Exhibit 10.3
Page 1 of 8
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Dated: November 30, 2006
Rate Swap Transaction
Re: BNY Reference No. 38571
-----------------------
Ladies and Gentlemen:
The purpose of this letter agreement is to confirm the terms and conditions of
the rate swap Transaction entered into on the Trade Date specified below (the
"Transaction") between The Bank of New York ("BNY"), a trust company duly
organized and existing under the laws of the State of New York and Xxxxx Fargo
Bank, N.A., not individually, but solely as Supplemental Interest Trust Trustee
on behalf of the Banc of America Funding 2006-I Supplemental Interest Trust (the
"Counterparty"). The definitions and provisions contained in the 2000 ISDA
Definitions, as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation constitutes a "Confirmation" as referred to in and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of November 30, 2006, as amended and supplemented from time to time (the
"Agreement"), between The Bank of New York and Counterparty. All provisions
contained in the Agreement govern this Confirmation except as expressly modified
below.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Type of Transaction: Rate Swap
Notional Amount: With respect to any Calculation
Period the amount set forth for
such period on Schedule I
attached.
Trade Date: November 20, 2006
Effective Date: November 30, 2006
Termination Date: November 20, 2011
Page 2 of 8
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate: 5.015%
Fixed Rate Payer
Period End Dates: The 20th calendar day of each
month during the Term of this
Transaction, commencing December
20, 2006, and ending on the
Termination Date with No
Adjustments.
Fixed Rate Payer
Payment Dates: The 20th calendar day of each
month during the Term of this
Transaction, commencing December
20, 2006, and ending on the
Termination Date with No
Adjustments. Subject to the
Payment Netting Provision as set
out below.
Fixed Rate Day
Count Fraction: 30/360
Floating Amounts:
Floating Rate Payer: BNY
Floating Rate Payer
Period End Dates: The 20th calendar day of each
month during the Term of this
Transaction, commencing December
20, 2006, and ending on the
Termination Date with No
Adjustment.
Floating Rate Payer
Payment Dates: Early Payment shall be
applicable. Subject to the
Payment Netting Provision, each
Floating Rate Payer Payment Date
shall be one (1) Business Day
preceding the related Floating
Rate Payer Period End Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period
Compounding: Inapplicable
Page 3 of 8
Additional Terms:
Business Days: New York
Calculation Agent: BNY
Payment Netting Provision: For purposes of Section 2(c) of
the Agreement, any amount payable
by the Fixed Rate Payer on any
Fixed Rate Payer Payment Date
(each, a " Relevant Fixed Rate
Payer Payment Date") shall be
netted against any amount payable
by the Floating Rate Payer on the
Floating Rate Payer Payment Date
that relates to the Floating Rate
Payer Calculation Period that has
the same Period End Dates as the
Period End Dates for the Fixed
Rate Payer Calculation Period to
which the Relevant Fixed Rate
Payer Payment Date relates even
though the Relevant Fixed Rate
Payer Payment Date and its
related Floating Rate Payer
Payment Date may be different
dates, and the party with the
larger payable amount shall, on
such party's Payment Date, make a
payment to the other party in an
amount equal to the net
difference between the two
payable amounts.
Account Details and
Settlement Information: Payments to BNY:
The Bank of New York
Derivative Products Support
Department
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
ABA #000000000
Account #000-0000-000
Reference: Interest Rate Swaps
Payments to Counterparty:
Xxxxx Fargo Bank, N.A.
San Francisco, CA
ABA #: 000000000
Acct #: 0000000000
Account Name: Corporate Trust
Clearing
FFC #: 50964201
Ref: Banc of America Funding
2006-I, Swap Account
Page 4 of 8
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this agreement and returning it via facsimile to
Derivative Products Support Dept., Attn: Xxxxxx Xxxx/Xxxxx Au-Xxxxx at
000-000-0000/5837.
Page 5 of 8
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
THE BANK OF NEW YORK
By: _______________________________
Name:
Title:
Page 6 of 8
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
XXXXX FARGO BANK, N.A., NOT INDIVIDUALLY, BUT SOLELY AS SUPPLEMENTAL INTEREST
TRUST TRUSTEE ON BEHALF OF THE BANC OF AMERICA FUNDING 2006-I SUPPLEMENTAL
INTEREST TRUST
By:_______________________________
Name:
Title:
Page 7 of 8
SCHEDULE I
--------------------------------------------------------------------------------
Accrual Start Date Accrual End Date Notional Amount (in USD)
--------------------------------------------------------------------------------
20-Nov-06 20-Dec-06 529,698,020.25
--------------------------------------------------------------------------------
20-Dec-06 20-Jan-07 514,925,849.03
--------------------------------------------------------------------------------
20-Jan-07 20-Feb-07 500,866,677.60
--------------------------------------------------------------------------------
20-Feb-07 20-Mar-07 487,316,203.21
--------------------------------------------------------------------------------
20-Mar-07 20-Apr-07 474,146,524.79
--------------------------------------------------------------------------------
20-Apr-07 20-May-07 461,313,056.91
--------------------------------------------------------------------------------
20-May-07 20-Jun-07 448,777,575.95
--------------------------------------------------------------------------------
20-Jun-07 20-Jul-07 436,506,318.14
--------------------------------------------------------------------------------
20-Jul-07 20-Aug-07 424,469,838.80
--------------------------------------------------------------------------------
20-Aug-07 20-Sep-07 412,642,089.85
--------------------------------------------------------------------------------
20-Sep-07 20-Oct-07 400,990,519.19
--------------------------------------------------------------------------------
20-Oct-07 20-Nov-07 389,510,985.07
--------------------------------------------------------------------------------
20-Nov-07 20-Dec-07 378,220,730.48
--------------------------------------------------------------------------------
20-Dec-07 20-Jan-08 367,186,847.73
--------------------------------------------------------------------------------
20-Jan-08 20-Feb-08 356,393,049.71
--------------------------------------------------------------------------------
20-Feb-08 20-Mar-08 345,825,135.20
--------------------------------------------------------------------------------
20-Mar-08 20-Apr-08 335,470,795.69
--------------------------------------------------------------------------------
20-Apr-08 20-May-08 325,319,436.43
--------------------------------------------------------------------------------
20-May-08 20-Jun-08 315,362,010.53
--------------------------------------------------------------------------------
20-Jun-08 20-Jul-08 305,591,104.44
--------------------------------------------------------------------------------
20-Jul-08 20-Aug-08 296,000,291.27
--------------------------------------------------------------------------------
20-Aug-08 20-Sep-08 286,584,213.19
--------------------------------------------------------------------------------
20-Sep-08 20-Oct-08 277,330,886.69
--------------------------------------------------------------------------------
20-Oct-08 20-Nov-08 268,244,377.27
--------------------------------------------------------------------------------
20-Nov-08 20-Dec-08 259,323,698.26
--------------------------------------------------------------------------------
20-Dec-08 20-Jan-09 250,568,453.80
--------------------------------------------------------------------------------
20-Jan-09 20-Feb-09 241,976,698.48
--------------------------------------------------------------------------------
20-Feb-09 20-Mar-09 233,552,838.49
--------------------------------------------------------------------------------
20-Mar-09 20-Apr-09 225,294,742.21
--------------------------------------------------------------------------------
20-Apr-09 20-May-09 217,201,077.65
--------------------------------------------------------------------------------
20-May-09 20-Jun-09 209,272,394.37
--------------------------------------------------------------------------------
20-Jun-09 20-Jul-09 201,504,577.75
--------------------------------------------------------------------------------
20-Jul-09 20-Aug-09 193,900,638.87
--------------------------------------------------------------------------------
Page 8 of 8
--------------------------------------------------------------------------------
20-Aug-09 20-Sep-09 186,459,142.79
--------------------------------------------------------------------------------
20-Sep-09 20-Oct-09 179,175,892.87
--------------------------------------------------------------------------------
20-Oct-09 20-Nov-09 172,054,159.02
--------------------------------------------------------------------------------
20-Nov-09 20-Dec-09 165,118,357.19
--------------------------------------------------------------------------------
20-Dec-09 20-Jan-10 153,076,756.32
--------------------------------------------------------------------------------
20-Jan-10 20-Feb-10 147,074,213.73
--------------------------------------------------------------------------------
20-Feb-10 20-Mar-10 141,282,169.16
--------------------------------------------------------------------------------
20-Mar-10 20-Apr-10 135,693,888.69
--------------------------------------------------------------------------------
20-Apr-10 20-May-10 130,325,000.79
--------------------------------------------------------------------------------
20-May-10 20-Jun-10 125,207,723.62
--------------------------------------------------------------------------------
20-Jun-10 20-Jul-10 120,317,324.40
--------------------------------------------------------------------------------
20-Jul-10 20-Aug-10 115,636,412.28
--------------------------------------------------------------------------------
20-Aug-10 20-Sep-10 111,150,276.25
--------------------------------------------------------------------------------
20-Sep-10 20-Oct-10 106,846,651.24
--------------------------------------------------------------------------------
20-Oct-10 20-Nov-10 102,711,399.85
--------------------------------------------------------------------------------
20-Nov-10 20-Dec-10 98,732,728.94
--------------------------------------------------------------------------------
20-Dec-10 20-Jan-11 94,901,763.76
--------------------------------------------------------------------------------
20-Jan-11 20-Feb-11 91,214,275.59
--------------------------------------------------------------------------------
20-Feb-11 20-Mar-11 87,664,124.93
--------------------------------------------------------------------------------
20-Mar-11 20-Apr-11 84,251,974.27
--------------------------------------------------------------------------------
20-Apr-11 20-May-11 80,977,231.45
--------------------------------------------------------------------------------
20-May-11 20-Jun-11 77,819,883.49
--------------------------------------------------------------------------------
20-Jun-11 20-Jul-11 74,774,668.96
--------------------------------------------------------------------------------
20-Jul-11 20-Aug-11 71,832,483.16
--------------------------------------------------------------------------------
20-Aug-11 20-Sep-11 68,987,170.63
--------------------------------------------------------------------------------
20-Sep-11 20-Oct-11 66,230,815.47
--------------------------------------------------------------------------------
20-Oct-11 20-Nov-11 63,562,172.75
--------------------------------------------------------------------------------
(Multicurrency--Cross Border)
ISDA(R)
International Swap and Derivatives Association, Inc.
MASTER AGREEMENT
dated as of November 30, 2006
-----------------
THE BANK OF NEW YORK and XXXXX FARGO BANK, N.A.,
not in its individual capacity, but
solely as Supplemental Interest Trust
Trustee on behalf of the Banc of America
Funding Corporation 2006-I Supplemental
Interest Trust
established as a banking organization The Supplemental Interest Trust is a
under the laws of the State of New common law trust established under the
York. laws.
("Party A") ("Party B")
------------------------------------- ----------------------------------------
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner
customary for the relevant obligation unless otherwise specified in the
relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such
amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether
assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However,
X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure
would not have occurred but for (I) any action taken by a
taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is
entered into (regardless of whether such action is taken or
brought with respect to a party to this Agreement) or (II) a
Change in Tax Law.
