Exhibit 99.4
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of September 8, 2006 ("Assignment
Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW
YORK ("Assignee"), as Corridor Contract Administrator for CWHEQ, Inc. Home
Equity Loan Asset-Backed Certificates Series 2006-S4, pursuant to a Corridor
Contract Administration Agreement (the "Corridor Contract Administration
Agreement") dated as of September 8, 2006, and JPMORGAN CHASE BANK, N.A.
("Remaining Party").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, effective as of September 8, 2006, Assignor desires to assign all
of its rights and delegate all of its duties and obligations to Assignee under a
certain Transaction (the "Assigned Transaction") as evidenced by a certain
confirmation with a Trade Date of August 28, 2006, whose JPMORGAN CHASE BANK,
N.A. reference numbers are 2000005079722 and 2000005079723 (the "Confirmation"),
a copy of which is attached hereto as Exhibit I;
WHEREAS, Assignor and Remaining Party executed and delivered the
Confirmation in connection with an ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement");
WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction and the Confirmation, including any modifications that may be agreed
to by Assignee and Remaining Party; and
WHEREAS, Assignor desires to obtain the written consent of Remaining Party
to the assignment, delegation, and assumption and Remaining Party desires to
grant such consent in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption. Effective as of and from September 8,
2006 (the "Effective Date"), Assignor hereby assigns all of its rights and
delegates all of its duties and obligations to Assignee and Assignee hereby
assumes all Assignor's rights, duties, and obligations under the Assigned
Transaction and the Confirmation arising on or after the Effective Date.
2. Release. Effective as of and from the Effective Date, Remaining
Party and Assignor hereby release one another from all duties and obligations
owed under and in respect of the Assigned Transaction and the Confirmation, and
Assignor hereby terminates its rights under and in respect of the Assigned
Transaction; provided, that such release shall not affect Assignor's obligation
to pay the Fixed Amount in accordance with the terms of the Assigned Transaction
and the Confirmation.
3. Limitation on Liability. Assignor and Remaining Party agree to the
following: (a) The Bank of New York ("BNY") is entering into this Assignment
Agreement solely in its capacity as Corridor Contract Administrator under the
Corridor Contract Administration Agreement; and (b) in no case shall BNY (or any
person acting as successor Corridor Contract Administrator under the Corridor
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 Assignee under the terms of the Assigned Transaction, all such
liability, if any, being expressly waived by Assignor and Remaining Party and
any person claiming by, through or under either such party.
4. Consent and Acknowledgment of Remaining Party. Remaining Party
hereby consents to the assignment and delegation by Assignor to Assignee of all
the rights, duties, and obligations of Assignor under the Assigned Transaction
pursuant to this Assignment Agreement.
5. Governing Agreement. The Assigned Transaction and the Confirmation
shall form a part of, and be subject to, the ISDA Form Master Agreement, as if
Assignee and Remaining Party had executed such agreement on the Effective Date
of the Assigned Transaction (the "Assignee Agreement"). The Confirmation,
together with all other documents referring to the ISDA Form Master Agreement
confirming transactions entered into between Assignee and Remaining Party, shall
form a part of, and be subject to, the Assignee Agreement. For the purposes of
this paragraph, capitalized terms used herein and not otherwise defined shall
have the meanings assigned in the ISDA Form Master Agreement.
6. Additional Provision. Each party hereby agrees that the Confirmation
and thus the Assigned Transaction is each hereby amended as follows:
(a) The following additional provision shall be added as a new Section
6:
"Regulation AB Compliance. Party A and Party B agree that the terms
of the Item 1115 Agreement dated as of May 9, 2006 (the "Regulation
AB Agreement"), between Countrywide Home Loans, Inc., CWABS, INC.,
CWMBS, Inc., CWALT, Inc., CWHEQ, Inc. and JPMorgan Chase Bank, N.A.
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 Annex A."
(b) The Item 1115 Agreement dated as of May 9, 2006, between Countrywide
Home Loans, Inc., CWABS, INC., CWMBS, Inc., CWALT, Inc., CWHEQ, Inc.
and JPMorgan Chase Bank, N.A., a copy of which is attached hereto as
Exhibit II, shall be added as Annex A.
