Exhibit 99.4
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of November 30, 2006 ("Assignment
Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW
YORK ("Assignee"), as Corridor Contract Administrator for CWHEQ, Inc. Home
Equity Loan Asset-Backed Certificates Series 2006-S7, pursuant to a Corridor
Contract Administration Agreement (the "Corridor Contract Administration
Agreement") dated as of November 30, 2006, and SWISS RE FINANCIAL PRODUCTS
CORPORATION ("Remaining Party").
W I T N E S S E T H:
WHEREAS, effective as of November 30, 2006, 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
Confirmation with a Trade Date of November 16, 2006, whose SWISS RE FINANCIAL
PRODUCTS CORPORATION reference number is 1143052, (the "Confirmation"), copy of
which is attached hereto as Exhibit I;
WHEREAS, Assignor and Remaining Party executed and delivered the
Confirmation in connection with an ISDA Master Agreement (Multicurrency--Cross
Border) form (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 November 30, 2006
(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; provided, that such release shall not affect Assignor's obligation
to pay the Fixed Amount in accordance with the terms of the Assigned
Transaction and the Confirmation.
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 solely in its capacity as Corridor Contract Administrator under the
Corridor Contract Administration Agreement; and (b) in no case shall BNY (or
any person acting as successor Corridor Contract Administrator under the
Corridor 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 liability, if any, being expressly waived by Assignor and
Remaining Party and any person claiming by, through or under either such party.
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. 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 the
transaction 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.
6. Additional Provision. Each party hereby agrees that the Confirmation
and thus the Assigned Transaction are each hereby amended as follows:
(a) The following additional provision shall be added as a new
Section 6:
"Regulation AB Compliance. Party A and Party B agree that the
terms of the Item 1115 Agreement dated as of January 26, 2006
(the "Regulation AB Agreement"), between Countrywide Home Loans,
Inc., CWABS, INC., CWMBS, Inc., CWALT, Inc., CWHEQ, Inc. and
Swiss Re Financial Products Corporation shall be incorporated by
reference into this Agreement so that Party B shall be an
express third party beneficiary of the Regulation AB Agreement.
A copy of the Regulation AB Agreement is attached hereto as
Annex A."
7. 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;
and
(c) Its obligations under this Assignment Agreement constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms.
2
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.
8. Indemnity. Each of Assignor and Remaining Party 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. Each of Assignee
and Remaining Party (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.
9. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
10. 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, Xxxx Xxxx XX-000,
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, 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, 0x, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust MBS Administration, CWHEQ, Series 2006-S7 or
such other address as may be hereafter furnished in writing to Assignor and
Remaining Party; and (iii) in the case of Remaining Party,
Address: 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: Head of Operations
Telex No. 000-000-0000
copy to: 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000
Attention: Legal Department
Telex No: 000-000-0000
such other address as may be hereafter furnished in writing to Assignor
and Assignee.
11. 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 501580
Attn: Xxxxx Xxxxxx 000-000-0000
Fax: 000-000-0000
3
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.
4
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, AS CORRIDOR CONTRACT
ADMINISTRATOR FOR CWHEQ, INC. HOME EQUITY
LOAN ASSET-BACKED CERTIFICATES SERIES
2006-S7
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
------------------------------------
Title: Assistant Treasurer
-----------------------------------
SWISS RE FINANCIAL PRODUCTS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------------
Title: Vice President
-----------------------------------
5
Item 1115 Agreement dated as of January 26, 2006 (this "Agreement"),
between COUNTRYWIDE HOME LOANS, INC., a New York corporation ("CHL"), CWABS,
INC., a Delaware corporation ("CWABS"), CWMBS, Inc., a Delaware corporation
("CWMBS"), CWALT, Inc., a Delaware corporation ("CWALT"), CWHEQ, Inc., a
Delaware corporation ("CWHEQ ") and SWISS RE FINANCIAL PRODUCTS CORPORATION,
as counterparty (the "Counterparty").
RECITALS
WHEREAS, CWABS, CWMBS, CWALT and CWHEQ each have filed
Registration Statements on Force S-3 (each, a "Registration Statement") with
the Securities and Exchange Commission (the "Commission") for purposes of
offering mortgage backed or asset-backed notes and/or certificates (the
"Securities") through special purpose vehicles (each, an "SPV").
WHEREAS, from time to time, on the closing date (the "Closing
Date") of a transaction pursuant to which Securities are offered (each, a
"Transaction"), the Counterparty and CHL or an underwriter or dealer with
respect to the Transaction, enter into certain derivative agreements (each, a
"Derivative Agreement"), including interest rate or currency swaps, for
purposes of providing certain yield enhancements that are assigned to the SPV
or the related trustee on behalf of the SPV or a swap or corridor contract
administrator (each, an "Administrator").
NOW, THEREFORE, in consideration of the mutual agreements set
forth herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereby agree as follows:
Section 1. Definitions
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to the
related Registration Statement for which the entity of the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Exchange Act: The Securities Exchange Act of 1934, as amended and
the rules and regulations promulgated thereunder.
Exchange Act Reports: All Distribution Reports on Form 10-D,
Current Reports on Form 8-K and Annual Reports on Form 10-K that are to be
filed with respect to the related SPV pursuant to the Exchange Act.
Master Agreement: The ISDA Master Agreement between the
Counterparty and CHL, or if no such Master Agreement exists, the ISDA Master
Agreement assumed to apply to the Derivative Agreement pursuant to its terms.
Prospectus Supplement: The prospectus supplement prepared in
connection with the public offering and sale of the related Securities.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related Depositor such
information regarding the Counterparty, as a derivative
instrument counterparty, as is reasonably requested by the
related Depositor for the purpose of compliance with Item
1115(a)(1) of Regulation AB. Such information shall include,
at a minimum:
(A) The Counterparty's legal name (and any d/b/a);
(B) the organizational form of the Counterparty;
(C) a description of the general character of the business
of the Counterparty;
(D) a description of any material legal or governmental
proceedings pending (or known to be contemplated)
against the Counterparty which may have a material
impact on the Counterparty's ability to perform under
the related Derivative Agreement;
(E) a description of any affiliation or relationship
between the Counterparty and any of the following
parties:
(1) CHL (or any other sponsor identified to the
Counterparty by CHL);
(2) the related Depositor (as identified to the
Counterparty by CHL);
2
(3) the SPV;
(4) Countrywide Home Loans Servicing LP (or any
other servicer or master servicer identified to
the Counterparty by CHL);
(5) The Bank of New York (or any other trustee
identified to the Counterparty by CHL);
(6) any originator identified to the Counterparty by
CHL;
(7) any enhancement or support provider identified
to the Counterparty by CHL; and
(8) any other material transaction party identified
to the Counterparty by CHL.
(ii) if requested by the related Depositor for the purpose of
compliance with Item 1115(b) with respect to a Transaction,
the Counterparty shall:
(A) provide the financial data required by Item 1115(b)(1)
or (b)(2) of Regulation AB (as specified by the
related Depositor to the Counterparty) with respect to
the Counterparty (or any entity that consolidates the
Counterparty) and any affiliated entities providing
derivative instruments to the SPV (the "Company
Financial Information"), in a form appropriate for use
in the Prospectus Supplement and in an
XXXXX-compatible form; and
(B) if applicable, cause its accountants to issue their
consent to the filing of such financial statements in
the Registration Statement.
(b) Following the Closing Date with respect to a Transaction,
(i) (I) no later than the 25th calendar day of each month, the
Counterparty shall (i) notify the related Depositor in
writing of (A) any material litigation or governmental
proceedings pending against the Counterparty which may have
a material impact on the Counterparty's ability to perform,
under the related Derivative Agreement or (B) any
affiliations or relationships that develop following the
Closing Date between the Counterparty and any of the parties
specified in Section 2(a)(i)(E) (and any other parties
identified in writing by the related Depositor) and (ii)
provide to the related Depositor a description of such
proceedings, affiliations or relationships as described in
Section 2(b)(i)(I)(i); and
(ii) if the Counterparty provided Company Financial Information
to the related Depositor for the Prospectus Supplement,
within 5 Business Days of the release of any updated
financial data, the Counterparty shall (1) provide current
Company Financial Information as required under Item
3
1115(b) of Regulation AB to the related Depositor in an
XXXXX-compatible form, and (2) if applicable, cause its
accountants to issue their consent to filing or incorporation
by reference of such financial statements in the Exchange Act
Reports of the SPV;
(iii) if the related Depositor requests Company Financial
Information from the Counterparty, for the purpose of
compliance with Item 1115(b) of Regulation AB following the
Closing Date, the Counterparty shall upon five Business Days
written notice either (A), (1) provide current Company
Financial Information as required under Item 1115(b) of
Regulation AB to the related Depositor in an
XXXXX-compatible form, (2) if applicable, cause its
accountants to issue their consent to filing or
incorporation by reference of such financial statements in
the Exchange Act Reports of the SPV and (3) within 5
Business Days of the release of any updated financial data,
provide current Company Financial Information as required
under Item 1 115(b) of Regulation AB to the related
Depositor in an XXXXX-compatible form and if applicable,
cause its accountants to issue their consent to filing or
incorporation by reference of such financial statements in
the Exchange Act Reports of the SPV or (B) assign the
Derivative Agreement as provided below.