2
(ii) Liability. If:--
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any deduction
or withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under
such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver
this Agreement and any other documentation relating to this Agreement that
it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).
3
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner
reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
4
organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such party
to comply with or perform any agreement or obligation to be complied
with or performed by it in accordance with any Credit Support Document
if such failure is continuing after any applicable grace period has
elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction of
all obligations of such party under each Transaction to which such
Credit Support Document relates without the written consent of the
other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity
of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation under
Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
5
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them (individually
or collectively) in an aggregate amount of not less than the applicable
Threshold Amount (as specified in the Schedule) which has resulted in such
Specified Indebtedness becoming, or becoming capable at such time of being
declared, due and payable under such agreements or instruments, before it
would otherwise have been due and payable or (2) a default by such party,
such Credit Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount under
such agreements or instruments (after giving effect to any applicable
notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation, amalgamation
or merger); (2) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as
they become due; (3) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (4) institutes
or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights, or a
petition is presented for its winding-up or liquidation, and, in the
case of any such proceeding or petition instituted or presented
against it, such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or the
making of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case within 30
days of the institution or presentation thereof; (5) has a resolution
passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar
official for it or for all or substantially all its assets; (7) has a
secured party take possession of all or substantially all its assets
or has a distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or substantially
all its assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or restrained, in
each case within 30 days thereafter; (8) causes or is subject to any
event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified
in clauses (1) to (7) (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume all
the obligations of such party or such Credit Support Provider under
this Agreement or any Credit Support Document to which it or its
predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
6
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 4(b)) for such party (which will be the
Affected Party):--
(1) to perform any absolute or contingent obligation to make a payment
or delivery or to receive a payment or delivery in respect of such
Transaction or to comply with any other material provision of this
Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether such action is taken
or brought with respect to a party to this Agreement) or (y) a Change in
Tax Law, the party (which will be the Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled
Payment Date (1) be required to pay to the other party an additional amount
in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount is required to be deducted or withheld for or
on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) (other than by reason of
Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate, will
be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the Schedule
or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
7
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will, promptly
upon becoming aware of it, notify the other party, specifying the nature of
that Termination Event and each Affected Transaction and will also give
such other information about that Termination Event as the other party may
reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights and obligations under
this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on
the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)( 1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party gives
notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger
or an Additional Termination Event occurs, or a Tax Event Upon Merger
occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a Credit
Event Upon Merger or an Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to the other party and
provided that the relevant Termination Event is then
8
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount, if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining
a Market Quotation, the records of the party obtaining such quotation will
be conclusive evidence of the existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default:--
(1) First Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting
Party the excess, if a positive number, of (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect
of the Terminated Transactions and the Termination Currency Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the sum
of the Settlement Amount (determined by the
9
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value
of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and to
the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the Transactions
are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions, and
an amount will be payable equal to (I) the sum of (a) one-half of
the difference between the Settlement Amount of the party with
the higher Settlement Amount ("X") and the Settlement Amount of
the party with the lower Settlement Amount ("Y") and (b) the
Termination Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the Transactions
are being terminated, in respect of all Terminated Transactions)
and an amount will be payable equal to one-half of the difference
between the Loss of the party with the higher Loss ("X") and the
Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
10
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
11
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and
may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
12
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
reenactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
14
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
15
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference Market
maker to provide its quotation to the extent reasonably practicable as of the
same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
16
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a) (iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
THE BANK OF NEW YORK XXXXX FARGO BANK, N.A., not in its
individual capacity, but solely as
Supplemental Interest Trust Trustee
on behalf of the Banc of America
Funding Corporation 2006-I
Supplemental Interest Trust
By:_________________________________ By:__________________________________
Name: Name:
Title: Title:
Date: Date:
18
(Multicurrency -- Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
SCHEDULE
to the
Master Agreement
dated as of November 30, 2006
between
THE BANK OF NEW YORK and XXXXX FARGO BANK, N.A.,
not in its individual capacity,
but solely as Supplemental
Interest TrustTrustee on behalf
of the Banc of America
Funding Corporation
2006-I Supplemental
Interest Trust
established as a banking organization The Supplemental Interest Trust is
under the laws of the State of New York a common law trust established
under the laws of the
State of New York.
("Party A") ("Party B")
---------------------------- -------------------------------
Certain Definitions. Capitalized terms used in this Agreement that are not
defined herein and are defined in the Pooling and Servicing Agreement, dated
November 30, 2006, among Banc of America Funding Corporation, as Depositor,
Xxxxx Fargo Bank, N.A, as Master Servicer and Securities Administrator, and U.S.
Bank National Association, as Trustee (the "Pooling and Servicing Agreement")
have the meanings assigned therein. In the event of any inconsistency between
the terms of this Agreement and the terms of the Pooling and Servicing
Agreement, this Agreement will govern.
Part 1. Termination Provisions.
(a) "Specified Entity" in relation to Party A or Party B shall mean: none.
(b) "Specified Transaction" will have the meaning specified in Section 14.
(c) Applicability. The following provisions apply or do not apply to the parties
as specified below:
(i) Section 5(a)(i) (Failure to Pay or Deliver):
(A) will apply to Party A; and
(B) will apply to Party B.
(ii) Section 5(a)(ii) (Breach of Agreement):
(A) will apply to Party A; and
(B) will not apply to Party B.
(iii) Section 5(a)(iii) (Credit Support Default):
19
(A) will apply to Party A; and
(B) will not apply to Party B.
(iv) Section 5(a)(iv) (Misrepresentation):
(A) will apply to Party A; and
(B) will not apply to Party B.
(v) Section 5(a)(v) (Default under Specified Transaction):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(vi) Section 5(a)(vi) (Cross Default):
(A) will apply to Party A; and
(B) will not apply to Party B.
For the purposes of Section 5(a)(vi):
"Specified Indebtedness" will have the meaning specified in
Section 14, except that it shall not include indebtedness in
respect of deposits received.
"Threshold Amount" means, 3% of consolidated shareholders
equity of Party A and its subsidiaries determined in
accordance with generally accepted accounting principles of
the United States consistently applied as of the last day of
the fiscal quarter ended immediately prior to the occurrence
or existence of an event for which a Threshold Amount is
applicable under Section 5(a)(vi).
(vii) Section 5(a)(vii) (Bankruptcy):
(A) will apply to Party A; and
(B) With respect to Party B only, the provisions of Section
5(a)(vii) clause 2 will not be applicable as an Event of
Default to the extent such event relates to nonpayment of
indebtedness other than that of the related class of
Certificates.
(viii) Section 5(a)(viii) (Merger without Assumption):
(A) will apply to Party A; and
(B) will apply to Party B.
(ix) Section 5(b)(i) (Illegality):
(A) will apply to Party A; and
(B) will apply to Party B.
(x) Section 5(b)(ii) (Tax Event):
(A) will apply to Party A; provided that the words "(x) any
action taken by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement)
or (y)" shall be deleted; and
(B) will apply to Party B.
(xi) Section 5(b)(iii) (Tax Event upon Merger):
20
(A) will apply to Party A, provided, that Party A shall not be
entitled to designate an Early Termination Date by reason of a
Tax Event upon Merger in respect of which it is the Affected
Party; and
(B) will apply to Party B.
(xii) Section 5(b)(iv) (Credit Event upon Merger):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(xiii) Section 5(b)(v) (Additional Termination Event):
(A) will apply to Party A with respect to Part 1(g)(iii) and
(iv); and
(B) will apply to Party B with respect to Parts 1(g)(i) and
(ii).
With respect to the Xxxxx'x Rating Condition, notwithstanding Sections 5(a)(i)
and 5(a)(iii), any failure by Party A to perform any obligation under the Credit
Support Annex hereto shall not be an Event of Default unless a Moody's Ratings
Event has occurred and at least 30 Local Business Days have elapsed and such
failure is not remedied on or before the third Local Business Day after notice
of such failure is given to Party A.
(d) The "Automatic Early Termination" provision of Section 6(a):
(A) will not apply to Party A; and
(B) will not apply to Party B.
(e) Payments on Early Termination. For the purpose of Section 6(e), the Second
Method and Market Quotation will apply. For such purpose, for so long as the
Overcollateralized Certificates are rated by Moody's, if Party A is the Affected
Party in respect of an Additional Termination Event or a Tax Event Upon Merger
or the Defaulting Party in respect of any Event of Default (but not, in any
case, in respect of a Termination Event arising from an Illegality or Tax
Event), the following provisions shall apply:
(i) The definitions of "Market Quotation" and "Settlement Amount" are
amended in their entirety to read as follows:
"Market Quotation" means, with respect to one or more
Terminated Transactions, an offer capable of becoming legally
binding upon acceptance made by a Reference Market-maker with
ratings that meet the Collateralization Requirement or the
Ratings Requirement, as the case may be, for an amount that
would be paid to Party B (expressed as a negative number) or
by Party B (expressed as a positive number) in consideration
of an agreement between Party B and such Reference
Market-maker to enter into a transaction (the "Replacement
Transaction"), with commercial terms substantially the same as
those of this Agreement (save for the exclusion of provisions
relating to Transactions that are not Terminated Transactions)
(which shall be determined by Party B, acting in a
commercially reasonable manner), that would have the effect of
preserving the economic equivalent for Party B of any payment
or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable
condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transactions or group of Terminated
Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that
date. For this purpose, Unpaid Amounts in respect of the
Terminated Transaction or group of Transactions are to be
excluded but, without limitation, any payment or delivery that
would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition
21
precedent) after that Early Termination Date is to be
included.
"Settlement Amount" means, with respect to any Early
Termination Date: --
(a) the Termination Currency Equivalent of the Market
Quotation (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions for which a
Market Quotation is accepted by Party B so as to become
legally binding on or before the day falling ten (10) Local
Business Days after the day on which the Early Termination
Date is designated (or such later day not be later than the
Early Termination Date as Party B may specify in writing to
Party A); or (if there is no such accepted Market Quotation)
(b) Party B's Loss (whether positive or negative and without
reference to any Unpaid amounts) for the relevant Terminated
Transaction or group of Terminated Transactions.
(ii) Party B and, if request is made in writing within two Local
Business Days after the day on which the Early Termination Date is
designated, Party A, shall use reasonable efforts to obtain one or more
Market Quotations before the date determined pursuant to clause (a) of
the definition of "Settlement Amount".
(iii) Notwithstanding anything to the contrary in Section 6(e)(i)(3) or
Part 5(g), if the Settlement Amount is a negative number, the Unpaid
Amounts of Party A and Party B shall be subject to netting in
accordance with Section 2(c).
(f) "Termination Currency" means United States Dollars.
