BEAR XXXXXXX
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
000-000-0000
Exhibit A
DATE: February 27, 2006
TO: Deutsche Bank AG, New York Branch
ATTENTION: Mr. Xxxx Xxxxxxxx
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: FXNEC7853
The purpose of this letter agreement ("Agreement") is to confirm the terms and conditions of the Transaction entered
into on the Trade Date specified below (the "Transaction") between Bear Xxxxxxx Financial Products Inc. ("BSFP") and
Deutsche Bank AG, New York Branch ("Counterparty"). This Agreement, which evidences a complete and binding agreement
between you and us to enter into the Transaction on the terms set forth below, constitutes a "Confirmation" as
referred to in the "ISDA Form Master Agreement" (as defined below), as well as a "Schedule" as referred to in the
ISDA Form Master Agreement.
1. This Agreement is subject to the 2000 ISDA Definitions (the "Definitions"), as published by the International
Swaps and Derivatives Association, Inc. ("ISDA"). You and we have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross Border) form (the "ISDA Form Master
Agreement") but, rather, an ISDA Form Master Agreement shall be deemed to have been executed by you and us on the
date we entered into the Transaction. All provisions contained in, or incorporated by reference to, the ISDA Form
Master Agreement shall govern the Transaction referenced in this Confirmation, except as expressly modified below. In
the event of any inconsistency between the provisions of this Agreement and the Definitions or the ISDA Form Master
Agreement, this Agreement shall prevail for purposes of the Transaction.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
Type of Transaction: Rate Cap
Notional Amount: With respect to any Calculation Period, the amount set forth for such period on the
Schedule of Notional Amounts.
Trade Date: February 6, 2006
Effective Date: Xxxxx 00, 0000
Xxxxxxxxxxx Date: April 25, 2009, subject to adjustment in accordance with the Business Day Convention.
Fixed Amount (Premium):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date:February 27, 2006
Fixed Amount:USD 145,000
Floating Amounts:
Floating Rate Payer: BSFP
Cap Rate: 5.00000%
Floating Rate Payer
Period End Dates: The 25th calendar day of each month during the Term of this
Transaction, commencing April 25, 2006 and ending on the Termination
Date, subject to adjustment in accordance with the Business Day
Convention.
Floating Rate Payer
Payment Dates: Early Payment is applicable. The Floating Rate Payer Payment Dates
shall be two Business Days prior to each Floating Rate Payer Period
End Date.
Floating Rate for initial
Calculation Period: To be determined.
Floating Rate Option: USD-LIBOR-BBA, provided, however, that if the Floating Rate determined
from such Floating Rate Option for any Calculation Period is greater
than 9.00000% then the Floating Rate for such Calculation Period shall
be deemed to be 9.00000%.
Designated Maturity: One month
Floating Rate Day
Count Fraction: 30/360
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Business Days: New York
Business Day Convention: Following
3. 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.
4. Provisions Deemed Incorporated in a Schedule to the ISDA Form Master Agreement:
1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form Master Agreement will apply to
any Transaction.
2) Termination Provisions. For purposes of the ISDA Form Master Agreement:
(a) "Specified Entity" is not applicable to BSFP or Counterparty for any purpose.
(b) "Specified Transaction" is not applicable to BSFP or Counterparty for any purpose, and, accordingly, Section
5(a)(v) shall not apply to BSFP or Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not apply to BSFP or Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e) of ISDA Form Master Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
3) Tax Representations. Not applicable
4) Limitation on Events of Default. Notwithstanding the terms of Sections 5 and 6 of the ISDA Form Master Agreement,
if at any time and so long as the Counterparty has satisfied in full all its payment obligations under Section
2(a)(i) of the ISDA Form Master Agreement and has at the time no future payment obligations, whether absolute or
contingent, under such Section, then unless BSFP is required pursuant to appropriate proceedings to return to the
Counterparty or otherwise returns to the Counterparty upon demand of the Counterparty any portion of any such
payment, (a) the occurrence of an event described in Section 5(a) of the ISDA Form Master Agreement with respect to
the Counterparty shall not constitute an Event of Default or Potential Event of Default with respect to the
Counterparty as Defaulting Party and (b) BSFP shall be entitled to designate an Early Termination Date pursuant to
Section 6 of the ISDA Form Master Agreement only as a result of the occurrence of a Termination Event set forth in
either Section 5(b)(i) or 5(b)(ii) of the ISDA Form Master Agreement with respect to BSFP as the Affected Party, or
Section 5(b)(iii) with respect to BSFP as the Burdened Party.