(c) Prior to printing of any Prospectus Supplement, CHL and Depositor
will inform the Counterparty of the scope and extent of the
information that they need to receive from the Counterparty for
use in the related Prospectus Supplement for the purpose of
compliance with Item 1115 of Regulation AB (the "Scope of
Information"). CHL and the Depositor acknowledge that the
Counterparty need not undertake any review of the related
Prospectus Supplement (other than with respect to the Company
Information and/or the Company Financial Information) in
connection with its provision of the Company Information and/or
the Company Financial Information.
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
4
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 he stated therein. The selected
financial data and summary financial information included in
the Company Financial Information present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements of
the Counterparty.
(iii) The Company Financial Information and other Company
Information included or incorporated by reference in the
Registration Statement (including through filing on an
Exchange Act Report), at the time they were or hereafter are
tiled with the Commission, complied in all material respects
with the requirements of Item 1115(b) of Regulation AB (in
the case of the Company Financial Information) and, did not
and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
(b) The Counterparty agrees that the terms of this Agreement shall be
incorporated by reference into any Derivative Agreement so that
each SPV who is a beneficiary of a Derivative Agreement shall be
an express third party beneficiary of this Agreement.
Section 4. Indemnification; Remedies
(a) The Counterparty shall indemnify CHL and the related Depositor,
each person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with
respect to such SPV, or for execution of a certification pursuant
to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act; each
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
5
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, immediately and automatically, without
notice or grace period, constitute an Additional Termination
Event (as defined in the Master Agreement) with the
Counterparty as the sole Affected Party (as defined in the
Master Agreement) under the Derivative Agreement. Following
such termination, a termination payment (if any) shall be
payable by the applicable party as determined by the
application of Section 6(e)(ii) of the Master Agreement,
with Market Quotation and Second Method being the applicable
method for determining the termination payment
(notwithstanding anything in the Derivative Agreement to the
contrary).
(ii) If the Counterparty has failed to deliver any information,
report, certification or accountants' consent when and as
required under Section 2, which continues unheeded for the
lesser of ten calendar days after the date on which such
information, report, certification or accountants' consent
was required to be delivered or such period in which the
applicable Exchange Act Report for which such information is
required can be timely filed (without taking into account
any extensions permitted to be filed), and the Counterparty
has not, at its own cost, within the period in which the
applicable Exchange Act Report for which such information is
required can be timely filed caused another entity (which
meets any applicable ratings threshold in the Derivative
Agreement) to replace the Counterparty as party to the
Derivative Agreement that (i) has signed an agreement with
CHL and the Depositors substantially in the form of this
Agreement, (ii) has agreed to deliver any information,
report, certification or accountants' consent when and as
required under Section 2 hereof and (iii) is approved by the
Depositor (which approval shall not be unreasonably
withheld) and any rating agency, if applicable, on terms
6
substantially similar to the Derivative Agreement, then an
Additional Termination Event (as defined in the Master
Agreement) shall have occurred with the Counterparty as the
sole Affected Party. Following such termination, a
termination payment (if any) shall be payable by the
applicable party as determined by the application of Section
6(e)(ii) of the Master Agreement, with Market Quotation and
Second Method being the applicable method for determining
the termination payment (notwithstanding anything in the
Derivative Agreement to the contrary).
(iii) In the event that the Counterparty or the SPV has found a
replacement entity in accordance with Section 2(b)(ii), the
Counterparty shall promptly reimburse the SPV for all
reasonable incidental expenses incurred by the SPV, as such
are incurred, in connection with the termination of the
Counterparty as counterparty and the entry into a new
Derivative Instrument. The provisions of this paragraph
shall not limit whatever rights the SPV may have under other
provisions of this Agreement or otherwise, whether in equity
or at law, such as an action for damages, specific
performance or injunctive relief.
(c) CHL and the related Depositor shall indemnify the Counterparty,
each person who controls the 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 Prospectus Supplement (other than the Company
Information), or (B) the omission or alleged omission to state in
related Prospectus Supplement (other than the Company Information)
a material fact required to be stated in the Prospectus Supplement
or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
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
7
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. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject
matter.
8
IN WITNESS WHEREOF, the parties hereto brave 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:
----------------------------------
Name:
Title
CWMBS, INC.
By:
----------------------------------
Name:
Title:
CWALT, INC.
By:
----------------------------------
Name:
Title:
CWHEQ, INC.
By:
----------------------------------
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.
By:
----------------------------------
Name:
Title:
SWISS RE FINANCIAL PRODUCTS CORPORATION
By:
----------------------------------
Name:
Title:
9
SWISS RE FINANCIAL PRODUCTS CORPORATION
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000/Phone: (000) 000-0000
DATE: November 30, 2006
TO: Countrywide Home Loans, Inc.
ATTENTION: Documentation Unit
FROM: Swiss Re Financial Products Corporation
TELEPHONE: (000) 000 0000
FACSIMILE: (000) 000 0000
SUBJECT: Fixed Income Derivatives Confirmation
REFERENCE NUMBER: 1143052
The purpose of this long-form confirmation ("Confirmation") is to confirm the
terms and conditions of the current Transaction entered into on the Trade Date
specified below (the "Transaction") between Swiss Re Financial Products
Corporation ("Party A") and Countrywide Home Loans, Inc. ("Party B"). This
Confirmation evidences a complete and binding agreement between you and us to
enter into the Transaction on the terms set forth below and replaces any
previous agreement between us with respect to the subject matter hereof. This
Confirmation constitutes a "Confirmation" and also constitutes a "Schedule" as
referred to in the ISDA Master Agreement, and Paragraph 13 of a Credit Support
Annex to the Schedule.
1. 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 Party A and Party B had executed an agreement in such form on the
date hereof, with a Schedule as set forth in Item 3 of this
Confirmation, 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 3 hereof and Annex A hereto; (ii) the provisions set forth in Item
3 hereof, which are incorporated by reference into the Schedule; (iii)
the Credit Support Annex; (iv) the Definitions; and (v) the ISDA Master
Agreement.
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 the provisions herein deemed incorporated in a Schedule
to the ISDA Master Agreement; each reference herein to a "Paragraph"
will be construed as a reference to a Paragraph of the Credit Support
Annex.
Reference Number: 1143052
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Type of Transaction: Interest Rate Cap
Notional Amount: The amount set forth on the attached Amortization Schedule, Schedule A
Trade Date: November 16, 2006
Effective Date: November 30, 2006
Termination Date: November 25, 2008
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer
Payment Date: November 30, 2006
Fixed Amount: USD 13,000
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate: As set forth on the attached Amortization Schedule, Schedule A
Floating Rate Payer
Period End Dates: The 25th day of each month, subject to adjustment in accordance with the
Following Business Day Convention
Floating Rate Payer
Payment Dates: One (1) Business Days prior to each Period End Date, commencing on December
22, 2006
Floating Rate Option: USD-LIBOR-BBA; provided, however, that if the Floating Rate determined from
such Floating Date Option for any Calculation Period is greater than 9.00%
then the Floating Rate for such Calculation Period shall be deemed to be
9.00% Floating Rate Day Count Fraction: Actual/360
Designated Maturity: One month
Spread: None
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Business Days: New York
Calculation Agent: Party A
Reference Number: 1143052
3. Provisions Deemed Incorporated in a Schedule to the ISDA Master Agreement:
Part 1. Termination Provisions.
For the purposes of this Agreement:-
(a) "Specified Entity" will not apply to Party A or Party B for any purpose.
(b) "Specified Transaction" will not apply to Party A or Party B for any
purpose.
(c) Events of Default.
The statement below that an Event of Default will apply to a specific
party means that upon the occurrence of such an Event of Default with
respect to such party, the other party shall have the rights of a
Non-defaulting Party under Section 6 of this Agreement; conversely, the
statement below that such event will not apply to a specific party means
that the other party shall not have such rights.
(i) The "Failure to Pay or Deliver" provisions of Section 5(a)(i) will
apply to Party A and will apply to Party B; provided, however,
that Section 5(a)(i) is hereby amended by replacing the word
"third" with the word "first"; provided, further, that
notwithstanding anything to the contrary in Section 5(a)(i), any
failure by Party A to comply with or perform any obligation to be
complied with or performed by Party A under the Credit Support
Annex shall not constitute an Event of Default under Section
5(a)(i) unless (A) a Required Ratings Downgrade Event 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 Party A.