(g) "Additional Termination Event" will apply. The following shall constitute
Additional Termination Events, and the party specified shall be the Affected
Party with respect thereto:--
(i) Termination of Trust Fund. The Trust, Supplemental Interest Trust
or Trust Fund shall be terminated pursuant to any provision of the
Pooling and Servicing Agreement (including, without limitation, by
exercise of the option to purchase and giving of notice under Sections
10.01 and 10.02 of the Pooling and Servicing Agreement). The Early
Termination Date with respect to such Additional Termination Event
shall be the Distribution Date upon which the Trust and the
Supplemental Interest Trust or Trust Fund is terminated and final
payment is made in respect of the Certificates. Each of Party A and
Party B may designate an Early Termination Date in respect of this
Additional Termination Event. Party B shall be the sole Affected Party.
(ii) Amendment of Pooling and Servicing Agreement. The amendment of the
Pooling and Servicing Agreement in a manner which has a material
adverse affect on Party A without first obtaining the prior written
consent of Party A (such consent not to be unreasonably withheld),
where such consent is required under the Pooling and Servicing
Agreement. Party B shall be the sole Affected Party.
(iii) Collateralization Event or Ratings Event. A Collateralization
Event or Ratings Event (as defined in Part 5(j)(i)) has occurred and is
continuing and Party A fails to comply with the provisions of Part
5(j)(ii) within the time periods set out therein, and, with respect to
a Ratings Event, at least one substitute counterparty has made an offer
which remains capable of becoming legally binding upon acceptance to be
the Transferee of an assignment, transfer or replacement in accordance
with Part 5(j)(B)(1)). Party A shall be the sole Affected Party.
22
(iv) Regulation AB. Party A shall fail to comply with the provisions of
Part 5(k) within the time provided for therein. Party A shall be the
sole Affected Party.
Part 2. Tax Representations.
(a) Payer Representations. For the purpose of Section 3(e), Party A and Party B
make the following representations:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e)) to be made by it to
the other party under this Agreement. In making this representation, it may rely
on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f);
(ii) the satisfaction of the agreement contained in Section 4 (a)(i) or
4(a)(iii) and the accuracy and effectiveness of any document provided
by the other party pursuant to Section 4 (a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d), provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice of its legal or commercial position.
(b) Payee Representations. For the purpose of Section 3(f), Party A and Party B
make the following representations.
(i) The following representation will apply to Party A:
(x) It is a "U.S. person" (as that term is used in section
1.1441-4(a)(3)(ii) of the United States Treasury Regulations)
for United States federal income tax purposes, (y) it is a
trust company duly organized and existing under the laws of
the State of New York, and (y) its U.S. taxpayer
identification number is 000000000.
(ii) The following representation will apply to Party B:
None.
(c) Additional Amounts Not Payable by Party B. Party B shall not be required to
pay any additional amounts pursuant to Section 2(d)(i)(4).
23
Part 3. Agreement to Deliver Documents. For the purpose of Section 4(a):
(a) Tax forms, documents or certificates to be delivered are:
---------------------------------------------------------------------------------------------------------
Party required to Form/Document/ Certificate Date by which to be
deliver document delivered
---------------------------------------------------------------------------------------------------------
Party A and Any form or other document required or (i) Prior to the first
Party B reasonably requested to allow the other party to scheduled Distribution
make payments under this Agreement without any Date; (ii) promptly upon
deduction or withholding for or on account reasonable demand by the
of any tax or with such deduction or withholding at other party; and (iii)
a reduced rate. promptly upon learning
that any form previously
provided by to the other
party has become obsolete
or incorrect.
--------------------------- ----------------------------------------------------- -------------------------
(b) Other documents to be delivered are:
----------------------------------------------------------------------------------------------------------
Party required to Form/Document/ Date by which to be Covered by Section
deliver document Certificate delivered 3(d) Representation
----------------------------------------------------------------------------------------------------------
Party A A certificate of an authorized Upon the execution and Yes
officer of the party, as to the delivery of this
incumbency and authority of the Agreement
respective officers of the party
signing this Agreement, any
relevant Credit Support
Document, or any Confirmation,
as the case may be.
----------------------- ---------------------------------- -------------------------- ---------------------
Party B (i) a copy of the executed As to (i) within 30 days Yes
Pooling and Servicing Agreement, of execution and
(ii) an incumbency certificate delivery of the Pooling
verifying the true signatures and Servicing Agreement
and authority of the person or and as to (ii) and (iii)
persons signing this Agreement upon execution and
on behalf of Party B, and (iii) delivery of this
a certified copy of the Agreement
authorizing resolution (or
equivalent authorizing
documentation) of the
Supplemental Interest Trust
Trustee which sets forth the
authority of each signatory to
the Confirmation signing on its
behalf and the authority of such
party to enter into Transactions
contemplated and performance of
its obligations hereunder.
----------------------- ---------------------------------- -------------------------- ---------------------
24
----------------------- ---------------------------------- -------------------------- ---------------------
Party A A copy of the annual balance Promptly after request No.
sheet of Party A for the most by Party B; provided, if
recently completed fiscal year available on
and publicly available in its xxxx://xxx.xxxx.xxx,
regulatory call report. such delivery is not
required.
----------------------- ---------------------------------- -------------------------- ---------------------
Party A A legal opinion as to Upon the execution and Yes
enforceability of this Agreement delivery of this
and any Confirmation evidencing Agreement and such
a Transaction hereunder. Confirmation
----------------------- ---------------------------------- -------------------------- ---------------------
Party B A legal opinion as to the Upon the execution and Yes
enforceability of this Agreement delivery of this
and any Confirmation evidencing Agreement and such
a Transaction hereunder Confirmation
----------------------- ---------------------------------- -------------------------- ---------------------
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purpose of Section 12(a) :
Address for notices or communications to Party A:
Party A: With respect to any Transaction, to the office(s) specified in
the Confirmation related to such Transaction. A copy of any notice or
other communication with respect to Sections 5 or 6 should also be sent
to the addresses set out below:
The Bank of New York
Legal Department
Xxx Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Address for notices or communications to Party B:
Address: Xxxxx Fargo Bank, N.A.,
not in its individual capacity, but solely
as Supplemental Interest Trust Trustee on
behalf of the Banc of America Funding
Corporation 2006-I Supplemental Interest
Trust 0000 Xxx Xxxxxxxxx Xx.
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager - Banc of America Funding 2006-I
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
(For all purposes.)
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent:-- not applicable.
Party B appoints as its Process Agent:-- not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
25
(d) Multibranch Party. For the purpose of Section 10(c):
Party A is a Multibranch Party and will enter into each Transaction
only through the following Office:- New York (for all Transactions).
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) "Credit Support Document" Credit Support Document means in relation to:--
Party A: the Credit Support Annex hereto and any guaranty upon
downgrade.
Party B: Not applicable.
(g) "Credit Support Provider" means in relation to:
Party A: Not Applicable (except with respect to credit support
furnished pursuant to Part 5(j) or 5(k)).
Party B: Not Applicable.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine other than New York General Obligations Law Sections 5-1401 and
5-1402.
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) will apply.
(j) "Affiliate" will have the meaning specified in Section 14, provided, that,
Party B shall not be deemed to have any Affiliates for purposes of this
Agreement, including for purposes of Section 6(b)(ii) hereof.
(k) Additional Representations. Section 3 is hereby amended by adding after
Section 3(f) the following subsections:
"(g) Relationship Between Parties.
(1)Nonreliance. It is not relying on any statement or
representation of the other party regarding the Transaction
(whether written or oral), other than the representations
expressly made in this Agreement or the Confirmation in respect
of that Transaction.
(2)Evaluation and Understanding.
(i) It is acting for its own account and has the capacity to
evaluate (internally or through independent professional
advice) the Transaction and has made its own decision to enter
into the Transaction; it is not relying on any communication
(written or oral) of the other Party As investment advice or
as a recommendation to enter into such transaction; it being
understood that information and explanations related to the
terms and conditions of such transaction shall not be
considered investment advice or a recommendation to enter into
such transaction. No communication (written or oral) received
from the other party shall be deemed to be an assurance or
guarantee as to the expected results of the transaction; and
(ii) It understands the terms, conditions and risks of the
Transaction and is willing and able to accept those terms and
conditions and to assume (and does, in fact assume) those
risks, financially and otherwise.
(3) Principal. The other party is not acting as a fiduciary or an
advisor for it in respect of this Transaction.
26
(h) Exclusion from Commodities Exchange Act. (1) It is an "eligible
contract participant" within the meaning of Section 1a(12) of the
Commodity Exchange Act, as amended; (2) this Agreement and each
Transaction is subject to individual negotiation by such party; and (3)
neither this Agreement nor any Transaction will be executed or traded
on a "trading facility" within the meaning of Section 1a(33) of the
Commodity Exchange Act, as amended.
(i) Swap Agreement. Each Transaction is a "swap agreement" as defined
in 12 U.S.C. Section 1821(e)(8)(D)(vi) and a "covered swap agreement"
as defined in the Commodity Exchange Act (7 U.S.C.
Section 27(d)(1)).["]
Part 5. Other Provisions.
(a) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(b) Recording of Conversations. Each party (i) consents to the recording of
telephone conversations between the trading, marketing and other relevant
personnel of the parties in connection with this Agreement or any potential
Transaction, (ii) agrees to obtain any necessary consent of, and give any
necessary notice of such recording to, its relevant personnel and (iii) agrees,
to the extent permitted by applicable law, that recordings may be submitted in
evidence in any Proceedings.
(c) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits
or expectations of the parties. The parties shall endeavor to engage in good
faith negotiations to replace any invalid or unenforceable term, provision,
covenant or condition with a valid or enforceable term, provision, covenant or
condition, the economic effect of which comes as close as possible to that of
the invalid or unenforceable term, provision, covenant or condition.
(d) Set-off. All payments under this Agreement shall be made without
set-off or counterclaim, except as provided in Section 2(c), Section 6 or the
provisions hereof relating to Market Quotation and Loss. Section 6(e) is amended
by deleting the following sentence: "The amount, if any, payable in respect of
an Early Termination Date and determined pursuant to this Section will be
subject to any Set-off." For the avoidance of doubt, if more than one
Transaction is entered into under this Agreement, nothing herein is intended to
prevent the determination of a Settlement Amount with respect to all such
Transactions pursuant to Section 6.
(e) Failure to Pay or Deliver. Section 5(a)(i) is hereby amended by replacing
the word "third" by the word "second" in the third line thereof.
(f) Non-Recourse. Notwithstanding any provision herein or in this Agreement to
the contrary, the obligations of the Supplemental Interest Trust hereunder are
limited recourse obligations of the Supplemental Interest Trust, payable solely
from the Swap Account . In the event that the Swap Account and proceeds thereof
should be insufficient to satisfy all claims outstanding and following the
realization of the Swap Account and the distribution of the proceeds thereof in
accordance with the Pooling and Servicing Agreement, any claims against or
obligations of the Trust and the Supplemental Interest Trust under this
Agreement or any confirmation hereunder still outstanding shall be extinguished
and thereafter not revive.
(g) Limitation on Institution of Bankruptcy Proceedings. Party A shall not
institute against or cause any other person to institute against, or join any
other person in instituting against Party B, the Depositor or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
under any of the laws of the United States or any other jurisdiction, for a
27
period of one year and one day (or, if longer, the applicable preference period)
following indefeasible payment in full of the Overcollateralized Certificates.
