Exhibit 99.6
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of March 30, 2007 ("Assignment
Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW
YORK ("Assignee"), not in its individual or corporate capacity but solely as
Swap Contract Administrator for CWHEQ Home Equity Loan Trust, Series 2007-S3,
pursuant to a Swap Contract Administration Agreement (the "Swap Contract
Administration Agreement") dated as of March 30, 2007, and BEAR XXXXXXX
CAPITAL MARKETS INC. ("Remaining Party").
W I T N E S S E T H:
WHEREAS, effective as of March 30, 2007, Assignor desires to assign all
of its rights and delegate all of its duties and obligations to Assignee under
a certain Transaction (the "Assigned Transaction") as evidenced by a certain
confirmation with a Trade Date of March 27, 2007, whose BEAR XXXXXXX CAPITAL
MARKETS INC. reference number is CXCWL07S3 (the "Confirmation"), a copy of
which is attached hereto as Exhibit I;
WHEREAS, the Confirmation supplements, forms a part of, and is subject
to, an agreement in the form of the 1992 Multicurrency - Cross-Border Master
Agreement published by the International Swaps and Derivatives Association,
Inc. (the "ISDA Form Master Agreement");
WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction and the Confirmation, including any modifications that may be
agreed to by Assignee and Remaining Party; and
WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party
desires to grant such consent in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Assignment and Assumption. Effective as of and from March 30, 2007
(the "Effective Date"), Assignor hereby assigns all of its rights and
delegates all of its duties and obligations to Assignee and Assignee hereby
assumes all Assignor's rights, duties, and obligations under the Assigned
Transaction and the Confirmation arising on or after the Effective Date.
2. Release. Effective as of and from the Effective Date, Remaining Party
and Assignor hereby release one another from all duties and obligations owed
under and in respect of the Assigned Transaction and the Confirmation, and
Assignor hereby terminates its rights under and in respect of the Assigned
Transaction.
3. Limitation on Liability. Assignor and Remaining Party agree to the
following: (a) The Bank of New York ("BNY") is entering into this Assignment
Agreement not in its individual or corporate capacity, but solely in its
capacity as Swap Contract Administrator under the Swap Contract Administration
Agreement and its liability under this Assignment Agreement and under the Swap
Contract Administration Agreement shall be as set forth in the Swap Contract
Administration Agreement; (b) in no case shall BNY (or any person acting as
successor Swap Contract Administrator under the Swap Contract Administration
Agreement) be personally liable for or on account of any of the statements,
representations, warranties, covenants or obligations stated to be those of
Assignee under the terms of the Assigned Transaction, all such personal
liability, if any, being expressly waived by Assignor and Remaining Party and
any person claiming by, through or under either such party; and (c) recourse
against BNY shall be limited to the assets available under the Swap Contract
Administration Agreement or the pooling and servicing agreement for CWHEQ Home
Equity Loan Trust, Series 2007-S3 dated as of March 1, 2007 among CWHEQ, Inc.,
as depositor, Park Monaco Inc., as a seller, Park Granada LLC, as a seller,
Park Sienna LLC, as a seller, Countrywide Home Loans, Inc., as a seller,
Countrywide Home Loans Servicing LP, as master servicer and The Bank of New
York, as trustee (the "Pooling and Servicing Agreement").
4. Consent and Acknowledgment of Remaining Party. Remaining Party hereby
consents to the assignment and delegation by Assignor to Assignee of all the
rights, duties, and obligations of Assignor under the Assigned Transaction
pursuant to this Assignment Agreement.
5. Governing Agreement. Following the assignment of the Assigned
Transaction pursuant to the terms hereof, the Assigned Transaction and the
Confirmation shall form a part of, and be subject to, the ISDA Form Master
Agreement, as if Assignee and Remaining Party had executed such agreement on
the trade date of the Transaction (the "Assignee Agreement"). The
Confirmation, together with all other documents referring to the ISDA Form
Master Agreement confirming transactions entered into between Assignee and
Remaining Party, shall form a part of, and be subject to, the Assignee
Agreement. For the purposes of this paragraph, capitalized terms used herein
and not otherwise defined shall have the meanings assigned in the ISDA Form
Master Agreement. For the avoidance of doubt, in interpreting the Assignee
Agreement, the Counterparty shall be the Trust Fund created under the Pooling
and Servicing Agreement for whom the Assignee is acting on behalf of as Swap
Contract Administrator, so that, for example, a Bankruptcy pursuant to Section
5(a)(vii) of the ISDA Form Master Agreement (as amended by the Confirmation)
shall refer to a Bankruptcy of the Trust Fund, not a Bankruptcy of either the
Assignor or of Bank of New York in its individual or corporate capacity or any
other capacity.
6. Representations. Each party hereby represents and warrants to the
other parties as follows:
(a) It is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization or incorporation;
(b) It has the power to execute and deliver this Assignment Agreement;
(c) 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
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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;
(d) All governmental and other consents that are required to have been
obtained by it with respect to this Assignment Agreement have been
obtained and are in full force and effect and all conditions of
any such consents have been complied with; and
(e) Its obligations under this Assignment Agreement constitute its
legal, valid and binding obligations, enforceable in accordance
with their respective terms.
As of the Effective Date, each of Assignor and Remaining Party
represents that no event or condition has occurred that constitutes an Event
of Default, a Potential Event of Default or, to the party's knowledge, a
Termination Event (as such terms are defined in the Confirmation and Assignee
Agreement), with respect to the party, and no such event would occur as a
result of the party's entering into or performing its obligations under this
Assignment Agreement.
7. Indemnity. Assignor hereby agrees to indemnify and hold harmless
Assignee with respect to any and all claims arising under the Assigned
Transaction prior to the Effective Date. Assignee (subject to the limitations
set forth in paragraph 3 above) hereby agrees to indemnify and hold harmless
Assignor with respect to any and all claims arising under the Assigned
Transaction on or after the Effective Date.
8. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to conflicts of law provisions thereof other than New York General Obligations
Law Sections 5-1401 and 5-1402.
9. Notices. For the purposes of this Assignment Agreement and Section
12(a) of the ISDA Form Master Agreement of the Assigned Transaction, the
addresses for notices or communications are as follows: (i) in the case of
Assignor, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxxxxxx, with a copy to the same
address, Attention: Legal Department, or such other address as may be
hereafter furnished in writing to Assignee and Remaining Party; (ii) in the
case of Assignee, The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust MBS Administration, CWHEQ, Series 2007-S3 or
such other address as may be hereafter furnished in writing to Assignor and
Remaining Party, with a copy to MBIA Insurance Corporation, 000 Xxxx Xxxxxx,
Xxxxxx, Xxx Xxxx 00000, Attention: IPM-Structured Mortgage; and (iii) in the
case of Remaining Party,
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager - 36th Floor
Telex No. 000-000-0000
copy to: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Telex No: 000-000-0000
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copy to: MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx,
Xxx Xxxx 00000
Attention: IPM-Structured Mortgage
such other address as may be hereafter furnished in writing to Assignor
and Assignee.
10. Payments. All payments (if any) remitted by Remaining Party under
the Assigned Transaction shall be made by wire transfer according to the
following instructions:
The Bank of New York
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: TAS A/C 540752
Attn: Xxxxxxx Xxxxxx 000-000-0000
Fax: 000-000-0000
11. Optional Termination. In connection with the optional termination of
the trust fund pursuant to Section 9.01 of the Pooling and Servicing
Agreement, with effect following all distributions on the final Distribution
Date under the Pooling and Servicing Agreement (such date, the "Optional
Termination Distribution Date"):
(a) (1) (A) Assignee hereby assigns all of its rights and delegates
all of its liabilities and obligations to Countrywide Home Loans,
Inc., (for purposes of this Section 11 "CHL") and CHL hereby
assumes all of Assignee's rights, liabilities, and obligations,
under the Assigned Transaction and the Confirmation arising after
the final distributions on the Optional Termination Distribution
Date (such transaction and confirmation, collectively, the "New
Assigned Transaction") and (B) Remaining Party hereby consents to
such assignment, delegation and assumption;
(2) Remaining Party and CHL agree to enter into the New Assigned
Transaction as evidenced by a confirmation (the "New
Confirmation") such New Confirmation evidencing a complete and
binding agreement between Remaining Party and CHL and such New
Confirmation will constitute a Confirmation (as that word is
defined in the New Agreement, defined below) that supplements,
forms a part of, and is subject to, an agreement (the "New
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
date Remaining Party and CHL enter into the New Assigned
Transaction Remaining Party and CHL had executed an agreement in
such form, but without any Schedule (as that word is defined in
the New Agreement) except for the elections made therein.
Remaining Party and CHL further agree that such New Confirmation
shall have substantially identical terms to the Assigned
Transaction and Confirmation.
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(b) Remaining Party and Assignee are each released and discharged from
further obligations owed under and in respect of the Assigned
Transaction and their respective rights against each other
thereunder are cancelled;
(c) Remaining Party and CHL hereby agree that the Confirmation shall
be amended as follows:
(1) Section 4 of the Confirmation shall be deleted in its
entirety.
(d) Remaining Party hereby agrees that CHL may do one of the following
with the New Assigned Transaction and the New Confirmation:
(i) retain such New Assigned Transaction and New Confirmation;
(ii) assign all of its rights and delegate all of its liabilities
and obligations under the New Assigned Transaction and the New
Confirmation to a third party, such assignment and delegation to
be effective upon the receipt of written consent thereto from
Remaining Party (in its sole and absolute discretion); or
(iii) terminate the New Assigned Transaction by giving three
Business Days' prior written notice to Remaining Party (the
"Optional Swap Termination"). In connection with the Optional Swap
Termination, if any, a termination payment (if any) shall be
payable by CHL or Remaining Party, as applicable, as determined by
the Calculation Agent by the application of Section 6(e)(ii) of
the ISDA Form Master Agreement, with Market Quotation and Second
Method being the applicable method for determining the termination
payment. The exercise of the right to terminate under this
provision shall not be an Event of Default under any of the other
Transactions between CHL and Bear Xxxxxxx Capital Markets Inc. For
purposes of the Optional Swap Termination, CHL shall be the sole
Affected Party.
(e) If CHL exercises its right to retain the New Assigned Transaction
and New Confirmation pursuant to Section 11(d)(i) of this
Assignment Agreement, then Remaining Party has the right to do one
of the following with the New Assigned Transaction and the New
Confirmation:
(i) retain such New Assigned Transaction and New Confirmation;
(ii) assign all of its rights and delegate all of its liabilities
and obligations under the New Assigned Transaction to a subsidiary
of The Bear Xxxxxxx Companies, Inc. without the consent of CHL; or
(iii) assign all of its rights and delegate all of its liabilities
and obligations under the New Assigned Transaction to a third
party with the consent of CHL;
provided, however, that if Remaining Party exercises its right to
assign the Assigned Transaction under (ii) or (iii) above the
assignee shall be an entity that
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(1) has executed an ISDA Master Agreement with CHL, (2) has
executed an Item 1115 Regulation AB Agreement with CHL and (3)
agrees to accept all of the terms and conditions of the Assigned
Transaction and New Confirmation without amendment or supplement.
12. Counterparts. This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission), each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement
as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
THE BANK OF NEW YORK, NOT IN ITS
INDIVIDUAL OR CORPORATE CAPACITY
BUT SOLELY AS SWAP CONTRACT
ADMINISTRATOR FOR CWHEQ HOME
EQUITY LOAN TRUST, SERIES 2007-S3
By: /s/ Xxxxxxxx Pensor
-----------------------------
Name: Xxxxxxxx Pensor
Title: Vice President
BEAR XXXXXXX CAPITAL MARKETS INC.
