ISDA® International Swaps and Derivatives Association, Inc. SCHEDULE to the Master Agreement dated as of October 30, 2006 between
Execution
version
(Multicurrency
- Cross Border)
ISDA®
International
Swaps and Derivatives Association, Inc.
SCHEDULE
to
the
Master
Agreement
dated
as
of October 30, 2006
between
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ABN
AMRO BANK N.V.
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and
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SUPPLEMENTAL
INTEREST TRUST,
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(“Party
A”)
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(“Party
B”;’)
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Part
1. Termination Provisions.
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(a)
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“Specified
Entity”
means in relation to Party A for the purpose
of:
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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
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(b)
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“Specified
Transaction”
will have the meaning specified in Section 14 of this
Agreement.
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(c)
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Certain
Events of Default.
The following Events of Default will apply to the parties as specified
below, and the definition of “Event of Default” in Section 14 is deemed to
be modified accordingly:
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Section
5(a)(i) (Failure
to Pay or Deliver)
will
apply to Party A and Party B.
Section
5(a)(ii) (Breach
of Agreement)
will
not apply to Party A or Party B.
Section
5(a)(iii) (Credit
Support Default)
will
not apply to Party A or Party B.
Section
5(a)(iv) (Misrepresentation)
will
not apply to Party A or Party B.
Section
5(a)(v) (Default
under Specified Transaction)
will
not apply to Party A or Party B.
Section
5(a)(vi) (Cross
Default)
will
not apply to Party A or Party B.
Section
5(a)(vii) (Bankruptcy)
will
apply to Party A and Party B; provided
that
clause (2) thereof shall not apply to Party B.
1
Section
5(a)(viii) (Merger
without Assumption)
will
apply to Party A and Party B.
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(d)
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Termination
Events.
The following Termination Events will apply to the parties as specified
below:
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Section
5(b)(i) (Illegality)
will
apply to Party A and Party B.
Section
5(b)(ii) (Tax
Event)
will
apply to Party A and Party B.
Section
5(b)(iii) (Tax
Event upon Merger)
will
apply to Party A and Party B.
Section
5(b)(iv) (Credit
Event upon Merger)
will
not apply to Party A or Party B.
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(e)
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The
“Automatic
Early Termination”
provision of Section 6(a) of this Agreement will not apply to Party
A and
will not apply to Party B.
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(f)
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Payments
on Early Termination.
For the purpose of Section 6(e) of this
Agreement:
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(i)
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Market
Quotation will apply.
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(ii)
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The
Second Method will apply.
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(g)
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“Termination
Currency”
means United States Dollars.
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(h)
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Additional
Termination Events.
The following Additional Termination Events will apply, in each case
with
respect to Party B as the sole Affected Party (unless otherwise provided
below):
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(i)
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Party
A fails to comply with the Downgrade Provisions as set forth in Part
5(b),
after giving effect to all grace or cure periods therein. For all
purposes
of this Agreement, Party A shall be the sole Affected Party with
respect
to the occurrence of a Termination Event described in this Part
1(h)(i).
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(ii)
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Party
B or the Trust Fund (as defined in the Trust Agreement, dated as
of
October 1, 2006, among Xxxxx Fargo Bank, N.A., as securities administrator
(the Securities Administrator), U.S. Bank National Association (the
Trustee),
Xxxxxxx Fixed Income Services Inc., Structured Asset Securities
Corporation and Aurora Loan Services LLC (the Trust
Agreement))
is terminated.
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(iii)
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The
Trust Agreement is amended or modified without the prior written
consent
of Party A, where such consent is required under the terms of the
Trust
Agreement.
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(iv)
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The
Class Principal Amounts of the Offered Certificates are reduced to
zero.
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(v)
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Notice
of the Master Servicer’s or, the NIMS Insurer’s intention to exercise its
option to purchase the Mortgage Loans pursuant to Section 7.01 of
the
Trust Agreement is given by the Trustee to Certificateholders pursuant
to
Section 7.02 of the Trust Agreement, provided
that the Early Termination Date may not be earlier than the date
on which
the Certificates are redeemed pursuant to Section 7.02 of the Trust
Agreement.
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Notwithstanding
anything in Section 6 of the Agreement to the contrary, any amounts due as
result of the occurrence of an Additional Termination Event described in Part
1(h)(ii) and Part 1(h)(v) of this Schedule may be calculated prior to the Early
Termination Date and shall be payable on the Early Termination
Date.
Part
2. Tax Representations.
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(a)
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Payer
Representations.
For the purpose of Section 3(e) of this Agreement, Party A will make
the
following representation and Party B will make the following
representation:
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2
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) 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 representations made by the other party
pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the
agreement 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.
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(b)
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Payee
Representations.
For the purpose of Section 3(f) of this Agreement, Party A and Party
B
make the representations specified below, if
any:
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(i)
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Party
A makes the following
representations:
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(1)
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It
is a resident of The Netherlands for the purpose of the application
of the
existing tax treaties between The Netherlands and those countries
where
offices of Party B are located.
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(2)
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With
respect to its non-U.S. branches, it is fully eligible for the benefits
of
the “Business Profits” or “Industrial and Commercial Profits” provision,
as the case may be, the “Interest” provision or the “Other Income”
provision (if any) of the Specified Treaty with respect to any payment
described in such provisions and received or to be received by it
in
connection with this Agreement and no such payment is attributable
to a
trade or business carried on by it through a permanent establishment
in
the Specified Jurisdiction. With respect to Party A, Specified Treaty
means the income tax treaty between the United States and The Netherlands;
Specified Jurisdiction means the United
States.
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(3)
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With
respect to its U.S. branches, each payment received or to be received
by
it in connection with this Agreement will be effectively connected
with
its conduct of a trade or business in the United
States.