5) Documents to be Delivered. For the purpose of Section 4(a):
(1) Tax forms, documents, or certificates to be delivered are:
Party required to deliver document Form/Document/ Date by which to
Certificate be delivered
BSFP and Any document required or Promptly after the earlier of (i) reasonable
the Counterparty reasonably requested to allow demand by either party or (ii) learning that
the other party to make such form or document is required
payments under this Agreement
without any deduction or
withholding for or on the
account of any Tax or with such
deduction or withholding at a
reduced rate
(2) Other documents to be delivered are:
Party required to Form/Document/ Date by which to Covered by Section 3(d) Representation
deliver document Certificate be delivered
BSFP and Any documents required by Upon the execution and Yes
the Counterparty the receiving party to delivery of this Agreement
evidence the authority of and such Confirmation
the delivering party or its
Credit Support Provider, if
any, for it to execute and
deliver this Agreement, any
Confirmation , and any
Credit Support Documents to
which it is a party, and to
evidence the authority of
the delivering party or its
Credit Support Provider to
perform its obligations
under this Agreement, such
Confirmation and/or Credit
Support Document, as the
case may be
BSFP and A certificate of an Upon the execution and Yes
the Counterparty authorized officer of the delivery of this Agreement
party, as to the incumbency and such Confirmation
and authority of the
respective officers of the
party signing this Agreement,
any relevant Credit Support
Document, or any
Confirmation, as the case may
be
6) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of ISDA Form Master Agreement:
Address for notices or communications to BSFP:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to the Counterparty:
Address: 00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx Xxxxxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
with a copy to:
Address: 00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Ms. Xxxxx Oh
Facsimile: 000-000-0000
Phone: 000-000-0000
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
BSFP appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(c) Offices. The provisions of Section 10(a) ISDA Form Master Agreement will not apply to this Agreement;
neither BSFP nor the Counterparty have any Offices other than as set forth in the Notices Section and BSFP agrees
that, for purposes of Section 6(b) of ISDA Form Master Agreement, 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 ISDA Form Master Agreement:
BSFP is not a Multibranch Party.
The Counterparty is 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 the 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. Not applicable for either BSFP or the Counterparty.
(g) Credit Support Provider.
BSFP: Not Applicable
The Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law of the State of New York shall
govern their rights and duties in whole.
(i) Severability. If any term, provision, covenant, or condition of this Agreement, or the application
thereof to any party or circumstance, shall be held to be invalid or unenforceable (in whole or in part) for any
reason, the remaining terms, provisions, covenants, and conditions hereof shall continue in full force and effect as
if this Agreement had been executed with the invalid or unenforceable portion eliminated, so long as this Agreement
as so modified continues to express, without material change, the original intentions of the parties as to the
subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the
respective benefits or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any invalid or unenforceable term,
provision, covenant or condition with a valid or enforceable term, provision, covenant or condition, the economic
effect of which comes as close as possible to that of the invalid or unenforceable term, provision, covenant or
condition.
(j) Consent to Recording. Each party hereto consents to the monitoring or recording, at any time and from time
to time, by the other party of any and all communications between officers or employees of the parties, waives any
further notice of such monitoring or recording, and agrees to notify its officers and employees of such monitoring or
recording.
(k) Waiver of Jury Trial. Each party waives any right it may have to a trial by jury in respect of any
Proceedings relating to this Agreement or any Credit Support Document.
(l) BSFP will not unreasonably withhold or delay its consent to an assignment of this Agreement to any other
third party.
7) "Affiliate" will have the meaning specified in Section 14 of the ISDA Form Master Agreement, provided that BSFP
shall not be deemed to have any Affiliates for purposes of this Agreement, including for purposes of Section 6(b)(ii).
8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at the end thereof the following
subsection (g):
"(g) Relationship Between Parties.
Each party represents to the other party on each date when it enters into a Transaction
that:--
(1) Nonreliance. It is not relying on any statement or representation of the other party
regarding the Transaction (whether written or oral), other than the representations expressly made in this Agreement
or the Confirmation in respect of that Transaction.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or through independent professional advice) the
Transaction and has made its own decision to enter into the Transaction; and
(ii) It understands the terms, conditions and risks of the Transaction and is willing and able to
accept those terms and conditions and to assume those risks, financially and otherwise.
(3) Purpose. It is entering into the Transaction for the purposes of managing its borrowings or
investments, hedging its underlying assets or liabilities or in connection with a line of business.
(4) Principal. It is entering into the Transaction as principal, and not as agent or in any other
capacity, fiduciary or otherwise."
9) Swap Disclosure Event. If, upon the occurrence of a Swap Disclosure Event (as defined in Part clause (ii) in
paragraph 10 below), Party A has not, within 10 Business Days after such Swap Disclosure Event complied with any of
the provisions set forth in clause (iii) of paragraph 10 below, 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.
10) Compliance with Regulation AB.
(i) BSFP agrees and acknowledges that Residential Funding Corporation ("RFC") is required under Regulation AB
under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Exchange
Act") ("Regulation AB"), to disclose certain financial information regarding BSFP or its group of affiliated entities,
if applicable, depending on the aggregate "significance percentage" of this Agreement and any other derivative
contracts between BSFP or its group of affiliated entities, if applicable, and Counterparty, as calculated from time
to time in accordance with Item 1115 of Regulation AB.