By:
Name:
Title:
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BEAR XXXXXXX Exhibit I
BEAR XXXXXXX CAPITAL MARKETS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
TEL: 000-000-0000
DATE: March 30, 2007
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: CXCWL07S2
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the "Transaction") between Bear Xxxxxxx Capital Markets Inc. ("Bear Xxxxxxx")
and Countrywide Home Loans, Inc. ("Counterparty"). This letter agreement
constitutes the sole and complete "Confirmation," as referred to in the "ISDA
Master Agreement" (as defined below), as well as a "Schedule" as referred to
in the ISDA Master Agreement
(1) This Confirmation is subject to the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). Any reference to a "Swap Transaction" in the
Definitions is deemed to be a reference to a "Transaction" for purposes
of this Agreement, and any reference to a "Transaction" in this Agreement
is deemed to be a reference to a "Swap Transaction" for purposes of the
Definitions. This Confirmation shall supplement, form a part of, and be
subject to an agreement in the form of the ISDA Master Agreement
(Multicurrency - Cross Border) as published and copyrighted in 1992 by
the International Swaps and Derivatives Association, Inc. (the "ISDA
Master Agreement"), as if Bear Xxxxxxx and Counterparty had executed an
agreement in such form on the date hereof, with a Schedule as set forth
in Item 4 of this Confirmation (the "Schedule"), and an ISDA Credit
Support Annex (Bilateral Form - ISDA Agreements Subject to New York Law
Only version) as published and copyrighted in 1994 by the International
Swaps and Derivatives Association, Inc., with Paragraph 13 thereof as set
forth in Annex A hereto (the "Credit Support Annex"). For the avoidance
of doubt, the Transaction described herein shall be the sole Transaction
governed by such ISDA Master Agreement. In the event of any inconsistency
among any of the following documents, the relevant document first listed
shall govern: (i) this Confirmation, exclusive of the provisions set
forth in Item 4 hereof and Annex A hereto; (ii) the Schedule; (iii) the
Credit Support Annex; (iv) the Definitions; and (v) the ISDA Master
Agreement. Terms capitalized but not defined herein shall have the
meanings attributed to them in the Pooling and Servicing Agreement dated
as of March 1, 2007 among CWHEQ Inc., as depositor, Park Monaco Inc., as
a seller, Park Granada LLC, as a seller, Park Sienna LLC, as a seller,
Countrywide Home Loans, Inc., as a seller, Countrywide Home Loans
Servicing LP, as master servicer and The Bank of New York, as trustee
(the "Pooling and Servicing Agreement").
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 2 of 33
Each reference herein to a "Section" (unless specifically referencing the
Pooling and Servicing Agreement or to a "Section" "of this Agreement"
will be construed as a reference to a Section of the ISDA Master
Agreement; each herein reference to a "Part" will be construed as a
reference to Schedule; each reference herein to a "Paragraph" will be
construed as a reference to a Paragraph of the Credit Support Annex.
(2) The terms of the particular Transaction to which this Confirmation
relates are as follows:
Notional Amount: With respect to any Calculation
Period, the lesser of (i) the amount
set forth for such period on the
Schedule I attached hereto and (ii)
the aggregate Certificate Principal
Balance of the Class A-4-V and A-S-V
Certificates (initially USD
73,310,000) immediately prior to the
Distribution Date occurring in the
calendar month in which such
Calculation Period ends; provided that
upon the occurrence of an Optional
Termination, with respect to each
Calculation Period beginning on or
after the final Distribution Date with
respect to such Optional Termination,
the Notional Amount shall equal the
Scheduled Amount for such Calculation
Period as set forth in the Schedule I
attached hereto multiplied by the
quotient of (A) the Notional Amount
for the Calculation Period immediately
prior to such Optional Termination
divided by (B) the Scheduled Amount
for the Calculation Period immediately
prior to such Optional Termination as
set forth in the Schedule I attached
hereto.
Trade Date: March 23, 2007
Effective Date: Xxxxx 00, 0000
Xxxxxxxxxxx Date: March 25, 2014, subject to adjustment
in accordance with the Business Day
Convention; provided, however, that
for the purpose of determining the
final Fixed Rate Payer Period End
Date, Termination Date shall be
subject to No Adjustment.
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Period End Dates: The 25th calendar day of each month
during the Term of this Transaction,
commencing April 25, 2007 and ending
on March 25, 2014, with No Adjustment.
Fixed Rate Payer
Payment Dates: The 25th calendar day of each month
during the Term of this Transaction,
commencing April 25, 2007 and ending
on the Termination Date, subject to
adjustment in accordance with the
Business Day Convention.
Fixed Rate: 5.13%
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 3 of 33
Fixed Rate Day
Count Fraction: 30/360
Floating Amounts:
Floating Rate Payer: Bear Xxxxxxx
Floating Rate Payer
Period End Dates: The 25th calendar day of each month
during the Term of this Transaction,
commencing April, 25, 2007 and ending
on the Termination Date, subject to
adjustment in accordance with the
Business Day Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. One
Business Day prior to each Fixed Rate
Payer Period End Date.
Floating Rate for initial
Calculation Period: To be determined
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month, except with respect to the
initial Calculation Period for which
the Designated Maturity shall be the
Linear Interpolation of the two week
and the one month.
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation
Period
Compounding: Inapplicable
Upfront Fixed
Amount: Counterparty will pay USD 490,000 to
Bear Xxxxxxx on the Effective Date.
Business Days: New York
Business Day Convention: Following
Calculation Agent: Bear Xxxxxxx
Netting: Notwithstanding anything to the
contrary in Section 2(c) of the ISDA
Master 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 ISDA
Master Agreement, even if such amounts
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 4 of 33
are not due on the same payment date.
For avoidance of doubt any payments
pursuant to Section 6(e) of the ISDA
Master Agreement shall not be subject
to netting.
(3) Additional Provisions: For each Calculation Period,
Counterparty will make the Monthly
Report available on its website
xxxxx://xxx.xxxxxxxxxxxxxxxxxxxx.xxx
indicating the outstanding principal
balance of the Class A-4-V and A-5-V
Certificates as of the first day of
the month in which such Calculation
Period begins
(4) Provisions Deemed Incorporated in a Schedule to the ISDA Master
Agreement:
Part 1. Termination Provisions.
For purposes of the ISDA Master Agreement:
(a) "Specified Entity" will not apply to Bear Xxxxxxx or Counterparty for any
purpose.
(b) "Specified Transactions" will not apply to Bear Xxxxxxx or Counterparty
for any purpose.
(c) The "Failure to Pay or Deliver" provisions of Section 5(a)(i) will apply
to Bear Xxxxxxx and will apply to Counterparty; provided that
notwithstanding anything to the contrary in Section 5(a)(i) or Paragraph
7 of the Credit Support Annex, any failure by Bear Xxxxxxx to comply with
or perform any obligation to be complied with or performed by Bear
Xxxxxxx under the Credit Support Annex shall not constitute an Event of
Default under Section 5(a)(i) unless (A) a Xxxxx'x Second Level Downgrade
has occurred and been continuing for 30 or more Local Business Days and
(B) such failure is not remedied on or before the third Local Business
Day after notice of such failure is given to Bear Xxxxxxx.
(d) The "Breach of Agreement" provisions of Section 5(a)(ii) will apply to
Bear Xxxxxxx and will not apply to Counterparty.
(e) The "Credit Support Default" provisions of Section 5(a)(iii) will apply
to (x) Bear Xxxxxxx; provided that notwithstanding anything to the
contrary in Section 5(a)(iii)(l), any failure by Bear Xxxxxxx to comply
with or perform any obligation to be complied with or performed by Bear
Xxxxxxx under the Credit Support Annex shall not constitute an Event of
Default under Section 5(a)(iii) unless (A) a Xxxxx'x Second Level
Downgrade has occurred and been continuing for 30 or more Local Business
Days and (B) such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to Bear Xxxxxxx and
(y) Counterparty solely in respect of Counterparty's obligations under
Paragraph 3(b) of the Credit Support Annex.
(f) The "Misrepresentation" provisions of Section 5(a)(iv) will apply to Bear
Xxxxxxx and will not apply to Counterparty.
(g) The "Default under Specified Transaction" provisions of Section 5(a)(v)
will not apply to Bear Xxxxxxx or Counterparty.
(h) The "Cross Default" provisions of Section 5(a)(vi) will apply to Bear
Xxxxxxx and will not apply to Counterparty.
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 5 of 33
"Specified Indebtedness" will have the meaning specified in
Section 14.
"Threshold Amount" means USD 100,000,000.
(i) The "Bankruptcy" provisions of Section 5(a)(vii) will apply to Bear
Xxxxxxx and will apply to Counterparty except that the provisions of
Section 5(a)(vii)(2), (6) (to the extent that such provisions refer to
any appointment contemplated or effected by the Pooling and Servicing
Agreement or any appointment to which Counterparty has not become subject
to), (7) and (9) will not apply to Counterparty; provided that, with
respect to Counterparty only, Section 5(a)(vii)(4) is hereby amended by
adding after the words "against it" the words "(excluding any proceeding
or petition instituted or presented by Bear Xxxxxxx)", and Section
5(a)(vii)(8) is hereby amended by deleting the words "to (7) inclusive"
and inserting lieu thereof," (3), (4) as amended, (5) or (6) as amended".
(j) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will apply to
Bear Xxxxxxx and will apply to Counterparty; provided that Bear Xxxxxxx
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.
(k) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to Bear Xxxxxxx or Counterparty.
(l) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Bear Xxxxxxx or to Counterparty.
(m) Payments on Early Termination. For the purpose of Section 6(e) of the
ISDA Master Agreement:
(1) Market Quotation will apply; and
(2) the Second Method will apply;
provided that if Bear Xxxxxxx is the Defaulting Party or the sole
Affected Party, the following provisions will apply:
(A) Section 6(e) of the ISDA Master Agreement will be amended
by inserting on the first line "or is effectively designated"
after "If an Early Termination Date occurs";
(B) The definition of Market Quotation in Section 14 shall be
deleted in its entirety and replaced with the following:
"Market Quotation" means, with respect to one or more
Terminated Transactions, and a party making the
determination, an amount determined on the basis of Firm
Offers from Reference Market-makers that are Eligible
Replacements. Each Firm Offer will be (1) for an amount
that would be paid to Counterparty (expressed as a
negative number) or by Counterparty (expressed as a
positive number) in consideration of an agreement between
Counterparty and such Reference Market-maker to enter into
a Replacement Transaction and (2) made on the basis that
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
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 6 of 33
applicable condition precedent) after that Early
Termination Date is to be included. The party making the
determination (or its agent) will request each Reference
Market-maker to provide its Firm Offer 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 Firm
Offers 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. The Market Quotation shall be the Firm
Offer actually accepted by Counterparty no later than the
Business Day preceding the Early Termination Date. If no
Firm Offers are provided by the Business Day preceding the
Early Termination Date, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or
group of Transactions cannot be determined.
(C) Counterparty shall use best efforts to accept a Firm Offer
that would determine the Market Quotation. If more than one
Firm Offer (which, if accepted, would determine the Market
Quotation) is provided, Counterparty shall use commercially
reasonable efforts to accept the Firm Offer (among such Firm
Offers) which would require either (x) the lowest payment by
the Counterparty to the Reference Market-maker, to the extent
Counterparty would be required to make a payment to the
Reference Market-maker or (y) the highest payment from the
Reference Market-maker to Counterparty, to the extent the
Reference Market-maker would be required to make a payment to
the Counterparty. If only one Firm Offer (which, if accepted,
would determine the Market Quotation) is provided, Counterparty
shall use commercially reasonable efforts to accept such Firm
Offer.
