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
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Name: Xxxxxx Xxxxxxx
Title: Director
By: /s/ Xxxxxxxx Xxxx
-----------------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
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