(ii) The "Breach of Agreement" provisions of Section 5(a)(ii) will
apply to Party A and will not apply to Party B.
(iii) The "Credit Support Default" provisions of Section 5(a)(iii) will
apply to Party A and will not apply to Party B except that Section
5(a)(iii)(1) will apply to Party B solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit Support Annex;
provided, however, that notwithstanding anything to the contrary
in Section 5(a)(iii)(1), any failure by Party A to comply with or
perform any obligation to be complied with or performed by Party A
under the Credit Support Annex shall not constitute an Event of
Default under Section 5(a)(iii) unless (A) a Required Ratings
Downgrade Event 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 Party A.
(iv) The "Misrepresentation" provisions of Section 5(a)(iv) will apply
to Party A and will not apply to Party B.
(v) The "Default under Specified Transaction" provisions of Section
5(a)(v) will apply to Party A and will not apply to Party B.
(vi) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and will not apply to Party B. For purposes of Section
5(a)(vi), solely with respect to Party A:
"Specified Indebtedness" will have the meaning specified in
Section 14, except that such term shall not include insurance
contracts entered into in the ordinary course of Party A's Credit
Support Provider's insurance business.
"Threshold Amount" means with respect to Party A an amount equal
to three percent (3%) of the Shareholders' Equity of Party A or,
if applicable, the Eligible Guarantor.
"Shareholders' Equity" means with respect to an entity, at any
time, the sum (as shown in the most recent annual audited
financial statements of such entity) of (i) its capital stock
(including preferred stock) outstanding, taken at par value, (ii)
its capital surplus and (iii) its retained earnings, minus (iv)
treasury stock, each to be determined in accordance with generally
accepted accounting principles.
Reference Number: 1143052
(vii) The "Bankruptcy" provisions of Section 5(a)(vii) will apply to
Party A and will apply to Party B 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 Party B has
not become subject), (7) and (9) will not apply to Party B;
provided that, with respect to Party B 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
Party A or its Affiliates)", 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), (6) as amended, or (7)".
(viii) The "Merger Without Assumption" provisions of Section 5(a)(viii)
will apply to Party A and will apply to Party B.
(d) Termination Events.
The statement below that a Termination Event will apply to a specific
party means that upon the occurrence of such a Termination Event, if
such specific party is the Affected Party with respect to a Tax Event,
the Burdened Party with respect to a Tax Event Upon Merger (except as
noted below) or the non-Affected Party with respect to a Credit Event
Upon Merger, as the case may be, such specific party shall have the
right to designate an Early Termination Date in accordance with Section
6 of this Agreement; conversely, the statement below that such an event
will not apply to a specific party means that such party shall not have
such right; provided, however, with respect to "Illegality" the
statement that such event will apply to a specific party means that upon
the occurrence of such a Termination Event with respect to such party,
either party shall have the right to designate an Early Termination Date
in accordance with Section 6 of this Agreement.
(i) The "Illegality" provisions of Section 5(b)(i) will apply to Party
A and will apply to Party B.
(ii) The "Tax Event" provisions of Section 5(b)(ii) will apply to Party
A except that, for purposes of the application of Section 5(b)(ii)
to Party A, Section 5(b)(ii) is hereby amended by deleting the
words "(x) any action taken by a taxing authority, or brought in a
court of competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or
(y)", and the "Tax Event" provisions of Section 5(b)(ii) will
apply to Party B.
(iii) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will
apply to Party A and will apply to Party B, provided that Party A
shall not be entitled to designate an Early Termination Date by
reason of a Tax Event upon Merger in respect of which it is the
Affected Party.
(iv) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to Party A and will not apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Party A and will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply, provided, however, that, in the event
of a Derivative Provider Trigger Event, the following provisions
will apply:
Reference Number: 1143052
(A) 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, a Firm Offer which is (1) made by a
Reference Market-maker that is an Eligible Replacement, (2)
for an amount that would be paid to Party B (expressed as a
negative number) or by Party B (expressed as a positive
number) in consideration of an agreement between Party B and
such Reference Market-maker to enter into a Replacement
Transaction, and (3) 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 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 quotation to the extent
reasonably practicable as of the same day and time (without
regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The
day and time as of which those quotations are to be obtained
will be selected in good faith by the party obliged to make
a determination under Section 6(e), and, if each party is so
obliged, after consultation with the other.
(B) The definition of Settlement Amount shall be deleted in its
entirety and replaced with the following:
"Settlement Amount" means, with respect to any Early
Termination Date, an amount (as determined by Party B) equal
to:
(a) If a Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding on
or before the day falling ten Local Business Days
after the day on which the Early Termination Date is
designated, or such later day as Party B may specify
in writing to Party A, but in either case no later
than one Local Business Day prior to the Early
Termination Date (such day, the "Latest Settlement
Amount Determination Day"), the Termination Currency
Equivalent of the amount (whether positive or
negative) of such Market Quotation;
(b) If, on the Latest Settlement Amount Determination Day,
no Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions has
been accepted by Party B so as to become legally
binding and one or more Market Quotations from
Approved Replacements have been made and remain
capable of becoming legally binding upon acceptance,
the Settlement Amount shall equal the Termination
Currency Equivalent of the amount (whether positive or
negative) of the lowest of such Market Quotations (for
the avoidance of doubt, the lowest of such Market
Quotations shall be the lowest Market Quotation of
such Market Quotations expressed as a positive number
or, if any of such Market Quotations is expressed as a
negative number, the Market Quotation expressed as a
negative number with the largest absolute value); or
(c) If, on the Latest Settlement Amount Determination Day,
no Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding
and no Market Quotation from an Approved Replacement
remains capable of becoming legally binding upon
acceptance, the Settlement Amount shall equal Party
B's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for the relevant
Terminated Transaction or group of Terminated
Transactions.
(C) If Party B requests Party A in writing to obtain Market
Quotations, Party A shall use its reasonable efforts to do
so before the Latest Settlement Amount Determination Day.
Reference Number: 1143052
(D) If the Settlement Amount is a negative number, Section
6(e)(i)(3) 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) Party B shall pay to
Party A an amount equal to the absolute value of the
Settlement Amount in respect of the Terminated Transactions,
(II) Party B shall pay to Party A the Termination Currency
Equivalent of the Unpaid Amounts owing to Party A and (III)
Party A shall pay to Party B the Termination Currency
Equivalent of the Unpaid Amounts owing to Party B; 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 Party A under the immediately preceding
clause (III) shall not be netted-off against any amount
payable by Party B under the immediately preceding clause
(I)."
(E) At any time on or before the Latest Settlement Amount
Determination Day at which two or more Market Quotations
from Approved Replacements remain capable of becoming
legally binding upon acceptance, Party B shall be entitled
to accept only the lowest of such Market Quotations (for the
avoidance of doubt, the lowest of such Market Quotations
shall be the lowest Market Quotation of such Market
Quotations expressed as a positive number or, if any of such
Market Quotations is expressed as a negative number, the
Market Quotation expressed as a negative number with the
largest absolute value).
(ii) The Second Method will apply.
(g) "Termination Currency" means USD.
(h) Additional Termination Events. Additional Termination Events will apply
as provided in Part 5(c).
Reference Number: 1143052
Part 2. Tax Matters.
(a) Tax Representations.
(i) Payer Representations. For the purpose of Section 3(e) of this
Agreement:
(A) Party A makes the following representation(s):
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of
any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under
this Agreement. In making this representation, it may rely
on: the accuracy of any representations made by the other
party pursuant to Section 3(f) of this Agreement; (ii) the
satisfaction of the agreement contained in Section 4(a)(i)
or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement;
and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement, provided
that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does
not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial
position.
(B) Party B makes the following representation(s):
None.
(ii) Payee Representations. For the purpose of Section 3(f) of this
Agreement:
(A) Party A makes the following representation(s):
SRFP represents that it is a corporation organized under the
laws of the State of Delaware.
(B) Party B makes the following representation(s):
None.
(b) Tax Provisions.
(i) Gross Up. Section 2(d)(i)(4) shall not apply to Party B as X, and
Section 2(d)(ii) shall not apply to Party B as Y, in each case
such that Party B shall not be required to pay any additional
amounts referred to therein.
(ii) Indemnifiable Tax. The definition of "Indemnifiable Tax" in
Section 14 is deleted in its entirety and replaced with the
following:
"Indemnifiable Tax" means, in relation to payments by Party A, any
Tax and, in relation to payments by Party B, no Tax.
Reference Number: 1143052
Part 3. Agreement to Deliver Documents.