7. Representations. Each party hereby represents and warrants to the
other parties as follows:
(a) It is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization or incorporation;
(b) It has the power to execute and deliver this Assignment Agreement;
and
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(c) Its obligations under this Assignment Agreement constitute its
legal, valid and binding obligations, enforceable in accordance with
their respective terms; except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship or other laws affecting the enforcement of
creditors' rights generally or by general equity principles.
As of the Effective Date, each of Assignor and Remaining Party represents
that no event or condition has occurred that constitutes an Event of Default, a
Potential Event of Default or, to the party's knowledge, a Termination Event (as
such terms are defined in the Confirmation and Assignee Agreement), with respect
to the party, and no such event would occur as a result of the party's entering
into or performing its obligations under this Assignment Agreement.
8. Indemnity. Assignor hereby agrees to indemnify and hold harmless
Assignee with respect to any and all claims arising under the Assigned
Transaction prior to the Effective Date. Assignee (subject to the limitations
set forth in paragraph 3 above) hereby agrees to indemnify and hold harmless
Assignor with respect to any and all claims arising under the Assigned
Transaction on or after the Effective Date.
9. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the conflict of laws provisions thereof (except Sections 5-1401 and 5-1402 of
the New York General Obligations Law).
10. Notices. For the purposes of this Assignment Agreement and Section
12(a) of the ISDA Form Master Agreement of the Assigned Transaction, the
addresses for notices or communications are as follows: (i) in the case of
Assignor, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxx Xxxx XX-000,
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, with a copy to the same
address, Attention: Legal Department, or such other address as may be hereafter
furnished in writing to Assignee and Remaining Party; (ii) in the case of
Assignee, The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, CWHEQ, Series 2006-S4 or such
other address as may be hereafter furnished in writing to Assignor and Remaining
Party; and (iii) in the case of Remaining Party, as specified in the
Confirmations and, for purposes of Section 5 and Section 6 of the Assignee
Agreement:
Address: 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Legal Department--Derivatives Practice Group
Telex No: 000-000-0000
or such other address as may be hereafter furnished in writing to Assignor
and Assignee.
11. Payments. All pa9yments (if any) remitted by Remaining Party under
the Assigned Transaction shall be made by wire transfer according to the
following instructions:
The Bank of New York
New York, NY
ABA # 000-000-000
3
GLA # 111-565
For Further Credit: TAS A/C [580916]
Attn: Xxx Xxxxx Xxxxxxx 000-000-0000
Fax: 000-000-0000
12. Counterparts. This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission), each of which
when executed shall be deemed to be an original but all of which taken together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement
as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Executive Vice President
THE BANK OF NEW YORK, AS CORRIDOR CONTRACT
ADMINISTRATOR FOR CWHEQ, INC. HOME EQUITY LOAN
ASSET-BACKED CERTIFICATES SERIES 2006-S4
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Executive Vice President
JPMORGAN CHASE BANK, N.A.
By: /s/ Xxxxxxx Xxxxx
-------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
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Cap Transaction (REVISION)
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between:
JPMORGAN CHASE BANK, N.A.
("JPMorgan")
and
COUNTRYWIDE HOME LOANS, INC.
(the "Counterparty")
on the Trade Date and identified by the JPMorgan Deal Number specified below
(the "Transaction"). This letter agreement constitutes a "Confirmation" as
referred to in the Master Agreement specified below, and supersedes any previous
confirmation or other writing with respect to the transaction described below.
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc. are incorporated into this Confirmation.
JPMorgan and Counterparty have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Mulitcurrecny- Cross
Border) form (the "Form Master Agreement"). A Form Master Agreement shall be
deemed to have executed by JPMorgan and Counterparty on the date we entered into
this Transaction. All provisions contained in, or incorporated by reference to,
the Form Master Agreement shall govern the Transaction referenced in this
Confirmation except as expressly modified herein. In the event of any
inconsistency between the provisions of this Agreement and the Definitions or
the Form Master Agreement, this Agreement shall prevail for purposes of this
Transaction.