(D) Upon the written request by Counterparty to Bear Xxxxxxx,
Bear Xxxxxxx shall obtain the Market Quotations on behalf of
Counterparty.
(E) If the Settlement Amount is a negative number, Section
6(e)(i)(3) of the ISDA Master Agreement shall be deleted in its
entirety and replaced with the following:
"(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, (I) Counterparty shall
pay to Bear Xxxxxxx an amount equal to the absolute value
of the Settlement Amount in respect of the Terminated
Transactions, (II) Counterparty shall pay to Bear Xxxxxxx
the Termination Currency Equivalent of the Unpaid Amounts
owing to Bear Xxxxxxx and (III) Bear Xxxxxxx shall pay to
Counterparty the Termination Currency Equivalent of the
Unpaid Amounts owing to Counterparty; provided, however,
that (x) the amounts payable under the immediately
preceding clauses (II) and (III) shall be subject to
netting in accordance with Section 2(c) of this Agreement
and (y) notwithstanding any other provision of this
Agreement, any amount payable by Bear Xxxxxxx under the
immediately preceding clause (III) shall not be netted-off
against any amount payable by Counterparty under the
immediately preceding clause (I)."
(n) "Termination Currency" means United States Dollars.
(o) Additional Termination Events. Additional Termination Events will apply:
Reference Number: CXCWL07S2
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March 30, 2007
Page 7 of 33
(i) If, without the prior written consent (such consent not to be
reasonably withheld) of Bear Xxxxxxx where such consent is
required under the Pooling and Servicing Agreement, an
amendment or supplemental agreement is made to the Pooling and
Servicing Agreement which amendment or supplemental agreement
could reasonably be expected to have a material adverse effect
on the interests of Bear Xxxxxxx under this Agreement, an
Additional Termination Event shall have occurred with respect
to Counterparty, Counterparty shall be the sole Affected Party
and all Transactions hereunder shall be Affected Transaction.
(ii) If an Applied Realized Loss Amount is applied to reduce the
Certificate Principal Balance of any class of Class A
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.
(iii) (A) If a S&P First Level Downgrade has occurred and
is continuing and Bear Xxxxxxx fails to take any
action described under Part (5)(f)(i)(1), within the
time period specified therein, then an Additional
Termination Event shall have occurred with respect to
Bear Xxxxxxx, Bear Xxxxxxx shall be the sole Affected
Party with respect to such Additional Termination
Event and all Transactions hereunder shall be
Affected Transactions.
(B) If a S&P Second Level Downgrade has occurred and is
continuing and Bear Xxxxxxx fails to take any action
described under Part (5)(f)(i)(2) within the time
period specified therein, then an Additional
Termination Event shall have occurred with respect to
Bear Xxxxxxx, Bear Xxxxxxx shall be the sole Affected
Party with respect to such Additional Termination
Event and all Transactions hereunder shall be
Affected Transactions.
(C) If (A) a Xxxxx'x Second Level Downgrade has not
occurred and been continuing for 30 or more Local
Business Days and (B) Bear Xxxxxxx has failed to
comply with or perform any obligation to be complied
with or performed by Bear Xxxxxxx in accordance with
the Credit Support Annex, then an Additional
Termination Event shall have occurred with respect to
Bear Xxxxxxx and Bear Xxxxxxx shall be the sole
Affected Party with respect to such Additional
Termination Event.
(D) If (A) a Xxxxx'x Second Level Downgrade has occurred
and been continuing for 30 or more Local Business
Days and (B) either (i) at least one Eligible
Replacement has made a Firm Offer to be the
transferee or (ii) at least one entity that satisfies
the Xxxxx'x Approved Ratings Threshold has made a
Firm Offer to provide an Eligible Guaranty in respect
of all of Bear Xxxxxxx' present and future
obligations under this Agreement, then an Additional
Termination Event shall have occurred with respect to
Bear Xxxxxxx, Bear Xxxxxxx shall be the sole Affected
Party with respect to such Additional Termination
Event and all Transactions hereunder shall be
Affected Transactions.
Part 2. Tax Matters.
(a) Tax Representations.
Reference Number: CXCWL07S2
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March 30, 2007
Page 8 of 33
(i) Payer Representations. For the purpose of Section 3(c) of the
ISDA Master Agreement, each of Bear Xxxxxxx and the Counterparty
will 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) of the ISDA Master Agreement) to be
made by it to the other party under this Agreement. In making this
representation, it may rely on:
(1) the accuracy of any representations made by the other party
pursuant to Section 3(f) of the ISDA Master Agreement;
(2) the satisfaction of the agreement contained in Sections
4(a)(i) and 4(a)(iii) of the ISDA Master Agreement and the
accuracy and effectiveness of any document provided by the
other party pursuant to Sections 4(a)(i) and 4(a)(iii) of the
ISDA Master Agreement; and
(3) the satisfaction of the agreement of the other party
contained in Section 4(d) of the ISDA Master 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) of
the ISDA Master Agreement by reason of material prejudice to
its legal or commercial position.
(ii) Payee Representations. For the purpose of Section 3(f) of the
ISDA Master Agreement, each of Bear Xxxxxxx and the Counterparty
make the following representations.
The following representation will apply to Bear Xxxxxxx:
Bear Xxxxxxx is a corporation organized under the laws of the
State of Delaware and its U.S. taxpayer identification number
is 00-0000000.
The following representation will apply to the Counterparty:
Counterparty represents that it is a "United States person" as
such term is defined in Section 7701(a)(3) of the Internal
Revenue Code of 1986, as amended.
(b) Tax Provisions.
Notwithstanding the definition of "Indemnifiable Tax" in Section
14 of this Agreement, all Taxes in relation to payments by Bear
Xxxxxxx shall be Indemnifiable Taxes (including any Tax imposed in
respect of a Credit Support Document) unless (i) such Taxes are
assessed directly against Counterparty and not by deduction or
withholding by Bear Xxxxxxx or (ii) arise as a result of a Change
in Tax Law (in which case such Tax shall be an Indemnifiable Tax
only if such Tax satisfies the definition of Indemnifiable Tax
provided in Section 14). In relation to payments by Counterparty,
no Tax shall be an Indemnifiable Tax.
Part 3. Agreement to Deliver Documents. For the purpose of Section 4(a) of
the ISDA Master Agreement:
(i) Tax forms, documents, or certificates to be delivered are:
Reference Number: CXCWL07S2
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March 30, 2007
Page 9 of 33
Party required to
deliver document Form/Document/Certificate Date by which to be delivered
Bear Xxxxxxx An original properly completed and (i) upon execution of this
executed United States Internal Agreement, (ii) on or before the
Revenue Service Form W-9 (or any first payment date under this
successor thereto) with respect to Agreement, including any Credit
any payments received or to be Support Document, (iii) promptly
received by Bear Xxxxxxx, that upon the reasonable demand by
eliminates U.S. federal withholding Counterparty, (iv) prior to the
and backup withholding Tax on expiration or obsolescence of any
payments to Bear Xxxxxxx under this previously delivered form, and (v)
Agreement. promptly upon the information on any
such previously delivered form
becoming inaccurate or incorrect.
Counterparty An original properly completed and (i) upon execution of this
executed United States Internal Agreement, (ii) on or before the
Revenue Service Form W-9 (or any first payment date under this
successor thereto) with respect to Agreement, including any Credit
any payments received or to be Support Document, (iii) promptly
received by Counterparty. upon the reasonable demand by Bear
Xxxxxxx, (iv) prior to the
expiration or obsolescence of any
previously delivered form, and (v)
promptly upon the information on any
such previously delivered form
becoming inaccurate or incorrect.
(ii) Other documents to be delivered are:
Party required to Form/Document/Certificate Date by which to be Covered by Section 3(d)
deliver document delivered Representation
Bear Xxxxxxx and the Any documents required by Upon the execution and Yes
Counterparty the receiving party to delivery of this Agreement
evidence the authority of and such Confirmation
the delivering party or its
Credit Support Provider, if
any, for it to execute and
deliver this Agreement, any
Confirmation, and any Credit
Support Documents to which
it is a party, and to
evidence the authority of
the delivering party or its
Credit Support Provider to
perform its obligations
under this
Reference Number: CXCWL07S2
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March 30, 2007
Page 10 of 33
Party required to Form/Document/Certificate Date by which to be Covered by Section 3(d)
deliver document delivered Representation
Agreement, such Confirmation
and/or Credit Support
Document, as the case may be
Bear Xxxxxxx and A certificate of an Upon the execution and Yes
the Counterparty authorized officer of the delivery of this Agreement
party, as to the incumbency and such Confirmation
and authority of the
respective officers of the
party signing this
Agreement, any relevant
Credit Support Document, or
any confirmation, as the
case may be
Bear Xxxxxxx and An opinion of counsel of Upon the execution and No
the Counterparty such party regarding the delivery of this Agreement
enforceability of this
Agreement in a form
reasonably satisfactory to
the other party.
Counterparty An executed copy of the Concurrently with filing No
Pooling and Servicing of each draft of the
Agreement and the Swap Pooling and Servicing
Administration Agreement Agreement with the U.S.
Securities and Exchange
Commission
Part 4 Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of the ISDA
Master Agreement:
Address for notices or communications to Bear Xxxxxxx:
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
Facsimile: (000) 000-0000
Reference Number: CXCWL07S2
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March 30, 2007
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and
Address: MBIA Insurance Corporation
000 Xxxx Xxxxxx, Xxxxxx
Xxx Xxxx 00000
Attention: IPM-Structured Mortgage
(For all purposes)
Address for notices or communications to the Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
With respect to Notices of Section 5 and 6 of the Agreement:
Address: MBIA Insurance Corporation
000 Xxxx Xxxxxx, Xxxxxx
Xxx Xxxx 00000
Attention: IPM-Structured Mortgage
(b) Account Details and Settlement Information:
Payments to Bear Xxxxxxx:
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 Capital Markets
Sub-account Number: 000-00000-00
Attention: Derivatives Operations
Payments to Counterparty:
See Assignment Agreement
Reference Number: CXCWL07S2
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(c) Process Agent. For the purpose of Section 13(c) of the ISDA Master
Agreement:
Bear Xxxxxxx appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(d) Offices. The provisions of Section 10(a) of the ISDA Master Agreement
will not apply to this Agreement; neither Bear Xxxxxxx nor the
Counterparty have any Offices other than as set forth in the Notices
Section.
(e) Multibranch Party. For the purpose of Section 10(c) of the ISDA
Master Agreement:
Bear Xxxxxxx is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(f) Credit Support Document.
Bear Xxxxxxx: The Credit Support Annex and any guaranty in
support of Bear Xxxxxxx' obligations under this Agreement.
Counterparty: The Credit Support Annex.
(g) Credit Support Provider.
Bear Xxxxxxx: The guarantor under any guaranty in support
of Bear Xxxxxxx' obligations under this Agreement.
Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the
law of the State of New York shall govern their rights and duties in
whole, without regard to the conflict of law provisions thereof other
than New York General Obligations Law Sections 5-1401 and 5-1402.
(i) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in
the second line of subparagraph (i) thereof the word "non-", (ii)
deleting "; and" from the end of subparagraph 1 and inserting "." in
lieu thereof, and (iii) deleting the final paragraph thereof.
(j) "Affiliate": Bear Xxxxxxx and Counterparty shall be deemed not to
have any Affiliates for purposes of this Agreement, including for
purposes of Section 6(b)(ii) of the ISDA Master Agreement.
(k) Netting of Payments. The parties agree that subparagraph (ii) of
Section 2(c) of the 1SDA Master Agreement will apply to each
Transaction.
Part 5. Other Provisions.
(a) Section 3 of the ISDA Master Agreement is hereby amended by adding at the
end thereof the following subsection (g):
Reference Number: CXCWL07S2
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March 30, 2007
Page 13 of 33
"(g) Relationship Between Parties.
