EXHIBIT 99.6
The Schedule to the ISDA Master Agreement
(Multicurrency-Cross Border)
SCHEDULE
to the
Master Agreement
dated as of August 30,2006
between
XXXXXX BROTHERS SPECIAL FINANCING INC. ("Party A"),
a corporation organized under the laws of
the State of Delaware
and
THE BANK OF NEW YORK, not in its individual or corporate capacity but solely as
Swap Contract Administrator for CWALT, Inc. Alternative Loan Trust 2006-OC7,
pursuant to a Swap Contract Administration Agreement (`Party B")
All terms used herein and not otherwise defined are given their meaning in the
Pooling and Servicing Agreement dated as of August 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") and in the Swap Contract Administration
Agreement dated as of August 30, 2006, among the Bank of New York, as Swap
Contract Administrator (in such capacity, the "Swap Contract Administrator") and
as Trustee under the Pooling and Servicing Agreement referred to below (in such
capacity, the "Trustee"), and Countrywide Home Loans, Inc.(the "Swap Contract
Administration Agreement")
Part 1: Termination Provisions
In this Agreement:-
(a) "Specified Entity" means in relation to Party A for the purpose of:-
Section 5(a)(v), Not applicable.
Section 5(a)(vi), Not applicable.
Section 5(a)(vii), Not applicable.
Section 5(b)(iv), Not applicable.
and in relation to Party B for the purpose of:-
Section 5(a)(v), Not applicable.
Section 5(a)(vi), Not applicable.
Section 5(a)(vii), Not applicable.
Section 5(b)(iv), Not applicable.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement.
(c) Events of Default.
(i) The "Breach of Agreement" provisions of Section 5(a)(ii) will not
apply to Party A and will not apply to Party B.
(ii) The "Credit Support Default" provisions of Section 5(a)(iii) will
apply to Party A and will not apply to Party B.
(iii) The "Misrepresentation" provisions of Section 5(a)(iv) will not
apply to Party A and will not apply to Party B.
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(iv) The "Default under Specified Transaction" provisions of Section
5(a)(v) will not apply to Party A and will not apply to Party B.
(v) "Cross Default" provisions of Section 5(a)(vi) will not apply to Party
A and will not apply to Party B.
(vi) Clause (2) of the "Bankruptcy" provisions of Section 5(a)(vii)
will not apply to Party B with respect to its inability to pay its
subordinated debt.
(d) Termination Events.
(i) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to Party A and will not apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to Party A and will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement, Market Quotation and the Second Method will apply.
(g) "Termination Currency" means USD.
(h) Additional Termination Events will apply. Each of the following shall
constitute an Additional Termination Event:
(A) Approved Ratings Threshold. Upon the occurrence of a Collateralization
Event (as defined below) Party A has not, within 30 days after such
ratings downgrade (unless, within 30 days after such downgrade, each such
Swap Rating Agency has reconfirmed the rating of the Covered Certificates
which was in effect immediately prior to such downgrade without regard to
any financial guarantee insurance policy, if applicable, unless the rating
of the Covered Certificates were changed due to a circumstance other than
the downgrading of Party A's (or its Credit Support Provider's rating),
complied with one of the four solutions listed 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.
In the event that (A) either (i) the unsecured, long-term senior debt
obligations of Party A (or its Credit Support Provider) are rated below
"A1" by Xxxxx'x or are rated "A1" by Xxxxx'x and such rating is on watch
for possible downgrade (but only for so long as it is on watch for
possible downgrade) or (ii) the unsecured, short-term debt obligations of
Party A (or its Credit Support Provider) are rated below "P-1" by Xxxxx'x
or are rated "P-1" by Xxxxx'x and such rating is on watch for possible
downgrade (but only for so long as it is on watch for possible downgrade),
(B) no short-term rating is available from Xxxxx'x and the unsecured,
long-term senior debt obligations of Party A (or its Credit Support
Provider) are rated below "Aa3" by Xxxxx'x or are rated "Aa3" by Xxxxx'x
and such rating is on watch for possible downgrade (but only for so long
as it is on watch for possible downgrade), or (C) either (i) the
unsecured, short-term debt obligations of Party A (or its Credit Support
Provider) are rated below "A-1" by S&P or (ii) if Party A (or its Credit
Support Provider) does not have a short-term rating from S&P, the
unsecured, long-term senior debt obligations of Party A (or its Credit
Support Provider) are rated below "A+" by S&P (such event a
"Collateralization Event"), then, Party A, at its own cost and subject to
Rating Agency Condition (other than with respect to sub-clause (iii)