(a) For the purpose of Section 4(a)(i), tax forms, documents, or
certificates to be delivered are:
---------------------- -------------------------------------------------- -----------------------------------------------
Party required to Form/Document/ Date by which to
deliver document Certificate be delivered
---------------------- -------------------------------------------------- -----------------------------------------------
Party A A correct, complete and duly executed U.S. (i) Before the first scheduled payment; (ii)
Internal Revenue Service Form W-9 or other promptly upon reasonable demand by Party B;
applicable form (or successor thereto), and (iii) promptly upon learning that any
together with appropriate attachments, that Form W-9 or other applicable form (or any
eliminates U.S. federal withholding and backup successor thereto) previously provided by
withholding Tax on payments to Party A under Party A has become obsolete or incorrect.
this Agreement.
---------------------- -------------------------------------------------- -----------------------------------------------
Party B Party B will deliver at closing a correct, (i) Before the first scheduled payment; (ii)
complete and duly executed U.S. Internal promptly upon reasonable demand by Party B;
Revenue Service Form W-9 or other applicable and (iii) promptly upon learning that any
form (or successor thereto), together with Form W-9 or other applicable form (or any
appropriate attachments, that eliminates U.S. successor thereto) previously provided by
federal withholding and backup withholding Tax Party A has become obsolete or incorrect.
on payments to Party B under this Agreement,
and may deliver other tax forms relating to the
beneficial owner of payments to Party B under
this Agreement from time to time.
---------------------- -------------------------------------------------- -----------------------------------------------
Reference Number: 1143052
(b) For the purpose of Section 4(a)(ii), other documents to be delivered
are:
---------------------- ---------------------------------------- ---------------------------------------- ----------------
Party required to Form/Document/ Date by which to Covered by
deliver document Certificate be delivered Section 3(d)
Representation
---------------------- ---------------------------------------- ---------------------------------------- ----------------
Party A and Any documents required by the Upon the execution and delivery of Yes
Party B receiving party to evidence the this Agreement
authority of the delivering party or
its Credit Support Provider, if any,
for it to execute and deliver the
Agreement, this 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 the
Agreement, this Confirmation and any
Credit Support Document, as the case
may be
---------------------- ---------------------------------------- ---------------------------------------- ----------------
Party A and A certificate of an authorized officer Upon the execution and delivery of Yes
Party B of the party, as to the incumbency and this Agreement
authority of the respective officers
of the party signing the Agreement,
this Confirmation, and any relevant
Credit Support Document, as the case
may be
---------------------- ---------------------------------------- ---------------------------------------- ----------------
Party A Annual Report of Party A containing Promptly upon becoming publicly Yes
consolidated financial statements available
certified by independent certified
public accountants and prepared in
accordance with generally accepted
accounting principles in the country
in which Party A is organized
---------------------- ---------------------------------------- ---------------------------------------- ----------------
Party A Semi-Annual Financial Statements of Promptly upon becoming publicly Yes
Party A's Credit Support Provider available
containing unaudited, consolidated
financial statements of Party A's
Credit Support Provider's Interin
Report prepared in accordance with
generally accepted accounting
principles in the country in which
Party A is organized
---------------------- ---------------------------------------- ---------------------------------------- ----------------
---------------------- ---------------------------------------- ---------------------------------------- ----------------
Party A A guarantee of Swiss Reinsurance Upon the execution and delivery of No
Company substantially in the form of this Agreement
Exhibit A to this Confirmation
---------------------- ---------------------------------------- ---------------------------------------- ----------------
Party A An opinion of counsel to Party A's Upon the execution and delivery of No
Guarantor substantially in the form of this Agreement
Exhibit B to this Confirmation
---------------------- ---------------------------------------- ---------------------------------------- ----------------
Reference Number: 1143052
Part 4. Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: Swiss Re Financial Products Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Head of Operations
Facsimile No. (000) 000-0000
(For all purposes)
With a copy to: Swiss Re Financial Products Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
Facsimile No.: (000) 000-0000
Address for notices or communications to Party B:
Address: Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Legal Department
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement;
neither Party A nor Party B has any Offices other than as set forth in
the Notices Section.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A; provided, however,
that if an Event of Default shall have occurred with respect to Party A,
Party B shall have the right to appoint as Calculation Agent a third
party, reasonably acceptable to Party A, the cost for which shall be
borne by Party A.
(f) Credit Support Document.
Party A: The Credit Support Annex, and any guarantee in support of
Party A's obligations under this Agreement.
Party B: The Credit Support Annex, solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit Support
Annex.
Reference Number: 1143052
(g) Credit Support Provider.
Party A: The guarantor under any guarantee in support of Party A's
obligations under this Agreement.
Party B: None.
(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) Netting of Payments. The parties agree that subparagraph (ii) of Section
2(c) will apply to each Transaction hereunder.
(j) Affiliate. "Affiliate" shall have the meaning assigned thereto in
Section 14; provided, however, that Party B shall be deemed to have no
Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii).
Reference Number: 1143052
Part 5. Others Provisions.
(a) Definitions. Unless otherwise specified in a Confirmation, this
Agreement and each Transaction under this Agreement are subject to the
2000 ISDA Definitions as published and copyrighted in 2000 by the
International Swaps and Derivatives Association, Inc. (the
"Definitions"), and will be governed in all relevant respects by the
provisions set forth in the Definitions, without regard to any amendment
to the Definitions subsequent to the date hereof. The provisions of the
Definitions are hereby incorporated by reference in and shall be deemed
a part of this Agreement, except that (i) references in the Definitions
to a "Swap Transaction" shall be deemed references to a "Transaction"
for purposes of this Agreement, and (ii) references to a "Transaction"
in this Agreement shall be deemed references to a "Swap Transaction" for
purposes of the Definitions. Each term capitalized but not defined in
this Agreement shall have the meaning assigned thereto in the Pooling
and Servicing Agreement.
(b) Amendments to ISDA Master Agreement.
(i) Single Agreement. Section 1(c) is hereby amended by the adding the
words "including, for the avoidance of doubt, the Credit Support
Annex" after the words "Master Agreement".
(ii) [Reserved]
(iii) Change of Account. Section 2(b) is hereby amended by the addition
of the following after the word "delivery" in the first line
thereof:
"to another account in the same legal and tax jurisdiction as the
original account".
(iv) Representations. Section 3 is hereby amended by adding at the end
thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Nonreliance. (i) 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 (ii) it
has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors
to the extent it has deemed necessary, and 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.
(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 subject to Section 6(n) of this Agreement
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 is an "eligible swap
participant" as such term is defined in, Section
35.1(b)(2) of the regulations (17 C.F.R. 35)
promulgated under, and an "eligible contract
participant" as defined in Section 1(a)(12) of the
Commodity Exchange Act, as amended."
Reference Number: 1143052
(v) 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) by
deleting the words "to transfer" and inserting the words "to
effect a Permitted Transfer" in lieu thereof.
(vi) 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.
(vii) Local Business Day. The definition of Local Business Day in
Section 14 is hereby amended by the addition of the words "or any
Credit Support Document" after "Section 2(a)(i)" and the addition
of the words "or Credit Support Document" after "Confirmation".
(c) Additional Termination Events. The following Additional Termination
Events will apply:
(i) First Rating Trigger Collateral. If (A) it is not the case that a
Xxxxx'x Second Trigger Ratings Event has occurred and been
continuing for 30 or more Local Business Days and (B) Party A has
failed to comply with or perform any obligation to be complied
with or performed by Party A in accordance with the Credit Support
Annex, then an Additional Termination Event shall have occurred
with respect to Party A and Party A shall be the sole Affected
Party with respect to such Additional Termination Event.
(ii) Second Rating Trigger Replacement. If (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or more
Local Business Days and (B) (i) at least one Eligible Replacement
has made a Firm Offer to be the transferee of all of Party A's
rights and obligations under this Agreement (and such Firm Offer
remains an offer that will become legally binding upon such
Eligible Replacement upon acceptance by the offeree) and/or (ii)
an Eligible Guarantor has made a Firm Offer to provide an Eligible
Guarantee (and such Firm Offer remains an offer that will become
legally binding upon such Eligible Guarantor immediately upon
acceptance by the offeree), then an Additional Termination Event
shall have occurred with respect to Party A and Party A shall be
the sole Affected Party with respect to such Additional
Termination Event.
(iii) Amendment of Pooling and Servicing Agreement. If, without the
prior written consent of Party A where such consent is required
under the Pooling and Servicing Agreement (such consent not to be
unreasonably withheld), an amendment is made to the Pooling and
Servicing Agreement which amendment could reasonably be expected
to have a material adverse effect on the interests of Party A
(excluding, for the avoidance of doubt, any amendment to the
Pooling and Servicing Agreement that is entered into solely for
the purpose of appointing a successor servicer, master servicer,
securities administrator, trustee or other service provider) under
this Agreement, an Additional Termination Event shall have
occurred with respect to Party B and Party B shall be the sole
Affected Party with respect to such Additional Termination Event.
(iv) Reserved.
