EXHIBIT 99.6
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The Item 1115 Agreement
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
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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. 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.
Regulation S-X: 17 C.F.R. ss.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
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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
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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
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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
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(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).
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(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.
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(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.
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IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
CWABS, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
CWMBS, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
CWALT, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
CWHEQ, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
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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
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