EXHIBIT 99.3
A Confirmation
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Date: September 28, 2006
To: The Bank of New York, not in its individual capacity From: Xxxxxx Xxxxxxx Capital Services Inc.
but solely as trustee of the Supplemental Interest
Trust for CWALT, Inc., Alternative Loan Trust 2006-32CB
Attn: Corporate Trust Administration, CWALT 0000-00XX Contact: New York Derivative Client Services
000 Xxxxxxx Xxxxxx, 0X Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
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Re: KQBHN, Class A-1
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 of the Supplemental Interest Trust
for CWALT, Inc., Alternative Loan Trust 2006-32CB 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.
Capitalized Terms used but not defined in this Confirmation, the 2000 ISDA
Definitions or the Agreement (as defined below) shall have the meanings given to
them in the pooling and servicing agreement, dated as of September 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 LP, as master servicer, and The Bank of
New York, as trustee (the "Pooling and Servicing Agreement").
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 of the Supplemental Interest Trust for
CWALT, Inc., Alternative Loan Trust 2006-32CB
Trade Date: September 25, 2006
Notional Amount: With respect to any Calculation Period, the amount set forth
for such period in Schedule A attached hereto.
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Effective Date: October 25, 2006
Termination Date: November 25, 2010
Fixed Amounts:
Fixed Amount Payer: Party B
Fixed Amount Payer Payment Date: September 28, 2006
Fixed Amount: USD $129,000 (Party A hereby acknowledges receipt of payment
in full of this amount)
Floating Amounts:
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: 5.33%
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)
November 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 November 25, 2006 and the
final Calculation Period will accrue from and including
October 25, 2010 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 9.33% per annum for such Calculation
Period, then the Floating Rate for such Calculation Period
shall be deemed to be equal to 9.33% per annum.
Designated Maturity: 1 Month
Floating Rate Day Count Fraction: 30/360
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Business Days: New York
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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 501391
Attn: Xxxxxxx X. Xxxxxx
Tel: 000-000-0000
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.
(v) The "Misrepresentation" provisions of Section 5(a)(iv) of the
Agreement will be inapplicable to Party A and Party B.
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(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.
(ii) For the purpose of Section 3(f), Party B makes the following
representation:
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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 for Party A, but
excludes Xxxxxx Xxxxxxx Derivative Products Inc. Party B shall be deemed
to have no affiliates for purposes of this Agreement.
(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 on behalf of the Supplemental Interest Trust 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.
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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 (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/ X. X. Xxxxx
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Name: X. X. Xxxxx
Title: Vice President
THE BANK OF NEW YORK, not in its individual capacity
but solely as trustee of the Supplemental Interest Trust for CWALT, Inc.,
Alternative Loan Trust 2006-32CB
By: /s/ Xxxxxxxx Xxxxxxxxxxx
----------------------------------------
Name: Xxxxxxxx Xxxxxxxxxxx
Title: Vice President
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Schedule A
Class A-1
Interest Rate Cap Schedule
Floating Rate Payer
Payment Date Notional Amount ($)
--------------------------- -------------------
November 24, 2006.......... 49,024,226.93
December 24, 2006.......... 47,953,215.66
January 24, 2007........... 46,788,422.61
February 24, 2007.......... 45,531,489.10
March 24, 2007............. 44,184,260.60
April 24, 2007............. 42,618,846.28
May 24, 2007............... 40,881,136.38
June 24, 2007.............. 39,048,829.69
July 24, 2007.............. 37,125,543.00
August 24, 2007............ 35,114,971.05
September 24, 2007......... 33,026,605.49
October 24, 2007........... 31,632,887.67
November 24, 2007.......... 30,273,941.43
December 24, 2007.......... 28,949,186.13
January 24, 2008........... 27,658,050.78
February 24, 2008.......... 26,399,973.86
March 24, 2008............. 25,174,403.21
April 24, 2008............. 23,980,795.80
May 24, 2008............... 22,818,617.67
June 24, 2008.............. 21,687,343.71
July 24, 2008.............. 20,586,457.53
August 24, 2008............ 19,515,451.33
September 24, 2008......... 18,473,825.75
October 24, 2008........... 17,461,089.75
November 24, 2008.......... 16,476,760.42
December 24, 2008.......... 15,520,362.90
January 24, 2009........... 14,591,430.23
February 24, 2009.......... 13,689,503.19
March 24, 2009............. 12,814,130.22
April 24, 2009............. 11,964,867.27
May 24, 2009............... 11,141,277.67
June 24, 2009.............. 10,342,932.00
July 24, 2009.............. 9,569,408.02
August 24, 2009............ 8,820,290.47
September 24, 2009......... 8,095,171.03
October 24, 2009........... 7,393,648.18
November 24, 2009.......... 6,715,327.05
December 24, 2009.......... 6,059,819.38
January 24, 2010........... 5,426,743.34
February 24, 2010.......... 4,815,723.49
March 24, 2010............. 4,226,390.60
April 24, 2010............. 3,658,381.63
May 24, 2010............... 3,111,339.55
June 24, 2010.............. 2,584,913.30
July 24, 2010.............. 2,078,757.65
August 24, 2010............ 1,592,533.14
September 24, 2010......... 1,125,905.94
October 24, 2010........... 678,547.81
November 24, 2006.......... 250,135.95
December 24, 2010 and
thereafter................. 0.00
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Annex A
Regulation AB Agreement
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