Each party represents to the other party on each date when
it enters into a Transaction that:
(1) Nonreliance. (i) It is acting for its own account,
(ii) 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 and
(iii) it has consulted with its own legal, regulatory,
tax, business, investment, financial and accounting
advisors to the extent it has deemed necessary, (iv)
it has made its own investment, hedging and trading
decisions based upon its own judgment and upon any
advice from such advisors as it has deemed necessary
and not upon any view expressed by the other party,
(v) it has made its own independent decisions to enter
into the Transaction and as to whether the Transaction
is appropriate or proper for it based upon its own
judgment and upon advice from such advisors as it has
deemed necessary, (vi) it is not relying on any
communication (written or oral) of the other party as
investment advice or as a recommendation to enter into
this Transaction; it being understood that information
and explanations related to the terms and conditions
of this Transaction shall not be considered investment
advice or a recommendation to enter into this
Transaction and (vii) it has not received from the
other party any assurance or guaranty as to the
expected results of this Transaction.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or
through independent professional advice) the
Transaction and has made its own decision to
enter into 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
those risks, financially and otherwise.
(3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments,
hedging its underlying assets or liabilities or in
connection with a line of business.
(4) Status of Parties. The other party is not acting as an
agent, fiduciary or advisor for it in respect of the
Transaction.
(5) Eligible Contract Participant. It constitutes an
"eligible contract participant" as such term is
defined in Section 1(a)12 of the Commodity Exchange
Act, as amended.
(6) Line of Business. It has entered into this Agreement
(including each Transaction governed hereby) in
conjunction with its line of business or the financing
of its business."
(b) Non-Recourse. Notwithstanding any provision herein or in the ISDA
Master Agreement to the contrary, the obligations of Counterparty hereunder
are limited recourse obligations of Counterparty, payable solely from the Swap
Account and the proceeds thereof, in accordance with the terms of the Pooling
and Servicing Agreement. 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 proceeds thereof, any claims
against or obligations of Counterparty under the ISDA Master Agreement or any
other confirmation thereunder
Reference Number: CXCWL07S2
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March 30, 2007
Page 14 of 33
still outstanding shall be extinguished and thereafter not revive. The
Counterparty shall not have liability for any failure or delay in making a
payment hereunder to Bear Xxxxxxx due to any failure or delay in receiving
amounts in the Swap Account from the Trust created pursuant to the Pooling and
Servicing Agreement.
(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) Consent to Recording. Each party hereto consents to 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, waives any
further notice of such monitoring or recording, and agrees to notify its
officers and employees of such monitoring or recording.
(e) 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.
(f) Rating Agency Downgrade.
(i) S&P Downgrade:
(1) In the event that a S&P First Level Downgrade occurs and is
continuing, then within 30 days after such rating downgrade,
Bear Xxxxxxx shall, at its own expense, either (i) procure a
Permitted Transfer, (ii) obtain an Eligible Guaranty or
(iii) post collateral in accordance with the Credit Support
Annex.
(2) In the event that a S&P Second Level Downgrade occurs and is
continuing, then within 10 Local Business Days after such
rating withdrawal or downgrade, Bear Xxxxxxx shall, at its
own expense, either (i) procure a Permitted Transfer or (ii)
obtain an Eligible Guaranty.
(ii) Moody's Downgrade.
(1) In the event that a Moody's Second Level Downgrade occurs
and is continuing, Bear Xxxxxxx shall as soon as reasonably
practicable thereafter, at its own expense and using
commercially reasonable efforts, either (i) procure a
Permitted Transfer or (ii) obtain an Eligible Guaranty.
(g) Payment Instructions. Bear Xxxxxxx hereby agrees that, unless
notified in writing by the Swap Administrator of other payment instructions,
any and all amounts payable by Bear Xxxxxxx to the Counterparty under this
Agreement shall be paid to the Swap Contract Administrator at the account
specified in the Assignment Agreement
Reference Number: CXCWL07S2
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March 30, 2007
Page 15 of 33
(h) Amendment. No amendment, waiver, supplement or other modification
of this Transaction shall be permitted by either party unless (i) each of S&P
and Moody's have been provided notice of the same and (ii) such amendment,
waiver, supplement, assignment or other modification satisfies the Rating
Agency Condition.
(i) Transfer.
(i) The first paragraph of Section 7 is hereby amended in its
entirety as follows:
"Subject to Section 6(b)(ii), Part 5(f) and Part 5(j),
neither this Agreement nor any interest or obligation in or
under this Agreement may be transferred (whether by way of
security or otherwise) without (a) the prior written consent
of the other party (which consent shall be deemed given by
Counterparty if the transfer, novation or assignment is to
an Eligible Replacement) and (b) satisfaction of the Rating
Agency Condition with respect to S&P, except that:"
(ii) If an entity has made a Firm Offer (which remains an offer
that will become legally binding upon acceptance by Counterparty)
to be the transferee of a transfer, Counterparty shall, at Bear
Xxxxxxx' written request and at Bear Xxxxxxx' expense, take any
reasonable steps required to be taken by Counterparty to effect
such transfer.
(j) Transfer to Avoid Termination Event. Section 6(b)(ii) is hereby
amended by (i) deleting the words "or if a Tax Event Upon Merger occurs and
the Burdened Party is the Affected Party," and (ii) deleting the last
paragraph thereof and inserting the following:
"Notwithstanding anything to the contrary in Section 7 (as amended
herein) and Part 5(i), any transfer by Bear Xxxxxxx under this
Section 6(b)(ii) shall not require the consent of Counterparty;
provided that:
(i) the transferee (the "Transferee") is an Eligible
Replacement;
(ii) if the Transferee is domiciled in a different country or
political subdivision thereof from both Bear Xxxxxxx and
Counterparty, such transfer satisfies the Rating Agency
Condition;
(iii) the Transferee will not, as a result of such transfer, be
required on the next succeeding Scheduled Payment Date to
withhold or deduct on account of any Tax (except in respect
of default interest) amounts in excess of that which Bear
Xxxxxxx would, on the next succeeding Scheduled Payment Date
have been required to so withhold or deduct unless the
Transferee would be required to make additional payments
pursuant to Section 2(d) (i)(4) corresponding to such
excess;
(iv) a Termination Event or Event of Default does not occur as a
result of such transfer; and
(v) the Transferee confirms in writing that it will accept all
of the interests and obligations in and under this Agreement
which are to be transferred to it in accordance with the
terms of this provision.
On and from the effective date of any such transfer to the
Transferee, Bear Xxxxxxx will be fully released from any and all
obligations hereunder."
Reference Number: CXCWL07S2
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March 30, 2007
Page 16 of 33
(k) Proceedings. Bear Xxxxxxx 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.
(1) Compliance with Regulation AB.
Regulation AB Compliance. Bear Xxxxxxx and Counterparty agree that the terms
of the Item 1115 Agreement dated as of March 30, 2007 (the "Regulation AB
Agreement"), between Countrywide Home Loans, Inc., CWABS, INC., CWMBS, Inc.,
CWALT, Inc., CWHEQ, Inc. and Bear Xxxxxxx Capital Markets 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 B.
(m) Substantial Financial Transaction. 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) 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.
(n) Set-Off. Except as expressly provided for in Section 2(c), Section 6
or Part 1(m)(E) hereof, and notwithstanding any other 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. Section 6(e) shall be 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."
(o) Counterparts. 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.
(p) Swap Contract Administration Agreement. Bear Xxxxxxx shall be an
express third party beneficiary of the Swap Contract Administration Agreement,
dated as of March 30, 2007 (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 C.
(q) Additional Defined Terms.
(i) Capitalized terms used but nor defined herein shall have the
meanings ascribed to such terms in the Pooling and Servicing
Agreement.
(ii) Additional Definitions:
"Eligible Guaranty" means an unconditional and irrevocable
guaranty of all present and future payment obligations and
obligations to post collateral of Bear Xxxxxxx or an
Eligible Replacement to Counterparty under this Agreement
that is provided by an Eligible Guarantor as principal
debtor
Reference Number: CXCWL07S2
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March 30, 2007
Page 17 of 33
rather than surety and that is directly enforceable by
Counterparty, the form and substance of which guaranty are subject
to the Rating Agency Condition with respect to S&P.
"Eligible Guarantor" means an entity that has credit ratings at
least equal to the Moody's Required Ratings Threshold and S&P
Approved Ratings Threshold.
"Eligible Replacement" means an entity that either (i) satisfies
the S&P Approved Ratings Threshold and the Moody's Required
Ratings Threshold or (ii) provides an Eligible Guaranty from an
Eligible Guarantor.
"Firm Offer" means an offer which, when made, is capable of
becoming legally binding upon acceptance.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor.
"Moody's Approved Ratings Threshold" means, with respect to (i)
Bear Xxxxxxx, a Moody's counterparty rating of "Al" or above and
(ii) with respect to any other entity (or its guarantor), (x) if
such entity has both a long-term unsecured and unsubordinated debt
rating or counterparty rating from Moody's and a short-term
unsecured and unsubordinated debt rating from Moody's, a long-term
unsecured and unsubordinated debt rating or counterparty rating
from Moody's of "A2" or above and a short-term unsecured and
unsubordinated debt rating from Moody's of "Prime-1" or above, or
(y) if such entity has only a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's, a
long-term unsecured and unsubordinated debt rating or counterparty
rating from Moody's of "Al" or above.
"Moody's First Level Downgrade" means that no Relevant Entity
satisfies the Moody's Approved Rating Threshold.
"Moody's Required Ratings Threshold" means, with respect to (i)
Bear Xxxxxxx, a counterparty rating of "A3" or above and (ii) with
respect to any other entity (or its guarantor), (x) if such entity
has both a long-term unsecured and unsubordinated debt rating or
counterparty rating from Moody's and a short-term unsecured and
unsubordinated debt rating from Moody's, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's of
"A3" or above or a short-term unsecured and unsubordinated debt
rating from Moody's of "Prime-2" or above, or (y) if such entity
has only a long-term unsecured and unsubordinated debt rating or
counterparty rating from Moody's, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's of
"A3" or above.
"Moody's Second Level Downgrade" means that no Relevant Entity
satisfies the Moody's Required Ratings Threshold.
"Permitted Transfer" means a transfer by novation by Bear Xxxxxxx
to an entity (the "Transferee") of all, but not less than all, of
Bear Xxxxxxx' rights, liabilities, duties and obligations under
this Agreement, with respect to which transfer each of the
following conditions is satisfied: (a) the Transferee is an
Eligible Replacement that is a recognized dealer in interest rate
swaps organized under the laws of the United States of America or
a jurisdiction located in the United States of America (or another
jurisdiction reasonably acceptable to Counterparty), (b) an Event
of Default or Termination Event would not occur as a result of
such transfer, (c) pursuant to a written instrument (the "Transfer
Agreement"), the Transferee acquires and assumes all rights and
obligations of Bear Xxxxxxx under the Agreement and the relevant
Transaction, (d) Bear Xxxxxxx will be responsible for any costs or
expenses
Reference Number: CXCWL07S2
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March 30, 2007
Page 18 of 33
incurred in connection with such transfer (including any
replacement cost of entering into a replacement transaction); (e)
either (A) Moody's has been given prior written notice of such
transfer and the Rating Agency Condition is satisfied with respect
to S&P or (B) each Rating Agency has been given prior written
notice of such transfer and such transfer is in connection with
the assignment and assumption of this Agreement without
modification of its terms, other than party names, dates relevant
to the effective date of such transfer, tax representations and
any other representations regarding the status of the substitute
counterparty, notice information and account details and other
similar provisions; and (f) such transfer otherwise complies with
the terms of the Pooling and Servicing Agreement.