(ii) It shall be a swap disclosure event ("Swap Disclosure Event") if, on any Business Day after the date hereof,
RFC requests from Party A the applicable financial information described in Item 1115 of Regulation AB (such request
to be based on a reasonable determination by RFC, in good faith, that such information is required under Regulation
AB) (the "Swap Financial Disclosure").
(iii) Upon the occurrence of a Swap Disclosure Event, BSFP, at its own expense, shall (a) provide to RFC the Swap
Financial Disclosure, (b) secure another entity to replace BSFP as party to this Agreement on terms substantially
similar to this Agreement and subject to prior notification to the Swap Rating Agencies, which entity (or a guarantor
therefor) meets or exceeds the Approved Rating Thresholds (or which satisfies the Rating Agency Condition) and which
entity is able to comply with the requirements of Item 1115 of Regulation AB or (c) obtain a guaranty of the BSFP's
obligations under this Agreement from an affiliate of the BSFP that is able to comply with the financial information
disclosure requirements of Item 1115 of Regulation AB, such that disclosure provided in respect of the affiliate will
satisfy any disclosure requirements applicable to the Swap Provider, and cause such affiliate to provide Swap
Financial Disclosure. If permitted by Regulation AB, any required Swap Financial Disclosure may be provided by
incorporation by reference from reports filed pursuant to the Exchange Act.
(iv) BSFP [if obligations of Swap Provider are guaranteed, the guarantor must cover this indemnity obligation] agrees
that, in the event that BSFP provides Swap Financial Disclosure to RFC in accordance with clause (iii)(a) of this
paragraph 10 or causes its affiliate to provide Swap Financial Disclosure to RFC in accordance with clause (iii)(c)
of this paragraph 10, it will indemnify and hold harmless RFC, its respective directors or officers and any person
controlling RFC, from and against any and all losses, claims, damages and liabilities caused by any untrue statement
or alleged untrue statement of a material fact contained in such Swap Financial Disclosure or caused by any omission
or alleged omission to state in such Swap Financial Disclosure a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
11) Third Party Beneficiary. RFC shall be a third party beneficiary of this Agreement.
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE OF THE BEAR XXXXXXX COMPANIES INC.
OTHER THAN BSFP IS AN OBLIGOR OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT.
5. Account Details and
Settlement Information: 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
Payments to Counterparty:
Deutsche Bank AG New York Branch (Direct)
ABA #: 000000000
Swift Code: XXXXXX00
Account no: 100440170004
Ref: Interest Rate Swaps
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: _______________________________
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to, accepts and confirms the terms of the
foregoing as of the Trade Date.
DEUTSCHE BANK AG, NEW YORK BRANCH
By: _______________________________
As authorized agent or officer for Deutsche Bank AG
Name:
Title:
By: _______________________________
As authorized agent or officer for Deutsche Bank AG
Name:
Title:
lm
SCHEDULE OF NOTIONAL AMOUNTS
(all such dates subject to adjustment in accordance with the Business Day Convention)
Notional Amount
From and including To but excluding (USD)
Effective Date 4/25/2006 48,436,482.26
4/25/2006 5/25/2006 46,945,753.57
5/25/2006 6/25/2006 45,330,202.91
6/25/2006 7/25/2006 43,592,519.71
7/25/2006 8/25/2006 41,735,709.73
8/25/2006 9/25/2006 39,763,088.17
9/25/2006 10/25/2006 37,678,271.36
10/25/2006 11/25/2006 35,485,167.15
11/25/2006 12/25/2006 33,187,963.97
12/25/2006 1/25/2007 30,791,338.38
1/25/2007 2/25/2007 28,397,804.29
2/25/2007 3/25/2007 26,044,609.48
3/25/2007 4/25/2007 24,309,787.09
4/25/2007 5/25/2007 22,645,798.01
5/25/2007 6/25/2007 21,051,685.72
6/25/2007 7/25/2007 19,526,484.19
7/25/2007 8/25/2007 18,069,217.94
8/25/2007 9/25/2007 16,678,902.20
9/25/2007 10/25/2007 15,354,542.93
10/25/2007 11/25/2007 14,095,137.13
11/25/2007 12/25/2007 12,899,672.88
12/25/2007 1/25/2008 11,767,129.58
1/25/2008 2/25/2008 10,696,478.26
2/25/2008 3/25/2008 9,686,681.68
3/25/2008 4/25/2008 8,736,694.73
4/25/2008 5/25/2008 7,845,464.66
5/25/2008 6/25/2008 7,011,931.37
6/25/2008 7/25/2008 6,234,975.61
7/25/2008 8/25/2008 5,490,504.07
8/25/2008 9/25/2008 4,769,105.87
9/25/2008 10/25/2008 4,070,327.69
10/25/2008 11/25/2008 3,393,724.18
11/25/2008 12/25/2008 2,738,857.83
12/25/2008 1/25/2009 2,105,298.81
1/25/2009 2/25/2009 1,492,624.83
2/25/2009 3/25/2009 900,421.07
3/25/2009 Termination Date 328,279.98