below), shall within 30 days either (i) cause another entity to replace
Party A as party to this Agreement that satisfies the Swap Counterparty
Ratings Requirement and that is approved by the Trustee (which approval
shall not be unreasonably withheld) on terms substantially similar to this
Agreement; (ii) obtain a guaranty of, or a contingent agreement of another
person that satisfies the Swap Counterparty Ratings Requirement), to honor
Party A's obligations under this Agreement, provided that such other
person is approved by the Trustee such approval not to be unreasonably
withheld; (iii) post collateral in accordance with the Credit Support
Annex attached hereto; or (iv) establish any other arrangement
satisfactory to the applicable Swap Rating Agency which will be sufficient
to restore the immediately prior ratings of the Covered Certificates
without regard to any financial guarantee policy, if
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applicable, that satisfies the Swap Counterparty Ratings Requirements. If
Party A posts collateral in any circumstance described in this paragraph,
and if required at the time by S&P or necessary to satisfy the Rating
Agency Condition, concurrently with such delivery of Eligible Collateral,
Party A shall cause its outside counsel to deliver to Party B an opinion
in form and substance acceptable to S&P, as to the enforceability,
perfection and priority of Party B's security interest in such Eligible
Collateral in all relevant jurisdictions (i.e., that, notwithstanding
Party A's insolvency, the collateral will be available to meet swap
obligations free from any preference claim or moratorium). All collateral
posted by Party A shall be returned to Party A immediately upon Party A
securing a substitute counterparty that satisfies the Swap Counterparty
Ratings Requirements.
"Swap Counterparty Ratings Requirement" shall mean (a) either (i) the
unsecured, short-term debt obligations of the substitute counterparty (or
its Credit Support Provider) are rated at least "A-1" by S&P or (ii) if
the substitute counterparty does not have a short-term rating from S&P,
the unsecured, long-term senior debt obligations of the substitute
counterparty (or its Credit Support Provider) are rated at least "A+" by
S&P, and (b) either (i) the unsecured, long-term senior debt obligations
of such substitute counterparty (or its Credit Support Provider) are rated
at least "A1" by Xxxxx'x (and if rated "A1" by Xxxxx'x, such rating is not
on watch for possible downgrade) and the unsecured, short-term debt
obligations of such substitute counterparty (or its Credit Support
Provider) are rated at least "P-1" by Xxxxx'x (and if rated "P-1" by
Xxxxx'x, such rating is not on watch for possible downgrade and remaining
on watch for possible downgrade), or (ii) if such substitute counterparty
(or its Credit Support Provider) does not have a short-term debt rating
from Xxxxx'x, the unsecured, long-term senior debt obligations of such
substitute counterparty (or its Credit Support Provider) are rated at
least "Aa3" by Xxxxx'x (and if rated "Aa3" by Xxxxx'x, such rating is not
on watch for possible downgrade).
(B) Ratings Event. Upon the occurrence of a Ratings Event (as defined
below) Party A has not, within 10 days after such rating withdrawal or
downgrade (unless, within 10 days after such withdrawal or downgrade, each
such Swap Rating Agency has reconfirmed the rating of the Covered
Certificates which was in effect immediately prior to such withdrawal or
downgrade without regards to any financial guarantee insurance policy, if
applicable unless the rating of the Covered Certificates were changed due
to a circumstance other than the withdrawal or downgrading of Party A's
(or its Credit Support Provider's) rating), complied with one of the
solutions listed 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.
It shall be a ratings event ("Ratings Event") if at any time after the
date hereof Party A shall fail to satisfy the Swap Counterparty Ratings
Threshold. Swap Counterparty Ratings Threshold shall mean that both (A)
the unsecured, long-term senior debt obligations of Party A (or its Credit
Support Provider) are rated at least "BBB-" by S&P, and (B) either (i) the
unsecured, long-term senior debt obligations of Party A (or its Credit
Support Provider) are rated at least "A2" by Xxxxx'x (including if such
rating is on watch for possible downgrade) and the unsecured, short-term
debt obligations of Party A (or its Credit Support Provider) are rated at
least "P-1" by Xxxxx'x (including if such rating is on watch for possible
downgrade) or (ii) if Party A (or its Credit Support Provider) does not
have a short-term rating from Xxxxx'x, the unsecured, long-term senior
debt obligations of Party A (or its Credit Support Provider) are rated at
least "A1" by Xxxxx'x (including if such rating is on watch for possible
downgrade).
