EXHIBIT 99.4
A Confirmation
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Date: May 30, 2006
To: The Bank of New York, not in its individual capacity From: Xxxxxx Xxxxxxx Capital Services Inc.
but solely as trustee for CWALT, Inc., Alternative Contact: New York Derivative Client Services
Loan Trust 2006-20CB Group
Attn: Corporate Trust Administration, CWALT 2006-00XX
000 Xxxxxxx Xxxxxx, 0X
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
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Re: KQBE4, Class A-6
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between The Bank of New York, not
in its individual capacity but solely as trustee for CWALT, Inc., Alternative
Loan Trust 2006-20CB and Xxxxxx Xxxxxxx Capital Services Inc., on the Trade
Date specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" as referred to in the ISDA Master Agreement below.
The definitions and provisions contained in the 2000 ISDA Definitions
(as published by the International Swaps and Derivatives Association, Inc.)
are incorporated into this Confirmation. In the event of any inconsistency
between those definitions and this Confirmation, this Confirmation will
govern.
1. This Confirmation evidences a complete, binding agreement between
you and us as to the terms of the Transaction to which this Confirmation
relates. In addition, this Confirmation supplements, forms a part of, and is
subject to an agreement in the form of the ISDA Master Agreement
(Multicurrency-Cross Border), with such modifications as are specified herein,
as if we had executed an Agreement in such form on the Trade Date of the first
such Transaction between us (the "Agreement"). All provisions contained or
incorporated by reference in the Agreement shall govern this Confirmation
except as expressly modified below. In the event of any inconsistency between
the provisions of that Agreement and this Confirmation, this Confirmation will
prevail for the purpose of this Transaction.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Party A: Xxxxxx Xxxxxxx Capital Services Inc.
Party A Credit Support: Payments guaranteed by Xxxxxx Xxxxxxx
Party B: The Bank of New York, not in its individual capacity but
solely as trustee for CWALT, Inc., Alternative Loan Trust
2006-20CB
Trade Date: May 25, 2006
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 Class Certificate Balance of the Class A-6
Certificates immediately prior to the related Distribution
Date (as such terms are defined in the Pooling and Servicing
Agreement dated as of May 1, 2006 among CWALT, Inc. as
depositor, Countrywide Home Loans, Inc. as a seller, Park
Granada LLC, as a seller, Park Monaco Inc., as a seller, Park
Sienna LLC, as a seller, Countrywide Home Loans Servicing
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XX, as master servicer, and The Bank of New York, as trustee).
Effective Date: June 25, 2006
Termination Date: June 25, 2009
Fixed Amounts:
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Fixed Amount Payer: Party B
Fixed Amount Payer Payment Date: May 30, 2006
Fixed Amount: USD $206,000 (Party A hereby acknowledges receipt of payment
in full of this amount)
Floating Amounts:
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Floating Amount: To be determined in accordance with the following formula:
Greater of (i) (Floating Rate Option minus Strike Rate) *
Notional Amount * Floating Rate Day Count Fraction, and (ii)
zero.
Floating Rate Payer: Party A
Strike Rate: 5.50%
Floating Rate Payer Payment Dates: Early Payment -- For each Calculation Period, the first
Business Day prior to each Floating Rate Payer Period End
Date.
Floating Rate Payer Period End Date(s): The 25th of each month in each year from (and including) June
25, 2006 to (and including) the Termination Date with no
adjustment to Period End Dates. The initial Calculation Period
will accrue from and including the Effective Date to but
excluding July 25, 2006 and that the final Calculation Period
will accrue from and including May 25, 2009 to but excluding
the Termination Date.
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 9.00% per annum for such Calculation
Period, then the Floating Rate for such Calculation Period
shall be deemed to be equal to 9.00% per annum.
Designated Maturity: 1 Month
Floating Rate Day Count Fraction: 30/360
Reset Dates: The first day of Each Calculation Period.
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Compounding: Inapplicable
Business Days: New York
Calculation Agent: Party A; provided, however, that if an Event of Default occurs
with respect to Party A, then Party B shall be entitled to
appoint a financial institution which would qualify as a
Reference Market-maker to act as Calculation Agent.