"Rating Agency" means each of Moody's and S&P.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder that the party acting or
failing to act must consult with each Rating Agency then providing
a rating of the Certificates and any Notes and receive from each
such Rating Agency a prior written confirmation that the proposed
action or inaction would not cause a downgrade or withdrawal of
its then-current rating of the Certificates and any Notes.
"Relevant Entity" means Bear Xxxxxxx and any Eligible Guarantor
under an Eligible Guaranty with respect to Bear Xxxxxxx.
"Replacement Transaction" means, with respect to any Terminated
Transaction or group of Terminated Transactions, a transaction or
group of transactions that (i) would have the effect of preserving
for Counterparty 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 been required after that Date, and
(ii) has terms which are substantially the same as this Agreement,
including, without limitation, rating triggers, Regulation AB
compliance, and credit support documentation, as determined by
Counterparty in its sole discretion, acting in a commercially
reasonable manner.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"S&P Approved Ratings Threshold" means with respect to (i) Bear
Xxxxxxx, a counterparty rating of "A+" or above and (ii) with
respect to any other entity (or its guarantor), a short-term
unsecured and unsubordinated debt rating from S&P of "A-1" or
above, or, if such entity does not have a short-term unsecured and
unsubordinated debt rating from S&P, a long-term unsecured and
unsubordinated debt rating from S&P of "A+" or above.
"S&P First Level Downgrade" means that no Relevant Entity
satisfies the S&P Approved Rating Threshold.
"S&P Required Ratings Threshold" means with respect to (i) Bear
Xxxxxxx, a counterparty rating of "BBB" or above and (ii) with
respect to any other entity (or its guarantor), a long-term
unsecured and unsubordinated debt rating from S&P of "BBB-" or
above.
"S&P Second Level Downgrade" means that no Relevant Entity
satisfies the S&P Required Rating Thresholds.
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 19 of 33
(q) Rating Agency Notifications. Except as otherwise provided herein,
no Early Termination Date shall be effectively designated hereunder shall be
made by either party unless each Rating Agency has been given prior written
notice of such designation.
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY
OR AFFILIATE OF THE BEAR XXXXXXX COMPANIES INC. OTHER THAN
BEAR XXXXXXX IS AN OBLIGOR OR A CREDIT SUPPORT PROVIDER ON
THIS AGREEMENT
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 Bear Xxxxxxx a facsimile of the
fully-executed Confirmation to 000-000-0000. For inquiries regarding U.S.
Transactions, please contact Derivatives Documentation 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.
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 20 of 33
Very truly yours,
BEAR XXXXXXX CAPITAL MARKETS INC.
By: /s/ Xxxxxxxxx Xxxxxx
----------------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Authorized Signatory
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By:
----------------------------------------------
As authorized agent or officer for Countrywide Home Loans, Inc.
Name:
Title:
cm
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 21 of 33
SCHEDULE I
(where for the purposes of (i) determining Floating Amounts, all such
dates subject to adjustment in accordance with the Following Business Day
Convention and (ii) determining Fixed Amounts, all such dates
subject to No Adjustment.)
------------------------------------------------------------------------------
From and including To but excluding Scheduled Amounts
------------------------------------------------------------------------------
(USD)
------------------------------------------------------------------------------
Effective Date 4/25/2007 73,310,000
------------------------------------------------------------------------------
4/25/2007 5/25/2007 73,310,000
------------------------------------------------------------------------------
5/25/2007 6/25/2007 73,310,000
------------------------------------------------------------------------------
6/25/2007 7/25/2007 73,310,000
------------------------------------------------------------------------------
7/25/2007 8/25/2007 73,310,000
------------------------------------------------------------------------------
8/25/2007 9/25/2007 73,310,000
------------------------------------------------------------------------------
9/25/2007 10/25/2007 73,310,000
------------------------------------------------------------------------------
10/25/2007 11/25/2007 73,310,000
------------------------------------------------------------------------------
11/25/2007 12/25/2007 73,310,000
------------------------------------------------------------------------------
12/25/2007 1/25/2008 73,310,000
------------------------------------------------------------------------------
1/25/2008 2/25/2008 73,310,000
------------------------------------------------------------------------------
2/25/2008 3/25/2008 73,310,000
------------------------------------------------------------------------------
3/25/2008 4/25/2008 73,310,000
------------------------------------------------------------------------------
4/25/2008 5/25/2008 73,310,000
------------------------------------------------------------------------------
5/25/2008 6/25/2008 73,310,000
------------------------------------------------------------------------------
6/25/2008 7/25/2008 73,310,000
------------------------------------------------------------------------------
7/25/2008 8/25/2008 73,310,000
------------------------------------------------------------------------------
8/25/2008 9/25/2008 73,310,000
------------------------------------------------------------------------------
9/25/2008 10/25/2008 73,310,000
------------------------------------------------------------------------------
10/25/2008 11/25/2008 73,310,000
------------------------------------------------------------------------------
11/25/2008 12/25/2008 73,310,000
------------------------------------------------------------------------------
12/25/2008 1/25/2009 73,310,000
------------------------------------------------------------------------------
1/25/2009 2/25/2009 73,310,000
------------------------------------------------------------------------------
2/25/2009 3/25/2009 73,310,000
------------------------------------------------------------------------------
3/25/2009 4/25/2009 73,310,000
------------------------------------------------------------------------------
4/25/2009 5/25/2009 73,310,000
------------------------------------------------------------------------------
5/25/2009 6/25/2009 73,310,000
------------------------------------------------------------------------------
6/25/2009 7/25/2009 73,310,000
------------------------------------------------------------------------------
7/25/2009 8/25/2009 73,310,000
------------------------------------------------------------------------------
8/25/2009 9/25/2009 73,310,000
------------------------------------------------------------------------------
9/25/2009 10/25/2009 73,310,000
------------------------------------------------------------------------------
10/25/2009 11/25/2009 73,310,000
------------------------------------------------------------------------------
11/25/2009 12/25/2009 73,310,000
------------------------------------------------------------------------------
12/25/2009 1/25/2010 73,310,000
------------------------------------------------------------------------------
1/25/2010 2/25/2010 73,310,000
------------------------------------------------------------------------------
2/25/2010 3/25/2010 73,310,000
------------------------------------------------------------------------------
3/25/2010 4/25/2010 73,310,000
------------------------------------------------------------------------------
4/25/2010 5/25/2010 73,310,000
------------------------------------------------------------------------------
5/25/2010 6/25/2010 73,310,000
------------------------------------------------------------------------------
6/25/2010 7/25/2010 73,310,000
------------------------------------------------------------------------------
7/25/2010 8/25/2010 73,310,000
------------------------------------------------------------------------------
Reference Number: CXCWL07S2
Countrywide Home Loans, Inc.
March 30, 2007
Page 22 of 33
------------------------------------------------------------------------------
8/25/2010 9/25/2010 73,310,000
------------------------------------------------------------------------------
9/25/2010 10/25/2010 73,310,000
------------------------------------------------------------------------------
10/25/2010 11/25/2010 73,310,000
------------------------------------------------------------------------------
11/25/2010 12/25/2010 73,310,000
------------------------------------------------------------------------------
12/25/2010 1/25/2011 73,310,000
------------------------------------------------------------------------------
1/25/2011 2/25/2011 73,310,000
------------------------------------------------------------------------------
2/25/2011 3/25/2011 73,310,000
------------------------------------------------------------------------------
3/25/2011 4/25/2011 73,310,000
------------------------------------------------------------------------------
4/25/2011 5/25/2011 73,310,000
------------------------------------------------------------------------------
5/25/2011 6/25/2011 73,310,000
------------------------------------------------------------------------------
6/25/2011 7/25/2011 73,310,000
------------------------------------------------------------------------------
7/25/2011 8/25/2011 73,309,787
------------------------------------------------------------------------------
8/25/2011 9/25/2011 70,342,595
------------------------------------------------------------------------------
9/25/2011 10/25/2011 67,466,778
------------------------------------------------------------------------------
10/25/2011 11/25/2011 64,679,703
------------------------------------------------------------------------------
11/25/2011 12/25/2011 61,978,808
------------------------------------------------------------------------------
12/25/2011 1/25/2012 59,361,605
------------------------------------------------------------------------------
1/25/2012 2/25/2012 56,825,667
------------------------------------------------------------------------------
2/25/2012 3/25/2012 54,368,640
------------------------------------------------------------------------------
3/25/2012 4/25/2012 51,988,248
------------------------------------------------------------------------------
4/25/2012 5/25/2012 50,057,449
------------------------------------------------------------------------------
5/25/2012 6/25/2012 48,185,705
------------------------------------------------------------------------------
6/25/2012 7/25/2012 46,371,271
------------------------------------------------------------------------------
7/25/2012 8/25/2012 44,612,447
------------------------------------------------------------------------------
8/25/2012 9/25/2012 42,907,585
------------------------------------------------------------------------------
9/25/2012 10/25/2012 41,255,086
------------------------------------------------------------------------------
10/25/2012 11/25/2012 39,653,393
------------------------------------------------------------------------------
11/25/2012 12/25/2012 38,100,999
------------------------------------------------------------------------------
12/25/2012 1/25/2013 36,596,437
------------------------------------------------------------------------------
1/25/2013 2/25/2013 35,212,042
------------------------------------------------------------------------------
2/25/2013 3/25/2013 34,065,681
------------------------------------------------------------------------------
3/25/2013 4/25/2013 32,954,760
------------------------------------------------------------------------------
4/25/2013 5/25/2013 32,010,756
------------------------------------------------------------------------------
5/25/2013 6/25/2013 31,093,337
------------------------------------------------------------------------------
6/25/2013 7/25/2013 30,201,763
------------------------------------------------------------------------------
7/25/2013 8/25/2013 29,335,314
------------------------------------------------------------------------------
8/25/2013 9/25/2013 28,460,164
------------------------------------------------------------------------------
9/25/2013 10/25/2013 27,607,792
------------------------------------------------------------------------------
10/25/2013 11/25/2013 26,779,465
------------------------------------------------------------------------------
11/25/2013 12/25/2013 25,974,514
------------------------------------------------------------------------------
12/25/2013 1/25/2014 25,192,287
------------------------------------------------------------------------------
1/25/2014 2/25/2014 24,432,150
------------------------------------------------------------------------------
2/25/2014 Termination Date 23,693,499
------------------------------------------------------------------------------
ANNEX A
UNILATERAL CSA SCHEDULE
Pledgor: BEAR XXXXXXX CAPITAL MARKETS INC. (the "Pledgor")
Secured Party: COUNTRYWIDE HOME LOANS, INC. (the "Secured Party")
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes no "additional obligations" within the meaning of
Paragraph 12.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(1) Delivery Amount. Paragraph 3(a) shall be amended by
replacing the words "upon a demand made by the Secured Party
on or promptly following a Valuation Date" with the words
"on each Valuation Date". The "Delivery Amount" with respect
to Pledgor for any Valuation Date shall equal the greatest
of:
(A) the amount by which the S&P Collateral Amount exceeds
the S&P Value on such Valuation Date of all Posted
Credit Support held by the Secured Party;
(B) the amount by which the Xxxxx'x First Level Collateral
Amount exceeds the Xxxxx'x First Level Value on such
Valuation Date of all Posted Credit Support held by
the Secured Party.
(C) the amount by which the Xxxxx'x Second Level
Collateral Amount exceeds the Xxxxx'x Second Level
Value on such Valuation Date of all Posted Credit
Support held by the Secured Party.
(2) "Return Amount" applicable to Secured Party for any
Valuation Date shall equal the least of:
(A) the amount by which the S&P Value on such Valuation
Date of all Posted Credit Support held by the Secured
Party exceeds the S&P Collateral Amount;
(B) the amount by which the Xxxxx'x First Level Value on
such Valuation Date of all Posted Credit Support held
by the Secured Party exceeds the Xxxxx'x First Level
Collateral Amount.