Following a Ratings Event, Party A shall take the following actions at its
own expense and subject to the Rating Agency Condition (other than with
respect to sub-clause (A) hereafter), (A) immediately post collateral in
accordance with the Credit Support Annex attached hereto (until such time
as it has secured a substitute counterparty or a guarantor that satisfies
the Swap Counterparty Ratings Requirement, and (B) not later than 10 days
after the occurrence of such a downgrade or withdrawal by S&P or Xxxxx'x,
either (I) assign all of its rights and obligations under the Transactions
to a counterparty that satisfies the Swap Counterparty Ratings Requirement
or whose guarantor satisfies the Swap Counterparty Ratings Requirement
pursuant to documentation substantially similar to the documentation then
in place and subject to prior notification to the Swap Rating Agencies, or
(II) provide a guaranty from a guarantor that satisfies the Swap
Counterparty Ratings Requirement pursuant to documentation substantially
similar to the documentation then in place and subject to prior
notification to the Swap Rating Agencies.
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The occurrence of the Additional Termination Event described in Part
1(h)(A) and (B) shall have no effect on Party A's obligation to undertake
the steps set forth hereunder in the event Party B does not exercise its
right to terminate hereunder. Notwithstanding the foregoing, in the event
that S&P has other published criteria with respect to the downgrade of a
counterparty in effect at the time of such a downgrade of Party A, Party A
shall be entitled to elect to take such other measures specified in such
published criteria subject to the satisfaction of the Rating Agency
Condition.
(C) Supplemental Pooling and Servicing Agreement without Party A's Prior
Written Consent. Party B enters into an amendment and or supplement to the
Pooling and Servicing Agreement or other modification to the Pooling and
Servicing Agreement that could reasonably be expected to have a material
adverse effect on Party A without the prior written consent of Party A
(such consent not to be unreasonably withheld). For the purpose of the
foregoing Additional Termination Event, Party B shall be the sole Affected
Party.
(D) Return of Collateral. Party B or its Custodian fails to transfer any
Return Amount pursuant to the terms of the Credit Support Annex following
any applicable notice, cure and grace periods provided for thereunder. For
the purpose of the foregoing Additional Termination Event, Party B shall
be the sole Affected Party.
Part 2: Tax Representations
(a) Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make 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 Sections 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representation made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction(s) of the agreement of the other party
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement; and (iii) the
satisfaction of the agreement of the other party contained in Section 4(d)
of this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other party
does not deliver a form or document under Section 4(a)(iii) of this
Agreement by reason of material prejudice to its legal or commercial
position.
(b) Payee Tax Representations.
For the purpose of Section 3(f) of this Agreement, Party A represents that
it is a corporation duly organized and validly existing under the laws of
the State of Delaware and Party B represents that it is a "United States
person" as such term is defined in Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended.
(c) Tax Representations in Confirmations. For purposes of Sections 2(d)(i)(4)
and 3(f), any payee tax representation specified in a Confirmation under
this Agreement shall be deemed to be specified in this Schedule.
(d) Deduction or Withholding for Tax. The provisions of Section 2(d)(i)(4) and
2(d)(ii) will not apply to Party B and Party B shall not be required to
pay any additional amounts referred to therein.
Part 3: Agreement to Deliver Documents
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:-
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(a) Tax forms, documents or certificates to be delivered are:-
Party required to Form/Document/ Date by which
deliver document Certificate to be Delivered
---------------- ----------- ---------------
Party A and Party B Forms and/or documents described in Upon reasonable demand by the other
Section 4(a)(iii) of the Agreement. party.
(b) Other documents to be delivered are:-
Party required to Form/Document/ Date by which Covered by Section
deliver document Certificate to be Delivered 3(d)
---------------- ----------- --------------- ----
Party A and Party B For each party, an incumbency Upon execution of this Yes
certificate with respect to each Agreement.
signatory to this Agreement and
the Credit Support Documents.
Party A A copy of the annual report of Upon request. Yes
its Credit Support Provider
containing audited consolidated
financial statements for such
fiscal year certified by
independent public accountants and
prepared in accordance with
generally accepted accounting
principles consistently applied.
Party A For its most recent fiscal Upon request. Yes
quarter, a copy of the unaudited
financial statements of its
Credit Support Provider, prepared
in accordance with generally
accepted accounting principles
consistently applied.
Party A and Party B Any documents required or Upon execution of this Yes
reasonably requested by the Agreement.
receiving party to evidence
authority of the delivering party
or its Credit Support Provider, if
any, 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 to its Credit
Support Provider to perform its
obligations under this Agreement,
such Confirmation and/or Credit
Support Document, as the case may
be.
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Party required to Form/Document/ Date by which Covered by Section
deliver document Certificate to be Delivered 3(d)
---------------- ----------- --------------- ----
Party A A guarantee of Xxxxxx Brothers Upon execution of this No
Holdings Inc. ("Holdings") Agreement.
substantially in the form of
Exhibit A to this Schedule.
