EXHIBIT 99.3
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BEAR XXXXXXX
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
000-000-0000
DATE: May 24, 2006
TO: COUNTRYWIDE HOME LOANS INC.
ATTENTION: Xx. Xxxx Xxxxx
TELEPHONE: 0-000-000-0000
FACSIMILE: 0-000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Mortgage Derivatives Confirmation and Agreement
REFERENCE NUMBER: XXXX00XX0
Dear Sir/Madam,
The purpose of this letter agreement (this "Confirmation") is to confirm
the terms and conditions of the transaction entered into on the Trade Date
specified below (the "Transaction") between Bear Xxxxxxx Financial Products
Inc. ("BSFP") and Countrywide Home Loans, Inc. ("Counterparty").
The definitions and provisions contained in the 2000 ISDA Definitions
(the "2000 Definitions"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA") are incorporated into this
Confirmation. In the event of any inconsistency between the 2000 Definitions
and this Confirmation, this Confirmation will govern for the purposes of the
Transaction. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the 2000 Definitions.
Each party hereto agrees to make payment to the other party hereto in
accordance with the provisions of this Confirmation and of the Agreement.
This Confirmation evidences a complete and binding agreement between you
and us as to the terms of the Swap Transaction to which this Confirmation
relates. This Confirmation (including the schedule hereto) will constitute a
Confirmation that supplements, forms a part of, and is subject to, an
agreement (the "Agreement") in the form of the 1992 Multicurrency - Cross
Border Master Agreement in the form published by the International Swaps and
Derivatives Association, Inc. (the "ISDA Form"), as if on the Trade Date we
had executed an agreement in such form, but without any Schedule except for
the elections made herein.
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In the event of any inconsistency between the provisions of the ISDA
Form and this Confirmation, this Confirmation will prevail for purposes of
this Swap Transaction. Capitalized terms used in this Confirmation and not
defined in this Confirmation or the 2000 Definitions shall have the respective
meaning assigned in the Pooling and Servicing Agreement dated as of May 1,
2006 among CWALT, Inc. as depositor, Park Granada LLC, as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home
Loans, Inc. as a seller, Countrywide Home Loans Servicing LP, as master
servicer, and The Bank of New York, as trustee (the "Pooling and Servicing
Agreement").
The terms of the particular Transaction to which this Confirmation relates are
as follows:
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2. TRADE DETAILS
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Notional Amount: With respect to any Calculation Period, the
lesser of (i) the amount set forth for such
period in Schedule A attached hereto and (ii)
the aggregate Class Certificate Balance of the
Class 1-A Certificates (021455 AA 8), Class
2-A-1 Certificates (021455 AB 6), Class 0-X-0X
Xxxxxxxxxxxx (000000 AC 4), Class 2-A-2B
Certificates (021455 AD 2), Class 2-A-3
Certificates (021455 AE 0), Class M-1
Certificates (021455 AF 7), Class M-2
Certificates (021455 AG 5), Class M-3
Certificates (021455 AH 3), Class M-4
Certificates (021455 AJ 9), Class M-5
Certificates (021455 AK 6), Class M-6
Certificates (021455 AL 4), Class M-7
Certificates (021455 AM 2), Class M-8
Certificates (021455 AN 0), Class M-9
Certificates (021455 AP 5) and Class B
Certificates (021455 AQ 3) (together, the
"Swap Certificates") immediately prior to the
Distribution Date (as defined in the Pooling
and Servicing Agreement) occurring in the
calendar month in which such Calculation
Period ends.
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Trade Date: May 12, 2006.
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Effective Date: May 30, 2006.
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Termination Date: May 25, 2009, subject to adjustment in
accordance with the Following Business Day
Convention
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Upfront Amount:
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Upfront Amount: Counterparty will pay $ 15,000 to BSFP on May
30, 2006.
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Fixed Amounts:
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Fixed Rate Payer: Counterparty.
Fixed Rate Payer Payment The 25th of each month in each year from (and
Date(s): including) June 25, 2006 to (and including)
the Termination Date, subject to adjustment in
accordance with the Following Business Day
Convention.
