Exhibit 99.1
[Corridor Contract Administration Agreement]
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CORRIDOR CONTRACT ADMINISTRATION AGREEMENT
This CORRIDOR CONTRACT ADMINISTRATION AGREEMENT, dated as of
September 28, 2006 (this "Agreement"), among THE BANK OF NEW YORK ("BNY"), as
corridor contract administrator (in such capacity, the "Corridor Contract
Administrator") and as trustee under the Pooling and Servicing Agreement
referred to below (in such capacity, the "Trustee"), and COUNTRYWIDE HOME
LOANS, INC. ("CHL").
WHEREAS, CHL is a party to an interest rate corridor agreement
between CHL and Bear Xxxxxxx Financial Products Inc. (the "Counterparty"),
with respect to the Class A-1 Certificates, with a Trade Date of September 14,
2006 and reference number of FXNEC8682 (the "Corridor Contract"), a copy of
which is attached to this Agreement at Exhibit A;
WHEREAS, CHL is conveying certain mortgage loans and other related
assets to a trust fund (the "Trust Fund") created pursuant to a Pooling and
Servicing Agreement, dated as of September 1, 2006 (the "Pooling and Servicing
Agreement"), among CWHEQ, Inc., as depositor, CHL, 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 (the "Master
Servicer"), and the Trustee, with respect to the CWHEQ, Inc., Home Equity Loan
Asset-Backed Certificates, Series 2006-S5;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, CHL is assigning all of its rights, and delegating all of its
duties and obligations (other than its obligation to pay the Fixed Amount and
any fees, if applicable (as defined in the Corridor Contract)), under the
Corridor Contract to the Corridor Contract Administrator, pursuant to the
Assignment Agreement, dated as of the date hereof (the "Assignment
Agreement"), among CHL., as assignor, the Corridor Contract Administrator, as
assignee, and the Counterparty;
WHEREAS, CHL desires that the Net Payments (as defined below) on
the Corridor Contract be distributed to the Trustee on behalf of the Trust
Fund to be applied for the purposes specified in the Pooling and Servicing
Agreement and that the Excess Payments (as defined below) on the Corridor
Contract be distributed to CHL;
WHEREAS, CHL and the Trustee desire to appoint the Corridor
Contract Administrator, and the Corridor Contract Administrator desires to
accept such appointment, to distribute funds received under the Corridor
Contract to the Trustee and to CHL as provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:
1. Definitions. Capitalized terms used but not otherwise defined in this
Agreement shall have the respective meanings assigned thereto in the Pooling
and Servicing Agreement.
Benefited Certificates: The Class A-1 Certificates.
Calculation Period: With respect to the Corridor Contract and any
payment made under the Corridor Contract, the related "Calculation Period" as
defined in the Corridor Contract.
Controlling Party: As defined in Section 5.
Corridor Contract Account: The separate account created and
maintained by the Corridor Contract Administrator pursuant to Section 3 with a
depository institution in the name of the Corridor Contract Administrator for
the benefit of CHL and the Trustee on behalf of the Holders of the Benefited
Certificates and designated "The Bank of New York for Countrywide Home Loans,
Inc. and certain registered Holders of CWHEQ, Inc., Home Equity Loan
Asset-Backed Certificates, Series 2006-S5". Funds in the Corridor Contract
Account shall be held for CHL and the Trustee on behalf of the Holders of the
Benefited Certificates as set forth in this Agreement.
Day Count Fraction: With respect to the Corridor Contract and any
Distribution Date, the "Floating Rate Day Count Fraction" specified for the
Calculation Period related to such Distribution Date in the Corridor Contract.
Excess Payment: For any Distribution Date, (a) with respect to any
payment received by the Corridor Contract Administrator from the Counterparty
in respect of the Corridor Contract for such Distribution Date (other than any
payment in respect of an early termination of the Corridor Contract), an
amount equal to the excess, if any, of such payment over the Net Payment for
such Distribution Date and (b) with respect to any payment received by the
Corridor Contract Administrator from the Counterparty in respect of an early
termination of the Corridor Contract received during the period from and
including the immediately preceding Distribution Date to and excluding the day
immediately preceding the current Distribution Date, an amount equal to the
excess, if any, of such payment over the Net Payment in respect of such
payment. Notwithstanding the foregoing, in the event that the aggregate
Certificate Principal Balance of the Benefited Certificates is reduced to zero
prior to the termination of the Corridor Contract, the Excess Payment for any
Distribution Date following the Distribution Date on which the aggregate
Certificate Principal Balance of the Benefited Certificates is reduced to zero
shall be the entire payment received from the Counterparty.