Party B Opinions of counsel to Party B Upon execution of this No
substantially in the form of Agreement.
Exhibit B to this Schedule.
Party A An opinion of counsel to Party A Upon execution of this No
and Party A's Credit Support Agreement.
Provider substantially in the form
of Exhibit C to this Schedule.
Party B Monthly Report At such time as each Yes
Monthly Report is
delivered to the
Trustee.
Party B Copy of any notice delivered under Upon availability. Yes
the Pooling and Servicing
Agreement that impacts this
Agreement.
Party B Executed copy of the Credit Upon execution of this Yes
Support Document specified in Part Agreement.
4 to this Schedule.
Party B Executed copy of the Swap Contract Upon execution of this Yes
Administration Agreement. Agreement.
Part 4: Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:-
Address for notices or communications to Party A:-
Address: Xxxxxx Brothers Special Financing Inc.
c/x Xxxxxx Brothers Inc.
Corporate Advisory Division
Transaction Management Group
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Documentation Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
For all purposes.
Address for notices or communications to Party B:-
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Address: The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration MBS Administration,
CWALT, Series 2006-OC7
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
For all purposes.
(b) Process Agent. For the purpose of Section 13(c) of this Agreement:-
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:-
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A; provided, however,
that if an Event of Default has occurred and is continuing with respect to
Party A, then the parties will mutually appoint a financial institution
acceptable to both parties which would qualify as a Reference Market-maker
to act as Calculation Agent until the earlier of (i) a designation under
Section 6(c)(ii), or (ii) the discontinuance of such Event of Default with
respect to Party A.
(f) Credit Support Document. Details of any Credit Support Document, each of
which is incorporated by reference in, constitutes part of, and is in
connection with, this Agreement and each Confirmation as if set forth in
full in this Agreement or such Confirmation:-
In the case of Party A: (1) A guarantee of Party A's obligations hereunder
substantially in the form annexed hereto as Exhibit A to this Schedule.
(2) The Credit Support Annex which supplements, forms part of, and is
subject to this Agreement.
In the case of Party B: From and including the date of its exclusion, the
Pooling and Servicing Agreement.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Xxxxxx Brothers
Holdings Inc.
Credit Support Provider means in relation to Party B: None.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine other than Sections 5-1401 and 5-1402 of the New
York General Obligations Law).
(i) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the
second line of subparagraph (i) thereof the word "non-"; and (ii) deleting
the final paragraph thereof.
(j) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will apply.
(k) "Affiliate" will have the meaning specified in Section 14 of this
Agreement, except that Party B shall be deemed to have no Affiliates; and
provided, however, that with respect to Party A, such definition shall be
25
understood to exclude Xxxxxx Brothers Derivative Products Inc. and Xxxxxx
Brothers Financial Products Inc.
Part 5: Other Provisions
(a) Accuracy of Specified Information. Section 3(d) is hereby amended by
inserting in the third line thereof after the words "in every material
respect" and before the period the phrase "or, in the case of audited or
unaudited financial statements, a fair presentation, in all material
respects, of the financial condition of the relevant person."
(b) No Violation or Conflict Representation. Section 3(a)(iii) is hereby
amended by inserting in the second line thereof after the words
"constitutional documents" and before the words ", any order or judgment"
the phrase "(including, but not limited to, the Pooling and Servicing
Agreement as amended, and any and all resolutions, investment policies,
guidelines, procedures or restrictions)."; provided, such amendment shall
be applicable only with respect to the Representations of Party B.
(c) Representations. Section 3 is hereby amended by adding the following
subsections after subsection (f) thereof:
(g) No Agency. It is entering into this Agreement, any Credit Support
Document to which it is a party, and 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).
(h) Eligible Contract Participant. It is an "eligible contract
participant" within the meaning of Section 1a(12) of the Commodity
Exchange Act, as amended.
(i) Non-Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into each 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. It is not 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.
(j) 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.
(k) Status of Parties. The other party is not acting as a fiduciary for
or an adviser to it in respect of that Transaction.
(d) Additional Representations and Warranties of Party B. Party B represents
to Party A in accordance with Section 3 of the Agreement (which
representations will be deemed to be repeated by Party B at all times
until the termination of this Agreement) that all representations and
warranties in the Swap Contract Administration Agreement are incorporated
hereby as if made under this Agreement and all references to the Swap
Contract Administration Agreement are references to this Agreement.
(e) Third-Party Beneficiary. Party B agrees with Party A that Party A
shall be an express third-party beneficiary of the Pooling and Servicing
Agreement and the Swap Contract Administration Agreement.
