EXHIBIT 99.6
The Item 1115 Agreement
Item 1115 Agreement dated as of March 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 BANK OF AMERICA, 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 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).
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,
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;
(ii) if requested by the related Depositor for the purpose of
compliance with Item 1115(b) with respect to a Transaction
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:
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(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 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) 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
(ii) 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.
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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)(i) or
Section 2(b)(ii)(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
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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 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.
(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 the preparation, execution or filing
of any report required to be filed with the Commission with
respect to such SPV, or for execution of a certification pursuant
to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act; each
person who controls any of such parties (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange
Act); and the respective present and former directors, officers,
employees and agents of each of the foregoing (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
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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) 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 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) 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
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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
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) If the Counterparty has failed to deliver any information,
report, or accountants' consent when and as required under
Section 2, which
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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 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. 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
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information of such permitted entity provided the
Counterparty has received written confirmation from CHL that
such amendment or interpretive guidance can be relied upon.
(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.
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(j) Integration. This Agreement contains the entire
understanding of the parties with respect to the subject
matter hereof. There are no restrictions, agreements,
promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other
than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter.
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IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
CWABS, INC.
By:
-----------------------------
Name:
Title:
CWMBS, INC.
By:
-----------------------------
Name:
Title:
CWALT, INC.
By:
-----------------------------
Name:
Title:
CWHEQ, INC.
By:
-----------------------------
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.
By:
-----------------------------
Name:
Title:
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BANK OF AMERICA, N.A.
By:
-----------------------------
Name:
Title:
12