(v) Optional Termination of Securitization. An Additional Termination
Event shall occur upon the notice to Certificateholders of an
Optional Termination becoming unrescindable in accordance with
Article IX of the Pooling and Servicing Agreement (such notice,
the "Optional Termination Notice"). With respect to such
Additional Termination Event: (A) Party B shall be the sole
Affected Party; (B) notwithstanding anything to the contrary in
Section 6(b)(iv) or Section 6(c)(i), the final Distribution Date
specified in the Optional Termination Notice is hereby designated
as the Early Termination Date for this Additional Termination
Event in respect of all Affected Transactions; (C) Section
2(a)(iii)(2) shall not be applicable to any Affected Transaction
in connection with the Early Termination Date resulting from this
Additional Termination Event; notwithstanding anything to the
contrary in Section 6(c)(ii), payments and deliveries under
Section 2(a)(i) or Section 2(e) in respect of the Terminated
Transactions resulting from this Additional Termination Event will
be required to be made through and including the Early Termination
Date designated as a result of this Additional Termination Event;
provided, for the avoidance of doubt, that any such payments or
deliveries that are made on or prior to such Early Termination
Date will not be treated as Unpaid Amounts in determining the
amount payable in respect of such Early Termination Date; (D)
notwithstanding anything to the contrary in Section 6(d)(i), (I)
if, no later than 4:00 pm New York City time on the day that is
four Business Days prior to
Reference Number: 1143052
the final Distribution Date specified in the Optional Termination
Notice, Party B requests the amount of the Estimated Swap
Termination Payment, Party A shall provide to Party B in writing
(which may be done in electronic format) the amount of the
Estimated Swap Termination Payment no later than 2:00 pm New York
City time on the following Business Day and (II) if Party B
provides written notice (which may be done in electronic format)
to Party A no later than two Business Days prior to the final
Distribution Date specified in the Optional Termination Notice
that all requirements of the Optional Termination have been met,
then Party A shall, no later than one Business Day prior to the
final Distribution Date specified in the Optional Termination
Notice, make the calculations contemplated by Section 6(e) of the
ISDA Master Agreement (as amended herein) and provide to Party B
in writing (which may be done in electronic format) the amount
payable by either Party B or Party A in respect of the related
Early Termination Date in connection with this Additional
Termination Event; provided, however, that the amount payable by
Party B, if any, in respect of the related Early Termination Date
shall be the lesser of (x) the amount calculated to be due by
Party B pursuant to Section 6(e) and (y) the Estimated Swap
Termination Payment; and (E) notwithstanding anything to the
contrary in this Agreement, any amount due from Party B to Party A
in respect of this Additional Termination Event will be payable on
the final Distribution Date specified in the Optional Termination
Notice and any amount due from Party A to Party B in respect of
this Additional Termination Event will be payable one Business Day
prior to the final Distribution Date specified in the Optional
Termination Notice.
Party B shall be an express third party beneficiary of this
Agreement as if a party hereto to the extent of Party B's rights
specified herein.
(d) Required Ratings Downgrade Event. In the event that no Relevant Entity
has credit ratings at least equal to the Required Ratings Threshold
(such event, a "Required Ratings Downgrade Event"), then Party A shall,
as soon as reasonably practicable and so long as a Required Ratings
Downgrade Event is in effect, at its own expense, using commercially
reasonable efforts, procure either (A) a Permitted Transfer or (B) an
Eligible Guarantee from an Eligible Guarantor.
(e) Transfers.
(i) Section 7 is hereby amended to read in its entirety as follows:
"Subject to Section 6(b)(ii), Part 5(d), and Part 5(e), neither
Party A nor Party B is permitted to assign, novate or transfer
(whether by way of security or otherwise) as a whole or in part
any of its rights, obligations or interests under the Agreement or
any Transaction without (a) the prior written consent of the other
party or (b) satisfaction of the Rating Agency Condition with
respect to S&P."
(ii) If an Eligible Replacement has made a Firm Offer (which remains an
offer that will become legally binding upon acceptance by Party B)
to be the transferee pursuant to a Permitted Transfer, Party B
shall, at Party A's written request and at Party A's expense, take
any reasonable steps required to be taken by Party B to effect
such transfer.
(f) Non-Recourse. Party A acknowledges and agree that, notwithstanding any
provision in this Agreement to the contrary, the obligations of Party B
hereunder are limited recourse obligations of Party B, payable solely
from the Supplemental Interest Trust and the proceeds thereof, in
accordance with the priority of payments and other terms of the Pooling
and Servicing Agreement and that Party A will not have any recourse to
any of the directors, officers, employees, shareholders or affiliates of
the Party B with respect to any claims, losses, damages, liabilities,
indemnities or other obligations in connection with any transactions
contemplated hereby. In the event that the Supplemental Interest Trust
and the proceeds thereof, should be insufficient to satisfy all claims
outstanding and following the realization of the account held by the
Supplemental Interest Trust and the proceeds thereof, any claims against
or obligations of Party B under the ISDA Master Agreement or any other
confirmation thereunder still outstanding shall be extinguished and
thereafter not revive. Party B shall not have liability for any failure
or delay in making a payment hereunder to Party A due to any failure or
delay in receiving amounts in the account held by the Supplemental
Interest Trust from the Trust created pursuant to the Pooling and
Servicing Agreement. This provision will survive the termination of this
Agreement.
(g) Timing of Payments by Party B upon Early Termination. Notwithstanding
anything to the contrary in Section 6(d)(ii), to the extent that all or
a portion (in either case, the "Unfunded Amount") of any amount that is
calculated as being due in respect of any Early Termination Date under
Section 6(e) from Party B to Party A will be paid by Party B from
amounts other than any upfront payment paid to Party B by an Eligible
Replacement that has entered a Replacement Transaction with Party B,
then such Unfunded Amount shall be due on the next subsequent
Distribution Date following the date on which the payment would have
been payable as determined in accordance with Section 6(d)(ii), and on
any subsequent Distribution Dates until paid in full (or if such Early
Termination Date is the final Distribution Date, on such final
Distribution Date); provided, however, that if the date on which the
payment would have been payable as determined in accordance with Section
6(d)(ii) is a Distribution Date, such payment will be payable on such
Distribution Date.
(h) Rating Agency Notifications. Notwithstanding any other provision of this
Agreement, no Early Termination Date shall be effectively designated
hereunder by Party B and no transfer of any rights or obligations under
this Agreement shall be made by either party unless each Swap Rating
Agency has been given prior written notice of such designation or
transfer.
(i) No Set-off. Except as expressly provided for in Section 2(c), Section 6
or Part 1(f)(i)(D) 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.".
(j) Amendment. Notwithstanding any provision to the contrary in this
Agreement, no amendment of either this Agreement or any Transaction
under this Agreement shall be permitted by either party unless each of
the Swap Agencies has been provided prior written notice of the same and
S&P confirms in writing (including by facsimile transmission) that it
will not downgrade, withdraw or otherwise modify its then-current
ratings of the Certificates or the Notes.
(k) Notice of Certain Events or Circumstances. Each Party agrees, upon
learning of the occurrence or existence of any event or condition that
constitutes (or that with the giving of notice or passage of time or
both would constitute) an Event of Default or Termination Event with
respect to such party, promptly to give the other Party and to each Swap
Rating Agency notice of such event or condition; provided that failure
to provide notice of such event or condition pursuant to this Part 5(l)
shall not constitute an Event of Default or a Termination Event.
(l) Proceedings. No Relevant Entity shall institute against, or cause any
other person to institute against, or join any other person in
instituting against Party B, the Supplemental Interest Trust, or the
trust formed pursuant to the Pooling and Servicing Agreement, in any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under any federal or state bankruptcy
or similar law for a period of one year (or, if longer, the applicable
preference period) and one day following payment in full of the
Certificates and any Notes. This provision will survive the termination
of this Agreement.
(m) [Reserved]
(n) 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) in
any respect, 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; provided, however, that this severability
provision shall not be applicable if any provision of Section 2, 5, 6,
or 13 (or any definition or provision in Section 14 to the extent it
relates to, or is used in or in connection with any such Section) shall
be so held to be invalid or unenforceable.
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.
Reference Number: 1143052
(o) Agent for Party B. [Reserved.]
(p) Escrow Payments. If (whether by reason of the time difference between
the cities in which payments are to be made or otherwise) it is not
possible for simultaneous payments to be made on any date on which both
parties are required to make payments hereunder, either Party may at its
option and in its sole discretion notify the other Party that payments
on that date are to be made in escrow. In this case deposit of the
payment due earlier on that date shall be made by 2:00 pm (local time at
the place for the earlier payment) on that date with an escrow agent
selected by the notifying party, accompanied by irrevocable payment
instructions (i) to release the deposited payment to the intended
recipient upon receipt by the escrow agent of the required deposit of
any corresponding payment payable by the other party on the same date
accompanied by irrevocable payment instructions to the same effect or
(ii) if the required deposit of the corresponding payment is not made on
that same date, to return the payment deposited to the party that paid
it into escrow. The party that elects to have payments made in escrow
shall pay all costs of the escrow arrangements.