(f) No Set-off. Notwithstanding any provision of this Agreement or any other
existing or future agreements, each of Party A and Party B irrevocably
waives as to itself any and all contractual rights it may have to set-
26
off, net, recoup or otherwise withhold or suspend or condition its payment
or performance of any obligation to the other party under this Agreement
against any obligation of one party hereto to the other party hereto
arising outside of this Agreement (which Agreement includes, without
limitation, the Master Agreement to which this Schedule is attached, this
Schedule, the Confirmations and any Credit Support Document). The
provisions for Set-Off set forth in Section 6(e) shall not apply.
(g) Transfer and Assignment. Notwithstanding anything to the contrary in
Section 7 and Section 6(b)(ii) of the Agreement, Party A may assign its
rights and obligations under the Agreement, in whole or in part, to any
Affiliate of Holdings effective upon delivery to Party B of the guarantee
by Holdings, in favor of Party B, of the obligations of such Affiliate,
such guarantee to be substantially the same as the guarantee then in
effect of the obligations of the transferor. Party A will provide prior
written notice to each Swap Rating Agency of any such assignment. Any
transfer pursuant to the foregoing or Section 7 of this Agreement shall
meet the following requirements:
1. No Event of Default nor Termination Event would occur immediately as a
result of such transfer;
2. Party A delivers to Party B both (a) an executed acceptance and
assumption by the Assignee of this Agreement and all Transactions (the
"Transferred Obligations") and (b) an executed guarantee from Party A's
Credit Support Provider on behalf of the Assignee, with respect to the
Transferred Obligations, substantially and in all material respects in the
form of the guaranty provided hereunder;
3. As a result of the Transfer, on the next scheduled payment date Party B
is not required to make payments (tax or otherwise) that are more than or
receive payments (tax or otherwise) that are less than the payments that
Party B would be required to make or receive under the Transactions or the
Agreement had the transfer not occurred.
On the Effective Date, (1) Party A shall be released from all obligations
and liabilities arising under the Transferred Obligations; (2) the
Assignee shall assume all obligations and liabilities under the
Transferred Obligations; and (3) the Transferred Obligations shall cease
to be Transaction(s) under this Agreement and shall be deemed to be
Transaction(s) under the master agreement between Assignee and Party B.
In addition, any transfer pursuant to Section 7 of this Agreement other
than the foregoing shall be subject to Rating Agency Condition and Party A
and Party B will provide prior written notice to each Swap Rating Agency
of any transfer under Section 6(b)(ii).
(h) Notices. For the purposes of subsections (iii) and (v) of Section 12(a),
the date of receipt shall be presumed to be the date sent if sent on a
Local Business Day or, if not sent on a Local Business Day, the date of
receipt shall be presumed to be the first Local Business Day following the
date sent.
(i) Service of Process. The third sentence of Section 13(c) shall be amended
by adding the following language at the end thereof: "if permitted in the
jurisdiction where the proceedings are initiated and in the jurisdiction
where service is to be made."
(j) Amendments. Section 9(b) is hereby amended by adding at the end thereof
the sentence: "In addition, any amendment or modification of this
Agreement shall be subject to the Rating Agency Condition."
(k) Amendments to Operative Documents. Party B agrees that it will obtain
Party A's written consent (which consent shall not be unreasonably
withheld) at least ten (10) Business Days prior to amending or
supplementing the Pooling and Servicing Agreement (or any other
transaction document), if such amendment and/or supplement would: (a)
materially adversely affect any of Party A's rights or obligations
hereunder; or (b) modify the obligations of, or impact the ability of,
Party B to fully perform any of Party B's obligations hereunder.
(l) No Bankruptcy Petition. Party A agrees that it will not, until a period of
one year and one day (or if longer, the applicable preference period),
after the payment in full of all of the Covered Certificates, acquiesce,
petition, invoke or otherwise cause Party B to invoke the process of any
governmental authority for the purpose of commencing or sustaining a case
(whether voluntary or involuntary) against Party B
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under any bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of Party B or any substantial part of its property or ordering
the winding-up or liquidation of the affairs of Party B; provided, that
this provision shall not restrict or prohibit Party A from joining any
other person, including, without limitation, the Trustee, in any
bankruptcy, reorganization, arrangement, insolvency, moratorium or
liquidation proceedings already commenced or other analogous proceedings
already commenced under applicable law.
(m) Additional Definition. Section 14 is hereby amended by adding the
following definitions in their appropriate alphabetical order:
"Moody's" means Xxxxx'x Investor Services, Inc.
