EXHIBIT 99.5
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The Item 1115 Agreement.
Item 11I15 Agreement dated as of January 30, 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 BEAR XXXXXXX FINANCIAL PRODUCTS INC., 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 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).
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.
Master Agreement: The ISDA Master Agreement between the Counterparty
and CHL, 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;
(D) a description of any material legal or
governmental proceedings pending (or known
to be contemplated) against the Counterparty
which may have a material impact on the
Counterparty's ability to perform under the
related Derivative Agreement;
(E) a description of any affiliation or
relationship 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);
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(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 for the purpose
of compliance with Item 1115(b) with respect to a
Transaction, 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 (or any entity that
consolidates 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;
and
(B) if applicable, cause its accountants to
issue their consent to the filing 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 (i) notify the
related Depositor in writing of (A) any
material litigation or governmental proceedings
pending against the Counterparty which may have
a material impact on the Counterparty's ability
to perform under the related Derivative
Agreement or (B) any affiliations or
relationships that develop following the
Closing Date between the Counterparty and any
of the parties specified in Section 2(a)(i)(E)
(and any other parties identified in writing by
the related Depositor) and (ii) provide to the
related Depositor a description of such
proceedings, affiliations or relationships as
described in Section 2(b)(i)(I)(i); and
(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
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1115(b) of Regulation AB to the related Depositor in
an XXXXX-compatible form, 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;
(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, (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, except as disclosed in
writing the related Depositor prior to such date:
(i) 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.
(ii) 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
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consistent with that of the audited financial
statements of the Counterparty.
(iii) 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) 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, 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, certification, 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) 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.
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(b) (i) Any failure by the Counterparty to deliver any
information, report, certification, accountants'
consent or other material when and 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), 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 such closing date, 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, certification 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,
certification 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), 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 ratings related
requirement of the applicable rating agencies at such
time) 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 which approval
is not needed if such assignment is to a subsidiary of
The Bear Xxxxxxx Companies, Inc., provided the
Depositor is given notice) 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. 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
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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
2(b)(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
Instrument. 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) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
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(g) 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.
(h) 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.
(i) 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.
(j) CHL agrees to provide to the Counterparty prior to January 30,
2006 the methodology for its estimate of maximum probable
exposure represented by the Derivative Agreements and then to
provide notice of any changes to the methodology.
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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
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
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By: /s/ F. Xxxxx Xxxxxx
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Name: F. Xxxxx Xxxxxx
Title: DPC Manager
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Xxxxxx Xxxxxx LLP
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
March 13, 2006
BY MODEM
Securities and Exchange Commission
000 X Xxxxxx XX
Xxxxxxxxxx, X.X. 00000
Re: CWALT, Inc.
Alternative Loan Trust 2006-5T2
Mortgage Pass-Through Certificates,
Series 2006-5T2
Ladies and Gentlemen:
On behalf of CWALT, Inc. (the "Company"), we enclose herewith for
filing, pursuant to the Securities and Exchange Act of 1934, as amended, the
Company's Current Report on Form 8-K in connection with the above-referenced
transaction.
Very truly yours,
/s/ Xxxxx X. Xxxxx
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Enclosure Xxxxx X. Xxxxx