(q) 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 trading, marketing, and operations
personnel of the parties and their Affiliates, waives any further notice
of such monitoring or recording, and agrees to notify such personnel of
such monitoring or recording.
(r) Waiver of Jury Trial. Each party waives any right it may have to a trial
by jury in respect of any in respect of any suit, action or proceeding
relating to this Agreement or any Credit Support Document.
(s) Form of ISDA Master Agreement. Party A and Party B hereby agree that the
text of the body of the ISDA Master Agreement is intended to be the
printed form of the ISDA Master Agreement (Multicurrency - Crossborder)
as published and copyrighted in 1992 by the International Swaps and
Derivatives Association, Inc.
(t) Payment Instructions. Party A hereby agrees that, unless notified in
writing by Party B of other payment instructions, any and all amounts
payable by Party A to Party B under this Agreement shall be paid to the
account specified in Item 4 of this Confirmation, below.
(u) Additional representations.
(i) Representations of Party A. Party A represents to Party B on the
date on which Party A enters into each Transaction that:--
Party A's obligations under this Agreement rank pari passu with
all of Party A's other unsecured, unsubordinated obligations
except those obligations preferred by operation of law.
(ii) Capacity. Party A represents to Party B on the date on which Party
A enters into this Agreement that it is entering into the
Agreement and the Transaction as principal and not as agent of any
person. Party B represents to Party A on the date on which Party B
enters into this Agreement that it is entering into the Agreement
and the Transaction in its capacity as Trustee.
(v) Acknowledgements.
(i) Substantial financial transactions. Each party hereto is hereby
advised and acknowledges as of the date hereof 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 Pooling and Servicing
Agreement relating to such Transaction, as applicable. This
paragraph shall be deemed repeated on the trade date of each
Transaction.
(ii) Bankruptcy Code. Subject to Part 5(m), without limiting the
applicability if any, of any other provision of the U.S.
Bankruptcy Code as amended (the "Bankruptcy Code") (including
without limitation Sections 362, 546, 556, and 560 thereof and the
applicable definitions in Section 101 thereof), the parties
acknowledge and agree that all Transactions entered into hereunder
will constitute "forward contracts" or "swap agreements" as
defined in Section 101 of the Bankruptcy Code or "commodity
contracts" as defined in Section 761 of the Bankruptcy Code, that
the rights of the parties
Reference Number: 1143052
under Section 6 of this Agreement will constitute contractual
rights to liquidate Transactions, that any margin or collateral
provided under any margin, collateral, security, pledge, or
similar agreement related hereto will constitute a "margin
payment" as defined in Section 101 of the Bankruptcy Code, and
that the parties are entities entitled to the rights under, and
protections afforded by, Sections 362, 546, 556, and 560 of the
Bankruptcy Code.
(w) Notices; Demands. In the event that Party A fails to perform any of its
obligations under this Agreement (including, without limitation, its
obligations to make any payment or transfer collateral), or breaches any
of its representations and warranties hereunder, or in the event that an
Event of Default, Termination Event, or Additional Termination Event
occurs, Party B shall, no later than the next Business Day following
such failure, breach or occurrence, notify the Depositor and give any
notice of such failure specified in this Agreement and make any demand
specified in this Agreement. In the event that Party A's obligations are
at any time guaranteed by a third party, then to the extent that Party A
fails to make any payment or delivery required under terms of this
Agreement, Party B shall, no later than the next Business Day following
such failure, demand that such guarantor make any and all payments then
required to be made by the guarantor pursuant to such guarantee. Party B
shall cause any replacement swap provider to provide a copy of the
related replacement derivative agreement to the Depositor. For the
avoidance of doubt, notwithstanding anything in this Agreement to the
contrary, the failure of Party B to comply with the requirements of this
paragraph shall not constitute an Event of Default or Termination Event.
(y) [Reserved]
(x) Additional Definitions.
As used in this Agreement, the following terms shall have the meanings
set forth below, unless the context clearly requires otherwise:
"Approved Ratings Threshold" means each of the S&P Approved
Ratings Threshold and the Moody's First Trigger Ratings Threshold.
"Approved Replacement" means, with respect to a Market Quotation,
an entity making such Market Quotation, which entity would satisfy
conditions (a), (b), (c) and (e) of the definition of Permitted
Transfer (as determined by Party B in its sole discretion, acting
in a commercially reasonable manner) if such entity were a
Transferee, as defined in the definition of Permitted Transfer.
"Derivative Provider Trigger Event" means (i) an Event of Default
with respect to which Party A is a Defaulting Party, (ii) a
Termination Event with respect to which Party A is the sole
Affected Party or (iii) an Additional Termination Event with
respect to which Party A is the sole Affected Party.
"Eligible Guarantee" means an unconditional and irrevocable
guarantee of all present and future obligations (for the avoidance
of doubt, not limited to payment obligations) of Party A or an
Eligible Replacement to Party B under this Agreement that is
provided by an Eligible Guarantor as principal debtor rather than
surety and that is directly enforceable by Party B, the form and
substance of which guarantee are subject to the Rating Agency
Condition with respect to S&P, and either (A) a law firm has given
a legal opinion confirming that none of the guarantor's payments
to Party B under such guarantee will be subject to Tax collected
by withholding or (B) such guarantee provides that, in the event
that any of such guarantor's payments to Party B are subject to
Tax collected by withholding, such guarantor is required to pay
such additional amount as is necessary to ensure that the net
amount actually received by Party B (free and clear of any Tax
collected by withholding) will equal the full amount Party B would
have received had no such withholding been required.
"Eligible Guarantor" means an entity that (A) has credit ratings
at least equal to the Approved Ratings Threshold or (B) has credit
ratings at least equal to the Required Ratings Threshold,
provided, for the avoidance of doubt, that an Eligible Guarantee
of an Eligible Guarantor with credit ratings below the Approved
Ratings Threshold will not cause a Collateral Event (as defined in
the Credit Support Annex) not to occur or continue.
"Eligible Replacement" means an entity (A) (i) that has credit
ratings at least equal to the Approved Ratings Threshold, (ii) has
credit ratings at least equal to the Required Ratings Threshold,
provided, for
Reference Number: 1143052
the avoidance of doubt, that an Eligible Guarantee of an Eligible
Guarantor with credit ratings below the Approved Ratings Threshold
will not cause a Collateral Event (as defined in the Credit
Support Annex) not to occur or continue, or (iii) the present and
future obligations (for the avoidance of doubt, not limited to
payment obligations) of which entity to Party B under this
Agreement are guaranteed pursuant to an Eligible Guarantee
provided by an Eligible Guarantor and (B) that has executed an
Item 1115 Agreement with Depositor.
"Estimated Swap Termination Payment" means, with respect to an
Early Termination Date, an amount determined by Party A in good
faith and in a commercially reasonable manner as the maximum
payment that could be owed by Party B to Party A in respect of
such Early Termination Date pursuant to Section 6(e) of the ISDA
Master Agreement, taking into account then current market
conditions.
"Firm Offer" means (A) with respect to an Eligible Replacement, a
quotation from such Eligible Replacement (i) in an amount equal to
the actual amount payable by or to Party B in consideration of an
agreement between Party B and such Eligible Replacement to replace
Party A as the counterparty to this Agreement by way of novation
or, if such novation is not possible, an agreement between Party B
and such Eligible Replacement to enter into a Replacement
Transaction (assuming that all Transactions hereunder become
Terminated Transactions), and (ii) that constitutes an offer by
such Eligible Replacement to replace Party A as the counterparty
to this Agreement or enter a Replacement Transaction that will
become legally binding upon such Eligible Replacement upon
acceptance by Party B, and (B) with respect to an Eligible
Guarantor, an offer by such Eligible Guarantor to provide an
Eligible Guarantee that will become legally binding upon such
Eligible Guarantor upon acceptance by the offeree.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
thereto.
"Moody's First Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee or an Eligible
Replacement, (i) 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" and a short-term
unsecured and unsubordinated debt rating from Moody's of
"Prime-1", or (ii) 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 "A1".
"Moody's Second Trigger Ratings Event" means that no Relevant
Entity has credit ratings from Moody's at least equal to the
Moody's Second Trigger Rating Threshold.
"Moody's Second Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee or an Eligible
Replacement, (i) 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 a short-term unsecured
and unsubordinated debt rating from Moody's of "Prime-2", or (ii)
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".