"Rating Agency Condition" means, with respect to any particular proposed
act or omission to act hereunder, that the party acting or failing to act
has consulted with each Rating Agency then providing a rating of any
Covered Certificates and has received from each Swap Rating Agency a
written confirmation that the proposed action or inaction would not cause
such Swap Rating Agency to downgrade or withdraw its then-current rating
of any Covered Certificates determined without regards to any financial
guarantee insurance policy, if applicable.
"S&P" means Standard & Poor's Ratings Services, a division of XxXxxx-Xxxx,
Inc.
"Swap Rating Agencies " means Moody's and S&P.
"USD" means United States Dollars.
All terms used herein and not otherwise defined are given their meaning in
the Pooling and Servicing Agreement.
(n) Waiver of Trial By Jury. Insofar as is permitted by law, each party
irrevocably waives any and all rights to trial by jury in any legal
proceeding in connection with this agreement or any transaction, and
acknowledges that this waiver is a material inducement to the other
party's entering into this agreement and each transaction hereunder.
(o) 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 to this Agreement; provided, however, that this severability
provision shall not be applicable if any provision of Section 2, 5, 6 or
13 (or any definition or provision in Section 14 to the extent it relates
to, or is used in or connection with any such Section) shall be held to be
invalid or unenforceable.
(p) Limited Liability. Party A and Party B agree to the following: (a) The
Bank of New York ("BNY") is entering into this Agreement not in its
individual or corporate capacity, but solely in its capacity as Swap
Contract Administrator under the Swap Contract Administration Agreement;
(b) in no case shall BNY (or any person acting as successor Swap Contract
Administrator under the Swap Contract Administration 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; and (c) recourse against Party B shall be limited to the
assets available under the Swap Contract Administration Agreement or the
Pooling and Servicing Agreement.
(q) Regulation AB Compliance. Party A and Party B agree that the terms of the
Item 1115 Agreement dated
28
as of February 24, 2006 (the "Regulation AB Agreement"), between
Countrywide Home Loans, Inc., CWABS, INC., CWMBS, Inc., CWALT, Inc.,
CWHEQ, Inc. and Xxxxxx Brothers Special Financing 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 Exhibit D.
The parties executing this Schedule have executed the Master Agreement and have
agreed as to the contents of this Schedule.
XXXXXX BROTHERS THE BANK OF NEW YORK, not in its individual or
SPECIAL FINANCING INC. corporate capacity but solely as Swap Contract
Administrator for CWALT, Inc. Alternative Loan
Trust 2006-OC7, pursuant to a Swap Contract
Administration Agreement
Party A Party B
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxxx Xxxxxxxxxxx
------------------------------------------------------- ----------------------------------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxxx Xxxxxxxxxxx
Title: Authorized Signatory Title: Vice President
Date: August 30, 2006 Date: August 30, 2006
29
XXXXXX BROTHERS
EXHIBIT A to Schedule
GUARANTEE OF XXXXXX BROTHERS HOLDINGS INC.
XXXXXX BROTHERS SPECIAL FINANCING INC. ("Party A") and THE BANK OF NEW YORK, not
in its individual or corporate capacity but solely as Swap Contract
Administrator for CWALT, Inc. Alternative Loan Trust 2006-OC7, pursuant to a
Swap Contract Administration Agreement, ("Party B") have entered into a Master
Agreement dated as of August 30, 2006, (the "Master Agreement"), pursuant to
which Party A and Party B have entered and/or anticipate entering into one or
more transactions (each a "Transaction"), the Confirmation of each of which
supplements, forms part of, and will be read and construed as one with, the
Master Agreement (collectively referred to as the "Agreement"). This Guarantee
is a Credit Support Document as contemplated in the Agreement. For value
received, and in consideration of the financial accommodation accorded to Party
A by Party B under the Agreement, XXXXXX BROTHERS HOLDINGS INC., a corporation
organized and existing under the laws of the State of Delaware ("Guarantor"),
hereby agrees to the following:
(a) Guarantor hereby unconditionally guarantees to Party B the due and
punctual payment of all amounts payable by Party A under each Transaction when
and as Party A's obligations thereunder shall become due and payable in
accordance with the terms of the Agreement. In case of the failure of Party A to
pay punctually any such amounts, Guarantor hereby agrees, upon written demand by
Party B, to pay or cause to be paid any such amounts punctually when and as the
same shall become due and payable.
(b) Guarantor hereby agrees that its obligations under this Guarantee
constitute a guarantee of payment when due and not of collection.
