Exhibit 99.2
BEAR XXXXXXX
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
000-000-0000
DATE: June 29, 2006
TO: COUNTRYWIDE HOME LOANS, INC.
ATTENTION: Xx. Xxxx Xxxxx
TELEPHONE: 0-000-000-0000
FACSIMILE: 0-000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Mortgage Derivatives Confirmation and Agreement
REFERENCE NUMBER: FXCWL069
Dear Sir/Madam,
The purpose of this letter agreement (this "Confirmation") is to
confirm the terms and conditions of the transaction entered into on the Trade
Date specified below (the "Transaction") between Bear Xxxxxxx Financial
Products Inc. ("BSFP") and Countrywide Home Loans, Inc. ("Counterparty").
The definitions and provisions contained in the 2000 ISDA Definitions
(the "2000 Definitions"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA") are incorporated into this
Confirmation. In the event of any inconsistency between the 2000 Definitions
and this Confirmation, this Confirmation will govern for the purposes of the
Transaction. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the 2000 Definitions.
Each party hereto agrees to make payment to the other party hereto in
accordance with the provisions of this Confirmation and of the Agreement.
This Confirmation evidences a complete and binding agreement between
you and us as to the terms of the Swap Transaction to which this Confirmation
relates. This Confirmation (including the schedule hereto) will constitute a
Confirmation that supplements, forms a part of, and is subject to, an
agreement (the "Agreement") in the form of the 1992 Multicurrency - Cross
Border Master Agreement in the form published by the International Swaps and
Derivatives Association, Inc. (the "ISDA Form"), as if on the Trade Date we
had executed an agreement in such form, but without any Schedule except for
the elections made herein.
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In the event of any inconsistency between the provisions of the ISDA
Form and this Confirmation, this Confirmation will prevail for purposes of
this Swap Transaction. Capitalized terms used in this Confirmation and not
defined in this Confirmation or the 2000 Definitions shall have the respective
meaning assigned in the Pooling and Servicing Agreement dated as of June 1,
2006 among CWABS, Inc. as depositor, Countrywide Home Loans, Inc. as a seller,
Park Monaco Inc., as a seller, Park Sienna LLC, as a seller, Countrywide Home
Loans Servicing LP, as master servicer, and The Bank of New York, as trustee
(the "Pooling and Servicing Agreement").
The terms of the particular Transaction to which this Confirmation relates are
as follows:
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2. TRADE DETAILS
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Notional Amount: With respect to any Calculation Period, the lesser
of (i) the amount set forth for such period in
Schedule A attached hereto and (ii) the aggregate
Certificate Principal Balance of the Class 2-AV,
Class 3-AV-1, Class 3-AV-2, Class 3-AV-3, Class
3-AV-4, Class MV-1, Class MV-2, Class MV-3, Class
MV-4, Class MV-5, Class MV-6, Class MV-7, Class
MV-8, and Class BV Certificates (together, the
"Swap Certificates") immediately prior to the
Distribution Date (as defined in the Pooling and
Servicing Agreement) occurring in the calendar
month in which such Calculation Period ends.
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Trade Date: June 13, 2006.
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Effective Date: June 30, 2006.
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Termination Date: June 25, 2011, subject to adjustment in accordance
with the Following Business Day Convention
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Upfront Amount:
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Upfront Amount: Counterparty will pay $125,000 to BSFP on June 30,
2006.
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Fixed Amounts:
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Fixed Rate Payer: Counterparty.
Fixed Rate Payer Payment The 25th of each month in each year from (and
Date(s): including) July 25, 2006 to (and including) the
Termination Date,
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subject to adjustment in accordance with the
Following Business Day Convention.
Fixed Rate Payer Period End The 25th of each month in each year from (and
Date(s): including) July 25, 2006 to (and including) June
25, 2011, with No Adjustment.
Fixed Rate: 5.46%.
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Fixed Rate Day Count Fraction: 30/360.
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Floating Amounts:
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Floating Rate Payer: BSFP.
Floating Rate Payer Period End The 25th of each month in each year from (and
Date(s): including) July 25, 2006 to (and including) the
Termination Date, subject to adjustment in
accordance with the Following Business Day
Convention.