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The terms of the particular Yield Curve Cap Transaction to which this
Confirmation relates are as follows:
A. TRANSACTION DETAILS
JPMorgan Deal Number(s): 2000005079722, 2000005079723
Notional Amount: As set forth as the Notional Balance in the
Notional Amount Schedule hereto.
Trade Date: 28 August 2006
Effective Date: 25 September 2006
Termination Date: 25 August 2008 subject to adjustment in
accordance with the Following Business Day
Convention.
Fixed Amount:
Fixed Rate Payer: Counterparty
Fixed Amount: USD 26,000.00
Fixed Rate Payer Payment Date: 08 September 2006
Floating Amounts:
Floating Rate Payer: JPMorgan
Floating Amounts: To be determined in accordance with the
following formula:
Greater of (i)(Floating Rate-Cap
Rate)*Floating Rate Payer Calculation
Amount*Floating Rate Day Count Fraction; and
(ii)zero
Cap Rate: The Strike as set forth in the Notional
Amount Schedule hereto
Floating Rate Payer Calculation
Amount: The Notional Amount
Floating Rate Payer Payment Dates: One New York Business Day prior to each
Period End Date
Floating Rate Payer Period End
Dates: The 25 October, 25 November, 25 December, 25
January, 25 February, 25 March, 25 April, 25
May, 25 June, 25 July, 25 August and 25
September in each year, from and including
25 October 2006 to and including the
Termination Date, subject to adjustment in
accordance with the Following Business Day
Convention and there will be an adjustment
to the Calculation Period.
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Floating Rate Option: USD-LIBOR-BBA; provided, however, that if
the Floating Rate determined from such
Floating Rate Option for any Calculation
Period is greater than the Ceiling (set
forth in the Notional Amount Schedule
hereto) then the Floating Rate for such
Calculation Period shall be deemed equal to
the Ceiling.
Designated Maturity: 1 Month
Spread: None
Floating Rate Day Count Fraction: Actual/360 (adjusted)
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Business Days: New York
Calculation Agent: JPMorgan, provided however, that if an Event
of Default occurs with respect to JPMorgan,
then Counterparty shall be entitled to
appoint a financial institution which would
qualify as a Reference Market-Maker to act
as Calculation Agent (such financial
institution subject to JPMorgan's consent).
Notional Amount Schedule:
Period Start Date Period End Date Notional Balance Strike Ceiling
----------------- --------------- ---------------- ------ -------
9/25/2006 10/25/2006 451,676,097.00 6.945% 9.000%
10/25/2006 11/25/2006 437,443,177.00 6.717% 9.000%
11/25/2006 12/25/2006 421,870,174.00 6.945% 9.000%
12/25/2006 1/25/2007 404,999,029.00 6.717% 9.000%
1/25/2007 2/25/2007 386,877,692.00 6.718% 9.000%
2/25/2007 3/25/2007 367,560,008.00 7.450% 9.000%
3/25/2007 4/25/2007 346,550,757.00 6.718% 9.000%
4/25/2007 5/25/2007 324,466,709.00 6.946% 9.000%
5/25/2007 6/25/2007 301,378,010.00 6.718% 9.000%
6/25/2007 7/25/2007 277,363,968.00 6.946% 9.000%
7/25/2007 8/25/2007 252,524,349.00 6.719% 9.000%
8/25/2007 9/25/2007 228,357,417.00 6.719% 9.000%
9/25/2007 10/25/2007 204,868,729.00 6.947% 9.000%
10/25/2007 11/25/2007 182,039,265.00 6.719% 9.000%
11/25/2007 12/25/2007 159,968,205.00 6.947% 9.000%
12/25/2007 1/25/2008 138,987,572.00 6.720% 9.000%
1/25/2008 2/25/2008 118,614,918.00 6.720% 9.000%
2/25/2008 3/25/2008 98,832,995.00 7.192% 9.000%
3/25/2008 4/25/2008 79,625,035.00 6.720% 9.000%
4/25/2008 5/25/2008 60,974,742.00 6.948% 9.000%
5/25/2008 6/25/2008 42,866,275.00 6.720% 9.000%
6/25/2008 7/25/2008 25,284,237.00 6.949% 9.000%
7/25/2008 8/25/2008 8,213,661.00 6.721% 9.000%
B. Provisions Deemed Incorporated in a Schedule to the Form Master Agreement
1) The parties agree that subparagraph (ii) of Section 2(c) of the Form
Master Agreement will apply to the Transaction
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2) Termination Provisions
(a) "Specified Entity" means, in relation to Party A, for the
purpose of Section 5(a) (v), Section 5(a)(vi), Section 5(a)(vii) and
Section 5(b)(iv): Not Applicable.