Fixed Rate Payer Period The 25th of each month in each year from (and
End Date(s): including) June 25, 2006 to (and including)
May 25, 2009, with No Adjustment.
Fixed Rate: 5.400 %.
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Fixed Rate Day Count 30/ 360.
Fraction:
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Floating Amounts:
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Floating Rate Payer: BSFP.
Floating Rate Payer The 25th of each month in each year from (and
Period End Date(s): including) June 25, 2006 to (and including)
the Termination Date, subject to adjustment in
accordance with the Following Business Day
Convention.
Floating Rate Payer Early Payment shall be applicable. For each
Payment Date(s): Calculation Period, the Floating Rate Payer
Payment Date shall be the first Business Day
prior to the related Floating Rate Payer
Period End Date.
Floating Rate Option. USD-LIBOR-BBA
Floating Rate Day Count Actual/360.
Fraction:
Designated Maturity: 1 Month, except with respect to the initial
Calculation Period for which the Designated
Maturity shall be the Linear
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Interpolation of the 2 week and the 1 month.
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Reset Dates: The first day of each Calculation Period.
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Business Days: New York.
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Additional Provisions: Each party hereto is hereby advised and
acknowledges that the other party has engaged
in (or refrained from engaging in) substantial
financial transactions and has taken (or
refrained from taking) other material actions
in reliance upon the entry by the parties into
the Transaction being entered into on the
terms and conditions set forth herein and in
the Confirmation relating to such Transaction,
as applicable. This paragraph shall be deemed
repeated on the trade date of each
Transaction.
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3. ACCOUNT DETAILS
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Payments to BSFP: Citibank, N.A., New York ABA Number:
000-0000-00, for the account of Bear, Xxxxxxx
Securities Corp. Account Number: 0925-3186,
for further credit to Bear Xxxxxxx Financial
Products Inc. Sub-account Number:
102-04654-1-3 Attention: Derivatives
Department
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Payments to Counterparty: See Assignment Agreement.
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4. NETTING
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Amendment to Section 2(c) of Notwithstanding anything to the contrary in
the Agreement: Section 2(c) of the Agreement, amounts that
are payable with respect to Calculation
Periods which end in the same calendar month
(prior to any adjustment of period end dates)
shall be netted, as provided in Section 2(c)
of the Agreement, even if such amounts are not
due on the same payment date. For avoidance of
doubt any payments pursuant to Section 6(e) of
the Agreement shall not be subject to netting.
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5. Provisions Deemed Incorporated into this Agreement:
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The following provisions i) through vii) will be deemed to be incorporated
into the Agreement:
i) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement will apply to any Transaction.
ii) Termination Provisions. For purposes of the Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty
for any purpose.
(b) "Specified Transaction" shall have the meaning specified in
Section 14 of this Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) of the
Agreement will be inapplicable to BSFP and Counterparty.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) of
the Agreement will be inapplicable to BSFP and Counterparty.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) of the
Agreement will be inapplicable to BSFP and Counterparty.
(f) The "Default Under Specified Transaction" provisions of Section
5(a)(v) of the Agreement will be inapplicable to BSFP and
Counterparty.
(g) The "Cross Default" provisions of Section 5(a)(vi) of the
Agreement will be inapplicable to BSFP and Counterparty.
(h) The "Bankruptcy" provisions of Section 5(a)(vii)(2) of the
Agreement will be inapplicable to Counterparty.
(i) The "Credit Event Upon Merger" provisions of Section 5(b)(iv)
of the Agreement will be inapplicable to BSFP and Counterparty.
(j) Additional Termination Events. Additional Termination Events
will apply. The following events shall constitute an Additional
Termination Event hereunder:
(i) Upon the occurrence of a Collateralization Event (as
defined in Part 5(vii)(d) below) BSFP has not, within 30 days
(unless, within 30 days after such downgrade, each such Swap
Rating Agency has reconfirmed the ratings of the Swap
Certificates which were in effect immediately prior to such
downgrade, unless the ratings of the Swap Certificates were
changed due to a circumstance other than the downgrading of
BSFP's rating), complied with Part 5(vii)(d) below, then an
Additional Termination Event shall have
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occurred with respect to BSFP and BSFP shall be the sole
Affected Party with respect to such Additional Termination
Event.