(C) the amount by which the Xxxxx'x Second Level Value on
such Valuation Date of all Posted Credit Support held
by the Secured Party exceeds the Xxxxx'x Second Level
Collateral Amount.
(3) "Credit Support Amount" shall be deleted in its entirety.
(ii) Eligible Collateral. The items set forth on the Collateral
Schedule attached as Schedule A hereto will qualify as "Eligible
Collateral" for the party specified.
11
(iii) Other Eligible Support. None
(iv) Thresholds.
(A) "Independent Amount" means: Pledgor: Not applicable. Secured
Party: Not applicable.
(B) "Threshold" means: Pledgor: Not applicable. Secured Party:
Not applicable.
(C) "Minimum Transfer Amount" means USD100,000; provided, that
if the aggregate Certificate Principal Balance of
Certificates rated by S&P is less than USD 50,000,000, the
"Minimum Transfer Amount" shall mean USD 50,000.
(D) Rounding. The Delivery Amount will be rounded up and the
Return Amount will be rounded down to the nearest integral
multiple of USD 10,000.
(c) Valuation and Timing.
(i) "Valuation Agent" means Pledgor.
(ii) "Valuation Date" means each Local Business Day.
(iii) "Valuation Time" means the close of business on the Local Business
Day in the city where the Valuation Agent is located immediately
preceding 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 11:00 A.M. (New York time).
(v) Transfer Timing and Calculations. Paragraphs 4(b) and 4(c) are
hereby amended and restated in entirety as set forth below.
"(b) Transfer Timing. 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 Valuation Date; 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
next Local Business Day thereafter.
(c) Calculations. All calculations of Value and Exposure for
purposes of Paragraphs 3 and 6(d) will be made by the Valuation
Agent as of the Valuation Time. The Valuation Agent will notify
each party (or the other party, if the Valuation Agent is a party)
of its calculations not later than the Notification Time on the
applicable Valuation Date (or in the case of Paragraph 6(d), the
Local Business Day following the day on which such relevant
calculations are performed)."
(d) Conditions Precedent. There shall be no "Specified Condition" with
respect to either party for
12
purposes of this Annex.
(e) Substitution
(i) "Substitution Date" means (A) the Local Business Day on which
the Secured Party receives the Substitute Credit Support, if
notice of substitution is received by the Notification Time on
such date, and (B) the Local Business Day following the date on
which the Secured Party receives the Substitute Credit Support, if
notice of substitution is received after the Notification Time.
(ii) Consent of Secured Party for Substitution. Inapplicable.
(iii) Amendment of Paragraph 4(d)(ii). Paragraph 4(d)(ii) is amended and
restated in its entirety as set forth below:
"(ii) subject to Paragraph 4(a) of this Annex, the Secured
Party will Transfer the items of Posted Credit Support
specified by the Pledgor in its notice not later than the
close of business on the Substitution Date, provided,
however, that if the Secured Party shall not have received
the Substitute Credit Support prior to 1:00 P.M. (New York
time) on the Substitution Date, then the Secured Party shall
Transfer the applicable items of Posted Credit Support not
later than the close of business on the Local Business Day
immediately following the day on which the Secured Party
receives the Substitute Credit Support. Notwithstanding the
foregoing, the Secured Party will only be obligated to
Transfer Posted Credit Support with a Value as of the
Substitution Date equal to the Value of the Substitute
Credit Support delivered by the Pledgor in exchange
therefor."
(f) Dispute Resolution.
(i) "Resolution Time" means 12:00 noon, New York time, on the Local
Business Day for both parties following the date the Disputing
Party gives notice of a dispute pursuant to Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), disputes
over the Value of Posted Credit Support will be resolved by the
Valuation Agent seeking bid-side quotations as of the relevant
Recalculation Date or date of Transfer, as applicable, from three
parties that regularly act as dealers in the securities in
question. The Value will be the arithmetic mean of the quotations
obtained by the Valuation Agent, multiplied by the applicable
Valuation Percentage, if any. If no quotations are available for a
particular security, then the Valuation Agent's original
calculation of Value thereof will be used for that security.
(iii) Alternative. Subject to item (iv) below, the provisions of
Paragraph 5 will apply.
(iv) Modification of Paragraph 5. The introductory paragraph of
Paragraph 5 shall be amended and restated to read in its entirety
as follows:
"If a party (a `Disputing Party') disputes (I) the Valuation
Agent's calculation of a Delivery Amount or a Return Amount
or (II) the Value of any Transfer of Eligible Credit Support
or Posted Credit Support, then:
(A) the Disputing Party will (x) notify the other
party and, if applicable, the Valuation Agent of the amount
it is disputing, (y) indicate what it believes the correct
amount to be and (z) provide a statement showing, in
reasonable detail, how
13
it arrived at such amount and the appropriate party will
deliver the undisputed amount to the other party not later
than (i) (a) the close of business on the Valuation Date, if
the demand made under Paragraph 3 in the case of (I) above
is made by the Notification Time, or (b) the close of
business of the Local Business Day following the date on
which the demand is made under Paragraph 3 in the case of
(I) above, if such demand is made after the Notification
Time, or (ii) the close of business of the date of Transfer,
in the case of (II) above;
(B) the parties will consult with each other and provide
such information as the other party shall reasonably request
in an attempt to resolve the dispute; and
(C) if they fail to resolve the dispute by the Resolution
Time, then:"
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians. The Secured
Party and its Custodian (if any) will be entitled to hold Posted
Collateral pursuant to Paragraph 6(b), provided that the following
conditions applicable to it are satisfied:
(1) it is not a Defaulting Party;
(2) Posted Collateral consisting of Cash or certificated
securities that cannot be paid or delivered by book-entry may be
held only in any state of the United States which has adopted the
Uniform Commercial Code;
(3) the short-term rating of any Custodian shall be at least "A-1"
by S&P
There shall be no Custodian for Pledgor.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will
not apply to Secured Party and Secured Party will not have any
right to use the Posted Collateral or take any action specified in
Paragraph 6(c).
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" will be the "Federal Funds
(Effective)" rate as such rate is displayed on Telerate page 118
for such day under the caption "Effective".
(ii)Amendment of Paragraph 6(d)(i) - Distributions. Clause (d)(i)
of Paragraph 6 shall be amended by deleting each occurrence of the
words "or is deemed to receive".
(iii) Amendment of Paragraph 6(d)(ii) - Interest Amount. Clause
(d)(ii) of Paragraph 6 shall be amended and restated to read in
its entirety as follows:
"(ii) Interest Amount. In lieu of any interest, dividends or
other amounts paid with respect to Posted Collateral in the
form of cash (all of which may be retained by the Secured
Party), the Secured Party will credit to Pledgor on the 20th
day of each calendar month (or if such day is not a Local
Business Day, the next Local Business Day) the Interest
Amount. The Interest Amount will constitute Posted
Collateral and will be subject to the security interest
granted under Paragraph 2. For purposes of calculating the
Interest Amount the amount of interest calculated for each
day of the interest period shall be compounded monthly."
Secured Party
14
shall not be obliged to credit any Interest Amount unless
and until it has received such amount.
(i) Demands and Notices.
All demands, specifications and notices under this Annex will be made
pursuant to the Notices Section of this Agreement.
(j) Addresses for Transfers.
Pledgor: To be provided in writing by Pledgor to Secured
Party.
Secured Party: To be provided in writing by Secured Party to
Pledgor.
(k) Other Provision(s).
(i) Amendment of Paragraph 7 - Events of Default. Clause (iii) of
Paragraph 7 shall not apply to Secured Party.
(ii) Non-Reliance. Notwithstanding the obligations of the Secured
Party under Paragraph 6(a), and without limiting the generality of
the final sentence of Paragraph 6(a), each party, as Pledgor,
acknowledges that it has the means to monitor all matters relating
to all valuations, payments, defaults and rights with respect to
Posted Collateral without the need to rely on the other party, in
its capacity as Secured Party, and that, given the provisions of
this Annex on substitution, responsibility for the preservation of
the rights of the Pledgor with respect to all such matters is
reasonably allocated hereby to the Pledgor.
(iii) Agreement as to Single Secured Party and Pledgor. Each of Pledgor
and Secured Party agree that, notwithstanding anything to the
contrary in the recital to this Annex, Paragraph 1(b) or Paragraph
2 or the definitions in Paragraph 12, (a) the term "Secured Party"
as used in this Annex means only Secured Party, (b) the term
"Pledgor" as used in this Annex means only Pledgor, (c) only
Pledgor makes the pledge and grant in Paragraph 2, the
acknowledgement in the final sentence of Paragraph 8(a) and the
representations in Paragraph 9 and (d) only Pledgor will be
required to make Transfers of Eligible Credit Support hereunder.
(iv) Trustee. The Trustee is hereby authorized to (i) make demands on
behalf of the Secured Party pursuant to Paragraph 3 hereunder and
(ii) provide notice on behalf of the Secured Party pursuant to
Paragraph 7 hereunder.
(v) Collateral Account. Secured Party shall at all times maintain all
Posted Collateral in a segregated trust account.
(vi) External Calculations. At any time at which Pledgor (or, to the
extent applicable, its Credit Support Provider) does not have a
long-term unsubordinated and unsecured debt rating of at least
"BBB+" from S&P, the Valuation Agent shall (at its own expense)
obtain external calculations of the Secured Party's Exposure from
at least two Reference Market-makers on the last Local Business
Day of each calendar month. Any determination of the S&P
Collateral Amount shall be based on the greatest of the Secured
Party's Exposure determined by the Valuation Agent and such
Reference Market-makers. Such external calculation may not be
obtained from the same Reference Market-maker more than four times
in any 12-
15
month period.
(vii) Notice to S&P. At any time at which Pledgor (or, to the extent
applicable, its Credit Support Provider) does not have a long-term
unsubordinated and unsecured debt rating of at least "BBB+" from
S&P, the Valuation Agent shall provide to S&P not later than the
Notification Time on the Local Business Day following each
Valuation Date its calculations of the Secured Party's Exposure
and the Value of any Eligible Credit Support or Posted Credit
Support for that Valuation Date. The Valuation Agent shall also
provide to S&P any external marks of the Secured Party's Exposure.
(viii) Expenses. Pledgor shall be responsible for all reasonable costs
and expenses incurred by Secured Party in connection with the
Transfer of any Eligible Collateral under this Annex.
(ix) Additional Defined Terms.
"DV01" means, with respect to a Transaction and any date of
determination, the sum of the estimated change in the Secured
Party's Exposure with respect to such Transaction that would
result from a one basis point change in the relevant swap curve on
such date, as determined by the Valuation Agent in good faith and
in a commercially reasonable manner. The Valuation Agent shall,
upon request of Secured Party, provide to Secured Party a
statement showing in reasonable detail such calculation.
"Xxxxx'x First Level Additional Collateralized Amount" means, with
respect to any Transaction, the lesser of (x) the product of 15
and DV01 for such Transaction and such Valuation Date and (y) the
product of 2% and the Notional Amount for such Transaction for the
Calculation Period which includes such Valuation Date.
"Xxxxx'x First Level Collateral Amount" means, (A) for any
Valuation Date on which (I) a Xxxxx'x First Level Downgrade has
occurred and has been continuing (x) for at least 30 Local
Business Days or (y) since this Annex was executed and (II) it is
not the case that a Xxxxx'x Second Level Downgrade has occurred
and been continuing for at least 30 Local Business Days, an amount
equal to the greater of (a) zero and (b) the sum of the Secured
Party's aggregate Exposure for all Transactions and the aggregate
of Xxxxx'x First Level Additional Collateralized Amounts for each
Transaction and (B)for any other Valuation Date, zero.