Floating Rate Payer Payment Date(s): Early Payment shall be applicable. For each
Calculation Period, the Floating Rate Payer Payment
Date shall be the first Business Day prior to the
related Floating Rate Payer Period End Date.
Floating Rate Option. USD-LIBOR-BBA
Floating Rate Day Count Fraction: Actual/360.
Designated Maturity: 1 Month, except with respect to the initial
Calculation Period for which the Designated
Maturity shall be the Linear Interpolation of the 2
week and the 1 month.
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Reset Dates: The first day of each Calculation Period.
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Business Days: New York.
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Additional Provisions: Each party hereto is hereby advised and
acknowledges that the other party has engaged in
(or refrained from engaging in) substantial
financial transactions and has taken (or refrained
from taking)
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other material actions in reliance upon the entry
by the parties into the Transaction being entered
into on the terms and conditions set forth herein
and in the Confirmation relating to such
Transaction, as applicable. This paragraph shall be
deemed repeated on the trade date of each
Transaction.
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3. ACCOUNT DETAILS
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Payments to BSFP: Citibank, N.A., New York
ABA Number: 000-0000-00, for the account of
Bear, Xxxxxxx Securities Corp.
Account Number: 0925-3186, for further credit
to Bear Xxxxxxx Financial Products Inc.
Sub-account Number: 102-04654-1-3
Attention: Derivatives Department
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Payments to Counterparty: See Assignment Agreement.
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4. NETTING
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Amendment to Section 2(c) of the Agreement: Notwithstanding anything to the contrary in
Section 2(c) of the Agreement, amounts that
are payable with respect to Calculation
Periods which end in the same calendar month
(prior to any adjustment of period end dates)
shall be netted, as provided in Section 2(c)
of the Agreement, even if such amounts are
not due on the same payment date. For
avoidance of doubt any payments pursuant to
Section 6(e) of the Agreement shall not be
subject to netting.
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5. Provisions Deemed Incorporated into this Agreement:
The following provisions i) through vii) will be deemed to be incorporated
into the Agreement:
i) The parties agree that subparagraph (ii) of Section 2(c) of the
ISDA Form Master Agreement will apply to any Transaction.
ii) Termination Provisions. For purposes of the Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty
for any purpose.
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(b) "Specified Transaction" shall have the meaning specified in
Section 14 of this Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of
the Agreement will be inapplicable to BSFP and Counterparty.
(d) The "Credit Support Default" provisions of Section 5(a)(iii)
of the Agreement will be inapplicable to BSFP and
Counterparty.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of
the Agreement will be inapplicable to BSFP and Counterparty.
(f) The "Default Under Specified Transaction" provisions of
Section 5(a)(v) of the Agreement will be inapplicable to
BSFP and Counterparty.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the
Agreement will be inapplicable to BSFP and Counterparty.
(h) The "Bankruptcy" provisions of Section 5(a)(vii)(2) of the
Agreement will be inapplicable to Counterparty.
(i) The "Credit Event Upon Merger" provisions of Section
5(b)(iv) of the Agreement will be inapplicable to BSFP and
Counterparty.
(j) Additional Termination Events. Additional Termination Events
will apply. The following events shall constitute an
Additional Termination Event hereunder:
(i) Upon the occurrence of a Collateralization Event (as
defined in Part 5(vii)(d) below) BSFP has not, within 30 days
(unless, within 30 days after such downgrade, each such Swap
Rating Agency has reconfirmed the ratings of the Swap
Certificates which were in effect immediately prior to such
downgrade (determined without regard to any financial
guaranty insurance policy, if applicable), unless the
ratings of the Swap Certificates were changed due to a
circumstance other than the downgrading of BSFP's rating),
complied with Part 5(vii)(d) below, then an Additional
Termination Event shall have occurred with respect to BSFP
and BSFP shall be the sole Affected Party with respect to
such Additional Termination Event.