(h) Priority of Payments. Amounts payable to Party A hereunder (other than
Transfers of Posted Credit Support under the Credit Support Annex Unpaid Amounts
(including earnings on Posted Cash Collateral), interest pursuant to Section
6(d)(ii) and the Settlement Amounts paid in respect of a Replacement
Transaction) shall be subject to the priority of payments as set forth in
Section 5.03 of the Pooling and Servicing Agreement). Settlement Amounts shall
be payable only on a Distribution Date. This provision shall survive the
termination or expiration of this Agreement.
(i) Transfer, Amendment and Assignment. Notwithstanding the provisions of
Section 7 and Section 9(b), no assignment, transfer, amendment, waiver,
supplement or other modification of any Transaction shall be permitted by either
party unless the Rating Agency Condition is satisfied with respect thereto.
(j) Ratings Downgrade.
(i) Definitions. For purposes of each Transaction: (A) "Rating Agency
Condition" means, with respect to any action taken or to be taken
hereunder, a condition that is satisfied when each of, Fitch, Inc.
("Fitch"), Xxxxx'x Investors Service Inc. ("Moody's") and Standard &
Poor's Ratings Services, a division of The McGraw Hill Companies, Inc.
("S&P")] (each a "Rating Agency", and the rating condition with respect
to it, the "Fitch Rating Condition", "Xxxxx'x Rating Condition" and
"S&P Rating Condition", respectively) has confirmed in writing to the
Securities Administrator that such action will not result in
withdrawal, reduction or other adverse action with respect to any
then-current rating by such Rating Agency of the Offered
Overcollateralized Certificates; (B) "Qualifying Ratings" means, with
respect to the debt of any assignee or guarantor hereunder, (1) a
short-term unsecured and unsubordinated debt rating of "P-1" (not on
watch for downgrade), and a long-term unsecured and unsubordinated debt
of "A1" (not on watch for downgrade) (or, if it has no short-term
unsecured and unsubordinated debt rating, a long term rating of "Aa3"
(not on watch for downgrade) by Moody's, and (2) a short-term unsecured
and unsubordinated debt rating of "A-1," or if it does not have a
short-term rating, a long-term unsecured and unsubordinated debt rating
of "A+" by S&P, and (3) a short-term unsecured and unsubordinated debt
rating of "F1" by Fitch and a long-term unsecured and unsubordinated
debt rating of "A" by Fitch; (C) a "Collateralization Event" shall
occur with respect to Party A (or any applicable credit support
provider) if: (1) its short-term unsecured and unsubordinated debt
rating is reduced to "P-2", and its long-term unsecured and
unsubordinated debt is reduced to "A3" or below (or, if it has no
short-term unsecured and unsubordinated debt rating, its long term
rating is reduced to "A2" or lower) by Moody's (a "Moody's
Collateralization Event"), or (2) its short-term unsecured and
unsubordinated debt rating is reduced to "A-2" or below, or, if it does
not have a short-term rating, its long-term unsecured and
unsubordinated debt rating is reduced to "A" or below by S&P (a "S&P
Collateralization Event"); or (3) its short-term unsecured and
unsubordinated debt rating is reduced to "F-2" or lower by Fitch (a
"Fitch Collateralization Event"); and (D) a "Ratings Event" shall occur
with respect to Party A (or any applicable credit support provider) if:
(1) its short-term unsecured and unsubordinated debt rating is
withdrawn or reduced to "P-3" or lower and its long-term unsecured and
unsubordinated debt is reduced to "Baa1" (or, if it has no short-term
unsecured and unsubordinated debt rating, its long term rating is
reduced to "Baa1" or lower) by Moody's (a "Moody's Ratings Event"), or
(2) its long-term unsecured and unsubordinated debt rating is withdrawn
or reduced to "BBB" or lower by S&P (a "S&P Ratings Event"), or (3) its
short-term unsecured and unsubordinated debt rating is withdrawn or
reduced to "F3" or below and its long-term unsecured and unsubordinated
28
debt rating is withdrawn or reduced to "BBB" or lower by Fitch (a
"Fitch Ratings Event").
(ii) Actions to be Taken. Subject, in each case to satisfaction of the
Rating Agency Condition: (A) if a Collateralization Event occurs with
respect to Party A (or any applicable credit support provider), then
Party A shall, at its own expense, within thirty (30) days of such
Collateralization Ratings Event: (1) post collateral in accordance with
the Credit Support Annex; or (2) on terms substantially similar to this
Agreement assign or transfer the Transactions to or replace the
Transactions with transactions with a third party approved by Party B
(such approval not to be unreasonably withheld) the ratings of which
(or of the guarantor of which) meet or exceed the Qualifying Ratings;
or (3) obtain a guaranty of or a contingent agreement to honor Party
A's obligations under this Agreement by a third party approved by Party
B (such approval not to be unreasonably withheld) the ratings of which
(or of the guarantor of which) meet or exceed the Qualifying Ratings;
or (4) establish any other arrangement approved by Party B (such
approval not to be unreasonably withheld) that satisfies the Rating
Condition; and (B) if a Ratings Event occurs with respect to Party A
(or any applicable Credit Support Provider), then Party A shall, at its
own expense, within ten (10) Business Days of such Ratings Event: (1)
on terms substantially similar to this Agreement assign or transfer the
Transactions to or replace the Transactions with transactions with a
third party approved by Party B (such approval not to be unreasonably
withheld) the ratings of which (or of the guarantor of which) meet or
exceed the Qualifying Ratings, or (2) obtain a guaranty of or a
contingent agreement to honor Party A's obligations under this
Agreement by a third party approved by Party B (such approval not to be
unreasonably withheld) the ratings of which (or of the guarantor of
which) meet or exceed the Qualifying Ratings; or (3) establish any
other arrangement approved by Party B (such approval not to be
unreasonably withheld) that satisfies the Rating Condition.
(k) Regulation AB. For purposes of Items 1114 and 1115 ("Item 1114" and "Item
1115", respectively) of Subpart 229.1100 - Asset Backed Securities (Regulation
AB) (17 C.F.R. ss.ss.229.1100 - 229.1123) ("Regulation AB") under the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as amended and interpreted by the Securities and Exchange
Commission and its staff, if the Depositor or Party B makes a determination,
acting reasonably and in good faith, that (x) the applicable percentage of the
cash flow supporting any offered class of the asset-backed securities with
respect to which Party A is liable to provide payments under Item 1114 or
"significance percentage" with respect to this Agreement under Item 1115 has
been reached (the "applicable percentage"), and (y) it has a reporting
obligation under the Exchange Act, then Party A shall ("Reg AB Disclosure
Event"), within five (5) Business Days after notice to that effect, at its sole
expense, take one of the following actions (each subject to the Rating Agency
Condition): (1) provide (including, if permitted by Regulation AB, provision by
reference to reports filed pursuant to the Exchange Act or otherwise publicly
available information): (A) (i)(x) the financial data required by Item 301 of
Regulation S-K (17 C.F.R. ss.229.301), pursuant to Item 1115(b)(1); (y)
financial statements meeting the requirements of Regulation S-X (17 C.F.R.
ss.ss.210.1-01 through 210.12-29, but excluding 17 C.F.R. ss. 210.3-05 and
Article 11 of Regulation S-X (17 C.F.R. ss. ss. 210.11-01 through 210.11-03)),
pursuant to Item 1114(b)(2) or Item 1115(b)(2); or (z) such other financial
information as may at the time be required or permitted to be provided in
satisfaction of the requirements of Items 1114(b) or 1115(b); and (ii) any
updates to such financial information within five (5) Business Days of the
release thereof, and (B) the consent to filing in the Exchange Act Reports of
the Depositor the report relating to audits of such financial statements by the
firm conducting such audit; or (2) post collateral in accordance with the Credit
29
Support Annex (which, for such purpose, will be modified to substitute for
"Collateralization Event" throughout the words "Reg AB Disclosure Event," and
define "Credit Support Amount" therein as needed so as to result in the posting
of an amount sufficient to reduce the applicable percentage below the
requirements of Item 1114 or Item 1115); or (3) on terms substantially similar
to this Agreement assign or transfer the Transactions to or replace the
Transactions with transactions with a third party approved by Party B (such
approval not to be unreasonably withheld) the ratings of which (or of the
guarantor of which) meet or exceed the Qualifying Ratings and which is able to
comply with the requirements of Item 1114(b) and Item 1115(b) and provides the
financial information and consents and any indemnification provided for in
connection with this Agreement; or (4) obtain a guaranty of or a contingent
agreement to honor Party A's obligations under this Agreement by a third party
approved by Party B (such approval not to be unreasonably withheld) the ratings
of which (or of the guarantor of which) meet or exceed the Qualifying Ratings
and which is able to comply with the requirements of Item 1114(b) and Item
1115(b) and provides the financial information and consents and any
indemnification provided for in connection with this Agreement. Party A's
obligation to comply with this Part 5(k) shall be suspended on January 1, 2007
unless, at any time, Party A receives notification from the Depositor or the
Securities Administrator that the Trust Fund's obligation to file periodic
reports under the Exchange Act shall continue; provided, however, that such
obligations shall not be suspended in respect of any Exchange Act Report or
amendment to an Exchange Act Report in such fiscal year which relates to any
fiscal year in which the Trust Fund was subject to the reporting requirements of
the Exchange Act. This obligation shall continue to be suspended unless the
Depositor or Securities Administrator notifies Party A that the Trust Fund's
obligations to file reports under the Exchange Act has resumed. If the Depositor
or Party B reasonably requests, Party A shall provide such other information as
may be necessary for the Depositor to comply with Item 1114 or Item 1115. The
Depositor shall be an express third party beneficiary of this Agreement as if a
party hereto to the extent of Depositor's rights explicitly specified herein.
(l) Supplemental Interest Trust Trustee's Capacity. It is expressly understood
and agreed by the parties hereto that, insofar as this Agreement and any
confirmation evidencing a Transaction hereunder is executed by Xxxxx Fargo Bank,
N.A, (i) this Agreement and such confirmation is executed and delivered by Xxxxx
Fargo Bank, N.A, not in its individual capacity but solely as Supplemental
Interest Trust Trustee of the Supplemental Interest Trust pursuant to the
Pooling and Servicing Agreement in the exercise of the powers and authority
conferred and vested in it thereunder, and pursuant to instruction set forth
therein, (ii) each of the representations, undertakings and agreements herein or
therein made on behalf of the Supplemental Interest Trust is made and intended
not as a personal representation, undertaking or agreement of Xxxxx Fargo Bank,
N.A but is made and intended for the purpose of binding only the Supplemental
Interest Trust, and (iii) under no circumstances xxxx Xxxxx Fargo Bank, N.A, in
its individual capacity, be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken under
this Agreement or any such confirmation
(m) Supplemental Interest Trust Trustee's Representation. Xxxxx Fargo Bank, N.A,
as Supplemental Interest Trust Trustee of the Supplemental Interest Trust
represents and warrants that:
It has been directed under the Pooling and Servicing Agreement to enter
into this Agreement and each confirmation evidencing a Transaction
hereunder as Supplemental Interest Trust Trustee on behalf of the
Supplemental Interest Trust.