"Xxxxx'x First Level Value" means, for any date that the Xxxxx'x
First Level Collateral Amount is determined and the Value of any
Eligible Collateral or Posted Collateral that is a security, the
bid price for such security obtained by the Valuation Agent
multiplied by the Xxxxx'x First Level Valuation Percentage for
such security set forth on Schedule A hereto.
"Xxxxx'x Second Level Additional Collateralized Amount" means,
with respect to any Transaction,
(1) if such Transaction is not a Transaction-Specific Hedge,
the lesser of (i) the product of the 50 and DV01 for such
Transaction and such Valuation Date and (ii) the product of
8% and the Notional Amount for such Transaction for the
Calculation Period (as defined in the related Transaction)
which includes such Valuation Date; or
(2) if such Transaction is a Transaction-Specific Hedge, the
lesser of (i) the product of the 65 and DV01 for such
Transaction and such Valuation Date and (ii) the product of
10% and the Notional Amount for such Transaction for the
Calculation Period (as defined in the related Transaction)
which includes such Valuation Date.
16
"Xxxxx'x Second Level Collateral Amount" means, (A) for any
Valuation Date on which it is the case that a Xxxxx'x Second
Level Downgrade has occurred and been continuing for at
least 30 Local Business Days, an amount equal to the
greatest of (a) zero, (b) the aggregate amount of the Next
Payments for all Next Payment Dates and (c) the sum of the
Secured Party's aggregate Exposure and the aggregate of
Xxxxx'x Second Level Additional Collateralized Amounts for
each Transaction and (B) for any other Valuation Date, zero.
"Xxxxx'x Second Level Value" means, for any date that the
Xxxxx'x Second Level Collateral Amount is determined and the
Value of any Eligible Collateral or Posted Collateral that
is a security, the bid price for such security obtained by
the Valuation Agent multiplied by the Xxxxx'x Second Level
Valuation Percentage for such security set forth on Schedule
A hereto.
"Next Payment" means, in respect of each Next Payment Date,
the greater of (i) the amount of any payments due to be made
by the Pledgor pursuant to Section 2(a) on such Next Payment
Date less any payments due to be made by the Secured Party
under Section 2(a) on such Next Payment Date (in each case,
after giving effect to any applicable netting under Section
2(c)) and (ii) zero.
"Next Payment Date" means the next scheduled payment date
under any Transaction.
"Remaining Weighted Average Maturity" means, with respect to
a Transaction, the expected weighted average maturity for
such Transaction as determined by the Valuation Agent.
"S&P Collateral Amount" means, (A) for any Valuation Date on
which a S&P First Level Downgrade has occurred and been
continuing for at least 30 days or on which a S&P Second
Level Downgrade has occurred and is continuing, an amount
equal to the sum of (1) 100.0% of the Secured Party's
Exposure for such Valuation Date and (2) the product of the
Volatility Buffer for each Transaction and the Notional
Amount of such Transaction for the Calculation Period (as
defined in the related Transaction) of such Transaction
which includes such Valuation Date, or (B) for any other
Valuation Date, zero.
"S&P Value" means, for any date that the S&P Collateral
Amount is determined and the Value of any Eligible
Collateral or Posted Collateral that is a security, the bid
price for such security obtained by the Valuation Agent
multiplied by the S&P Valuation Percentage for such security
set forth on Schedule A hereto.
"Transaction-Specific Hedge" means any Transaction that is a
cap, floor or swaption or a Transaction in respect of which
(x) the notional amount of the interest rate swap is
"balance guaranteed" or (y) the notional amount of the
interest rate swap for any Calculation Period otherwise is
not a specific dollar amount that is fixed at the inception
of the Transaction.
"Volatility Buffer" means, for any Transaction, the related
percentage set forth in the following table:
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
The higher of the S&P
short-term credit
rating of (i) Pledgor
and (ii) the Credit Remaining Weighted Remaining Weighted Remaining Weighted Remaining Weighted
Support Provider of Average Maturity up Average Maturity up Average Maturity up Average Maturity up
Pledgor, if applicable to 3 years to 5 years to 10 years to 30 years
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
"A-2" or higher 2.75% 3.25% 4.00% 4.75%
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
17
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
"A-3" 3.25% 4.00% 5.00% 6.25%
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
"BB+" or lower 3.50% 4.50% 6.75% 7.50%
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
18
IN WITNESS WHEREOF, the parties have executed this Annex on the
respective date specified below with effect from the date specified on the
first page of this document.
BEAR XXXXXXX CAPITAL MARKETS INC.
By: /s/ Xxxxxxxxx Xxxxxx
----------------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Authorized Signatory
COUNTRYWIDE HOME LOANS, INC.
By:
----------------------------------------------
Name:
Title:
19
SCHEDULE A
----------
COLLATERAL SCHEDULE
-------------------
The Xxxxx'x First Level Valuation Percentages shall be used in determining the
Xxxxx'x First Level Collateral Amount.
The Xxxxx'x Second Level Valuation Percentages shall be used in determining
the Xxxxx'x Second Level Collateral Amount.
The S&P Valuation Percentages shall be used in determining the S&P Collateral
Amount.
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
ISDA Collateral Asset Remaining Maturity Xxxxx'x First Level Xxxxx'x Second Level S&P Valuation
Definition (ICAD) Code Valuation Percentage Valuation Percentage Percentage
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
US-CASH N/A 100% 100% 100%
EU-CASH N/A 98% 94% 92.5%
GB-CASH N/A 98% 95% 94.1%
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
< 1 Year 100% 100% 98.9%
1 to 2 years 100% 99% 98.0%
US-TBILL 2 to 3 years 100% 98% 97.4%
US-TNOTE 3 to 5 years 100% 97% 95.5%
US-TBOND 5 to 7 years 100% 96% 93.7%
(fixed rate) 7 to 10 years 100% 94% 95.5%
10 to 20 years 100% 90% 91.1%
> 20 years 100% 88% 88.6%
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
US-TBILL All Maturities 100% 99% Not Eligible
US-TNOTE Collateral
US-TBOND
(floating rate)
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
GA-US-AGENCY < 1 Year 100% 99% 98.5%
(fixed rate) 1 to 2 years 100% 99% 97.7%
2 to 3 years 100% 98% 97.3%
3 to 5 years 100% 96% 94.5%
5 to 7 years 100% 93% 93.1%
7 to 10 years 100% 93% 90.7%
10 to 20 years 100% 89% 87.7%
> 20 years 100% 87% 84.4%
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
GA-US-AGENCY All Maturities 100% 98% Not Eligible
(floating rate) Collateral
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
20
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Rated Aa3 or better Rated Aa3 or better Rated AAA or better
by Xxxxx'x by Xxxxx'x by S&P
< 1 Year 98% 94% 98.8&
1 to 2 years 98% 93% 97.9%
GA-EUROZONE-GOV (other 2 to 3 years 98% 92% 97.1%
than EU-CASH) (fixed 3 to 5 years 98% 90% 91.2%
rate) 5 to 7 years 98% 89% 87.5%
7 to 10 years 98% 88% 83.8%
10 to 20 years 98% 84% 75.5%
> 20 years 98% 82% Not Eligible
Collateral
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
GA-EUROZONE-GOV (other Rated Aa3 or better Rated Aa3 or better Rated AAA or better
than EU-CASH) (floating by Xxxxx'x by Xxxxx'x by S&P
rate)
All Maturities 98% 93% Not Eligible
Collateral
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
< 1 Year 98% 94% Not Eligible
Collateral
1 to 2 years 98% 93% Not Eligible
Collateral
2 to 3 years 98% 92% Not Eligible
Collateral
GA- GB-GOV (other than 3 to 5 years 98% 91% Not Eligible
GB-CASH) (fixed rate) Collateral
5 to 7 years 98% 90% Not Eligible
Collateral
7 to 10 years 98% 89% Not Eligible
Collateral
10 to 20 years 98% 86% Not Eligible
Collateral
> 20 years 98% 84% Not Eligible
Collateral
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
GA-GB-GOV (other than All Maturities 98% 94% Not Eligible
GB-CASH) (floating rate) Collateral
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
The ISDA Collateral Asset Definition (ICAD) Codes used in this Collateral
Schedule shall have the meanings set forth in the Collateral Asset Definitions
(First Edition -- June 2003) as published and copyrighted in 2003 by the
International Swaps and Derivatives Association, Inc.
21
ANNEX B
Item 1115 Agreement dated as of March 30, 2007 (this "Agreement"), between
COUNTRYWIDE HOME LOANS, INC., a New York corporation ("CHL"), CWABS, INC., a
Delaware corporation ("CWABS"), CWMBS, Inc., a Delaware corporation ("CWMBS"),
CWALT, Inc., a Delaware corporation ("CWALT"), CWHEQ, Inc., a Delaware
corporation ("CWHEQ") and BEAR XXXXXXX CAPITAL MARKETS INC., as counterparty
(the "Counterparty").
RECITALS
WHEREAS, CWABS, CWMBS, CWALT and CWHEQ each have filed Registration
Statements on Form S-3 (each, a "Registration Statement") with the Securities
and Exchange Commission (the "Commission") for purposes of offering mortgage
backed or asset-backed notes and/or certificates (the "Securities") through
special purpose vehicles (each, an "SPV").
WHEREAS, from time to time, on the closing date (the "Closing Date")
of a transaction pursuant to which Securities are offered (each, a
"Transaction"), the Counterparty and CHL or an underwriter or dealer with
respect to the Transaction, enter into certain derivative agreements (each, a
"Derivative Agreement"), including interest rate or currency swaps, for
purposes of providing certain yield enhancements that are assigned to the SPV
or the related trustee on behalf of the SPV or a swap or corridor contract
administrator (each, an "Administrator").
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereby agree as follows:
Section 1. Application and Definitions
(a) Application. This Agreement shall only apply to a Derivative
Agreement entered into on or after the date hereof which incorporates
the terms of this Agreement.
(b) Definitions.
Business Day: Any day other than a Saturday, a Sunday or any
day on which banking institutions in the states where the parties are located
are authorized or obligated by law, executive order or government decree to be
closed.
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to the
related Registration Statement for which the entity of the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Exchange Act: The Securities Exchange Act of 1934, as amended and the
rules and regulations promulgated thereunder.
Exchange Act Reports: All Distribution Reports on Form 10-D, Current
Reports on Form 8-K and Annual Reports on Form 10-K that are to be filed with
respect to the related SPV pursuant to the Exchange Act.
Master Agreement: The ISDA Master Agreement between the Counterparty
and CHL, or if no such Master Agreement exists, the ISDA Master Agreement
assumed to apply to the Derivative Agreement pursuant to its terms.
Offering Document: The prospectus, free writing prospectus,
prospectus supplement, offering circular or any other document prepared in
connection with the public offering and sale of the related Securities.
Prospectus Supplement: The prospectus supplement prepared in
connection with the public offering and sale of the related Securities.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related Depositor such
information regarding the Counterparty, as a derivative
instrument counterparty, as is reasonably requested by the
related Depositor for the purpose of compliance with Item
1115(a)(1) of Regulation AB. Such information shall include, at
a minimum:
(A) The Counterparty's legal name (and any d/b/a);
(B) the organizational form of the Counterparty;
(C) a description of the general character of the business of
the Counterparty; and
2
(D) a description of any affiliation or relationship between
the Counterparty and any of the following parties:
(1) any servicer or master servicer identified to the
Counterparty by CHL (to the extent such servicer or
master servicer is not an affiliate of CHL);
(2) The Bank of New York (or any other trustee identified
to the Counterparty by CHL);
(3) any originator identified to the Counterparty by CHL;
(4) any enhancement or support provider identified to the
Counterparty by CHL; and
(5) any other material Transaction party identified in
writing to the Counterparty by CHL.