(ii) Upon the occurrence of a Ratings Event (as defined in
Part 5(vii)(e) below) BSFP has not, within 10 business days
after such rating withdrawal or downgrade (unless, within 10
business days after such withdrawal or downgrade, each such
Swap Rating Agency has reconfirmed the ratings of the Swap
Certificates which were in effect immediately prior to such
withdrawal or downgrade (determined without regard to any
financial guaranty insurance policy, if applicable), unless
the ratings of the Swap Certificates
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were changed due to a circumstance other than the withdrawal
or downgrading of BSFP's rating), complied with Part 5(vii)(e)
below, then an Additional Termination Event shall have
occurred with respect to BSFP and BSFP shall be the sole
Affected Party with respect to such Additional Termination
Event.
(iii) An amendment and/or supplement to the Pooling and
Servicing Agreement (or any other transaction document) is
made without the prior written consent of BSFP (such consent
not to be unreasonably withheld or delayed), if such amendment
and/or supplement would: (a) materially adversely affect any
of BSFP's rights or obligations hereunder; or (b) modify the
obligations of, or impact the ability of, Counterparty to
fully perform any of Counterparty's obligations hereunder.
Counterparty shall be the sole Affected Party.
(iv) If an Applied Realized Loss Amount is applied to reduce
the Certificate Principal Balance of any class of Class AV
Certificates, then an Additional Termination Event shall
have occurred with respect to Counterparty and Counterparty
shall be the sole Affected Party with respect to such
Additional Termination Event.
(k) The "Automatic Early Termination" provision of Section 6(a)
of the Agreement will be inapplicable to BSFP and
Counterparty.
(l) Payments on Early Termination. For the purpose of Section
6(e) of the Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(m) "Termination Currency" means United States Dollars.
iii) Tax Representations.
Payer Tax Representations. For the purpose of Section 3(e), each of
BSFP and Counterparty makes the following representation:
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) of
this Agreement) 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 representation made by the other
party pursuant to Section 3(f) of this Agreement; (ii) the
satisfaction of the agreement of the other party contained
in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the
other party pursuant to Section 4(a)(i) or 4(a)(iii) of
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this Agreement; and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement,
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 to its
legal or commercial position.
BSFP Payee Tax Representations. For the purpose of Section 3(f), BSFP
makes the following representations:
BSFP is a corporation organized under the laws of the United
States.
Counterparty Payee Tax Representations. For the purpose of Section
3(f), Counterparty makes the following representation:
Counterparty represents that it is a "United States person"
as such term is defined in Section 7701(a)(30) of the
Internal Revenue Code of 1986, as amended.
iv) Documents to be Delivered. For the purpose of Section 4(a):
(a) Tax forms, documents or certificates to be delivered are:
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Party required to deliver document Form/Document/Certificate Date by which to be delivered
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BSFP and Counterparty An executed U.S. Internal Promptly after the earlier
Revenue Service Form W-9 (or of (i) reasonable demand by
any successor thereto)and any either party or (ii)
other document required or learning that such form or
reasonably requested to allow document is required
the other party to make
payments under this Agreement
without any deduction or
withholding for or on the
account of any Tax or with such
deduction or withholding at a
reduced rate.
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(b) Other Documents to be delivered are:
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Party required to Form/Document/Certificate Date by which to be Covered by Section 3(d)
deliver document delivered representation
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BSFP and Any documents required or Upon the Yes
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Counterparty reasonably requested by the receiving party execution
to evidence authority of the delivering party or and delivery of this
its Credit Support Provider, if any, to execute Agreement and such
and deliver this Agreement, any Confirmation, Confirmation
and any Credit Support Documents to which it is
a party, and to evidence the authority of the
delivering party to its Credit Support Provider
to perform its obligations under this Agreement,
such Confirmation and/or Credit Support Document,
as the case may be.
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BSFP and Counterparty A certificate of an authorized officer of the Upon the execution Yes
party, as to the incumbency and authority of the and delivery of this
respective officers of the party signing this Agreement and such
agreement, any relevant Credit Support Document, Confirmation
or any Confirmation, as the case may be.
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BSFP An opinion of counsel (which may include in-house Closing Date No
counsel) reasonably satisfactory to Counterparty.
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Counterparty Executed copy of the Credit Support Document Upon execution Yes
specified herein.
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Counterparty Copy of any notice delivered under the Pooling and Upon availability Yes
Servicing Agreement that impacts this Confirmation
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v) Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to BSFP:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx
00000
Attention: Derivative Operations 7th Floor
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Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its Process Agent: Not Applicable.