(b) "Specified Entity" means, in relation to Party B, for the
purpose of Section 5(a) (v), Section 5(a)(vi), Section 5(a)(vii) and
Section (b)(iv): Not Applicable.
(c) "Specified Transaction" is not applicable to Party A or Party B
for any purpose, and accordingly, Section 5(a)(v) shall not apply to Party
A or Party B.
(d) The "Cross Default" provisions of Section 5(a)(vi) will not
apply to Party A or Party B.
(e) The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
will not apply to Party A or Party B.
(f) The "Automatic Early Termination" provision of Section 6(a) will
not apply to Party A or to Party B.
(g) The Form Master Agreement will be governed by, and construed in
accordance with, the laws of the State of New York without reference to
its conflict of laws provisions (except for Section 5-1401 and 5-1402 of
the New York General Obligations Law).
(h) The phrase "Termination Currency" means United States Dollars.
(i) For the purpose of Section 6(e) of the Form Master Agreement,
Market Quotation and Second Method will apply.
3) Tax Representations: Not Applicable.
4) Fully-Paid Transactions. Notwithstanding the terms of Sections 5 and
6 of the Form Master Agreement, if at any time and so long as Party
B shall have satisfied in full all its payment and delivery
obligations under Section 2(a)(i) of the Form Master Agreement and
shall at the time have no future payment or delivery obligations,
whether absolute or contingent, under such Section, then unless
Party A is required pursuant to appropriate proceedings to return to
Party B or otherwise returns to Party B (upon demand of Party B, or
otherwise) any portion of any such payment or delivery: (i) the
occurrence of an event described in Section 5(a) of the Form Master
Agreement with respect to Party B shall not constitute an Event of
Default or a Potential Event of Default with respect to Party B as
the Defaulting Party; and (ii) Party A shall be entitled to
designate an Early Termination Date pursuant to Section 6 of the
Form Master Agreement only as a result of the occurrence of a
Termination Event set forth in (i) either Section 5(b)(i) or 5
(b)(ii) of the Form Master Agreement with respect to Party A as the
Affected Party or (ii) Section 5(b)(iii) of the Form Master
Agreement with respect to Party A as the Burdened Party.
5) Address for Notices: For the purposes of Section 12(a) of the
Agreement
(a) Address for notices or communication to JPMorgan:
NA Derivatives Operations
000 Xxxxxxx Xxxxxxxxxx Xx.
0/XXX0
Xxxxxx, XX 00000-0000
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(b) Address for notices or communication to Counterparty:
0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
6) Process Agent. For the purpose of Section 13(c):
JPMorgan appoints as its
Process Agent: Not Applicable
The Counterparty appoints as it
Process Agent: Not Applicable
7) Multibranch Party. For the purpose of Section 10(c) of this
Agreement:
JPMorgan is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
8) Credit Support Document
In relation to Party A: Not Applicable.
In relation to Party B: Not Applicable.
9) Credit Support Provider
In relation to Party A: Not Applicable.
In relation to Party B: Not Applicable.
10) 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 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 the form Master Agreement had been
executed with the invalid or unenforceable portion eliminated, so long as the
form Master 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 the form Master Agreement
will not substantially impair the respective benefits or expectations of the
parties.