(ii) Upon the occurrence of a Ratings Event (as defined in Part
5(vii)(e) below) BSFP has not, within 10 business days after
such rating withdrawal or downgrade (unless, within 10 business
days after such withdrawal or downgrade, each such Swap Rating
Agency has reconfirmed the ratings of the Swap Certificates
which were in effect immediately prior to such withdrawal or
downgrade, unless the ratings of the Swap Certificates were
changed due to a circumstance other than the withdrawal or
downgrading of BSFP's rating), complied with Part 5(vii)(e)
below, then an Additional Termination Event shall have occurred
with respect to BSFP and BSFP shall be the sole Affected Party
with respect to such Additional Termination Event.
(iii) An amendment and/or supplement to the Pooling and
Servicing Agreement (or any other transaction document) is made
without the prior written consent of BSFP (such consent not to
be unreasonably withheld or delayed), if such amendment and/or
supplement would: (a) materially adversely affect any of BSFP's
rights or obligations hereunder; or (b) modify the obligations
of, or impact the ability of, Counterparty to fully perform any
of Counterparty's obligations hereunder. Counterparty shall be
the sole Affected Party.
(iv) Upon allocation of any Applied Realized Loss Amount to any
Class of Senior Certificates pursuant to the Pooling and
Servicing Agreement, an Additional Termination Event shall have
occurred with respect to Counterparty and Counterparty shall be
the sole Affected Party with respect to such Additional
Termination Event.
(k) The "Automatic Early Termination" provision of Section 6(a) of
the Agreement will be inapplicable to BSFP and Counterparty.
(l) Payments on Early Termination. For the purpose of Section 6(e)
of the Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(m) "Termination Currency" means United States Dollars.
iii) Tax Representations.
Payer Tax Representations. For the purpose of Section 3(e), each of BSFP
and Counterparty makes the following representation:
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It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or
on account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it
to the other party under this Agreement. In making this
representation, it may rely on: (i) the accuracy of any
representation made by the other party pursuant to Section 3(f) of
this Agreement; (ii) the satisfaction of the agreement of the
other party contained in Section 4(a)(i) or 4(a)(iii) of this
Agreement and the accuracy and effectiveness of any document
provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement; and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the
other party does not deliver a form or document under Section
4(a)(iii) by reason of material prejudice to its legal or
commercial position.
BSFP Payee Tax Representations. For the purpose of Section 3(f),
BSFP makes the following representations:
BSFP is a corporation organized under the laws of the United
States.
Counterparty Payee Tax Representations. For the purpose of Section
3(f), Counterparty makes the following representation:
Counterparty represents that it is a "United States person" as
such term is defined in Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended.
iv) Documents to be Delivered. For the purpose of Section 4(a):
(a) Tax forms, documents or certificates to be delivered are:
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Party required to Form/Document/Certificate Date by which to be
deliver document delivered
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BSFP and Counterparty An executed U.S. Internal Promptly after the
Revenue Service Form W-9 earlier of (i) reasonable
(or any successor demand by either party or
thereto) and any other (ii) learning that such
document required or form or document is
reasonably requested to required
allow the other party to
make payments under this
Agreement without any
deduction or withholding
for or on the account of
any Tax or with such
deduction or withholding
at a reduced
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rate.
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(b) Other Documents to be delivered are:
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Party required Form/Document/Certificate Date by Covered by
to deliver which to be Section 3(d)
document delivered representation
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BSFP and Any documents required or Upon the Yes
Counterparty reasonably requested by the execution
receiving party to evidence and delivery
authority of the delivering of this
party or its Credit Support Agreement
Provider, if any, to and such
execute and deliver this Confirmation
Agreement, any
Confirmation, and any
Credit Support Documents to
which it is a party, and to
evidence the authority of
the delivering party to its
Credit Support Provider to
perform its obligations
under this Agreement, such
Confirmation and/or Credit
Support Document, as the
case may be.
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BSFP and A certificate of an Upon the Yes
Counterparty authorized officer of the execution
party, as to the incumbency and delivery
and authority of the of this
respective officers of the Agreement
party signing this and such
agreement, any relevant Confirmation
Credit Support Document, or
any Confirmation, as the
case may be.