Counterparty appoints as its Process Agent: Not Applicable.
(c) Offices. The provisions of Section 10(a) will not apply to this
Agreement; neither BSFP nor Counterparty have any Offices other than as set
forth in the Notices Section and BSFP agrees that, for purposes of Section
6(b), it shall not in future have any Office other than one in the United
States.
(d) Multibranch Party. For the purpose of Section 10(c) of this
Agreement:
BSFP is not a Multibranch Party.
Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP; provided,
however, that if an Event of Default occurs with respect to
BSFP, then Counterparty shall be entitled to appoint a
financial institution which would qualify as a Reference
Market-maker to act as Calculation Agent.
(f) Credit Support Document.
With respect to BSFP: Not Applicable.
With respect to Counterparty: From and including the date of
its execution, the Pooling and Servicing Agreement.
Counterparty agrees that the security interests in collateral
granted to BSFP under the foregoing Credit Support Document
shall secure the obligations of Counterparty to BSFP hereunder.
(g) Credit Support Provider.
With respect to BSFP: Not Applicable.
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With respect to Counterparty: Not Applicable.
(h) Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of the State of New York
(without reference to choice of law doctrine except Section
5-1401 and Section 5-1402 of the New York General Obligation
Law).
(i) Consent to Recording. Each party hereto consents and agrees
the monitoring or recording, at any time and from time to
time, by the other party of any and all communications between
officers or employees of the parties, and waives any further
notice of such monitoring or recording.
(j) Waiver of Jury Trial. To the extent permitted by applicable
law, each party irrevocably waives any and all right to trial
by jury in any legal proceeding in connection with this
Agreement, any Credit Support Document to which it is a Party,
or any Transaction. Each party also acknowledges that this
waiver is a material inducement to the other party's entering
into this Agreement.
(k) "Affiliate" Counterparty and BSFP shall be deemed to not have
any Affiliates for purposes of this Agreement.
(l) 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 endeavour 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
vi) Additional Representations:
Each party represents to the other party that (absent a
written agreement between the parties that expressly imposes
affirmative obligations to the contrary):-
(a) Non-Reliance. It is acting for its own account, and it has
made its own independent decisions to enter into the
Transaction and as to
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whether the Transaction is appropriate or proper based upon
its own judgment and upon advice from such advisers as it
has deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice or
as a recommendation to enter into the Transaction: it being
understood that information and explanations related to the
terms and conditions of the Transaction shall not be
considered investment advice or a recommendation to enter
into the 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.
(b) Assessment and Understanding. It is capable of assessing
the merits of and understanding (on its own behalf or
through independent professional advice), and understands
and accepts, the terms, conditions and risks of the
Transaction. It is also capable of assuming, and assumes,
the risks of the Transaction.
(c) Status of Parties. The other party is not acting as a
fiduciary for or an adviser to it in respect of the
Transaction.
(d) Purpose. It is entering into the Transaction for the
purposes of hedging its assets or liabilities or in
connection with a line of business.
(e) Eligible Contract Participant Representation. It is an
"eligible contract participant" within the meaning of
Section 1(a)(12) of the Commodity Exchange Act, as
amended, including as amended by the Commodity Futures
Modernization Act of 2000.
vii) Other Provisions.
(a) Set-Off. Notwithstanding any provision of this Agreement
or any other existing or future agreement, each party
irrevocably waives any and all rights it may have to set
off, net, recoup or otherwise withhold or suspend or
condition payment or performance of any obligation between
it and the other party hereunder against any obligation
between it and the other party under any other agreements.
The provisions for Set-Off set fort in Section 6(e) of the
Agreement shall not apply for purposes of this
Transaction.
(b) Proceedings. BSFP shall not institute against or cause any
other person to institute against, or join any other
person in instituting against, the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or
state bankruptcy, dissolution or similar law, for a period
of one year and one day (or, if longer, the applicable
preference period) following indefeasible payment in full
of the Certificates. Nothing herein shall prevent BSFP
from participating in any such proceeding once commenced.
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(c) Transfer, Amendment and Assignment. No transfer,
amendment, waiver, supplement, assignment or other
modification of this Confirmation shall be permitted by
either party unless (A) Standard & Poor's Ratings
Services, a division of The McGraw Hill Companies, Inc.