LIBOR: The "Floating Rate Option" as defined in the Corridor
Contract.
Net Payment: For any Distribution Date, (a) with respect to any
payment received by the Corridor Contract Administrator from the Counterparty
in respect of the Corridor Contract for such Distribution Date (other than any
payment in respect of an early termination of the Corridor Contract), an
amount equal to the product of (i) the excess, if any, of (x) LIBOR, over (y)
the related Strike Rate, (ii) the lesser of (x) the related Notional Balance
for such Distribution Date and (y) the aggregate Certificate Principal Balance
of the Benefited Certificates immediately prior to such Distribution Date and
(iii) the Day Count Fraction, and (b) with respect to any payment received by
the Corridor Contract Administrator from the Counterparty in respect of an
early termination of the Corridor Contract received during the period from and
including the immediately preceding Distribution Date to and excluding the day
immediately preceding the current Distribution Date, an amount equal to the
product of (i) a fraction, the numerator of which is equal to the lesser of
(x) the related Notional Balance for the
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first Distribution Date on or after the early termination of the Corridor
Contract and (y) the aggregate Certificate Principal Balance of the Benefited
Certificates immediately prior to the first Distribution Date on or after the
early termination of the Corridor Contract, and the denominator of which is
equal to the related Notional Balance for the first Distribution Date on or
after the early termination of the Corridor Contract and (ii) the amount of
such payment received in respect of such early termination. Notwithstanding
the foregoing, in the event that the aggregate Certificate Principal Balance
of the Benefited Certificates is reduced to zero prior to the termination of
the Corridor Contract, the Net Payment for any Distribution Date following the
Distribution Date on which the aggregate Certificate Principal Balance of the
Benefited Certificates is reduced to zero shall be $0.
Notional Balance: With respect to the Corridor Contract and any
Distribution Date, the "Notional Amount" specified for the Calculation Period
related to such Distribution Date in the Corridor Contract.
Responsible Officer: When used with respect to the Corridor
Contract Administrator, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the Corridor Contract Administrator customarily performing functions similar
to those performed by any of the above designated officers and also to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
Strike Rate: With respect to the Corridor Contract and any
Distribution Date, the "Cap Rate" specified for the Calculation Period related
to such Distribution Date in the Corridor Contract.
2. Appointment of Corridor Contract Administrator.
CHL and the Trustee hereby appoint BNY to serve as Corridor Contract
Administrator pursuant to this Agreement. The Corridor Contract Administrator
accepts such appointment and acknowledges the transfer and assignment to it of
CHL's rights under the Corridor Contract pursuant to the Assignment Agreement.
The Corridor Contract Administrator agrees to exercise the rights referred to
above for the benefit of CHL and the Trustee on behalf of the Trust Fund and
to perform the duties set forth in this Agreement.
3. Receipt of Funds; Corridor Contract Account.
The Corridor Contract Administrator hereby agrees to receive, on behalf
of CHL and the Trustee on behalf of the Trust Fund, all amounts paid by the
Counterparty under the Corridor Contract. The Corridor Contract Administrator
shall establish and maintain the Corridor Contract Account into which the
Corridor Contract Administrator shall deposit or cause to be deposited on the
Business Day of receipt, all amounts payable by the Counterparty under the
Corridor Contract. All funds deposited in the Corridor Contract Account shall
be held for the benefit of CHL and the Trustee on behalf of the Holders of the
Benefited Certificates until withdrawn in accordance with Section 4. The
Corridor Contract Account shall be an "Eligible Account" as defined in the
Pooling and Servicing Agreement and, if the Trust Fund is terminated pursuant
to the Pooling and Servicing Agreement prior to the termination of this
Agreement, the
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Corridor Contract Account shall be an account that would otherwise qualify as
an "Eligible Account" under the Pooling and Servicing Agreement had the
termination of the Trust Fund not occurred.
Funds in the Corridor Contract Account shall remain uninvested.
The Corridor Contract Administrator shall give at least 30 days' advance
notice to CHL and the Trustee of any proposed change of location of the
Corridor Contract Account prior to any change thereof.
