (i) |
The
Counterparty is a foreign private issuer as defined in Rule 2b-4 of
the
Exchange Act and is currently subject to the periodic reporting
requirements of Section 13(a) of the Exchange
Act.
|
| (ii) |
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 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, (A) either (I) the financial statements included in the
Company Financial Information present fairly the consolidated financial
position of 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 or (II) if the Company has
adopted International Financial Reporting Standards and International
Accounting Standards (collectively “IFRS”) for the purpose of preparing
its financial statements, the Company Financial Information present
fairly
the consolidated financial position of 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 IFRS applied
on
a consistent basis; and the supporting schedules included in the Company
Financial Information present fairly in accordance with IFRS the
information required to be stated therein and such Company Financial
Information has been reconciled with GAAP to the extent required by
Regulation AB.
|
| (vi) |
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
|
| (vii) |
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 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.
|
| (viii) |
The
Counterparty is a “Foreign Business” as defined in Regulation
S-X.
|
| (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, 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 20th
calendar day of the month in which any of the representations or
warranties in Section 3(a)(i) through (iii) ceased to be
correct.
|
| (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.
|
| (d) |
If
the Counterparty has provided Company Information, upon any breach
by the
Counterparty of a representation or warranty pursuant to this Section
3 to
the extent made as of a date subsequent to such closing date, the
Counterparty shall, at its own cost, make a Required Substitution.
|
| Section 4. |
Representations
and Warranties and Covenants of the
Depositor.
|
| (a) |
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.
|
| (b) |
If
the related Depositor requests Company Financial Information from the
Counterparty, it agrees to provide to the Counterparty the methodology
and
calculation for its estimate of maximum probable exposure represented
by
the Derivative Agreements.
|
| Section 5. |
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 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
this Agreement 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;
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) |
Nothing
in this agreement shall be construed to allow the Indemnified Party
to
recover punitive, consequential, incidental, exemplary or special damages
or lost profits from the indemnifying
party.
|
| (c) (i) |
Any
Pre-Closing Termination Event 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 Pre-Closing Termination
Event or 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 make a Required Substitution when and
as
required under Section 2, which continues unremedied for the lesser
of ten
calendar days after the date on which such information, report, or
accountants’ consent was required to be delivered or such period in which
the applicable Exchange Act Report for which such information is required
can be timely filed (without taking into account any extensions permitted
to be filed), or if the Counterparty has failed to make a Required
Substitution as required under Section 3 within the period in which
the
applicable Exchange Act Report for which such information is required
can
be timely filed, then 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) |
In
the event that the Counterparty or the SPV has found a replacement
entity
in accordance with a Required Substitution, 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 6. |
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.
|
| (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.
|
| (k) |
Signatory.
The parties hereto agree that while the signatory to this Agreement
is
Deutsche Bank AG, New York Branch, the New York branch of Deutsche
Bank AG
is not for securities law purposes treated as a separate entity from
Deutsche Bank Aktiengesellschaft, the Exchange Act registrant and thus
the
Company Financial Information to be provided hereunder will be that
of
Deutsche Bank Aktiengesellschaft.
|
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
DEUTSCHE
BANK AG, NEW YORK BRANCH
By:
/s/
Xxxxxx Xxxxxxx
Name:
Xxxxxx
Xxxxxxx
Title:
Director
By:
/s/
Xxxxxxxx Xxxx
Name:
Xxxxxxxx
Xxxx
Title:
Vice
President