("S&P") has been provided notice of such transfer,
amendment, waiver, supplement, assignment or other
modification and confirms in writing (including by
facsimile transmission) that it will not qualify,
downgrade, withdraw or modify its then current ratings of
the Swap Certificates issued pursuant to the Pooling and
Servicing Agreement, (B) neither an Event of Default with
respect to the transferee nor a Termination Event would
exist immediately after that transfer, amendment, waiver,
supplement, assignment or other modification and (C) as of
the time of the transfer, amendment, waiver, supplement,
assignment or other modification, such act would not cause
any payments under the Transaction to become subject to
withholding tax.
(d) Approved Ratings Threshold. In the event that (A) either
(i) the unsecured, long-term senior debt obligations of
BSFP are rated below "A1" by Moody's or are rated "A1" by
Moody's and such rating is on watch for possible downgrade
(but only for so long as it is on watch for possible
downgrade) or (ii) the unsecured, short-term debt
obligations of BSFP are rated below "P-1" by Moody's or
are rated "P-1" by Moody's and such rating is on watch for
possible downgrade (but only for so long as it is on watch
for possible downgrade), (B) no short-term rating is
available from Moody's and the unsecured, long-term senior
debt obligations of BSFP are rated below "Aa3" by Moody's
or are rated "Aa3" by Moody's and such rating is on watch
for possible downgrade (but only for so long as it is on
watch for possible downgrade), or (C) either (i) the
unsecured, short-term debt obligations of BSFP are rated
below "A-1" by S&P or (ii) if BSFP does not have a
short-term rating from S&P, the unsecured, long-term
senior debt obligations of BSFP are rated below "A+" by
S&P (such event, a "Collateralization Event"), then, BSFP,
at its own cost, shall within 30 days either (i) cause
another entity to replace BSFP as party to this Agreement
that meets or exceeds the Swap Counterparty Ratings
Requirement and that is approved by the Trustee (which
approval shall not be unreasonably withheld or delayed) on
terms substantially similar to this Agreement; (ii) obtain
a guaranty of, or a contingent agreement of another person
that satisfies the Swap Counterparty Ratings Requirement
(and which satisfies the Rating Agency Condition), to
honor BSFP's obligations under this Agreement, provided
that such other person is approved by the Trustee such
approval not to be unreasonably withheld or delayed; (iii)
post collateral in accordance with a Credit Support Annex
which satisfies the Rating Agency Condition; or (iv)
establish any other arrangement satisfactory to the
applicable Swap Rating
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Agency which will be sufficient to restore the immediately
prior ratings of the Swap Certificates (determined without
regard to any financial guaranty insurance policy, if
applicable) and which satisfies the Rating Agency
Condition. All collateral posted by BSFP shall be returned
to BSFP immediately upon BSFP securing a substitute
counterparty that satisfies the Swap Counterparty Ratings
Requirement. "Swap Rating Agency" means S&P and Moody's.
"Swap Counterparty Ratings Requirement" shall mean (a)
either (i) the unsecured, short-term debt obligations of
the substitute counterparty (or its Credit Support
Provider) are rated at least "A-1" by S&P or (ii) if the
substitute counterparty does not have a short-term
rating from S&P, the unsecured, long-term senior debt
obligations of the substitute counterparty (or its
Credit Support Provider) are rated at least "A+" by S&P,
and (b) either (i) the unsecured, long-term senior debt
obligations of such substitute counterparty (or its
Credit Support Provider) are rated at least "A1" by
Moody's (and if rated "A1" by Moody's, such rating is
not on watch for possible downgrade) and the unsecured,
short-term debt obligations of such substitute
counterparty (or its Credit Support Provider) are rated
at least "P-1" by Moody's (and if rated "P-1" by
Moody's, such rating is not on watch for possible
downgrade and remaining on watch for possible
downgrade), or (ii) if such substitute counterparty (or
its Credit Support Provider) does not have a short-term
debt rating from Moody's, the unsecured, long-term
senior debt obligations of such substitute counterparty
(or its Credit Support Provider) are rated at least
"Aa3" by Moody's (and if rated "Aa3" by Moody's, such
rating is not on watch for possible downgrade).