3. Account
Details:
Payments to Party A: Citibank, New York
ABA No. 021 000 089
For: Xxxxxx Xxxxxxx Capital Services Inc.
Account No. 0000 0000
Operations Contact: Operations
Tel 000 000-0000
Fax 000 000-0000
Payments to Party B: The Bank of New York
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: TAS A/C 580748
Attn: Xxxxxx Xxx 212-815-4800
Fax: 000-000-0000
4. Modifications to the Agreement:
The parties hereby agree to amend the Agreement referenced in paragraph 1
above as follows:
(a) Termination Provisions. For purposes of the Agreement:
(i) "Specified Entity" means in relation to Party A for the
purpose of the Agreement:
Section 5(a)(v): None;
Section 5(a)(vi): None;
Section 5(a)(vii): None;
Section 5(b)(iv): None;
and in relation to Party B for the purpose of this Agreement:
Section 5(a)(v): None;
Section 5(a)(vi): None;
Section 5(a)(vii): None;
Section 5(b)(iv): None.
(ii) "Specified Transaction" shall be inapplicable to Party A and
Party B.
(iii) The "Breach of Agreement" provisions of Section 5(a)(ii) of
the Agreement will be inapplicable to Party A and Party B.
(iv) The "Credit Support Default" provisions of Section 5(a)(iii)
of the Agreement will be inapplicable to Party B.
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(v) The "Misrepresentation" provisions of Section 5(a)(iv) of
the Agreement will be inapplicable to Party A and Party B.
(vi) The "Default Under Specified Transaction" provisions of
Section 5(a)(v) of the Agreement will be inapplicable to
Party A and Party B.
(vii) The "Cross Default" provisions of Section 5(a)(vi) of the
Agreement will be inapplicable to Party A and Party B.
(viii) The "Credit Event Upon Merger" provisions of Section
5(b)(iv) of the Agreement will be inapplicable to Party A
and Party B.
(ix) The "Bankruptcy" provision of Section 5(a)(vii)(2) will not
apply to Party B.
(x) The "Automatic Early Termination" provision of Section 6(a)
of the Agreement will be inapplicable to Party A and Party
B.
(xi) Payments on Early Termination. For the purpose of Section
6(e) of the Agreement:
"Market Quotation" and "Second Method" will apply for the
purpose of Section 6(e) of this Agreement. "Termination
Currency" means United States Dollars.
(b) Fully-Paid Transactions. Notwithstanding the terms of Sections 5 and
6 of the Agreement if Party B has satisfied in full all of its
payment obligations under Section 2(a)(i) of the Agreement, then
unless Party A is required pursuant to appropriate proceedings to
return to Party B or otherwise returns to Party B upon demand of
Party B any portion of such payment, (a) the occurrence of an event
described in Section 5(a) of the Agreement with respect to Party B
shall not constitute an Event of Default or Potential Event of
Default with respect to Party B as the Defaulting Party and (b) Party
A shall be entitled to designate an Early Termination Event pursuant
to Section 6 of the Agreement only as a result of a Termination Event
set forth in either Section 5(b)(i) or Section 5(b)(ii) of the
Agreement with respect to Party A as the Affected Party or Section
5(b)(iii) of the Agreement with respect to Party A as the Burdened
Party. For purposes of the Transaction to which this Confirmation
relates, Party B's only obligation under Section 2(a)(i) of the
Agreement is to pay the Fixed Amount on the Fixed Rate Payer Payment
Date.
(c) Party A and Party B Payer Tax Representations. For the purpose of
Section 3(e), each of Party A and Party B makes the following
representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account
of any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e)) 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); (ii) the satisfaction of the agreement of the other
party contained in Section 4(a)(i) or 4(a)(iii) and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii); and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d), 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.
(d) Payee Tax Representations
(i) For the purpose of Section 3(f), Party A makes the following
representation:
It is a corporation duly organized and incorporated under
the laws of the State of Delaware and is not a foreign
corporation for United States tax purposes.
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(ii) For the purpose of Section 3(f), Party B makes the following
representation:
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.