"Permitted Transfer" means a transfer by novation by Party A to a
transferee (the "Transferee") of all, but not less than all, of
Party A's 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 Party B), (b) as of the date
of such transfer neither Party B nor the Transferee would be
required to withhold or deduct on account of Tax from any payments
under this Agreement, (c) an Event of Default or Termination Event
would not occur as a result of such transfer, (d) Party B has
consented in writing to the transfer, such consent not to be
unreasonably withheld, (e) the transfer would not give rise to a
taxable event or any other adverse Tax consequences to Party B or
its interest holders, as determined by Party B in its sole
discretion, (f) pursuant to a written instrument (the "Transfer
Agreement"), the Transferee acquires and assumes all rights and
obligations of Party A
Reference Number: 1143052
under the Agreement and the relevant Transaction, (g) Party B
shall have determined, in its sole discretion, acting in a
commercially reasonable manner, that such Transfer Agreement is
effective to transfer to the Transferee all, but not less than
all, of Party A's rights and obligations under the Agreement and
all relevant Transactions; (h) Party A will be responsible for any
costs or expenses incurred in connection with such transfer
(including any replacement cost of entering into a replacement
transaction); (i) Moody's has been given prior written notice of
such transfer and the Rating Agency Condition is satisfied with
respect to S&P; and (j) such transfer otherwise complies with the
terms of the Pooling and Servicing Agreement.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder and each Swap Rating
Agency specified in connection with such proposed act or omission,
that the party acting or failing to act must consult with each of
the specified Swap Rating Agencies and receive from each such Swap
Rating Agency a prior written confirmation that the proposed
action or inaction would not cause a downgrade or withdrawal of
the then-current rating of any Certificates or Notes.
"Relevant Entity" means Party A and, to the extent applicable, a
guarantor under an Eligible Guarantee.
"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 Party B 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, save for the exclusion of provisions
relating to Transactions that are not Terminated Transaction, as
determined by Party B in its sole discretion, acting in a
commercially reasonable manner.
"Required Ratings Downgrade Event" shall have the meaning assigned
thereto in Part 5(d).
"Required Ratings Threshold" means each of the S&P Required
Ratings Threshold and the Moody's Second Trigger Ratings
Threshold.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
"S&P Approved Ratings Threshold" means, with respect to Party A,
the guarantor under an Eligible Guarantee or an Eligible
Replacement, a short-term unsecured and unsubordinated debt rating
from S&P of "A-1", 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+".
"S&P Required Ratings Threshold" means, with respect to Party A,
the guarantor under an Eligible Guarantee or an Eligible
Replacement, a long-term unsecured and unsubordinated debt rating
from S&P of "BBB+".
"Swap Rating Agencies" means, with respect to any date of
determination, each of S&P and Moody's, to the extent that each
such rating agency is then providing a rating for any of the CHWEQ
Home Equity Loan Trust 2006-S7 (the "Certificates") or any notes
backed by the Certificates (the "Notes").
(y) Regulation AB Compliance.
Party A and Party B agree that the terms of the Item 1115 Agreement
dated as of January 26, 2006 (the "Regulation AB Agreement"), between
Countrywide Home Loans, Inc., CWABS, INC., CWMBS, Inc.,
Reference Number: 1143052
CWALT, Inc., CWHEQ, Inc. and Swiss Re Financial Products Corporation
shall be incorporated by reference into this Agreement. A copy of the
Regulation AB Agreement is attached hereto as Annex B.
Reference Number: 0000000
4. Account Details and Settlement Information:
Payments to Party A: JPMorgan Chase Bank
SWIFT: XXXXXX00
Account of: Swiss Re Financial Products
Account No.: 066-911184
ABA#: 000000000
Payments to Party B: Countrywide Home Loans, Inc.
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.
[Remainder of this page intentionally left blank.]
Reference Number: 1143052
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
Swiss Re Financial Products Corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Party B, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the date hereof.
Countrywide Home Loans, Inc.
By: /s/
-----------------------------------
Name:
Title:
Reference Number: 1143052
SCHEDULE A
(all such dates subject to adjustment in accordance with the
Following Business Day Convention)
------------------------------------------------------------------------------------------------------------
From and including To but excluding Notional Amount (USD) Cap Rate (%)
------------------------------------------------------------------------------------------------------------
November 30, 2006 December 25, 2006 438,104,000.00 8.743
------------------------------------------------------------------------------------------------------------
December 25, 2006 January 25, 2007 426,005,431.00 7.030
------------------------------------------------------------------------------------------------------------
January 25, 2007 February 25, 2007 412,499,609.00 7.030
------------------------------------------------------------------------------------------------------------
February 25, 2007 March 25, 2007 397,615,708.00 7.795
------------------------------------------------------------------------------------------------------------
March 25, 2007 April 25, 2007 381,388,539.00 7.030
------------------------------------------------------------------------------------------------------------
April 25, 2007 May 25, 2007 363,859,085.00 7.268
------------------------------------------------------------------------------------------------------------
May 25, 2007 June 25, 2007 345,074,660.00 7.031
------------------------------------------------------------------------------------------------------------
June 25, 2007 July 25, 2007 325,089,080.00 7.269
------------------------------------------------------------------------------------------------------------
July 25, 2007 August 25, 2007 303,962,110.00 7.031
------------------------------------------------------------------------------------------------------------
August 25, 2007 September 25, 2007 281,758,751.00 7.031
------------------------------------------------------------------------------------------------------------
September 25, 2007 October 25, 2007 258,548,112.00 7.270
------------------------------------------------------------------------------------------------------------
October 25, 2007 November 25, 2007 234,764,541.00 7.032
------------------------------------------------------------------------------------------------------------
November 25, 2007 December 25, 2007 211,447,798.00 7.270
------------------------------------------------------------------------------------------------------------
December 25, 2007 January 25, 2008 188,745,502.00 7.032
------------------------------------------------------------------------------------------------------------
January 25, 2008 February 25, 2008 166,640,597.00 7.032
------------------------------------------------------------------------------------------------------------
February 25, 2008 March 25, 2008 145,842,861.00 7.525
------------------------------------------------------------------------------------------------------------
March 25, 2008 April 25, 2008 125,775,462.00 7.033
------------------------------------------------------------------------------------------------------------
April 25, 2008 May 25, 2008 106,262,680.00 7.271
------------------------------------------------------------------------------------------------------------
May 27, 2008 June 25, 2008 87,289,282.00 7.033
------------------------------------------------------------------------------------------------------------
June 25, 2008 July 25, 2008 68,840,451.00 7.271
------------------------------------------------------------------------------------------------------------
July 25, 2008 August 25, 2008 50,901,777.00 7.033
------------------------------------------------------------------------------------------------------------
August 25, 2008 September 25, 2008 33,459,241.00 7.034
------------------------------------------------------------------------------------------------------------
September 25, 2008 October 25, 2008 16,499,209.00 7.272
------------------------------------------------------------------------------------------------------------
October 25, 2008 November 25, 2008 8,421.00 7.034
------------------------------------------------------------------------------------------------------------
Reference Number: 1143052
Annex A
Paragraph 13 of the Credit Support Annex
Reference Number: 1143052
Exhibit A
Form of Parental Guarantee
To: The Bank of New York (the "Beneficiary"), not in its individual capacity
but solely as Corridor Contract Administrator for the CWHEQ Home Equity Loan
Trust 2006-S7 (the "Rated Securities")
1. The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely and unconditionally guarantees the prompt
payment as and when due of all obligations of its indirect, wholly-owned
subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION, a Delaware corporation
("THE GUARANTEED SUBSIDIARY") under, in connection with or ancillary to a long
form confirmation dated as of November 30, 2006 between the Beneficiary and THE
GUARANTEED SUBSIDIARY as amended or restated from time to time (the
"Agreements") which support the issuance of the Rated Securities. In this
Guarantee these obligations are referred to as the "Guaranteed Obligations".
This Guarantee is given solely for the benefit of, and is enforceable only by,
the Beneficiary or any trustee as assignee of the Beneficiary to which this
Guarantee has been validly assigned in accordance with applicable law and who
is acting as trustee for the investors in the Rated Securities.
2. This Guarantee constitutes a Guarantee of payment and not of collection and
is not conditional or contingent upon any attempts to collect from, or pursue
or exhaust any rights or remedies against, THE GUARANTEED SUBSIDIARY. A demand
for payment hereunder may at the Beneficiary's option be made in writing
addressed to the Chief Financial Officer of the Guarantor. This Guarantee is
not however dependent in any way on the manner of the demand for payment. Delay
in making a claim will not affect the Guarantor's obligations under this
Guarantee unless the relevant legal limitation period has expired.
3. This Guarantee constitutes, and is intended by the Guarantor to constitute,
an unlimited non-accessory undertaking (,,unbeschrankte, nicht akzessorische
Verpflichtung") within the meaning of Article 111 of the Swiss Code of
Obligations (,CO`) and is not a mere surety (,,Burgschaft") within the meaning
of Article 492 et seq of the CO.