"Rating Agency Condition" means, with respect to any
particular proposed act or omission to act hereunder,
that the party acting or failing to act has consulted
with each Rating Agency then providing a rating of any
Swap Certificates and has received from each Rating
Agency a written confirmation that the proposed action
or inaction would not cause such Rating Agency to
downgrade or withdraw its then-current rating of any
Swap Certificates.
(e) Ratings Event. It shall be a ratings event ("Ratings
Event") if at any time after the date hereof BSFP shall
fail to satisfy the Swap Counterparty Ratings Threshold.
Swap Counterparty Ratings Threshold shall mean (A) the
unsecured, long-term senior debt obligations of BSFP are
rated at least "BBB-" by S&P, and (B) either (i) the
unsecured, long-term senior debt obligations of BSFP are
rated at least "A2" by Moody's (including if such rating
is on watch for possible downgrade) and the unsecured,
short-term debt obligations of BSFP are rated at least
"P-1" by Moody's (including if such rating is on watch for
possible downgrade) or (ii) if BSFP
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does not have a short-term rating from Moody's, the
unsecured, long-term senior debt obligations of BSFP are
rated at least "A1" by Moody's (including if such rating
is on watch for possible downgrade).
Following a Ratings Event, BSFP shall take the following
actions at its own expense, (A) immediately post
collateral in accordance with a Credit Support Annex
which satisfies the Rating Agency Condition (until such
time as it has secured a substitute counterparty or a
guarantor that satisfies the Swap Counterparty Ratings
Requirement), and (B) not later than 10 business days
after the occurrence of such a downgrade or withdrawal
by S&P or Moody's, either (I) assign all of its rights
and obligations under the Transactions to a counterparty
that satisfies the Swap Counterparty Ratings Requirement
or whose guarantor (pursuant to a form of guaranty which
satisfies the Rating Agency Condition) satisfies the
Swap Counterparty Ratings Requirement (or which
satisfies the Rating Agency Condition) pursuant to
documentation substantially similar to the documentation
then in place and subject to prior notification to the
Rating Agencies, or (II) provide a guaranty (pursuant to
a form of guaranty that satisfies the Rating Agency
Condition) from a guarantor that satisfies the Swap
Counterparty Ratings Requirement (or which satisfies the
Rating Agency Condition) pursuant to documentation
substantially similar to the documentation then in place
and subject to prior notification to the Rating
Agencies. In respect of subclause (I) immediately above,
Countrywide Securities Corporation shall make a good
faith attempt to provide reasonable assistance to BSFP
in locating a replacement party and effecting the
assignment.
(f) USA PATRIOT Act Notice. BSFP hereby notifies Counterparty
that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and
record information that identifies Counterparty, which
information includes the name and address of Counterparty
and other information that will allow BSFP to identify
Counterparty in accordance with the Act.
(g) Amendments. Counterparty agrees that it will obtain BSFP's
consent (which consent shall not be unreasonably withheld
or delayed) prior to amending or supplementing the Pooling
and Servicing Agreement (or any other transaction
document), if such amendment and/or supplement would: (a)
materially adversely affect any of BSFP's rights or
obligations hereunder; or (b) modify the obligations of,
or impact the ability of, Counterparty to fully perform
any of Counterparty's obligations hereunder.
(h) Assignment. BSFP will not unreasonably withhold or delay
its consent to an assignment of this Agreement to any
other third party.
14
(i) Regulation AB Compliance. BSFP and Counterparty agree that
the terms of the Item 1115 Agreement dated as of January
30, 2006 (the "Regulation AB Agreement"), between
Countrywide Home Loans, Inc., CWABS, INC., CWMBS, Inc.,
CWALT, Inc., CWHEQ, Inc. and Bear Xxxxxxx Financial
Products Inc. shall be incorporated by reference into this
Agreement so that Counterparty shall be an express third
party beneficiary of the Regulation AB Agreement. A copy
of the Regulation AB Agreement is attached hereto as Annex
A.