[Signature page immediately follows]
30
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on the
first page of this Agreement:
THE BANK OF NEW YORK XXXXX FARGO BANK, N.A.,
not in its individual
capacity, but solely as
Supplemental Interest Trust
Trustee on behalf of the
Banc of America Funding
Corporation 2006-I
Supplemental Interest Trust
By: --------------------------- By: ------------------------
Name: Name:
Title: Title:
Date: Date:
31
(Bilateral Form) (ISDA Agreements Subject to New York Law Only)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA Master Agreement
----------------------
Dated as of November 30, 2006
between
THE BANK OF NEW YORK and XXXXX FARGO BANK, N.A.,
not in its
individual capacity,
but solely as
Supplemental
Interest Trust
Trustee on behalf of
the Banc of America
Funding Corporation
2006-I Supplemental
Interest Trust
established as a banking organization The Supplemental Interest is a
under the laws of the State of New York common law trust established under
the laws of the State of New York.
("Party A") ("Party B")
--------------------------------- -----------------------------------
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to Party A.
Accordingly, the parties agree as follows:--
Paragraphs 1 - 12. Incorporation. Paragraphs 1 through 12 inclusive of the ISDA
Credit Support Annex (Bilateral Form) (ISDA Agreements Subject to New York Law
Only) published in 1994 by the International Swaps and Derivatives Association,
Inc. are incorporated herein by reference and made a part hereof, except that
Paragraph 1(b) is hereby amended in its entirety to read as follows:
"(b) Secured Party and Pledgor. Notwithstanding anything contained in this Annex
to the contrary, (a) the term "Secured Party" as used in this Annex means only
Party B, (b) the term "Pledgor" as used in this Annex means only Party A, (c)
only Party A makes the pledge and grant in Paragraph 2, the acknowledgment in
the final sentence of Paragraph 8(a) and the representations in Paragraph 9, and
(d) only Party A will be required to make Transfers of Eligible Credit Support
hereunder."
A-1
Paragraph 13.
Certain Definitions. As used herein, "Fitch", "Xxxxx'x", "S&P", "Rating Agency",
"Collateralization Event", "Fitch Collateralization Event"; "Moody's
Collateralization Event", "S&P Collateralization Event"; "Ratings Event", "Fitch
Ratings Event", "Moody's Ratings Event", and "S&P Ratings Event" have the
meanings assigned in the Schedule.
(a) Security Interest for "Obligations." The term "Obligations" as used in this
Annex includes the following additional obligations: Not applicable.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph
3(a) except that the words "upon a demand made by the
Transferee on or promptly following a Valuation Date" shall be
deleted and replaced by the words "on each Valuation Date
commencing no later than the Local Business day next following
the Valuation Date falling, in the case of a Collateralization
Event, on the 30th Local Business Day (or, in the case of an
S&P Collateralization Event, the 30th day or the next day
thereafter that is a Local Business Day), or, in the case of a
Ratings Event, promptly, after publication by the applicable
Rating Agency of the applicable change in rating,".
(B) "Return Amount" has the meaning specified in Paragraph
3(b).
(C) "Credit Support Amount" in Paragraph 3(b), shall be
amended in its entirety to read as follows:
"'Credit Support Amount' means, unless otherwise
specified in Paragraph 13, for any Valuation Date
after and during the continuance of a
Collateralization Event or Ratings Event, (i) the
Secured Party's Exposure for that Valuation Date,
plus (ii) the aggregate of all Independent Amounts
applicable to the Pledgor, if any, minus (iii) all
Independent Amounts applicable to the Secured Party,
if any, minus (iv) the Pledgor's Threshold; provided,
however, that the Credit Support Amount will be
deemed to be zero whenever the calculation of the
Credit Support Amount yields a number less than zero;
and, provided further, that the Credit Support Amount
in respect of a Xxxxx'x Rating Event will not be less
than the amount of the next scheduled Payment in
respect of the Affected Transactions to be made by
the Pledgor.
(ii) Eligible Collateral. The items set forth in Schedule 1 will
qualify as "Eligible Collateral" for Party A.
(iii) Other Eligible Support. The following items will qualify as
"Other Eligible Support" for the party specified: Not Applicable.
(iv) Thresholds.
(A) "Independent Amount" means with respect to Party B: Zero;
and, with respect to Party A: an amount, as of the date of
determination, equal to the product of the aggregate Notional
Amount outstanding at the beginning of the related Calculation
Period under the applicable Affected Transactions, and:
(1) in respect of a Moody's Collateralization
Event, the lesser of (x) 2% (for daily
valuation) or 4% (for weekly valuation) or
(y) the Moody's Increase Factor at First
Trigger, and, in respect of a Moody's
Ratings Event, the lesser of (x) 8% (for
daily valuation) or 9% (for weekly
valuation) or (y) the Moody's Increase
Factor at Second Trigger; and
(2) in respect of an S&P Collateralization Event
or an S&P Ratings Event, (x) with respect to
basis risk swaps, the product of the S&P
Volatility Buffer and .10, and (y) with
respect to all other Transactions the S&P
Volatility Buffer; and
A-2
(3) in respect of a Fitch Collateralization
Event or a Fitch Ratings Event, the Fitch
Volatility Cushion.
As used herein, the "Moody's Increase Factor" will be
determined using the table set forth in Schedule 2; the "S&P
Volatility Buffer" will be determined using the table set
forth in Schedule 3; and the "Fitch Volatility Cushion" will
be determined using the table set forth in Schedule 4.
(B) "Threshold" means for each party: An infinite number;
provided, that the Threshold for Party A shall be zero upon
the occurrence and during the continuance of an Event of
Default, Termination Event, Additional Termination Event,
Ratings Event, Collateralization Event (provided that, with
respect to a Collateralization Event, such event shall have
continued for at least 30 days) or Specified Condition with
respect to such party.
(C) "Minimum Transfer Amount" means with respect to Party A
and Party B: $100,000; provided, that the Minimum Transfer
Amount for such party shall be $50,000 in respect of an S&P
Collateralization Event if the aggregated principal balance of
the Certificates is less than $50,000,000 on the applicable
Valuation Date, and shall be zero upon the occurrence and
during the continuance of an Event of Default, Termination
Event, Additional Termination Event, or Specified Condition
with respect to such party.
(D) Rounding. The Delivery Amount and the Return Amount will
be rounded up and down respectively to the nearest integral
multiple of $1,000.
(v) Conflicting Rating Conditions. If any outstanding Certificates are
rated by more than one Rating Agency and a Collateralization Event or
Ratings Event with respect to each such Rating Agency has occurred and
is continuing, the Credit Support Amount and Independent Amount of
Party A shall equal the highest, and the Return Amount and Valuation
Percentage shall equal the lowest, of the applicable amounts determined
as set forth above; provided, that the Credit Support Amount and
Independent Amount may equal the lowest, and the Return Amount and
Valuation Percentage may equal the highest, of the applicable amounts
determined as set forth above if the Rating Condition of each Rating
Agency is satisfied with respect with respect thereto.
(c) Valuation and Timing.
(i) "Valuation Agent" means, Party A, provided, that if any Event of
Default with respect to Party A has occurred and is continuing, then
any designated third party mutually agreed to by the parties shall be
the Valuation Agent until such time as Party A is no longer a
Defaulting Party.
(ii) "Valuation Date" means:
[X] each Local Business Day, or
[ ] any Local Business Day in each calendar week, which shall
be the same calendar day each week to the extent practicable,
on a reasonably consistent basis.
If not selected above, the Valuation Date shall be selected by Party A
upon the first to occur of a Collateralization Event or Ratings Event
and shall not be changed thereafter.
(iii) "Valuation Time" means:
[ ] the close of business in the city of the Valuation
Agent on the Valuation Date or date of calculation,
as applicable;
[X] the close of business on the Local Business Day before the
Valuation Date or date of calculation, as applicable;
provided, that the calculations of Value and Exposure will be made as
of approximately the same time on the same date.
(iv) "Notification Time" means 1:00 p.m., New York time, on a Local
Business Day.
A-3
(d) Conditions Precedent and Secured Party's Rights and Remedies. (i)
Illegality, (ii) Credit Event Upon Merger, and (ii) Additional Termination
Events will be a "Specified Condition" for Party A (as the Affected Party) (but
not for purposes of Paragraph 8(d)), and (iv) Tax Event and (v) Tax Event Upon
Merger will not be a "Specified Condition for Party A.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph
4(d)(ii).
(ii) Consent. If specified here as applicable, then the Pledgor must
obtain the Secured Party's consent for any substitution pursuant to
Paragraph 4(d): Applicable.
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m., New York time, on the Local
Business Day following the date on which the notice is given that gives
rise to a dispute under Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value
of Posted Credit Support will be calculated as follows: as set forth
for other purposes in Paragraph 12.
(iii) Alternative. The provisions of Paragraph 5 will apply, except to
the following extent: (A) pending the resolution of a dispute, Transfer
of the undisputed Value of Eligible Credit Support or Posted Credit
Support involved in the relevant demand will be due as provided in
Paragraph 5 if the demand is given by the Notification Time, but will
be due on the second Local Business Day after the demand if the demand
is given after the Notification Time; and (B) the Disputing Party need
not comply with the provisions of Paragraph 5(II)(2) if the amount to
be Transferred does not exceed the Disputing Party's Minimum Transfer
Amount.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians. The Secured
Party will not be entitled to hold Posted Collateral itself. The
Secured Party will be hold Posted Collateral through a Custodian (which
may be the Securities Administrator or Trustee and which shall at all
times be a financial institution as specified under Section 9.05 of the
Pooling and Servicing Agreement, or, if not so specified, which shall
be a commercial bank or trust company which is unaffiliated with Party
B organized under the laws of the United States or any state thereof,
having assets of at least $10 billion and a long term debt or a deposit
rating of at least (i) Baa2 from Moody's and (ii) BBB from S&P, in an
identifiable segregated account (provided that, so long as the
Certificates are rated by S&P, the Custodian must have a short-term
debt or deposit rating of at least A-1 from S&P).
Initially, the Custodian for Party B is: Xxxxx Fargo Bank, N.A.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will
apply to the Secured Party; therefore, Party B will not have any of the
rights specified in Paragraph 6(c)(i) or 6 (c)(ii).