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BSFP An opinion of counsel may No
include (which Closing Date
in-house counsel) reasonably
satisfactory to Counterparty.
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Counterparty Executed copy of the Credit Upon Yes
Support Document specified execution
herein.
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Counterparty Copy of any notice delivered Upon Yes
under the Pooling and availability
Servicing Agreement that
impacts this Confirmation
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v) Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
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Address for notices or communications to BSFP:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx
00000
Attention: Derivative Operations 7th Floor
Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its Process Agent: Not Applicable.
Counterparty appoints as its Process Agent: Not Applicable.
(c) Offices. The provisions of Section 10(a) will not apply to this
Agreement; neither BSFP nor Counterparty have any Offices other than as set
forth in the Notices Section and BSFP agrees that, for purposes of Section
6(b), it shall not in future have any Office other than one in the United
States.
(d) Multibranch Party. For the purpose of Section 10(c) of this
Agreement:
BSFP is not a Multibranch Party.
Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is BSFP; provided,
however, that if an Event of Default occurs with respect to BSFP,
then Counterparty shall be entitled to appoint a financial
institution which would qualify as a Reference Market-maker to act
as Calculation Agent.
(f) Credit Support Document.
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With respect to BSFP: Not Applicable.
With respect to Counterparty: From and including the date of its
execution, the Pooling and Servicing Agreement. Counterparty
agrees that the security interests in collateral granted to BSFP
under the foregoing Credit Support Document shall secure the
obligations of Counterparty to BSFP hereunder.
(g) Credit Support Provider.
With respect to BSFP: Not Applicable.
With respect to Counterparty: Not Applicable.
(h) Governing Law. This Agreement shall be governed by, and construed
in accordance with the laws of the State of New York (without
reference to choice of law doctrine except Section 5-1401 and
Section 5-1402 of the New York General Obligation Law).
(i) Consent to Recording. Each party hereto consents and agrees the
monitoring or recording, at any time and from time to time, by the
other party of any and all communications between officers or
employees of the parties, and waives any further notice of such
monitoring or recording.
(j) Waiver of Jury Trial. To the extent permitted by applicable law,
each party irrevocably waives any and all right to trial by jury
in any legal proceeding in connection with this Agreement, any
Credit Support Document to which it is a Party, or any
Transaction. Each party also acknowledges that this waiver is a
material inducement to the other party's entering into this
Agreement.
(k) "Affiliate" Counterparty and BSFP shall be deemed to not have any
Affiliates for purposes of this Agreement.
(l) Severability. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms, provisions,
covenants, and conditions hereof shall continue in full force and
effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so
modified continues to express, without material change, the
original intentions of the parties as to the subject matter of
this Agreement and the deletion of such portion of this Agreement
will not substantially impair the respective benefits or
expectations of the parties.
The parties shall endeavour to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or condition with a valid or enforceable term, provision, covenant
or condition, the economic effect of which comes as close as
possible to
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that of the invalid or unenforceable term, provision, covenant or
condition
vi) Additional Representations:
Each party represents to the other party that (absent a written
agreement between the parties that expressly imposes affirmative
obligations to the contrary):-
(a) Non-Reliance. It is acting for its own account, and it has
made its own independent decisions to enter into the
Transaction and as to whether the Transaction is appropriate
or proper based upon its own judgment and upon advice from
such advisers as it has deemed necessary. It is not relying
on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into the
Transaction: it being understood that information and
explanations related to the terms and conditions of the
Transaction shall not be considered investment advice or a
recommendation to enter into the Transaction. No
communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as to
the expected results of the Transaction.
(b) Assessment and Understanding. It is capable of assessing the
merits of and understanding (on its own behalf or through
independent professional advice), and understands and
accepts, the terms, conditions and risks of the Transaction.
It is also capable of assuming, and assumes, the risks of
the Transaction.
(c) Status of Parties. The other party is not acting as a
fiduciary for or an adviser to it in respect of the
Transaction.
(d) Purpose. It is entering into the Transaction for the
purposes of hedging its assets or liabilities or in
connection with a line of business.