(c) Guarantor hereby agrees that its obligations under this Guarantee
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Agreement against Party A (other than as a result of the
unenforceability thereof against Party B), the absence of any action to enforce
Party A's obligations under the Agreement, any waiver or consent by Party B with
respect to any provisions thereof, the entry by Party A and Party B into
additional Transactions under the Agreement or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor (excluding the defense of payment or statute of limitations, neither
of which is waived) provided, however, that Guarantor shall be entitled to
exercise any right that Party A could have exercised under the Agreement to cure
any default in respect of its obligations under the Agreement or to setoff,
counterclaim or withhold payment in respect of any Event of Default or Potential
Event of Default in respect of Party B or any Affiliate, but only to the extent
such right is provided to Party A under the Agreement. The Guarantor
acknowledges that Party A and Party B may from time to time enter into one or
more Transactions pursuant to the Agreement and agrees that the obligations of
the Guarantor under this Guarantee will upon the execution of any such
Transaction by Party A and Party B extend to all such Transactions without the
taking of further action by the Guarantor.
(d) This Guarantee shall remain in full force and effect until such time
as Party B shall receive written notice of termination. Termination of this
Guarantee shall not affect Guarantor's liability hereunder as to obligations
incurred or arising out of Transactions entered into prior to the termination
hereof.
(e) Guarantor further agrees that this Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time, payment, or any
part thereof, of any obligation or interest thereon is rescinded or must
otherwise be restored by Party B upon an Event of Default as set forth in
Section 5(a)(vii) of the Master Agreement affecting Party A or Guarantor.
(f) Guarantor hereby waives (i) promptness, diligence, presentment, demand
of payment, protest, order and, except as set forth in paragraph (a) hereof,
notice of any kind in connection with the Agreement and this Guarantee, or (ii)
any requirement that Party B exhaust any right to take any action against Party
A or any other person prior to or contemporaneously with proceeding to exercise
any right against Guarantor under this Guarantee.
XXXXXX BROTHERS HOLDINGS INC.
000 XXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000
1
XXXXXX BROTHERS
This Guarantee shall be governed by and construed in accordance with the
laws of the State of New York, without reference to choice of law doctrine. All
capitalized terms not defined in this Guarantee, but defined in the Agreement,
shall have the meanings assigned thereto in the Agreement.
IN WITNESS WHEREOF, Guarantor has caused this Guarantee to be executed in
its corporate name by its duly authorized officer as of the date of the
Agreement.
XXXXXX BROTHERS HOLDINGS INC.
By: _____________________________
Name:
Title:
Date:
XXXXXX BROTHERS HOLDINGS INC.
000 XXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000
2
EXHIBIT B to Schedule
---------------------
[Form of Opinion of Counsel for Party B]
[Date]
1
EXHIBIT C to Schedule
---------------------
[Form of Opinion of Counsel for
Xxxxxx Brothers Special Financing Inc. and
Xxxxxx Brothers Holdings Inc.]
August 30, 2006
THE BANK OF NEW YORK,
not in its individual or corporate capacity
but solely as Swap Contract Administrator for
CWALT, Inc. Alternative Loan Trust 2006-OC7, pursuant to a Swap Contract
Administration Agreement
x/x Xxx Xxxx xx Xxx Xxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration MBS Administration,
CWALT, Series 2006-OC7
Ladies and Gentlemen:
I have acted as counsel to Xxxxxx Brothers Special Financing Inc., a
Delaware corporation ("Party A") and Xxxxxx Brothers Holdings Inc., a Delaware
corporation ("Guarantor"), and am familiar with matters pertaining to the
execution and delivery of the Master Agreement (the "Master Agreement") dated as
of August 30, 2006 between Party A and THE BANK OF NEW YORK, not in its
individual or corporate capacity but solely as Swap Contract Administrator for
CWALT, Inc. Alternative Loan Trust 2006-OC7, pursuant to a Swap Contract
Administration Agreement and the guarantee of Guarantor (the "Guarantee")
delivered in connection with the Master Agreement.
In connection with this opinion, I have examined, or have had examined on
my behalf, an executed copy of the Master Agreement and the Guarantee,
certificates and statements of public officials and officers of Party A and
Guarantor and such other agreements, instruments, documents and records as I
have deemed necessary or appropriate for the purposes of this opinion.
Except as expressly set forth herein, no independent investigation
(including, without limitation, conducting any review, search or investigation
of any public files, records or dockets) has been undertaken to determine the
existence or absence of the facts that are material to my opinions, and no
inference as to my knowledge concerning such facts should be made.
When used herein the phrase "to my knowledge" means to my actual knowledge
without independent investigation.
References in this letter to "Applicable Laws" are to those laws, rules
and regulations of the State of New York which, in my experience, are normally
applicable to transactions of the type contemplated by the Master Agreement and
the Guarantee. References in this letter to "Governmental Authorities" are to
executive, legislative, judicial, administrative or regulatory bodies of the
State of New York. References in this letter to "Governmental Approval" are to
any consent, approval, license, authorization or validation of, or filing,
recording or registration with, any Governmental Authority pursuant to
Applicable Laws.