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate", with respect to Eligible
Collateral in the form of Cash will be, if the custodian or trustee is
instructed to invest Cash Posted Collateral as provided herein, the
rate actually earned on the Cash Posted Collateral or, if the Pledgor
instructs that the Cash Posted Collateral not be invested, an amount
equal to the contractual rate of interest entitled to be received on
such amounts from the Swap Collateral Account (as hereinbelow defined),
as applicable; provided, that, if the Swap Collateral Account does not
pay interest and the Custodian or Trustee is not obligated to invest
Cash Posted Collateral under the Pooling and Servicing Agreement, the
"Interest Rate" will be, for any day, the rate opposite the caption
"Federal Funds (Effective)" for such day as published for such day in
Federal Reserve Publication H.15(519) or any successor publication as
A-4
published by the Board of Governors of the Federal Reserve System or
such other rate as agreed by the parties.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made (x) with respect to earnings from Eligible Investments
pursuant to Part 13(l)(vii) or from the interest on the Swap Collateral
Account pursuant to Part 13(h)(i), on such date as accrued and received
(or if so agreed, on the first Local Business Day of each calendar
month) and on any Local Business Day that Posted Collateral in the form
of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b), and
(y) with respect to any other Interest Amount, subject to the
availability of interest and earnings on the Mortgage Loans therefor,
on the first Local Business Day of each calendar month and on any Local
Business Day that Posted Collateral in the form of Cash is Transferred
to the Pledgor pursuant to Paragraph 3(b).
(iii) Alternative to Interest Amount. The provisions of Paragraph
6(d)(ii) will apply.
(i) Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other Posted
Support means: Inapplicable.
(ii) "Transfer" with respect to Other Eligible Support and Other Posted
Support means: Inapplicable.
(j) Demands and Notices. All demands, specifications and notices under this
Annex will be made pursuant to the Notices Section of this Agreement, unless
otherwise specified here:
(i) Party A: not applicable.
(ii) Party B:
Address: Xxxxx Fargo Bank, N.A.,
not in its individual capacity, but solely
as Supplemental Interest Trust Trustee on
behalf of the Banc of America Funding
Corporation 2006-I Supplemental Interest
Trust
0000 Xxx Xxxxxxxxx Xx.
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager - Banc of America Funding 2006-I
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
(k) Addresses for Transfers.
Party A: For Cash: To be provided
For Eligible Collateral: To be provided
Party B: Xxxxx Fargo Bank, N.A.
San Francisco, CA
ABA # 000-000-000.
Acct #: 0000000000
Acct. Name: SAS Clearing
FFC #: 00000000- Swap Account
FFC #: 00000000 - Floor Account
(l) Other Provisions.
(i) Additional Definitions. As used in this Annex:--
"Equivalent Collateral" means, with respect to any security
constituting Posted Collateral, a security of the same issuer
and, as applicable, representing or having the same class,
series, maturity, interest rate, principal amount or
liquidation value and such other provisions as are necessary
for that security and the security constituting Posted
Collateral to be treated as equivalent in the market for such
securities;
A-5
"Local Business Day" means: (i) any day on which commercial
banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in New York, and (ii)
in relation to a Transfer of Eligible Collateral, a day on
which the clearance system agreed between the parties for the
delivery of Eligible Collateral is open for acceptance and
execution of settlement instructions (or in the case of a
Transfer of Cash or other Eligible Collateral for which
delivery is contemplated by other means, a day on which
commercial banks are open for business (including dealings for
foreign exchange and foreign currency deposits) in New York
and such other places as the parties shall agree);
(ii) Transfer Timing.
(A) Paragraph 4(b) shall be deleted and replaced in its
entirety by the following paragraph: "Subject to Paragraphs
4(a) and 5 and unless otherwise specified, if a demand for the
Transfer of Eligible Credit Support or Posted Credit Support
is made by the Notification Time, then the relevant Transfer
will be made not later than the close of business on the
second Local Business Day thereafter; if a demand is made
after the Notification Time then the relevant Transfer will be
made not later than the close of business on the third Local
Business Day thereafter."
(B) Paragraph 6(d)(1) shall be amended so that the reference
therein to "the following Local Business Day" shall be
replaced by reference to "the second Local Business Day
thereafter".
(iii) Events of Default. Paragraph 7 shall be deleted and replaced in
its entirety by the following paragraph:
"For the purposes of Section 5(a)(i) of this Agreement, an
Event of Default will exist with respect to a party if that
party fails (or fails to cause its Custodian) to make, when
due, any Transfer of Eligible Credit Support, Posted Credit
Support or the Interest Amount, as applicable, required to be
made by it and that failure continues for two Local Business
Day after the notice of that failure is given to that party;
provided, that, with respect to a failure to Transfer Eligible
Credit Support, at least 30 Local Business Days have elapsed
after a Ratings Event has occurred and such failure is not
remedied on or before the third Local Business Day after
notice of such failure is given to Party A".
(iv) Return of Fungible Securities. In lieu of returning to the Pledgor
pursuant to Paragraphs 3(b), 4(d), 5 and 8(d) any Posted Collateral
comprising securities the Secured Party may return Equivalent
Collateral.
(v) No Counterclaim. A party's rights to demand and receive the
Transfer of Eligible Collateral as provided hereunder and its rights as
Secured Party against the Posted Collateral or otherwise shall be
absolute and subject to no counterclaim, set-off, deduction or defense
in favor of the Pledgor except as contemplated in Sections 2 and 6 of
the Agreement and Paragraph 8 of this Annex.
(vi) Holding Collateral. The Secured Party shall cause any Custodian
appointed hereunder to open and maintain a segregated account (the
"Swap Collateral Account") and to hold, record and identify all the
Posted Collateral therein and, subject to Paragraphs 6(c) and 8(a),
such Posted Collateral shall at all times be and remain the property of
the Pledgor and shall at no time constitute the property of, or be
commingled with the property of, the Secured Party or the Custodian.
(vii) Investment of Cash Posted Collateral. Cash Posted Collateral
shall be invested in Permitted Investments as directed by Party A. Such
instructions may be delivered as standing instructions, with gains and
losses incurred in respect of such investments to be for the account of
Party A, subject to the following parameters: the Cash Posted
Collateral shall be invested in such overnight (or redeemable within
A-6
two Local Business Days of demand) investments rated at least A-1+ by
S&P and Prime -1 by Xxxxx'x or AAAm or AAAmG by S&P and Aaa by Xxxxx'x
as directed by Party A (provided, that such investment shall be held
uninvested or invested at the direction of Party B if an Event of
Default or an Additional Termination Event has occurred with respect to
which Party A is the defaulting or sole Affected Party and Party B has
designated an Early Termination Date with respect thereto). Such
instructions may be delivered as standing instructions.
(viii) Return of Posted Collateral. At any time a Collateralization
Event or Ratings Event has occurred and is continuing with respect to
Party A, Party A shall be obligated to transfer Eligible Collateral in
accordance with the terms of this Annex. If a Collateralization Event
or Rating Event occurs and thereafter ceases to be continuing (and
provided that no Event of Default or Potential Event of Default exists
with respect to Party A) or Party A has made a Permitted Transfer under
this Agreement, then Party A's obligations to transfer Eligible
Collateral under this Annex will immediately cease with respect to that
Collateralization Event, and Party B will, upon demand by Party A,
return to Party A, or cause its Custodian to return, all Posted
Collateral held under this Annex. The Secured Party is authorized to
liquidate any Posted Collateral pursuant to written instructions from
Party A.
(ix) External Verification of Xxxx-to-Market Valuations. If the long
term senior unsecured debt of Party A is rated BBB or below by S&P or
Fitch (and with respect to the Fitch Rating Condition, its short-term
senior unsecured debt is rated F3 or below), once every month after an
S&P Ratings Event or Fitch Rating Event occurs and during its
continuance, Party A will at its own expense verify its determination
of Exposure of the Transaction on the next Valuation Date by seeking
quotations from two (2) Reference Market-makers (provided, that a
Reference Market-maker may not be used more than four times within each
12 month period) for their determination of Exposure of the Transaction
on such Valuation Date and the Valuation Agent will use the greater of
either (a) its own determination or (b) the high quotation for a
Reference Market-maker, if applicable for the next Valuation Date.
Party A shall provide the quotations of such Reference Market-makers to
S&P and Fitch.
(x) Expenses. Notwithstanding Paragraph 10, the Pledgor will be
responsible for, and will reimburse the Secured Party for, all transfer
and other taxes and other costs involved in the transfer of Eligible
Collateral.
(xi) Limit on Secured Party's Liability. The Secured Party will not be
liable for any losses or damages that the Pledgor may suffer as a
result of any failure by the Secured Party to perform, or any delay by
it in performing, any of its obligations under this Annex if the
failure or delay results from circumstances beyond the reasonable
control of the Secured Party or its Custodian, such as interruption or
loss of computer or communication services, labor disturbance, natural
disaster or local or national emergency.
(xii) Limited Responsibility of Supplemental Interest Trust Trustee.
The parties hereto acknowledge and agree that the Supplemental Interest
Trust Trustee shall have no (a) responsibility or liability for the
validity or sufficiency of any Posted Collateral, (b) duty or
responsibility for determining when Posted Collateral is required to be
provided by the Swap Provider under the Credit Support Annex or the
value of any Posted Collateral, or (c) duty or obligation to realize
upon any Posted Collateral in the event that any such collateral is
required to be liquidated pursuant to this Agreement or to enforce the
obligations of the issuer of any Posted Collateral.
[Signature page immediately follows]
A-7
IN WITNESS WHEREOF the parties have executed this Credit Support Annex
on the respective dates specified below with effect from the date on the first
page.