(j) Swap Contract Administration Agreement. BSFP shall be an
express third party beneficiary of the Swap Contract
Administration Agreement, dated as of June 30, 2006 (the
"Swap Contract Administration Agreement"), among The Bank
of New York, as Swap Contract Administrator and not in its
individual or corporate capacity but solely as Trustee
under the Pooling and Servicing Agreement, and Countrywide
Home Loans, Inc. A copy of the Swap Contract
Administration Agreement is attached hereto as Annex B.
15
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S. Transactions,
please contact Xxxxx Xxxxxx by telephone at 000-000-0000. For all other
inquiries please contact Derivatives Documentation by telephone at
000-0-000-0000. Originals will be provided for your execution upon your
request.
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,
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxxxx Xxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxxx Xxxxxx Xxxxxxxx
Title: Managing Director and Treasurer
16
Schedule A to the Confirmation dated as of June 30, 2006
Re: Reference Number FXCWL069
Period Start Date Period End Date Notional Amount
30-Jun-06 25-Jul-06 330,754,879
25-Jul-06 25-Aug-06 327,907,165
25-Aug-06 25-Sep-06 324,682,782
25-Sep-06 25-Oct-06 321,085,209
25-Oct-06 25-Nov-06 317,119,320
25-Nov-06 25-Dec-06 312,791,397
25-Dec-06 25-Jan-07 308,106,898
25-Jan-07 25-Feb-07 303,200,962
25-Feb-07 25-Mar-07 297,973,492
25-Mar-07 25-Apr-07 292,621,304
25-Apr-07 25-May-07 286,923,281
25-May-07 25-Jun-07 280,894,670
25-Jun-07 25-Jul-07 274,552,365
25-Jul-07 25-Aug-07 268,033,207
25-Aug-07 25-Sep-07 261,261,920
25-Sep-07 25-Oct-07 254,257,913
25-Oct-07 25-Nov-07 247,041,541
25-Nov-07 25-Dec-07 239,634,048
25-Dec-07 25-Jan-08 232,066,715
25-Jan-08 25-Feb-08 224,757,538
25-Feb-08 25-Mar-08 217,700,188
25-Mar-08 25-Apr-08 210,886,531
25-Apr-08 25-May-08 204,308,697
25-May-08 25-Jun-08 197,959,084
25-Jun-08 25-Jul-08 187,643,917
25-Jul-08 25-Aug-08 178,087,432
25-Aug-08 25-Sep-08 169,090,842
25-Sep-08 25-Oct-08 160,621,479
25-Oct-08 25-Nov-08 152,648,658
25-Nov-08 25-Dec-08 145,143,548
25-Dec-08 25-Jan-09 140,504,539
25-Jan-09 25-Feb-09 136,038,906
25-Feb-09 25-Mar-09 131,740,970
25-Mar-09 25-Apr-09 127,605,243
25-Apr-09 25-May-09 123,626,432
25-May-09 25-Jun-09 119,695,047
25-Jun-09 25-Jul-09 115,802,605
25-Jul-09 25-Aug-09 112,083,753
25-Aug-09 25-Sep-09 108,509,589
25-Sep-09 25-Oct-09 105,075,111
25-Oct-09 25-Nov-09 101,775,509
25-Nov-09 25-Dec-09 98,666,653
25-Dec-09 25-Jan-10 95,631,612
25-Jan-10 25-Feb-10 92,715,726
25-Feb-10 25-Mar-10 89,911,344
25-Mar-10 25-Apr-10 87,215,008
17
25-Apr-10 25-May-10 84,623,376
25-May-10 25-Jun-10 82,124,413
25-Jun-10 25-Jul-10 79,680,614
25-Jul-10 25-Aug-10 77,248,310
25-Aug-10 25-Sep-10 74,908,441
25-Sep-10 25-Oct-10 72,658,143
25-Oct-10 25-Nov-10 70,494,646
25-Nov-10 25-Dec-10 68,412,009
25-Dec-10 25-Jan-11 66,401,316
25-Jan-11 25-Feb-11 64,460,222
25-Feb-11 25-Mar-11 62,586,375
25-Mar-11 25-Apr-11 60,777,668
25-Apr-11 25-May-11 59,031,931
25-May-11 25-Jun-11 57,346,476
18
ANNEX A
[Insert Form of Regulation AB Agreement]
19
ANNEX B
[Insert Form of Swap Contract Administration Agreement]
20