4. Notwithstanding any reference to the obligations of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guarantee are its absolute
and independent obligations as a primary obligor. Payment of a claim hereunder
is required as soon as the Guaranteed Obligations are due and payable.
5. To the extent that any event or circumstance would give rise to any legal or
equitable discharge, defence or other rights of the Guarantor under this
Guarantee, but which event or circumstance would not give rise to any
discharge, defence or rights of THE GUARANTEED SUBSIDIARY under the Agreements,
the Guarantor hereby fully waives, subject to paragraph 7 below, such
discharge, defence, or rights and the Guarantor's liability hereunder shall
continue as if such event or circumstance had not arisen.
6. The Guarantor further agrees, subject to paragraph 7 below, that to the
extent that any event or circumstance gives rise to any legal or equitable
discharge, defence or other rights available to both the Guarantor under the
Guarantee and THE GUARANTEED SUBSIDIARY under the Agreements, the Guarantor
hereby agrees to waive such discharge, defence or other rights against the
Beneficiary, until such time as all the Guaranteed Obligations in relation to
the same event or circumstance have been fully met as required to protect
investors in the Rated Securities.
7. Notwithstanding any other provision of this Guarantee, the Guarantor will
have the right, prior to making any payment under this Guarantee, to (a) assert
such rights of offset as are set forth in the Agreements to the extent that
such rights relate to amounts due and payable by the Beneficiary to THE
GUARANTEED SUBSIDIARY and not to amounts which are subject to dispute; and (b)
defend manifestly fraudulent claims under this Guarantee made by the
Beneficiary.
8. This Guarantee will continue in full force and effect in relation to all
Guaranteed Obligations until all the Guaranteed Obligations have been satisfied
in full. For the avoidance of doubt, all Guaranteed Obligations entered into by
THE GUARANTEED SUBSIDIARY during the term of this Guarantee shall be honoured
in accordance with this Guarantee and shall be binding on the Guarantor and its
successors and assigns. This Guarantee may be amended only as necessary to
reflect changes to the Guaranteed Obligations which are validly agreed to by
the Beneficiary in accordance with the terms of the Rated
Reference Number: 1143052
Securities, including any requirement to obtain the consent of some or all of
the investors in the Rated Securities.
9. If any payment by THE GUARANTEED SUBSIDIARY is avoided, recaptured or
reduced as a result of insolvency or any similar event affecting creditors
rights generally having occurred in respect of THE GUARANTEED SUBSIDIARY, the
Guarantor's liability under this Guarantee shall continue as if the avoided,
recaptured or reduced payment had not occurred.
10. Upon payment by the Guarantor to the Beneficiary of any amount due under
this Guarantee, the Guarantor shall be entitled to require the assignment to it
of the rights of the Beneficiary against THE GUARANTEED SUBSIDIARY to the
extent satisfied by such payment, and the Beneficiary will take at the
Guarantor's expense such steps as the Guarantor may reasonably require to
implement such assignment. The Guarantor shall not exercise any rights against
THE GUARANTEED SUBSIDIARY which it may acquire in consequence of such payment
and assignment unless and until all the Guaranteed Obligations to the
Beneficiary shall have been paid in full.
11. This Guarantee is governed and will be construed in accordance with Swiss
law. The exclusive place of jurisdiction for any legal proceeding hereunder
shall be Zurich, Switzerland.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed in
its name as of the 30th day of November, 2006.
SWISS REINSURANCE COMPANY
Reference Number: 1143052
Exhibit B
Form of Parental Guarantee Opinion
The Bank of New York (the "Beneficiary"), not in its individual capacity but
solely as Corridor Contract Administrator for the CWHEQ Home Equity Loan Trust
2006-S7 (the "Rated Securities")
Guarantee by Swiss Reinsurance Company dated 30 November 2006 of Guaranteed
Obligations of Swiss Re Financial Products Corporation in connection with a
long form confirmation dated as of 30 November 2006 between the Beneficiary and
Swiss Re Financial Products Corporation
Dear Sirs
I am Legal Counsel of Swiss Reinsurance Company ("Swiss Re") and have acted as
Swiss counsel in connection with the Guarantee by Swiss Re dated 30 November
2006 (the "Guarantee") of all obligations of its indirect, wholly-owned
subsidiary Swiss Re Financial Products Corporation, a Delaware corporation (the
"Guaranteed Subsidiary") under, in connection with or ancillary to a long form
confirmation, dated as of 30 November 2006, between the Beneficiary and the
Guaranteed Subsidiary as amended or restated from time to time (the
"Agreement") which support the issuance of the "Rated Security". In this
Guarantee these obligations are referred to as the "Guaranteed Obligations".
The Guarantee has been given for the sole benefit of, and shall only be
enforceable by, the Beneficiary or, upon assignment, by a trustee which is
acting for the investors of the Rated Security.
As such legal adviser, I have been asked by Swiss Re to render a legal opinion
to you on certain matters of Swiss law relating to the Guarantee.
For the purpose of this opinion I have examined a copy of the Guarantee as
attached to this opinion, and I have reviewed such matters of Swiss law and
examined such other corporate documents of Swiss Re as I considered necessary
for this opinion.
Based upon the foregoing and subject to the qualifications stated below, I am
of the following opinion, limited in all respects to the law of Switzerland as
at the date hereof:
1. Swiss Re is a company limited by shares, duly organized and validly
existing under the law of Switzerland, with legal domicile in Zurich,
Switzerland.
2. Swiss Re has the corporate power and authority to issue the Guarantee
for Guaranteed Obligations of the Guaranteed Subsidiary and to perform
its obligations thereunder.
3. Swiss Re has taken all necessary corporate action to authorize the
execution and delivery of the Guarantee and the performance of its
obligations thereunder.
4. The Guarantee constitutes legal, valid and binding obligations of Swiss
Re in favour of the Beneficiary or (assuming the assignment to be valid
under applicable law) in favour of the trustee who is acting for the
benefit of the investors of the Rated Security.
5. The Guarantee has been duly executed by Swiss Re and is in proper form
for enforcement against Swiss Re and its properties in Switzerland.
6. The execution and delivery by Swiss Re of the Guarantee, and its
performance of its obligations under the Guarantee, do not violate or
conflict with (i) any provision of its Articles of Association, or (ii)
any law, rule, or regulation in Switzerland applicable to it.
7. No authorization, exemption, action or approval by, notice to or filing,
recordation or registration with, any governmental or other authority in
Switzerland is required to have been obtained or made by Swiss Re with
respect to the execution, delivery and performance of its obligations
under the Guarantee.
8. Swiss Re will not be required to make any deduction for Swiss
withholding tax from any payment under the Guarantee.
Reference Number: 1143052
9. The obligations of Swiss Re under the Guarantee constitute direct,
unconditional and general obligations of Swiss Re ranking at least pari
passu in priority of payment with all unsecured obligations of Swiss Re
which are not preferred by applicable law.
10. The courts of the Canton of Zurich, Switzerland, have jurisdiction in
any litigation brought against Swiss Re by the Beneficiary in respect of
claims made under the Guarantee.
This opinion is subject to the following qualifications:
a) The obligations of Swiss Re under the Guarantee may be limited by
applicable bankruptcy, insolvency, reorganisation, moratorium,
creditors' preference, statute of limitations or similar laws relating
to or affecting the rights of creditors generally.
b) The obligations of Swiss Re under the Guarantee may further be limited
by the application of general principles of law or equity such as
(without limitation) abuse of law or Swiss public policy in connection
with the claim made under the Guarantee, actual payment by or absence of
a Guaranteed Obligation of the Guaranteed Subsidiary, release of the
payment obligation of the Guaranteed Subsidiary by its obligee, and
manifest fraud.
c) Specific performance of the Guaranteed Obligations by the Guarantor
(other than for the payment of money) may not in all instances be
available but only damages upon proof of the damage suffered.
d) Art. 111 of the Swiss Code of Obligations which governs the substantive
legal aspects of the Guarantee is a very general provision of Swiss law
and is further specified to a significant extent by decisions of the
Swiss Federal Court on which this opinion relies. No assurance can be
given that future decisions of the Swiss Federal Court may not have a
material impact on the statements made in this opinion.
This opinion is addressed to you and is for the sole benefit of you. It may not
be relied upon, transmitted to or filed with any other person, firm, company or
institution without my express written consent. It can be released to Fitch
Ratings Ltd., Xxxxx'x Investors Service, Inc. and Standard & Poor's Ratings
Services and to their respective advisers for the purposes of information only,
since we understand that each of them wishes to know that this opinion has been
given and to be made aware of its terms. However, none of Fitch Ratings Ltd.,
Xxxxx'x Investors Service, Inc. nor Standard & Poor's Ratings Services, nor
their respective advisers, may rely on this opinion for their own benefit or
for that of any other person.
Very sincerely yours,
Reference Number: 1143052