4. Calculations; Distribution of Payments; Delivery of Notices.
The Corridor Contract Administrator hereby agrees to perform the
calculations necessary to distribute payments in accordance with this Section
4. The Corridor Contract Administrator shall perform such calculations based
on (x) the aggregate Certificate Principal Balance of the Benefited
Certificates provided by the Trustee pursuant to the Pooling and Servicing
Agreement and (y) the Notional Balances, Day Count Fractions and values of
LIBOR provided by the Counterparty pursuant to the Corridor Contract. The
Corridor Contract Administrator shall, absent manifest error, be entitled to
rely on information provided by the Trustee and the Counterparty.
On the Business Day of receipt of any payment from the Counterparty, the
Corridor Contract Administrator shall withdraw the amount of such payment from
the Corridor Contract Account and distribute such amounts sequentially, as
follows:
(a) first, to the Trustee for deposit into the Carryover Reserve Fund,
the applicable Net Payment; and
(b) second, to CHL, the applicable Excess Payment, in accordance with
the following wiring instructions:
Bank: Bank of New York
Account Name: Countrywide Home Loans
Account No: 8900038632
ABA No: 000000000
REF: CWHEQ 2006-S5
The Corridor Contract Administrator shall prepare and deliver any
notices required to be delivered under the Corridor Contract.
5. Control Rights.
The Controlling Party shall have the right to direct the Corridor
Contract Administrator with respect to the exercise of any right under the
Corridor Contract (such as the right to designate an Early Termination Date
following an Event of Default (each such term as defined in the Corridor
Contract). For purposes of this Agreement, the "Controlling Party" shall mean
(i) if the aggregate Certificate Principal Balance of the Benefited
Certificates immediately prior to the most recent Distribution Date (or, prior
to the first Distribution Date, the original aggregate
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Certificate Principal Balance) is equal to or greater than 50% of the Notional
Balance of the Corridor Contract as of such Distribution Date (or, prior to
the first Distribution Date, the original Notional Balance of the Corridor
Contract), the Trustee, and (ii) if the aggregate Certificate Principal
Balance of the Benefited Certificates immediately prior to the most recent
Distribution Date (or, prior to the first Distribution Date, the original
aggregate Certificate Principal Balance) is less than 50% of the Notional
Balance of the Corridor Contract as of such Distribution Date (or, prior to
the first Distribution Date, the original Notional Balance of the Corridor
Contract), CHL.
6. Monitoring of Significance Percentage. With respect to each Distribution
Date, the Corridor Contract Administrator shall calculate the "significance
percentage" (as defined in Item 1115 of Subpart 229.1100 - Asset Backed
Securities (Regulation AB), 17 C.F.R. xx.xx. 229.1100-229.1123) of the
Corridor Contract based on the Certificate Principal Balance of the Benefited
Certificates for such Distribution Date (after all distributions to be made
thereon on such Distribution Date) and based on the methodology provided in
writing by or on behalf of CHL no later than the fifth Business Day preceding
such Distribution Date. On each Distribution Date, the Corridor Contract
Administrator shall provide to CHL a written report (which written report may
include similar information with respect to other derivative instruments
relating to securitization transactions sponsored by CHL) specifying the
"significance percentage" of the Corridor Contract for that Distribution Date.
If the "significance percentage" of the Corridor Contract exceeds 7.0% with
respect to any Distribution Date, the Corridor Contract Administrator shall
make a separate notation thereof in the written report described in the
preceding sentence. Such written report may contain such assumptions and
disclaimers as are deemed necessary and appropriate by the Corridor Contract
Administrator.
7. Representations and Warranties of the Corridor Contract Administrator. The
Corridor Contract Administrator represents and warrants as follows:
(a) BNY is duly organized and validly existing as a banking
corporation under the laws of the State of New York and has all
requisite power and authority to execute and deliver this
Agreement and to perform its obligations as Corridor Contract
Administrator under this Agreement.
(b) The execution, delivery and performance of this Agreement by BNY
as Corridor Contract Administrator has been duly authorized by
BNY.
(c) This Agreement has been duly executed and delivered by BNY as
Corridor Contract Administrator and is enforceable against BNY in
accordance with its terms, except as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law).
8. Certain Matters Concerning the Corridor Contract Administrator.
(a) The Corridor Contract Administrator shall undertake to perform
such duties and only such duties as are specifically set forth in
this Agreement.