(e) Governing Law; Jurisdiction. This Agreement, each Credit Support
Document and each Confirmation will be governed by and construed in
accordance with the laws of the State of New York, without reference
to choice of law doctrine. Section 13(b) is amended by: (1) deleting
"non-" from the second line of clause (i); and (2) deleting the final
paragraph.
(f) Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury
in respect of any Proceedings relating to this Agreement or any
Credit Support Document.
(g) "Affiliate" has the meaning specified in Section 14, but excludes
Xxxxxx Xxxxxxx Derivative Products Inc.
(h) Additional Representations. Section 3 is hereby amended by adding at
the end thereof the following Subparagraphs:
(i) It is an "eligible contract participant" within the meaning
of Section 1a(12) of the Commodity Exchange Act (7 U.S.C.
1a), as amended by the Commodity Futures Modernization Act
of 2000.
(ii) It has entered into this Agreement (including each
Transaction evidenced hereby) in conjunction with its line
of business (including financial intermediation services) or
the financing of its business.
(iii) It is entering into this Agreement, any Credit Support
Document to which it is a party, each Transaction and any
other documentation relating to this Agreement or any
Transaction as principal (and not as agent or in any other
capacity, fiduciary or otherwise).
(iv) ERISA Representation. It continuously represents that it is
not (i) an employee benefit plan (hereinafter an "ERISA
Plan"), as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), subject to Title I of ERISA or a plan subject to
Section 4975 of the Internal Revenue Code of 1986, as
amended, or subject to any other statute, regulation,
procedure or restriction that is materially similar to
Section 406 of ERISA or Section 4975 of the Code (together
with ERISA Plans, "Plans"), (ii) a person acting on behalf
of a Plan or (iii) a person any of the assets of whom
constitute assets of a Plan. It will provide notice to the
other party in the event that it is aware that it is in
breach of any aspect of this representation or is aware that
with the passing of time, giving of notice or expiry of any
applicable grace period it will breach this representation.
(i) Relationship Between Parties. Each party will be deemed to represent
to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary for that
Transaction):
(i) Non-Reliance. Each of Party A and Party B is acting for its
own account. Each of Party A and Party B has made its own
independent decisions to enter into that Transaction and as
to whether that Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such
advisers as it has deemed necessary. Neither Party A nor
Party B is relying on any communication (written or oral) of
the other party as investment advice or as a recommendation
to enter into that Transaction; it being understood that
information and explanations related to the terms and
conditions of a Transaction shall not be considered
investment advice or a recommendation to enter into that
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 that Transaction.
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(ii) 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 that
Transaction. It is also capable of assuming, and assumes,
the risks of that Transaction.
(iii) Status of Parties. Party A is not acting as a fiduciary for
or an adviser to it in respect of that Transaction.
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(j) Addresses for Notices. For the purpose of Section 12(a):
(i) Address for notices or communications to Party A:
Xxxxxx Xxxxxxx Capital Services Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Legal Officer
Facsimile No.: 000-000-0000
(ii) Address for notices or communications to Party B:
The Bank of New York
Corporate Trust Administration, CWALT 2006-00XX
000 Xxxxxxx Xxxxxx, 0X
Xxx Xxxx, XX 00000
(k) Set-Off. Notwithstanding any provision of this Agreement or any other
existing or future agreement, each party irrevocably waives any and
all rights it may have to set off, net, recoup or otherwise withhold
or suspend or condition payment or performance of any obligation
between it and the other party hereunder against any obligation
between it and the other party under any other agreements. The
provisions for Set-Off set fort in Section 6(e) of the Agreement
shall not apply for purposes of this Transaction.
(l) Limitation on Liability: Party A and Party B agree to the following:
(a) the sole recourse in respect of the obligations of Party B
hereunder shall be to the Trust Fund (as defined in the Pooling and
Servicing Agreement), (b) The Bank of New York is entering into this
Agreement solely in its capacity as trustee and not in its individual
capacity under the Pooling and Servicing Agreement and (c) in no case
shall The Bank of New York (or any person acting as successor trustee
under the Pooling and Servicing Agreement) be personally liable for
or on account of any of the statements, representations, warranties,
covenants or obligations stated to be those of Party B under the
terms of this Agreement, all such liability, if any, being expressly
waived by Party A and any person claiming by, through or under Party
A.