(e) Eligible Contract Participant Representation. It is an
"eligible contract participant" within the meaning of
Section 1(a)(12) of the Commodity Exchange Act, as amended,
including as amended by the Commodity Futures Modernization
Act of 2000.
vii) Other Provisions.
(a) Set-Off. Notwithstanding any provision of this Agreement or
any other existing or future agreement, each party
irrevocably waives any and all rights it may have to set
off, net, recoup or otherwise withhold or suspend or
condition payment or performance of any obligation between
it and the other party hereunder against any obligation
between it and the other party under any other
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agreements. The provisions for Set-Off set fort in Section
6(e) of the Agreement shall not apply for purposes of this
Transaction.
(b) Proceedings. BSFP shall not institute against or cause any
other person to institute against, or join any other person
in instituting against, the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state
bankruptcy, dissolution or similar law, for a period of one
year and one day (or, if longer, the applicable preference
period) following indefeasible payment in full of the
Certificates. Nothing herein shall prevent BSFP from
participating in any such proceeding once commenced.
(c) Transfer, Amendment and Assignment. No transfer, amendment,
waiver, supplement, assignment or other modification of this
Confirmation shall be permitted by either party unless (A)
Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. ("S&P") has been provided notice of
such transfer, amendment, waiver, supplement, assignment or
other modification and confirms in writing (including by
facsimile transmission) that it will not qualify, downgrade,
withdraw or modify its then current ratings of the Swap
Certificates issued pursuant to the Pooling and Servicing
Agreement, (B) neither an Event of Default with respect to
the transferee nor a Termination Event would exist
immediately after that transfer, amendment, waiver,
supplement, assignment or other modification and (C) as of
the time of the transfer, amendment, waiver, supplement,
assignment or other modification, such act would not cause
any payments under the Transaction to become subject to
withholding tax.
(d) Approved Ratings Threshold. In the event that (A) either (i)
the unsecured, long-term senior debt obligations of BSFP are
rated below "A1" by Moody's or are rated "A1" by Moody's and
such rating is on watch for possible downgrade (but only for
so long as it is on watch for possible downgrade) or (ii)
the unsecured, short-term debt obligations of BSFP are rated
below "P-1" by Moody's or are rated "P-1" by Moody's and
such rating is on watch for possible downgrade (but only for
so long as it is on watch for possible downgrade), (B) no
short-term rating is available from Moody's and the
unsecured, long-term senior debt obligations of BSFP are
rated below "Aa3" by Moody's or are rated "Aa3" by Moody's
and such rating is on watch for possible downgrade (but only
for so long as it is on watch for possible downgrade), or
(C) either (i) the unsecured, short-term debt obligations of
BSFP are rated below "A-1" by S&P or (ii) if BSFP does not
have a short-term rating from S&P, the unsecured, long-term
senior debt obligations of BSFP are rated below "A+" by S&P
(such event, a "Collateralization Event"), then, BSFP, at
its own cost, shall within 30 days either (i) cause another
entity to replace BSFP as party to
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this Agreement that meets or exceeds the Swap Counterparty
Ratings Requirement and that is approved by the Trustee
(which approval shall not be unreasonably withheld or
delayed) on terms substantially similar to this Agreement;
(ii) obtain a guaranty of, or a contingent agreement of
another person that satisfies the Swap Counterparty Ratings
Requirement (and which satisfies the Rating Agency
Condition), to honor BSFP's obligations under this
Agreement, provided that such other person is approved by
the Trustee such approval not to be unreasonably withheld or
delayed; (iii) post collateral in accordance with a Credit
Support Annex which satisfies the Rating Agency Condition;
or (iv) establish any other arrangement satisfactory to the
applicable Swap Rating Agency which will be sufficient to
restore the immediately prior ratings of the Swap
Certificates and which satisfies the Rating Agency
Condition. All collateral posted by BSFP shall be returned
to BSFP immediately upon BSFP securing a substitute
counterparty that satisfies the Swap Counterparty Ratings
Requirement. "Swap Rating Agency" means S&P and Moody's.