(ii) if requested by the related Depositor for the purpose of
compliance with Item 1115(b) with respect to a Transaction, the
Counterparty shall:
(A) provide the financial data required by Item 1115(b)(1) or
(b)(2) of Regulation AB (as specified by the related
Depositor to the Counterparty) with respect to the
Counterparty (or any entity that consolidates the
Counterparty) and any affiliated entities providing
derivative instruments to the SPV (the "Company Financial
Information"), in a form appropriate for use in the
Prospectus Supplement and in an XXXXX-compatible form; and
(B) if required under the Exchange Act, cause its accountants
to issue their consent to the filing of such financial
statements in the Registration Statement.
(b) Following the Closing Date with respect to a Transaction,
(i) for the period from the closing date of the related Transaction
to December 31 of the calendar year in which the closing date of
the related Transaction occurs (and any additional period if
notified in writing by the related Depositor that the Depositor
will file Exchange Act reports in respect of the related SPV
after such period) no later than the 25th calendar day of each
month, the Counterparty shall (i) notify the related Depositor
in writing of any affiliations or relationships that develop
following the Closing Date between the Counterparty and any of
the parties specified in Section 2(a)(i)(D) (and any other
parties identified in writing by the related Depositor) and
provide to the related Depositor a description of such
affiliations or relationships; and
3
(ii) if the Counterparty provided Company Financial Information to
the related Depositor for the Prospectus Supplement, within 5
Business Days of the release of any updated financial data, the
Counterparty shall (1) provide current Company Financial
Information as required under Item 1115(b) of Regulation AB to
the related Depositor in an XXXXX-compatible form, and (2) if
required under the Exchange Act, cause its accountants to issue
their consent to filing or incorporation by reference of such
financial statements in the Exchange Act Reports of the SPV;
(iii) if the related Depositor requests Company Financial Information
from the Counterparty, for the purpose of compliance with Item
1115(b) of Regulation AB following the Closing Date, the
Counterparty shall upon five Business Days written notice either
(A), (1) provide current Company Financial Information as
required under Item 1115(b) of Regulation AB to the related
Depositor in an XXXXX-compatible form and (2) if required under
the Exchange Act, cause its accountants to issue their consent
to filing or incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV, (B) assign
the Derivative Agreement as provided below, (C) if the
Securities and Exchange Commission expressly permits an
affiliate guarantor's financial information to be used to
satisfy the financial information requirements of Item 1115(b)
of Regulation AB in lieu of the Counterparty's financial
information, obtain a guaranty of the Counterparty's obligations
under each Derivative Agreement entered into in connection with
the relevant Transaction from an affiliate of the Counterparty,
which affiliate has agreed to comply with the immediately
preceding clause (A) above and which guaranty meets all
applicable Securities and Exchange Commission requirements or
(D) with the consent of the Depositor related to the relevant
Transaction, post collateral in an amount sufficient to reduce
the "significance percentage" for purposes of Item 1115 of
Regulation AB with respect to any Derivative Agreement relating
to such Transaction.
(iv) within 5 Business Days of the release of any updated financial
data if such update is released (A) during the period from the
closing date of the related Transaction to December 31 of the
calendar year in which the closing date of the related
Transaction occurs (and any additional period if notified in
writing by the related Depositor that the Depositor will file
Exchange Act reports in respect of the related SPV after such
period) and (B) when the "significance percentage" for any
Derivative Agreement relating to such Transaction exceeds the
thresholds provided in Item 1115(b) of Regulation AB,
Counterparty shall provide current Company Financial Information
as required under Item 1115(b) of Regulation AB to the related
Depositor in an XXXXX-compatible form and if applicable, cause
its accountants to issue their consent to filing or
incorporation by reference of such financial statements in the
Exchange Act Reports of the SPV.
4
Section 3. Representations and Warranties and Covenants of the
Counterparty.
(a) The Counterparty represents and warrants to the related Depositor, as
of the date on which information is first provided to the related
Depositor under Section 2(a)(ii), Section 2(b)(ii) or Section
2(b)(iii)(A), that, except as disclosed in writing the related
Depositor prior to such date:
(i) The accountants who certify the financial statements and
supporting schedules included in the Company Financial
Information (if applicable) are independent registered public
accountants as required by the Securities Act;
(ii) If applicable, the financial statements included in the Company
Financial Information present fairly the consolidated financial
position of the Counterparty (or the entity that consolidates
the Counterparty) and its consolidated subsidiaries as at the
dates indicated and the consolidated results of their operations
and cash flows for the periods specified; except as otherwise
stated in the Company Financial Information, said financial
statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent
basis; and the supporting schedules included in the Company
Financial Information present fairly in accordance with GAAP the
information required to be stated therein;
(iii) The selected financial data and summary financial information
included in the Company Financial Information present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements of the
Counterparty; and
(iv) The Company Financial Information and other Company Information
included or incorporated by reference in the Registration
Statement (including through filing on an Exchange Act Report),
at the time they were or hereafter are filed with the
Commission, complied in all material respects with the
requirements of Item 1115(b) of Regulation AB (in the case of
the Company Financial Information) and, did not and will not
contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The Counterparty agrees that the terms of this Agreement shall be
incorporated by reference into any Derivative Agreement so that each
SPV who is a beneficiary of a Derivative Agreement shall be an
express third party beneficiary of this Agreement.
5
Section 4. Indemnification; Remedies
(a) The Counterparty shall indemnify CHL and the related Depositor, each
person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
SPV, or for execution of a certification pursuant to Rule 13a-14(d)
or Rule 15d-14(d) under the Exchange Act; each broker dealer acting
as underwriter, each person who controls any of such parties (within
the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act); and the respective present and former directors,
officers, employees and agents of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification,
accountants' consent or other material provided in written or
electronic form under Section 2 by or on behalf of the
Counterparty (collectively, the "Company Information"), or (B)
the omission or alleged omission to state in the Company
Information a material fact required to be stated in the Company
Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; or
(ii) any breach by the Counterparty of a representation or warranty
set forth in Section 3(a) and made as of a date prior to the
Closing Date, to the extent that such breach is not cured by the
Closing Date, or any breach by the Counterparty of a
representation or warranty pursuant to Section 3 to the extent
made as of a date subsequent to the Closing Date.
(b) (i) Any failure by the Counterparty to deliver any information,
report, certification, accountants' consent or other material
when and as required under Section 2 or any breach by the
Counterparty of a representation or warranty set forth in
Section 3 and made as of a date prior to the Closing Date, to
the extent that such breach is not cured by the Closing Date (or
in the case of information needed for purposes of printing the
Prospectus Supplement, the date of printing of the Prospectus
Supplement), or any breach by the Counterparty of a
representation or warranty pursuant to Section 3 to the extent
made as of a date subsequent to such closing date, shall, except
as provided in clause (ii) of this paragraph, constitute an
Additional Termination Event (as defined in the Master
Agreement) with the Counterparty as the sole Affected Party (as
defined in the Master Agreement) under the Derivative Agreement.
(ii) If the Counterparty has failed to deliver any information,
report, certification or accountants' consent when and as
required under Section 2, which continues unremedied for the
lesser of ten calendar days after the date on which such
information, report, certification or accountants'
6
consent was required to be delivered or such period in which the
applicable Exchange Act Report for which such information is
required can be timely filed (without taking into account any
extensions permitted to be filed), and the Counterparty has not,
at its own cost, within the period in which the applicable
Exchange Act Report for which such information is required can
be timely filed caused another entity (which meets any ratings
related requirement of the applicable rating agencies at such
time) to replace the Counterparty as party to the Derivative
Agreement that (i) has signed an agreement with CHL and the
Depositors substantially in the form of this Agreement, (ii) has
agreed to deliver any information, report, certification or
accountants' consent when and as required under Section 2 hereof
and (iii) is approved by the Depositor (which approval shall not
be unreasonably withheld and which approval is not needed if
such assignment is to a subsidiary of The Bear Xxxxxxx
Companies, Inc., provided the Depositor is given notice) and any
rating agency, if applicable, on terms substantially similar to
the Derivative Agreement, then such failure shall constitute an
Additional Termination Event (as defined in the Master
Agreement) under the related Derivative Agreement with the
Counterparty as the sole Affected Party (as defined in the
Master Agreement).
(iii) In the event that the Counterparty or the SPV has found a
replacement entity in accordance with Section 2(b)(ii), the
Counterparty shall promptly reimburse the SPV for all reasonable
incidental expenses incurred by the SPV, as such are incurred,
in connection with the termination of the Counterparty as
counterparty and the entry into a new Derivative Instrument. The
provisions of this paragraph shall not limit whatever rights the
SPV may have under other provisions of this Agreement or
otherwise, whether in equity or at law, such as an action for
damages, specific performance or injunctive relief.
(c) CHL and the related Depositor, jointly and severally, indemnify
Counterparty, each person who controls Counterparty (within the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act); and the respective present and former directors,
officers, employees and agents of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon (A) any untrue
statement of a material fact contained or alleged to be contained in
the related Offering Document (other than the Company Information),
or (B) the omission or alleged omission to state in related Offering
Document (other than the Company Information) a material fact
required to be stated in the Offering Document or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
7
Section 5. Miscellaneous.
(a) Construction. Throughout this Agreement, as the context requires, (a)
the singular tense and number includes the plural, and the plural
tense and number includes the singular; (b) the past tense includes
the present, and the present tense includes the past; and (c)
references to parties, sections, schedules, and exhibits mean the
parties, sections, schedules, and exhibits of and to this Agreement.
The section headings in this Agreement are inserted only as a matter
of convenience, and in no way define, limit, extend, or interpret the
scope of this Agreement or of any particular section.
(b) Assignment. None of the parties may assign their rights under this
Agreement without the prior written consent of the other parties.
Subject to the foregoing, this Agreement shall be binding on and
inure to the benefit of the parties and their respective successors
and permitted assigns.
(c) No Third-Party Benefits Except as Specified. None of the provisions
of this Agreement are intended to benefit, or to be enforceable by,
any third-party beneficiaries except the related SPV and any trustee
of an SPV or any Administrator.
(d) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without
regard to the conflict of laws principles thereof.
(e) Amendment and Waiver. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto. No
waiver of any provision of this Agreement or of any rights or
obligations of any party under this Agreement shall be effective
unless in writing and signed by the party or parties waiving
compliance, and shall be effective only in the specific instance and
for the specific purpose stated in that writing.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(g) Additional Documents. Each party hereto agrees to execute any and all
further documents and writings and to perform such other actions
which may be or become necessary or expedient to effectuate and carry
out this Agreement.
(h) Severability. Any provision hereof which is prohibited or
unenforceable shall be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof.
(i) Integration. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof. There are no
restrictions, agreements, promises, representations, warranties,
covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth or referred to herein.
8
This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter.
(j) Upon the Counterparty's request, CHL agrees to provide to the
Counterparty the methodology for its estimate of maximum probable
exposure represented by the Derivative Agreements.
(k) Notices. All notices and other communications hereunder will be in
writing (including by facsimile) and effective only upon receipt,
and, if sent to the Counterparty will be mailed or delivered to Bear
Xxxxxxx Capital Markets Inc., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Head of Interest Rate Derivatives,
if sent to the Countrywide Home Loan, Inc., 0000 Xxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, with a copy to
the same address, Attention: Legal Department.
9
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
CWABS, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
CWMBS, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
CWALT, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
CWHEQ, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
10
BEAR XXXXXXX CAPITAL MARKETS INC.
By:
-----------------------------
Name:
Title:
11