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(b) No provision of this Agreement shall be construed to relieve the
Corridor Contract Administrator from liability for its own grossly
negligent action, its own gross negligent failure to act or its
own misconduct, its grossly negligent failure to perform its
obligations in compliance with this Agreement, or any liability
that would be imposed by reason of its willful misfeasance or bad
faith; provided that:
(i) the duties and obligations of the Corridor Contract
Administrator shall be determined solely by the express
provisions of this Agreement, the Corridor Contract
Administrator shall not be liable, individually or as
Corridor Contract Administrator, except for the performance
of such duties and obligations as are specifically set forth
in this Agreement, no implied covenants or obligations shall
be read into this Agreement against the Corridor Contract
Administrator and the Corridor Contract Administrator may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Corridor Contract
Administrator and conforming to the requirements of this
Agreement that it reasonably believed in good faith to be
genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Corridor Contract Administrator shall not be liable,
individually or as Corridor Contract Administrator, for an
error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Corridor Contract
Administrator, unless the Corridor Contract Administrator
was grossly negligent or acted in bad faith or with willful
misfeasance; and
(iii) the Corridor Contract Administrator shall not be liable,
individually or as Corridor Contract Administrator, with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the
Controlling Party, or exercising any power conferred upon
the Corridor Contract Administrator under this Agreement.
(c) Except as otherwise provided in Sections 8(a) and 8(b):
(i) the Corridor Contract Administrator may request and rely
upon and shall be protected in acting or refraining from
acting upon any resolution, officer's certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed
by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Corridor Contract Administrator may consult with counsel
and any opinion of counsel shall be full and complete
authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in
accordance with such opinion of counsel;
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(iii) the Corridor Contract Administrator shall not be liable,
individually or as Corridor Contract Administrator, for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv) the Corridor Contract Administrator shall not be bound to
make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do
so by CHL or the Trustee; provided, however, that if the
payment within a reasonable time to the Corridor Contract
Administrator of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is,
in the opinion of the Corridor Contract Administrator not
reasonably assured to the Corridor Contract Administrator by
CHL and/or the Trustee, the Corridor Contract Administrator
may require reasonable indemnity against such expense, or
liability from CHL and/or the Trustee, as the case may be,
as a condition to taking any such action;
(v) the Corridor Contract Administrator shall not be required to
expend its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
liability is not assured to it; and
(vi) the Corridor Contract Administrator shall not be liable,
individually or as Corridor Contract Administrator, with
respect to or in connection with errors or omissions
contained in the report to be provided pursuant to Section 6
hereof, to the extent such errors or omissions are the
result of inaccuracies in the methodology or other
information provided to the Corridor Contract Administrator
by CHL.
(d) CHL covenants and agrees to pay or reimburse the Corridor Contract
Administrator, upon its request, for all reasonable expenses and
disbursements incurred or made by the Corridor Contract
Administrator in accordance with any of the provisions of this
Agreement except any such expense or disbursement as may arise
from its negligence, bad faith or willful misconduct. The Corridor
Contract Administrator and any director, officer, employee or
agent of the Corridor Contract Administrator shall be indemnified
by CHL and held harmless against any loss, liability or expense
incurred in connection with any legal action relating to this
Agreement, the Corridor Contract and the Assignment Agreement, or
in connection with the performance of any of the Corridor Contract
Administrator's duties hereunder or thereunder, other than any
loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of
the Corridor Contract Administrator's duties hereunder or
thereunder. Such indemnity shall survive the termination of this
Agreement or the resignation of the Corridor Contract
Administrator hereunder.
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Notwithstanding anything to the contrary in this Section 8(d), any
expenses, disbursements, losses or liabilities of the Corridor
Contract Administrator or any director, officer, employee or agent
thereof that are made or incurred as a result of any request,
order or direction of any NIM Insurer or any of the
Certificateholders made to the Trustee as contemplated by Section
8.02(a)(9) of the Pooling and Servicing Agreement and consequently
made to the Corridor Contract Administrator by the Trustee shall
be payable by the Trustee out of the security or indemnity
provided by any NIM Insurer or such Certificateholders pursuant to
Section 8.02(a)(9) of the Pooling and Servicing Agreement.
(e) Upon the resignation of BNY as Trustee in accordance with the
Pooling and Servicing Agreement, (i) BNY shall resign and be
discharged from its duties as Corridor Contract Administrator
hereunder and (ii) the Person that succeeds BNY as Trustee shall
be appointed as successor Corridor Contract Administrator
hereunder upon its execution, acknowledgement and delivery of the
instrument accepting such appointment in accordance with Section
8.08 of the Pooling and Servicing Agreement, whereupon the duties
of the Corridor Contract Administrator hereunder shall pass to
such Person. In addition, upon the appointment of a successor
Trustee under the Pooling and Servicing Agreement, such successor
Trustee shall succeed to the rights of the Trustee hereunder.
9. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(b) Each of BNY and CHL hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by
jury in any legal proceedings arising out of or relating to this
Agreement.
(c) This Agreement shall terminate upon the termination of the
Corridor Contract and the disbursement by the Corridor Contract
Administrator of all funds received under the Corridor Contract to
CHL and the Trustee on behalf of the Holders of the Benefited
Certificates.
(d) This Agreement may be amended, supplemented or modified in writing
by the parties hereto.
(e) This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including
by facsimile transmission), and all such counterparts taken
together shall be deemed to constitute one and the same
instrument.
(f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
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(g) The representations and warranties made by the parties to this
Agreement shall survive the execution and delivery of this
Agreement. No act or omission on the part of any party hereto
shall constitute a waiver of any such representation or warranty.
(h) The article and section headings in this Agreement are for
convenience of reference only, and shall not limit or otherwise
affect the meaning of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
THE BANK OF NEW YORK,
as Corridor Contract Administrator
By: /s/ Xxxxxxx Corchio
------------------------------------------
Name: Xxxxxxx Corchio
Title: Assistant Treasurer
THE BANK OF NEW YORK, not in its individual or
corporate capacity but solely as Trustee
By: /s/ Xxxxxxx Corchio
------------------------------------------
Name: Xxxxxxx Corchio
Title: Assistant Treasurer
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
EXHIBIT A
CORRIDOR CONTRACT
BEAR XXXXXXX
BEAR XXXXXXX FINANCIAL PRODUCTS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
000-000-0000
DATE: September 18, 2006
TO: Countrywide Home Loans, Inc.
ATTENTION: Xx. Xxxx Xxxxx
TELEPHONE: 0-000-000-0000
FACSIMILE: 0-000-000-0000 PAX: 0-000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Fixed Income Derivatives Confirmation and Agreement
REFERENCE NUMBER: FXNEC8682
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
Countrywide Home Loans, Inc., ("Counterparty"). This Agreement, which
evidences a complete and binding agreement between BSFP and Counterparty 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 and incorporates the 2000 ISDA Definitions
(the "Definitions"), as published by the International Swaps and
Derivatives Association, Inc. ("ISDA"). BSFP and Counterparty have
agreed to eater into this Agreement in lieu of negotiating a Schedule to
the 1992 ISDA Master Agreement (Multicurrency--Cross Border) form (the
"ISDA Form Master Agreement"). An ISDA Form Master Agreement shall be
deemed to have been executed by BSFP and Counterparty 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 herein. 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
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 2 of 11
Notional Amount: With respect to any Calculation period, the
amount set forth for such period in the
Schedule of Notional Amounts and Cap Rates
attached hereto.
Trade Date: September 14, 2006
Effective Date: September 28, 2006
Termination Date: August 25, 2008, subject to adjustment in
accordance with the Business Day Convention.
Fixed Amount (Premium):
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Date: September 18, 2006
Fixed Amount: USD 13,000
Floating Amounts:
Floating Rate Payer: BSFP
Cap Rate: With respect to any Calculation Period, the
rate set forth for such period in the
Schedule of Notional Amounts and Cap Rates
attached hereto.
Floating Rate Payer
Period End Dates: The 25th calendar day of each month during
the Term of this Transaction, commencing
October 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 shall be applicable. One
Business Day preceding each Floating Rate
Payer Period End 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 9.00000% then the Floating Rate
for such calculation Period shall be deemed
to be 9.00000%.
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 3 of 11
Designated Maturity: One month /
Floating Rate Day
Count Fraction: Acrual/36O
Reset Dates: The first day of each Calculation Period,
Compounding: Inapplicable
Business Days for payments: New York
Business Day Convention; Modified 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
I) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA
Form Master Agreement w11 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) of the ISDA Form Master Agreement
shall not apply to BSFP or Counterparty.
(c) The "Cross Default" provisions of Section 5(a)(vi) of the ISDA Form Master
Agreement will not apply to BSFP or to Counterparty.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of the ISDA
Form Master Agreement will not apply to BSFP or to Counterparty.
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 4 of 11
(e) The "Automatic Early Termination" provision of Section 6(a) of the ISDA
Form Master Agreement will not apply to BSFP or to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(c) of the 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(3)(iii) with respect to BSFP as the Burdened Party.