"Swap Counterparty Ratings Requirement" shall mean (a)
either (i) the unsecured, short-term debt obligations of the
substitute counterparty (or its Credit Support Provider) are
rated at least "A-1" by S&P or (ii) if the substitute
counterparty does not have a short-term rating from S&P, the
unsecured, long-term senior debt obligations of the
substitute counterparty (or its Credit Support Provider) are
rated at least "A+" by S&P, and (b) either (i) the
unsecured, long-term senior debt obligations of such
substitute counterparty (or its Credit Support Provider) are
rated at least "A1" by Moody's (and if rated "A1" by
Moody's, such rating is not on watch for possible downgrade)
and the unsecured, short-term debt obligations of such
substitute counterparty (or its Credit Support Provider) are
rated at least "P-1" by Moody's (and if rated "P-1" by
Moody's, such rating is not on watch for possible downgrade
and remaining on watch for possible downgrade), or (ii) if
such substitute counterparty (or its Credit Support
Provider) does not have a short-term debt rating from
Moody's, the unsecured, long-term senior debt obligations of
such substitute counterparty (or its Credit Support
Provider) are rated at least "Aa3" by Moody's (and if rated
"Aa3" by Moody's, such rating is not on watch for possible
downgrade).
"Rating Agency Condition" means, with respect to any
particular proposed act or omission to act hereunder, that
the party acting or failing to act has consulted with each
Rating Agency then providing a rating of any Swap
Certificates and has received from each Rating Agency a
written confirmation that the proposed action or inaction
would not cause such Rating Agency to downgrade or withdraw
its then-current rating of any Swap Certificates.
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(e) Ratings Event. It shall be a ratings event ("Ratings Event")
if at any time after the date hereof BSFP shall fail to
satisfy the Swap Counterparty Ratings Threshold. Swap
Counterparty Ratings Threshold shall mean (A) the unsecured,
long-term senior debt obligations of BSFP are rated at least
"BBB-" by S&P, and (B) either (i) the unsecured, long-term
senior debt obligations of BSFP are rated at least "A2" by
Moody's (including if such rating is on watch for possible
downgrade) and the unsecured, short-term debt obligations of
BSFP are rated at least "P-1" by Moody's (including if such
rating is on watch for possible downgrade) or (ii) if BSFP
does not have a short-term rating from Moody's, the
unsecured, long-term senior debt obligations of BSFP are
rated at least "A1" by Moody's (including if such rating is
on watch for possible downgrade).
Following a Ratings Event, BSFP shall take the following
actions at its own expense, (A) immediately post collateral
in accordance with a Credit Support Annex which satisfies
the Rating Agency Condition (until such time as it has
secured a substitute counterparty or a guarantor that
satisfies the Swap Counterparty Ratings Requirement), and
(B) not later than 10 business days after the occurrence of
such a downgrade or withdrawal by S&P or Moody's, either (I)
assign all of its rights and obligations under the
Transactions to a counterparty that satisfies the Swap
Counterparty Ratings Requirement or whose guarantor
(pursuant to a form of guaranty which satisfies the Rating
Agency Condition) satisfies the Swap Counterparty Ratings
Requirement (or which satisfies the Rating Agency Condition)
pursuant to documentation substantially similar to the
documentation then in place and subject to prior
notification to the Rating Agencies, or (II) provide a
guaranty (pursuant to a form of guaranty that satisfies the
Rating Agency Condition) from a guarantor that satisfies the
Swap Counterparty Ratings Requirement (or which satisfies
the Rating Agency Condition) pursuant to documentation
substantially similar to the documentation then in place and
subject to prior notification to the Rating Agencies. In
respect of subclause (I) immediately above, Countrywide
Securities Corporation shall make a good faith attempt to
provide reasonable assistance to BSFP in locating a
replacement party and effecting the assignment.
(f) USA PATRIOT Act Notice. BSFP hereby notifies Counterparty
that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and
record information that identifies Counterparty, which
information includes the name and address of Counterparty
and other information that will allow BSFP to identify
Counterparty in accordance with the Act.
(g) Amendments. Counterparty agrees that it will obtain BSFP's
consent (which consent shall not be unreasonably withheld or
14
delayed) prior to amending or supplementing the Pooling and
Servicing Agreement (or any other transaction document), if
such amendment and/or supplement would: (a) materially
adversely affect any of BSFP's rights or obligations
hereunder; or (b) modify the obligations of, or impact the
ability of, Counterparty to fully perform any of
Counterparty's obligations hereunder.