The parties shall endeavour to engage in good faith negotiations to replace
any invalid or unenforceable term, provision, covenant or condition with a
valid or enforceable term, provision, covenant or condition, the economic
effect of which comes as close as possible to that of the invalid or
unenforceable term, provision, covenant or condition.
11) Section 3 of the Form Master Agreement is hereby amended by adding
at the end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each party represents to the other party on each date
when it enters into a transaction that:--
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(1) Nonreliance. It is not relying on any statement
or representation of the other party regarding the Transaction (whether written
or oral), other than the representations expressly made in this Agreement or the
confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or
through independent professional advice) the Transaction and has made its own
decision to enter into the Transaction; and
(ii) It understands the terms, conditions and risks
of the Transaction and is willing and able to accept those terms and conditions
and to assume those risks, financially and otherwise.
(3) Purpose. It is entering into the Transaction
for the purposes of managing its borrowings or investments, hedging its
underlying assets or liabilities or in connection with a line of business.
(4) Principal. It is entering into the Transaction as
principal, and not as agent or in any other capacity, fiduciary or otherwise."
12) Waiver of Right to Trial by Jury.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY
JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS TRANSACTION AND THE FORM MASTER AGREEMENT.
13) Eligible Contract Participant.
Each party represents to the other party that it is an "eligible contract
participant" as defined in Section 1a (12) of the U.S. Commodity Exchange Act,
as amended.
B. ACCOUNT DETAILS
Payments to JPMorgan in USD: JPMORGAN CHASE BANK NA
JPMORGAN CHASE BANK NA
BIC: XXXXXX00XXX
AC No: 099997979
C. OFFICES
JPMorgan: NEW YORK
Counterparty: PASADENA
D. DOCUMENTS TO BE DELIVERED
Each party shall deliver to the other, at the time of its execution of this
Confirmation, evidence of the incumbency and specimen signature of the person(s)
executing this Confirmation, unless such evidence has been previously supplied
and remains true and in effect.
E. RELATIONSHIP BETWEEN PARTIES
Each party will be deemed to represent to the other party on the date on which
it enters into a Transaction that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for that
Transaction):
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(a) 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 advisers 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.
(b) Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is capable of assuming, and assumes the risks of that
Transaction.
(c) Status of Parties. The other party is not acting as a fiduciary for or an
adviser to it in respect of that Transaction.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing a copy of this Confirmation and returning it to us or by
sending to us a letter, telex or facsimile substantially similar to this letter,
which letter, telex or facsimile sets forth the material terms of the
Transaction to which this Confirmation relates and indicates agreement to those
terms. When referring to this Confirmation, please indicate: JPMorgan Deal
Number(s): 2000005079722, 2000005079723
JPMorgan Chase Bank, N.A.
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START SIGNATURE:U284298
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Name: Xxxxxxx Xxxxx
-----------------------------------------------------
Title: Vice President
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Accepted and confirmed as of the date first written:
COUNTRYWIDE HOME LOANS, INC.
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Name:
-----------------------------------------------------
Title:
-----------------------------------------------------
Your reference number:
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Client Service Group
All queries regarding confirmations should be sent to:
JPMorgan Chase Bank, N.A.
Contacts
JPMorgan Contact Telephone Number
Client Service Group (000 ) 0000000000
Group E-mail address:
Facsimile: (000 ) 000 000 0000
Telex:
Cable:
Please quote the JPMorgan deal number(s): 2000005079722, 2000005079723.
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Item 1115 Agreement dated as of May 9, 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 JPMorgan Chase Bank, N.A., 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").
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereby agree as follows:
Section 1. Definitions
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Countrywide Indemnified Party: As defined in Section 4(a).
Counterparty Indemnified Party: As defined in Section 4(b).
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to the
related Registration Statement for which the entity of the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Exchange Act: The Securities Exchange Act of 1934, as amended and the
rules and regulations promulgated thereunder.
Exchange Act Reports: All Distribution Reports on Form 10-D, Current
Reports on Form 8-K and Annual Reports on Form 10-K that are to be filed with
respect to the related SPV pursuant to the Exchange Act.