THE BANK OF NEW YORK XXXXX FARGO BANK, N.A.,
not in its individual
capacity, but solely as
Supplemental Interest
Trust Trustee of the
Banc of America Funding
Corporation 2006-I
Supplemental Interest
Trust
By: ---------------------------- By: --------------------
Name: Name:
Title: Title:
Date: Date:
A-8
SCHEDULE 1
ELIGIBLE COLLATERAL
Certificates: Banc of America Funding 2006-I Trust Mortgage Pass-Through
Certificates, Series 2006-I, Overcollateralized Certificates Highest Rating of
Certificates: Class 6-A-1 and 6-A-2 rated "Aaa" by Xxxxx'x , "AAA" by S&P, and
"AAA" by Fitch. Scheduled Date Certificates will fall below $50,000,000: not
applicable. Last Scheduled Payment Date of Transactions: November 20, 2011
Valuation Date (and Valuation Percentage column): Daily
----------------------------------------------------------------------------------------------------------------
Eligible Collateral & Valuation Percentages
Xxxxx'x and S&P
----------------------------------------------------------------------------------------------------------------
Valuation Percentage Valuation Percentage
-------- --------------------------------------------- ----------------------------- ---------------------------
Xxxxx'x S&P
-------- --------------------------------------------- ----------------------------- ---------------------------
Collateralization Rating Event Daily Weekly
Event
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(A) Cash: U.S. Dollars in depositary account 100 100 100 100
form
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(B) U.S. Treasury Securities: negotiable debt 100 100 98.9 98.6
obligations issued by the U.S. Treasury
Department after July 18, 1984 ("Treasuries")
having a remaining maturity of up to and not
more than 1 year.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(C) Treasuries having a remaining maturity of 100 99 98 97.3
greater than 1 year but not more than 2
years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(D) Treasuries having a remaining maturity of 100 98 97.4 95.8
greater than 2 years but not more than 3
years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(E) Treasuries having a remaining maturity of 100 97 95.5 93.8
greater than 3 years but not more than 5
years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(F) Treasuries having a remaining maturity of 100 95 93.7 91.4
greater than 5 years but not more than 7
years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(G) Treasuries having a remaining maturity of 100 94 92.5 90.3
greater than 7 years but not more than 10
years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(H) Treasuries having a remaining maturity of 100 89 91.1 87.9
greater than 10 years but not more than 20
years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(I) Treasuries having a remaining maturity of 100 87 88.6 84.6
greater than 20 years but not more than 30
years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
A-1-1
----------------------------------------------------------------------------------------------------------------
Eligible Collateral & Valuation Percentages
Xxxxx'x and S&P
----------------------------------------------------------------------------------------------------------------
Valuation Percentage Valuation Percentage
-------- --------------------------------------------- ----------------------------- ---------------------------
Xxxxx'x S&P
-------- --------------------------------------------- ----------------------------- ---------------------------
Collateralization Rating Event Daily Weekly
Event
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(J) Agency Securities: negotiable debt 100 99 98.5 98
obligations of the Federal National
Mortgage Association (FNMA), Federal Home
Loan Mortgage Corporation (FHLMC), Federal
Home Loan Banks (FHLB), Federal Farm Credit
Banks (FFCB), Tennessee Valley Authority
(TVA) (collectively, "Agency Securities")
issued after July 18, 1984 and having a
remaining maturity of not more than 1 year.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(K) Agency Securities having a remaining 100 98 97.7 96.8
maturity of greater than 1 year but not
more than 2 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(L) Agency Securities having a remaining 100 97 97.3 96.3
maturity of greater than 2 years but not
more than 3 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(M) Agency Securities having a remaining 100 96 94.5 94.5
maturity of greater than 3 years but not
more than 5 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(N) Agency Securities having a remaining 100 94 93.1 90.3
maturity of greater than 5 years but not
more than 7 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(O) Agency Securities having a remaining 100 93 90.7 86.9
maturity of greater than 7 years but not
more than 10 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(P) Agency Securities having a remaining 100 88 87.7 82.6
maturity of greater than 10 years but not
more than 20 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(Q) Agency Securities having a remaining 100 86 84.4 77.9
maturity of greater than 20 years but not
more than 30 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(R) FHLMC Certificates. Mortgage participation 100 86 86.40
certificates issued by FHLMC evidencing (weekly
undivided interests or participations in valuation)
pools of first lien conventional or FHA/VA
residential mortgages or deeds of trust,
guaranteed by FHLMC, issued after July 18, 1984
and having a remaining maturity of not more than
30 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(S) FNMA Certificates. Mortgage-backed 100 86 86.40
pass-through certificates issued by FNMA (weekly
evidencing undivided interests in pools of valuation)
first lien mortgages or deeds of trust on
residential properties, guaranteed by FNMA,
issued after July 18, 1984 and having a remaining
maturity of not more than 30 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
A-1-2
----------------------------------------------------------------------------------------------------------------
Eligible Collateral & Valuation Percentages
Xxxxx'x and S&P
----------------------------------------------------------------------------------------------------------------
Valuation Percentage Valuation Percentage
-------- --------------------------------------------- ----------------------------- ---------------------------
Xxxxx'x S&P
-------- --------------------------------------------- ----------------------------- ---------------------------
Collateralization Rating Event Daily Weekly
Event
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(T) GNMA Certificates. Mortgage-backed 100 86 86.40
pass-through certificates issued by private (weekly
entities, evidencing undivided interests in valuation)
pools of first lien mortgages or deeds of
trust on single family residences,
guaranteed by the Government National Mortgage
Association (GNMA) with the full faith and credit
of the United States, issued after July 18,
1984 and having a remaining maturity of not more
than 30 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(U) Commercial Mortgage-Backed Securities.
Commercial mortgage-backed securities rated
AAA by two major rating agencies with a
minimum par or face amount of $250 million
(excluding securities issued under Rule
144A) ("Commercial Mortgage-Backed
Securities") having a remaining maturity of
not more than 5 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(V) Commercial Mortgage-Backed Securities having a remaining maturity of
more than 5 years and not more than 10 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(W) Commercial Mortgage-Backed Securities having a remaining maturity of
more than 10 years.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(X) Commercial Paper. Commercial Paper with a 100 99 99
rating of at least P-1 by Xxxxx'x and at
least A-1+ by S&P and having a remaining
maturity of not more than 30 days.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
(Y) Other Items of Credit Support approved by * * *
the Rating Agencies to the extent any
Certificates are rated.
-------- --------------------------------------------- --------------- ------------- ------------ --------------
* percentage to be determined.
A-1-3
Certificates: Banc of America Funding 2006-I Trust Mortgage Pass-Through
Certificates, Series 2006-I, Overcollateralized Certificates
Highest Rating of Certificates: Class 6-A-1 and 6-A-2 rated "Aaa" by Xxxxx'x,
"AAA" by S&P, and "AAA" by Fitch.
Scheduled Date Certificates will fall
below $50,000,000: not applicable.
Last Scheduled Payment Date of Transactions: November 20, 2011
Valuation Date (and Valuation Percentage column): Daily
--------------------------------------------------------------------------------------------------------------
Eligible Collateral & Valuation Percentages
Fitch
----------- ---------------------------------------------------------- ----------------------------------------
Valuation Percentage
(Rating of Certificates)
---------- ---------------------------------------------------------- ----------------------------------------
AAA AA A BBB
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(A) Cash: U.S. Dollars in depositary account form 100% 100% 100% 100%
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(B) U.S. Treasury Securities: negotiable debt obligations 97.5% 97.8% 98.4% 98.9%
issued by the U.S. Treasury Department after July 18,
1984 ("Treasuries") having a remaining maturity of up to
and not more than 1 year.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(C) Treasuries having a remaining maturity of greater than 1 94.7% 95.3% 95.9% 96.5%
year but not more than 2 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(D) Treasuries having a remaining maturity of greater than 2 94.7% 95.3% 95.9% 96.5%
years but not more than 3 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(E) Treasuries having a remaining maturity of greater than 3 91.5% 92.5% 93.5% 94.5%
years but not more than 5 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(F) Treasuries having a remaining maturity of greater than 5 89.0% 90.1% 91.2% 92.3%
years but not more than 7 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(G) Treasuries having a remaining maturity of greater than 7 86.3% 87.5% 88.8% 90.0%
years but not more than 10 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(H) Treasuries having a remaining maturity of greater than 83.0% 84.5% 86.0% 87.5%
10 years but not more than 20 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(I) Treasuries having a remaining maturity of greater than 79.0% 80.7% 82.3% 84.0%
20 years but not more than 30 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(J) Agency Securities: negotiable debt obligations of the Federal N/A N/A N/A N/A
National Mortgage Association (FNMA), Federal Home Loan
Mortgage Corporation (FHLMC), Federal Home Loan Banks (FHLB),
Federal Farm Credit Banks (FFCB), Tennessee Valley
Authority (TVA) (collectively, "Agency Securities")
issued after July 18, 1984 and having a remaining maturity of
not more than 1 year.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(K) Agency Securities having a remaining maturity of greater N/A N/A N/A N/A
than 1 year but not more than 2 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(L) Agency Securities having a remaining maturity of greater N/A N/A N/A N/A
than 2 years but not more than 3 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(M) Agency Securities having a remaining maturity of greater N/A N/A N/A N/A
than 3 years but not more than 5 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(N) Agency Securities having a remaining maturity of greater N/A N/A N/A N/A
than 5 years but not more than 7 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(O) Agency Securities having a remaining maturity of greater N/A N/A N/A N/A
than 7 years but not more than 10 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
A-1-4
--------------------------------------------------------------------------------------------------------------
Eligible Collateral & Valuation Percentages
Fitch
----------- ---------------------------------------------------------- ----------------------------------------
Valuation Percentage
(Rating of Certificates)
---------- ---------------------------------------------------------- ----------------------------------------
(P) Agency Securities having a remaining maturity of greater N/A N/A N/A N/A
than 10 years but not more than 20 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(Q) Agency Securities having a remaining maturity of greater N/A N/A N/A N/A
than 20 years but not more than 30 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(R) FHLMC Certificates. Mortgage participation certificates N/A N/A N/A N/A
issued by FHLMC evidencing undivided interests or
participations in pools of first lien conventional or
FHA/VA residential mortgages or deeds of trust, guaranteed
by FHLMC, issued after July 18, 1984 and
having a remaining maturity of not more than 30 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(S) FNMA Certificates. Mortgage-backed pass-through N/A N/A N/A N/A
certificates issued by FNMA evidencing undivided interests
in pools of first lien mortgages or deeds of trust on
residential properties, guaranteed by FNMA, issued after
July 18, 1984 and having a remaining maturity of not more
than 30 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(T) GNMA Certificates. Mortgage-backed pass-through N/A N/A N/A N/A
certificates issued by private entities, evidencing
undivided interests in pools of first lien mortgages or
deeds of trust on single family residences, guaranteed
by the Government National Mortgage Association (GNMA)
with the full faith and credit of the United States,
issued after July 18, 1984 and having a remaining
maturity of not more than 30 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(U) Commercial Mortgage-Backed Securities. Commercial N/A N/A N/A N/A
mortgage-backed securities rated AAA by two major rating
agenices with a minimum par or face amount of $250 million
(excluding securities issued under Rule 144A) ("Commercial
Mortgage-Backed Securities") having a remaining maturity
of not more than 5 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(V) Commercial Mortgage-Backed Securities having a remaining N/A N/A N/A N/A
maturity of more than 5 years and not more than 10 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(W) Commercial Mortgage-Backed Securities having a remaining N/A N/A N/A N/A
maturity of more than 10 years.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(X) Commercial Paper. Commercial Paper with a rating of at N/A N/A N/A N/A
least P-1 by Fitch and at least A-1+ by S&P and having a
remaining maturity of not more than 30 days.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
(Y) Other Items of Credit Support approved by the Rating * * * *
Agencies to the extent any Certificates are rated.
---------- ---------------------------------------------------------- --------- --------- --------- ----------
* percentage to be determined when such other Item of Credit Support
(including, without limitation, Agency Securities, FHLMC Certificates ,
FNMA Certificates , GNMA Certificates , Commercial Mortgage-Backed
Securities and Commercial Paper) has been approved by Fitch.
A-1-5
SCHEDULE 2
MOODY'S INCREASE FACTOR
Certificates: Banc of America Funding 2006-I Trust Mortgage Pass-Through
Certificates, Series 2006-I, Overcollateralized Certificates
Highest Rating of Certificates: Class 6-A-1 and 6-A-2 rated "Aaa" by Moody's,
"AAA" by S&P, and "AAA" by Fitch.