(h) Assignment. BSFP will not unreasonably withhold or delay its
consent to an assignment of this Agreement to any other
third party.
(i) Regulation AB Compliance. BSFP and Counterparty agree that
the terms of the Item 1115 Agreement dated as of January 30,
2006 (the "Regulation AB Agreement"), between Countrywide
Home Loans, Inc., CWABS, INC., CWMBS, Inc., CWALT, Inc.,
CWHEQ, Inc. and Bear Xxxxxxx Financial Products Inc. shall
be incorporated by reference into this Agreement so that
Counterparty shall be an express third party beneficiary of
the Regulation AB Agreement. A copy of the Regulation AB
Agreement is attached hereto as Annex A.
(j) Swap Contract Administration Agreement. BSFP shall be an
express third party beneficiary of the Swap Contract
Administration Agreement, dated as of May 30, 2006 (the
"Swap Contract Administration Agreement"), among The Bank of
New York, as Swap Contract Administrator and not in its
individual or corporate capacity but solely as Trustee under
the Pooling and Servicing Agreement, and Countrywide Home
Loans, Inc. A copy of the Swap Contract Administration
Agreement is attached hereto as Annex B.
15
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 000-000-0000. For inquiries regarding U.S. Transactions,
please contact Xxxxx Xxxxxx by telephone at 000-000-0000. For all other
inquiries please contact Derivatives Documentation by telephone at
000-0-000-0000. Originals will be provided for your execution upon your
request.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxxxx Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxxx Xxxxxxxx
Title: Senior Managing Director and Treasurer
16
Schedule A to the Confirmation dated as of May 24, 2006
Re: Reference Number XXXX00XX0
Period Period
Start Date End Date Notional Amount
30-May-06 25-Jun-06 114,755,148.00
25-Jun-06 25-Jul-06 113,845,610.00
25-Jul-06 25-Aug-06 112,791,155.00
25-Aug-06 25-Sep-06 111,593,566.00
25-Sep-06 25-Oct-06 110,255,212.00
25-Oct-06 25-Nov-06 108,780,766.00
25-Nov-06 25-Dec-06 107,173,218.00
25-Dec-06 25-Jan-07 105,444,465.00
25-Jan-07 25-Feb-07 103,601,136.00
25-Feb-07 25-Mar-07 101,647,501.00
25-Mar-07 25-Apr-07 99,588,317.00
25-Apr-07 25-May-07 97,429,096.00
25-May-07 25-Jun-07 95,176,125.00
25-Jun-07 25-Jul-07 92,859,295.00
25-Jul-07 25-Aug-07 90,489,272.00
25-Aug-07 25-Sep-07 88,092,595.00
25-Sep-07 25-Oct-07 85,688,178.00
25-Oct-07 25-Nov-07 83,288,045.00
25-Nov-07 25-Dec-07 80,929,721.00
25-Dec-07 25-Jan-08 78,644,619.00
25-Jan-08 25-Feb-08 76,431,075.00
25-Feb-08 25-Mar-08 74,286,942.00
25-Mar-08 25-Apr-08 72,202,801.00
25-Apr-08 25-May-08 69,109,452.00
25-May-08 25-Jun-08 66,162,349.00
25-Jun-08 25-Jul-08 63,374,273.00
25-Jul-08 25-Aug-08 60,718,075.00
25-Aug-08 25-Sep-08 58,187,586.00
25-Sep-08 25-Oct-08 55,776,724.00
25-Oct-08 25-Nov-08 54,014,884.00
25-Nov-08 25-Dec-08 52,312,472.00
25-Dec-08 25-Jan-09 50,667,933.00
25-Jan-09 25-Feb-09 49,079,381.00
25-Feb-09 25-Mar-09 47,544,849.00
25-Mar-09 25-Apr-09 46,062,724.00
25-Apr-09 25-May-09 44,612,185.00
17
ANNEX A
[Insert Form of Regulation AB Agreement]
18
ANNEX B
[Insert Form of Swap Contract Administration Agreement]
19