Based on the foregoing but subject to the assumptions, exceptions,
qualifications and limitations hereinafter expressed, I am of the opinion that:
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a. Each of Party A and Guarantor is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware.
b. The execution, delivery and performance of the Master Agreement in
the case of Party A, and the Guarantee, in the case of Guarantor,
are within its corporate power, have been duly authorized by all
corporate action and do not conflict with any provision of its
certificate of incorporation or by-laws.
(iii) The Master Agreement, in the case of Party A, and the Guarantee, in
the case of Guarantor, have been duly executed and delivered and
each constitutes a legal, valid and binding obligation, enforceable
against it in accordance with its respective terms.
(iv) To the best of my knowledge, no Governmental Approval is required in
connection with the execution, delivery and performance of the
Master Agreement in the case of Party A, or the Guarantee, in the
case of Guarantor, except those that have been obtained and, to my
knowledge, are in effect.
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
A. My opinion in paragraph 3 above is subject to: (i)
bankruptcy, insolvency, reorganization, receivership, moratorium or
similar laws affecting creditors' rights generally (including,
without limitation, the effect of statutory or other laws regarding
fraudulent or other similar transfers or conveyances); (ii) general
principles of equity, regardless of whether enforceability is
considered in a proceeding in equity or at law; (iii) laws and
considerations of public policy that may limit the enforceability of
provisions (a) regarding indemnification and contribution rights and
obligations, (b) regarding the waiver or limitation of rights to
trial by jury, oral amendments to written agreements or rights of
setoff, (c) relating to submission to jurisdiction, venue or service
of process, and (d) purporting to prohibit or restrict, or require
the consent of the "account debtor" (as defined in Section 9-102 of
the Uniform Commercial Code as in effect in the State of New York
(the "NYUCC" )) for, the creation, perfection or enforcement of a
security interest in "accounts" or "general intangibles" (in each
case, as defined in Section 9-102 of the NYUCC).
B. I am a member of the Bar of the State of New York and
render no opinion on the laws of any jurisdiction other than the
laws of the State of New York and the General Corporation Law of the
State of Delaware. Except as described, I have not examined, or had
examined on my behalf, and I do not express any opinion with respect
to, Delaware law.
C. My opinions are limited to the present laws and to the
facts as they presently exist, and no opinion is to be inferred or
implied beyond the matters expressly so stated. I assume no
obligation to revise or supplement this opinion should the present
laws of the jurisdictions referred to in paragraph B above be
changed by legislative action, judicial decision or otherwise.
D. This letter is rendered solely to you solely for your
benefit in connection with the Master Agreement and the Guarantee
and the transactions related thereto and may not be relied upon by
any other person, entity or agency or by you in any other context or
for any other purpose. This letter may not be circulated, used or
quoted in whole or in part, nor may copies thereof be furnished or
delivered to any other person, without the prior written consent of
2
Xxxxxx Brothers Holdings Inc., except that you may furnish copies
hereof (i) to your independent auditors and attorneys, (ii) to any
United States, state or local authority having jurisdiction over you
or over Party A or Guarantor, (iii) pursuant to the order of any
legal process of any court of competent jurisdiction or any
governmental agency, and (iv) in connection with any legal action
arising out of the Master Agreement or the Guarantee.
E. I have assumed with your permission (i) the genuineness of
all signatures by each party other than Party A or Guarantor, (ii)
the authenticity of documents submitted to me as originals and the
conformity to authentic original documents of all documents
submitted to me as copies, (iii) the accuracy of the matters set
forth in the documents, agreements and instruments I reviewed, (iv)
that each party other than Party A and Guarantor is duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization, (v) the due execution and delivery,
pursuant to due authorization, of the Master Agreement by each party
other than Party A, and (vi) that the Master Agreement is the legal,
valid, binding and enforceable obligation of each party other than
Party A, enforceable against each such party in accordance with its
terms.
F. My opinion in paragraph 3 is subject to the qualification
that certain provisions contained in the Agreement and the Guarantee
may not be enforceable, but such unenforceability will not render
the Agreement or the Guarantee invalid as a whole or substantially
interfere with the practical realization of the principal benefits
provided thereby.
The foregoing opinions are given on the express understanding that the
undersigned is an officer of Xxxxxx Brothers Inc. and shall in no event incur
any personal liability in connection with said opinions.
Very truly yours,
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EXHIBIT D to Schedule
---------------------
[REGULATION AB AGREEMENT]
1