Indemnified Party: As defined in Section 4(b).
Master Agreement: The ISDA Master Agreement between the Counterparty
and SPV, or if no such Master Agreement exists, the ISDA Master Agreement
assumed to apply to the Derivative Agreement pursuant to its terms.
Prospectus Supplement: The prospectus supplement prepared in
connection with the public offering and sale of the related Securities.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related Depositor such
information regarding the Counterparty, as a derivative
instrument counterparty, as is reasonably requested by the
related Depositor for the purpose of compliance with Item
1115(a)(1) of Regulation AB. Such information shall include:
(A) the Counterparty's legal name (and any d/b/a);
(B) the organizational form of the Counterparty;
(C) a description of the general character of the business
of the Counterparty;
(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);
2
(3) the SPV;
(4) Countrywide Home Loans Servicing LP (or any other
servicer or master servicer identified to the
Counterparty by CHL);
(5) The Bank of New York (or any other trustee
identified to the Counterparty by CHL);
(6) any originator identified to the Counterparty by
CHL;
(7) any enhancement or support provider identified to
the Counterparty by CHL; and
(8) any other material transaction party identified to
the Counterparty by CHL.
(ii) if requested by the related Depositor, 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 and any affiliated entities providing
derivative instruments to the SPV (the "Company
Financial Information"), in a form appropriate for use
in the Prospectus Supplement and in an XXXXX-compatible
form (if not incorporated by reference) and hereby
authorizes the related Depositor to incorporate by
reference the financial data required by Item 1115(b)(2)
of Regulation AB; and
(B) if applicable, cause its accountants to issue their
consent to the filing or the incorporation by reference
of such financial statements in the Registration
Statement.
(b) Following the Closing Date with respect to a Transaction,
(i) no later than the 25th calendar day of each month, the
Counterparty shall (1) notify the related Depositor in
writing of any affiliations or relationships that
develop following the Closing Date between the
Counterparty and any of the parties specified in Section
2(a)(i)(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)(1);
(ii) if the Counterparty provided Company Financial
Information to the related Depositor for the Prospectus
Supplement, within 5 Business Days of the release of any
updated financial data, the Counterparty shall (1)
provide current Company Financial Information as
required under Item 1115(b) of Regulation AB to the
related Depositor in an XXXXX-
3
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:
(i) 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 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, the financial statements included in the
Company Financial Information present fairly the consolidated
financial position of the
4
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.
(c) If at any time the representations and warranties set forth in
3(a)(i) through (iii) are no longer true and correct, the
Counterparty shall provide notice to the related Depositor, and if
any Company Financial Information is required to be included in the
Registration Statement, or the Exchange Act Reports of the SPV, will
provide to the related Depositor such Company Financial Information
in XXXXX-compatible format no later than the 25th calendar day of
the month in which any of the representations or warranties in
Section 3(a)(i) through (iii) ceased to be correct.
(d) If applicable, the Counterparty represents and warrants to the
related Depositor, as of the date on which it has obtained a full
and unconditional guaranty of a parent company to honor
Counterparty's obligations under the Derivative Agreement as a
remedy to failing to deliver any information, report, or
accountants' consent when and as required under Section 2(a) or (b),
that the requirements of Rule 3-10(b) or 3-10(c) of Regulation S-X,
as applicable, have been satisfied with respect to the omission of
the financial information of the Counterparty (assuming the
Counterparty is treated as the Issuer of the registered security
under Rule 3-10).
5
(e) 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 broker dealer acting
as underwriter, each person who controls any of such parties (within
the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act); and the respective present and former directors,
officers, employees and agents of each of the foregoing (each, a
"Countrywide Indemnified Party"), and shall hold each of them
harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments,
and any other costs, fees and expenses that any of them may sustain
arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
accountants' consent or other material provided in written or
electronic form under Section 2 by or on behalf of the
Counterparty (collectively, the "Company Information"), or (B)
the omission or alleged omission to state in the Company
Information a material fact required to be stated in the
Company Information or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; or
(ii) any breach by the Counterparty of a representation or warranty
set forth in Section 3(a)(i), (ii), (iii) and (iv) 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(a)(i), (ii), (iii) and (iv) to the extent made as of
a date subsequent to the Closing Date.