Last Scheduled Payment Date of Transactions: November 20, 2011
Valuation Date (and Posting Frequency column): Daily
The Moody's Increase Factor will be determined using the following
table:
-------------------------------------------------------------------------
Xxxxx'x Increase Factor
-------------------------------------------------------------------------
Remaining Years to Maturity Posting Frequency
------------------------------ ------------------------------------------
Daily Weekly
------------------------------ --------------------- --------------------
Moody's Increase Factor at First Trigger
Swaps, Caps and Floors
-------------------------------------------------------------------------
1 0.15% 0.25%
------------------------------ --------------------- --------------------
2 0.30% 0.50%
------------------------------ --------------------- --------------------
3 0.40% 0.70%
------------------------------ --------------------- --------------------
4 0.60% 1.00%
------------------------------ --------------------- --------------------
5 0.70% 1.20%
------------------------------ --------------------- --------------------
6 0.80% 1.40%
------------------------------ --------------------- --------------------
7 1.00% 1.60%
------------------------------ --------------------- --------------------
8 1.10% 1.80%
------------------------------ --------------------- --------------------
9 1.20% 2.00%
------------------------------ --------------------- --------------------
10 1.30% 2.20%
------------------------------ --------------------- --------------------
11 1.40% 2.30%
------------------------------ --------------------- --------------------
12 1.50% 2.50%
------------------------------ --------------------- --------------------
13 1.60% 2.70%
------------------------------ --------------------- --------------------
14 1.70% 2.80%
------------------------------ --------------------- --------------------
15 1.80% 3.00%
------------------------------ --------------------- --------------------
16 1.90% 3.20%
------------------------------ --------------------- --------------------
17 2.00% 3.30%
------------------------------ --------------------- --------------------
18 2.00% 3.50%
------------------------------ --------------------- --------------------
19 2.00% 3.60%
------------------------------ --------------------- --------------------
20 2.00% 3.70%
------------------------------ --------------------- --------------------
21 2.00% 3.90%
------------------------------ --------------------- --------------------
22 to 30 2.00% 4.00%
-------------------------------------------------------------------------
Moody's Increase Factor at Second Trigger
Swaps
------------------------------ --------------------- --------------------
1 0.50% 0.60%
------------------------------ --------------------- --------------------
2 1.00% 1.20%
------------------------------ --------------------- --------------------
3 1.50% 1.70%
------------------------------ --------------------- --------------------
4 1.90% 2.30%
------------------------------ --------------------- --------------------
5 2.40% 2.80%
------------------------------ --------------------- --------------------
6 2.80% 3.30%
------------------------------ --------------------- --------------------
7 3.20% 3.80%
------------------------------ --------------------- --------------------
8 3.60% 4.30%
------------------------------ --------------------- --------------------
9 4.00% 4.80%
------------------------------ --------------------- --------------------
10 4.40% 5.30%
------------------------------ --------------------- --------------------
11 4.70% 5.60%
------------------------------ --------------------- --------------------
12 5.00% 6.00%
------------------------------ --------------------- --------------------
13 5.40% 6.40%
------------------------------ --------------------- --------------------
14 5.70% 6.80%
------------------------------ --------------------- --------------------
A-2-1
15 6.00% 7.20%
------------------------------ --------------------- --------------------
16 6.30% 7.60%
------------------------------ --------------------- --------------------
17 6.60% 7.90%
------------------------------ --------------------- --------------------
18 6.90% 8.30%
------------------------------ --------------------- --------------------
19 7.20% 8.60%
------------------------------ --------------------- --------------------
20 7.50% 9.00%
------------------------------ --------------------- --------------------
21 7.80% 9.00%
------------------------------ --------------------- --------------------
22 to 30 8.00% 9.00%
-------------------------------------------------------------------------
Moody's Increase Factor at Second Trigger
Caps, Floors, Transaction Specific Xxxxxx
-------------------------------------------------------------------------
1 0.65% 0.75%
------------------------------ --------------------- --------------------
2 1.30% 1.50%
------------------------------ --------------------- --------------------
3 1.90% 2.20%
------------------------------ --------------------- --------------------
4 2.50% 2.90%
------------------------------ --------------------- --------------------
5 3.10% 3.60%
------------------------------ --------------------- --------------------
6 3.60% 4.20%
------------------------------ --------------------- --------------------
7 4.20% 4.80%
------------------------------ --------------------- --------------------
8 4.70% 5.40%
------------------------------ --------------------- --------------------
9 5.20% 6.00%
------------------------------ --------------------- --------------------
10 5.70% 6.60%
------------------------------ --------------------- --------------------
11 6.10% 7.00%
------------------------------ --------------------- --------------------
12 6.50% 7.50%
------------------------------ --------------------- --------------------
13 7.00% 8.00%
------------------------------ --------------------- --------------------
14 7.40% 8.50%
------------------------------ --------------------- --------------------
15 7.80% 9.00%
------------------------------ --------------------- --------------------
16 8.20% 9.50%
------------------------------ --------------------- --------------------
17 8.60% 9.90%
------------------------------ --------------------- --------------------
18 9.00% 10.40%
------------------------------ --------------------- --------------------
19 9.40% 10.80%
------------------------------ --------------------- --------------------
20 9.70% 11.00%
------------------------------ --------------------- --------------------
21 to 30 10.00% 11.00%
------------------------------ --------------------- --------------------
A-2-2
SCHEDULE 3
S&P VOLATILITY BUFFER
Certificates: Banc of America Funding 2006-I Trust Mortgage Pass-Through
Certificates, Series 2006-I, Overcollateralized Certificates
Highest Rating of Certificates: Class 6-A-1 and 6-A-2 rated "Aaa" by Moody's,
"AAA" by S&P, and "AAA" by Fitch.
Scheduled Date Certificates will fall below $50,000,000: not applicable.
Last Scheduled Payment Date of Transactions: November 20, 2011
The S&P Volatility Buffer will be determined using the following table:
----------------------------------------------------------------------------------------------------
S&P Volatility Buffer
----------------------------------------------------------------------------------------------------
Party A Rating* Remaining Years to Maturity of Transactions
----------------------- ----------------------------------------------------------------------------
(Up to 5 years) (Up to 10 years) (Up to 30 years)
----------------------- ----------------------- --------------------------- ------------------------
If, on the related Valuation Date, the highest rated Certificates are
rated "AA-" or higher by S&P, the S&P Volatility Buffer is:
----------------------- ----------------------- --------------------------- ------------------------
A-2 3.25% 4.00% 4.75%
----------------------- ----------------------- --------------------------- ------------------------
A-3 4.00% 5.00% 6.25%
----------------------- ----------------------- --------------------------- ------------------------
BB+ or lower 4.50% 6.75% 7.50%
----------------------- ----------------------- --------------------------- ------------------------
If, on the related Valuation Date, the highest rated Certificates are
rated "A" or "A+" by S&P, the S&P Volatility Buffer is:
----------------------------------------------------------------------------------------------------
BBB+/BBB 3.25% 4.00% 4.50%
----------------------- ----------------------- --------------------------- ------------------------
A-2 3.25% 4.00% 4.50%
----------------------- ----------------------- --------------------------- ------------------------
A-3/BBB- 3.50% 4.50% 6.00%
----------------------- ----------------------- --------------------------- ------------------------
BB+ or lower 4.00% 5.25% 7.00%
----------------------- ----------------------- --------------------------- ------------------------
* This rating shall be the higher of the rating by S&P on the related Valuation
Date of the long-term debt and short-term debt of Party A or its guarantor or
other Credit Support Provider.
A-3-1
SCHEDULE 4
FITCH VOLATILITY CUSHION
Certificates: Banc of America Funding 2006-I Trust Mortgage Pass-Through
Certificates, Series 2006-I, Overcollateralized Certificates
Highest Rating of Certificates: Class 6-A-1 and 6-A-2 rated "Aaa" by
Moody's, "AAA" by S&P, and "AAA" by Fitch.
Scheduled Date Certificates will fall below $50,000,000: not applicable.
Last Scheduled Payment Date of Transactions: November 20, 2011
Valuation Date (and Posting Frequency column): Daily
The Fitch Volatility Cushion will be determined using the following
table:
------------------------------------------------------------------------
Fitch Volatility Cushion
(USD Interest Rate Swaps)
------------------------------------------------------------------------
Remaining Years to Posting Frequency
Maturity of Transactions Daily Weekly
------------------------------------------------------------------------
If, on the related Valuation Date, the highest rated
Certificates are rated "AA-" or higher by Fitch, the
Fitch Volatility Cushion is:
------------------------------------------------------------------------
1 0.8%
---------------------------- --------------------- ---------------------
2 1.7%
---------------------------- --------------------- ---------------------
3 2.5%
---------------------------- --------------------- ---------------------
4 3.3%
---------------------------- --------------------- ---------------------
5 4.0%
---------------------------- --------------------- ---------------------
6 4.7%
---------------------------- --------------------- ---------------------
7 5.3%
---------------------------- --------------------- ---------------------
8 5.9%
---------------------------- --------------------- ---------------------
9 6.5%
---------------------------- --------------------- ---------------------
10 7.0%
---------------------------- --------------------- ---------------------
11 7.5%
---------------------------- --------------------- ---------------------
12 8.0%
---------------------------- --------------------- ---------------------
13 8.5%
---------------------------- --------------------- ---------------------
14 9.0%
---------------------------- --------------------- ---------------------
> = 15 9.5%
------------------------------------------------------------------------
If, on the related Valuation Date, the highest rated
Certificates are rated "A+" or "A" by Fitch, the Fitch
Volatility Cushion is:
---------------------------- ---------------------- --------------------
1 0.6%
---------------------------- ---------------------- --------------------
2 1.2%
---------------------------- ---------------------- --------------------
3 1.8%
---------------------------- ---------------------- --------------------
4 2.3%
---------------------------- ---------------------- --------------------
5 2.8%
---------------------------- ---------------------- --------------------
6 3.3%
---------------------------- ---------------------- --------------------
A-4-1
7 3.8%
---------------------------- ---------------------- --------------------
8 4.2%
---------------------------- ---------------------- --------------------
9 4.6%
---------------------------- ---------------------- --------------------
10 5.0%
---------------------------- ---------------------- --------------------
11 5.3%
---------------------------- --------------------- ---------------------
12 5.7%
---------------------------- --------------------- ---------------------
13 6.0%
---------------------------- --------------------- ---------------------
14 6.4%
---------------------------- --------------------- ---------------------
> = 15 6.7%
---------------------------- --------------------- ---------------------
If, on the related Valuation Date, the highest rated
Certificates are rated "A-" or "BBB+" by Fitch, the
Fitch Volatility Cushion is:
------------------------------------------------------------------------
1 0.5%
----------------------------- --------------------- --------------------
2 1.0%
----------------------------- --------------------- --------------------
3 1.6%
----------------------------- --------------------- --------------------
4 2.0%
----------------------------- --------------------- --------------------
5 2.5%
----------------------------- --------------------- --------------------
6 2.9%
----------------------------- --------------------- --------------------
7 3.3%
----------------------------- --------------------- --------------------
8 3.6%
----------------------------- --------------------- --------------------
9 4.0%
----------------------------- --------------------- --------------------
10 4.3%
----------------------------- --------------------- --------------------
11 4.7%
----------------------------- --------------------- --------------------
12 5.0%
----------------------------- --------------------- --------------------
13 5.3%
----------------------------- --------------------- --------------------
14 5.6%
----------------------------- --------------------- --------------------
> = 15 5.9%
----------------------------- --------------------- --------------------
A-4-2