5) Documents to be Delivered For the purpose of Section 4(a) of the ISDA Form
Master Agreement:
(1) Tax forms, documents, or certificates to be delivered are:
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 5 of 11
Party required to deliver Form/Document/ Date by which to
document Certificate be delivered
BSFP and Any document required or Promptly after the earlier of (i) reasonable
the Counterparty reasonably requested to demand by either party or (ii) learning
allow the other party to that such form or document is required
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 rate
(2) Other documents to be delivered are:
Party required Form/Document/ Date by which to Covered by Section 3(d)
to deliver Certificate be delivered Representation
document
BSFP and Any documents Upon the execution and Yes
the Counterparty required by the delivery of this
receiving party to Agreement and such
evidence the authority Confirmation
of the delivering party
or its Credit Support
Provider, if any, for
it to execute and
deliver this Agreement,
any Confirmation , and
may 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
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 6 of 11
Party required Form/Document/ Date by which to Covered by Section 3(d)
to deliver Certificate be delivered Representation
document
BSFP and A certificate of an Upon the execution Yes
the Counterparty authorized officer of the and delivery of this
party, as to the Agreement and such
incumbency and Confirmation
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 I2(a) of the 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: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
21-Sep-2008 08:37am From-Treasury Dept. + T-401 P.007/011 F-138
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 7 of 11
(b) Process Agent. For the purpose of Section I3(c) of the ISDA Form Master
Agreement
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) of the ISDA Form Master
Agreement will not apply to this Agreement; neither 13SF? nor the
Counterparty have any Offices other than as set forth in the Notices
Section and 13SFP agrees that, for purposes of Section 6(b) of the 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 the ISDA Form
Master Agreement:
BSFP is not a Multibranch Party.
The 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 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, shell. 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
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 8 of 11
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.
(1) BSFP will not unreasonably withhold or delay its consent to an assignment
of this Agreement to any other third party.
(m) Set-off. The provisions for Set-off set forth in Section 6(e) of the ISDA
Form Master Agreement shall not apply for purposes of this Transaction.
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
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 9 of 11
(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."
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, Steams 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;
Please provide
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 Derivatives Documentation 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.
Reference Number: EXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 10 of 11
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: XXXX XXX EVITZ
Title: AUTHORIZED SIGNATORY
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By:
-----------------------------
As authorized agent or officer for Countrywide Home Loans, Inc.
Name:
Title:
er
Reference Number: FXNEC8682
Countrywide Home Loans, Inc.
September 18, 2006
Page 11 of 11
SCHEDULE OF NOTIONAL AMOUNTS AND CAP RATES
(all such dates subject to adjustment in accordance with the Business Day
Convention)
From and including To but excluding Notional Amount Cap Rate
------------------ ---------------- --------------- --------
(USD)
-----
Effective Date 25-Oct-2006 374,864,000.00 7.9030%
25-Oct-2006 25-Nov-2006 365,097,258.00 6.8690%
25-Nov-2006 25-Dec-2006 354,064,044.00 7,1020%
25-Dec-2006 25-Jan-2007 341,790,684.00 6,8690%
2S-Jan-2007 25-Feb-2007 328,307,047.00 6.8690%
25-Feb-2007 25-Mar-2007 313,648,648.00 7.6160%
25-Mar-2007 25-Apr-2007 297,856,358.00 6.8680%
25-Apr-2007 25-May-2007 280,369,134.00 7.1010%
25-May-2007 25-Jun-2007 261,842,807.00 6.8680%
25-Jun-2007 25-Jul-2007 242,335,575.00 7.1010%
25-Jul-2007 25-Aug-2007 221,909,190.00 6.8680%
25-Aug-2007 25-Sep-2007 200,718,415.00 6.8680%
25-Sep-2007 25-Oct-2007 179,611,537,00 7.1010%
25-Oct-2007 25-Nov-2007 159,069,368.00 6.8680%
25-Nov-2007 25-Dec-2007 139,544,129.00 7.1010%
25-Dec-2007 25-Jan-2008 120,723,753.00 6.8690%
25-Jan-2008 25-Feb-2008 102,426,601.00 6.8690%
25-Feb-2008 25-Mar-2008 84,638,243,00 7.3510%
25-Mar-2008 25-Apr-2008 67,344,646.00 6.8700%
25-Apr-2008 25-May-2008 50,532,160.00 7.1030%
25-May-2008 25-Jun-2008 34,187,513.00 6.8700%
25-Jun-2008 25-Jul-2008 18,297,792.00 7.1030%
25-Jul-2008 Termination Date 2,850,442.00 6.8710%