(b) The Depositor and CHL shall indemnify the Counterparty, each of its
officers and directors and each person who controls the Counterparty
(within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act) (each, a "Counterparty Indemnified Party";
and each of the Countrywide Indemnified Party and the Counterparty
Indemnified Party shall be referred to as the "Indemnified Party"),
and shall hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Prospectus Supplement or any free writing prospectus with
respect to the related Securities or the omission or alleged
6
omission to state a material fact necessary in order to make the
statements therein not misleading; provided, however, that the
indemnity set forth in this Section 4(b) shall not apply insofar as
such losses, claims, expenses, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained
in the Company Information or the omission or alleged omission to
state in the Company Information a material fact necessary in order
to make the statements therein not misleading and/or (ii) a breach
of the representations set forth in Sections 3(a) above.
(c) (i) Promptly after the Indemnified Party receives notice of the
commencement of any such action, the Indemnified Party will,
if a claim in respect thereof is to be made pursuant to this
Agreement, promptly notify the indemnifying party in writing
of the commencement thereof. In case any such action is
brought against the Indemnified Party, and it notifies the
indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's
expense to represent the Indemnified Party in any action for
which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the
Indemnified Party except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to
the Indemnified Party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the
Indemnified Party in an action, the Indemnified Party shall
have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent
the Indemnified Party would present such counsel with a
conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the
Indemnified Party and the indemnifying party, and the
Indemnified Party shall have reasonably concluded that there
may be legal defenses available to it that are different from
or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party
shall authorize the Indemnified Party to employ separate
counsel at the expense of the indemnifying party. The
indemnifying party will not, without the prior written consent
of the Indemnified Party, settle or compromise or consent to
the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought
hereunder (whether or not the Indemnified Party is an actual
or potential party to such claim or action) unless such
settlement, compromise or consent includes an unconditional
release of each Indemnified Party from all liability arising
out of such claim, action, suit
7
or proceeding. In addition, for so long as the indemnifying
party is covering all costs and expenses of the Indemnified
Party as provided herein, no Indemnified Party will settle
or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or
contribution may be sought hereunder without the consent of
the indemnifying party, which consent shall not be
unreasonably withheld.
(d) Nothing in this agreement shall be construed to allow the
Indemnified Party to recover punitive damages or consequential
damages from the indemnifying party.
(e) (i) Any failure by the Counterparty to deliver any information,
report, accountants' consent or other material when and in any
case only as required under Section 2 or any breach by the
Counterparty of a representation or warranty set forth in
Section 3 and made as of a date prior to the Closing Date, to
the extent that such breach is not cured by the Closing Date
(or in the case of information needed for purposes of printing
the Prospectus Supplement, the date of printing of the
Prospectus Supplement), 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) (ii) If the Counterparty has failed to deliver any
information, report, or accountants' consent when and as
required under Section 2, which continues unremedied for
the lesser of ten calendar days after the date on which
such information, report, or accountants' consent was
required to be delivered or such period in which the
applicable Exchange Act Report for which such
information is required can be timely filed (without
taking into account any extensions permitted to be
filed), 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 either cause another entity to replace the
Counterparty as party to the Derivative Agreement or
obtain a full and unconditional guaranty of a parent
company to honor the Counterparty's obligations under
the Derivative Agreement; provided that, with respect to
the guaranty of a parent company, if the financial
information is not separately
8
presented for the derivative counterparty then each of
the requirements set forth in Rule 3-10(b) or 3-10(c) of
Regulation S-X, as applicable, shall be satisfied,
including with respect to the parent, the Counterparty
and the financial statements of the parent (as though
the Counterparty were the issuer of registered
securities), in each case to or from, as applicable, an
entity that 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. 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 Section
4(e)(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) 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.
9
(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 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.
10
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
CWABS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWMBS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWALT, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
CWHEQ, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
11
JPMORGAN CHASE BANK, N.A.
By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
12