(m) Notices. Section 12(a) is amended by adding in the third line thereof
after the phrase "messaging system" and before the ")" the words, ";
provided, however, any such notice or other communication may be
given by facsimile transmission if telex is unavailable, no telex
number is supplied to the party providing notice, or if answer back
confirmation is not received from the party to whom the telex is
sent."
(n) Regulation AB Compliance. Party A and Party B agree that Section
4(e)(i) of the Item 1115 Agreement dated as of May 25, 2006 (the
"Regulation AB Agreement"), between Countrywide Home Loans, Inc.,
CWMBS, Inc., CWALT, Inc. and Xxxxxx Xxxxxxx Capital Services Inc.
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.
(o) Agreement to Deliver Documents. For the purpose of Sections 4(a)(i)
and (ii), each party agrees to deliver the following documents, as
applicable:
Tax forms, documents, or certificates to be delivered are:
Party A agrees to complete, execute, and deliver to Party B, the
appropriate United States Internal Revenue Service Form: (i) as of
the date of this Agreement; (ii) promptly upon reasonable demand by
Party B; and (iii) promptly upon learning that any such forms
previously provided by Party A has become obsolete or incorrect.
Party B agrees to complete, execute, and deliver to Party A, the
appropriate United States Internal Revenue Service Form: (i) as of
the date of this Agreement; (ii) promptly upon reasonable demand by
Party A; and
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(iii) promptly upon learning that any such forms previously provided
by Party B has become obsolete or incorrect.
(p) Obligations. Section 2 is amended by adding the following to the end
thereof:
"(f) Party B shall deliver or cause to be delivered to Party A IRS
Form W-9 (or successor thereto) as soon as is practicable after the
Effective Date."
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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us.
Best Regards,
XXXXXX XXXXXXX CAPITAL SERVICES INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President
THE BANK OF NEW YORK, not in its individual capacity
but solely as trustee for CWALT, Inc., Alternative Loan Trust 2006-20CB
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
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Schedule A
Class A-6
Interest Rate Cap Schedule
Floating Rate Payer
Payment Date Notional Amount ($)
--------------------------- -------------------
July 24, 2006.............. 79,201,303.24
August 24, 2006............ 78,157,085.68
September 24, 2006......... 76,871,002.71
October 24, 2006........... 75,347,365.90
November 24, 2006.......... 73,591,184.34
December 24, 2006.......... 71,608,154.77
January 24, 2007........... 69,404,648.51
February 24, 2007.......... 66,987,694.88
March 24, 2007............. 64,364,961.40
April 24, 2007............. 61,544,730.66
May 24, 2007............... 58,535,874.00
June 24, 2007.............. 55,348,917.66
July 24, 2007.............. 52,246,934.65
August 24, 2007............ 49,228,306.74
September 24, 2007......... 46,291,446.34
October 24, 2007........... 43,434,795.94
November 24, 2007.......... 40,656,827.56
December 24, 2007.......... 37,956,042.14
January 24, 2008........... 35,330,969.04
February 24, 2008.......... 32,780,165.50
March 24, 2008............. 30,302,216.09
April 24, 2008............. 27,895,732.19
May 24, 2008............... 25,559,351.52
June 24, 2008.............. 23,291,737.58
July 24, 2008.............. 21,091,579.25
August 24, 2008............ 18,957,590.20
September 24, 2008......... 16,888,508.53
October 24, 2008........... 14,883,096.22
November 24, 2008.......... 12,940,138.75
December 24, 2008.......... 11,058,444.59
January 24, 2009........... 9,236,844.80
February 24, 2009.......... 7,474,192.62
March 24, 2009............. 5,769,363.00
April 24, 2009............. 4,121,252.23
May 24, 2009............... 2,528,777.52
June 24, 2009.............. 990,876.61
July 24, 2009 and
thereafter................. 0.00
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Annex A
Regulation AB Agreement
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