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(ii)
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Party
B represents that it is a trust created under an agreement governed
by New
York law.
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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)
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Tax
forms, documents or certificates to be delivered
are:—
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Party
A and Party B
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Subject
to Section 4(a)(iii), any document required or reasonably requested
to
allow the other party to make payments under this Agreement without
any
deduction or withholding on account of any Tax.
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(i)
promptly upon reasonable demand by the other party, and (ii) promptly
upon
learning that any such Form previously provided by such party has
become
obsolete or incorrect.
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3
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(b)
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Other
documents to be delivered are:—
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Covered
by §3(d) Representation
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Party
A and Party B
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Incumbency
Certificate (or, if available the current authorized signature book
or
equivalent authorizing documentation) specifying the names, titles,
authority and specimen signatures of the persons authorized to execute
this Agreement which sets forth the specimen signatures of each signatory
to this Agreement, each Confirmation and each Credit Support Document
(if
any) signing on its behalf.
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Concurrently
with the execution and delivery of this Agreement unless previously
delivered and still in full force and effect.
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Yes
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Party
A and Party B
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An
executed copy of the Disclosure Agreement relating to the Preliminary
Prospectus Supplement or Free Writing Prospectus, as applicable (each
as
defined in the Trust Agreement)
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On
the date of such Preliminary Prospectus Supplement or Free Writing
Prospectus, as applicable.
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Yes
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Party
A and B
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An
opinion of counsel to such party reasonably satisfactory in form
and
substance to the other party, and, in the case of Party B, opinions
of
counsel relating to the Trust Agreement and other deal documents
reasonably satisfactory in form and substance to the Party A.
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Concurrently
with the execution and delivery of the Confirmation unless previously
delivered and still in full force and effect.
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No
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Party
B
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An
executed copy of the Trust Agreement.
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Within
30 days after the date of this Agreement.
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No
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Party
B
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Each
material amendment, supplement or waiver of the Trust Agreement,
as
proposed from time to time, or any other amendment or modification
of the
Trust Agreement that requires the written consent of Party A under
the
terms of the Trust Agreement.
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Promptly
upon learning of any proposed amendment, supplement or
waiver.
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No
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Part
4. Miscellaneous.
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(a)
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Addresses
for Notices.
For the purposes of Section 12(a) of this Agreement:
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(i)
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Addresses
for notices or communications to Party A:
-
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4
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(1)
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For
all purposes under this Agreement:
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ABN
AMRO Bank N.V., Chicago Branch
Global
Documentation Unit
000
X.
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx,
XX 00000
Attention: Treasury
Documentation
Telephone: 000-000-0000
Fax:000-000-0000
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(2)
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With
a copy to the Office through which Party A is acting for the purposes
of
the relevant Transactions:
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ABN
AMRO Bank N.V., Amsterdam Head Office
X.X.
Xxx
000
0000
XX
Xxxxxxxxx
Xxx
Xxxxxxxxxxx
Attention: Operations
Derivatives Markets
Forex
Options
Telephone:
00-00-0000000
Telefax:00-00-0000000
Swaps
Telephone:
00-00-0000000
Telefax:00-00-0000000
Interest
Related Products
Telephone
00-00-0000000
Telefax:
00-00-0000000
Credit
Derivatives
Telephone:
00-00-0000000
Telefax:
00-00-0000000
Telex:
16021
Answerback: ABAM NL
Electronic
Messaging System Details: Swift ABNA NL 2A
ABN
AMRO Bank N.V., Chicago Branch
000
Xxxx
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attention: Treasury
Operations
Telefax: 000-000-0000
Telephone: 000-000-0000
Electronic
Messaging System Details: ABNA US 33a XXX
5
ABN
AMRO Bank N.V., London Branch
000
Xxxxxxxxxxx,
Xxxxxx
XX0X 0XX,
Xxxxxx
Xxxxxxx
Attention:
Fixed
Income Derivatives Documentation
Telex: 887366
Answerback: ABNALN G
Telefax: 00
00
0000 0000
Telephone: 00
00
0000 0000
Electronic
Messaging System Details: Swift ABNA XX 0X
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(ii)
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Addresses
for notices or communications to Party
B:
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U.S.
Bank National Association
0
Xxxxxxx
Xxxxxx, 0xx Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Structured Finance - BNC 2006-2
Telephone
No.: (000)
000-0000
Facsimile
No: (000)
000-0000
With
a
copy to:
Xxxxx
Fargo Bank, N.A. as Securities Administrator
0000
Xxx
Xxxxxxxxx Xx.
Xxxxxxxx,
Xxxxxxxx 00000
Attention:
Service Manager - BNC 2006-2
Telephone
No.: (000)
000-0000
Facsimile
No.: (000) 000-0000
Aurora
Loan Services LLC, as Master Servicer
000
Xxxxxxxxx Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx,
XX 00000
Attention:
Xxxx
Xxxxxxxxxx
Facsimile
No.: (000)
000-0000
Telephone
No.: (000)
000-0000
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(b)
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Process
Agent. For
the purposes of Section 13(c) of this
Agreement:
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Party
A
appoints as its Process Agent, not applicable.
Party
B
appoints as its Process Agent, not applicable.
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(c)
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Offices.
The provisions of Section 10(a) will not apply to this
Agreement.
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(d)
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Multibranch
Party.
For the purpose of Section 10(c) of this
Agreement:
|
Party
A
is a Multibranch Party and may act through the following Offices: Amsterdam,
Chicago and London.
Party
B
is not a Multibranch Party.
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(e)
|
Calculation
Agent.
The Calculation Agent is Party A.
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(f)
|
Credit
Support Document.
Credit Support Document means
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With
respect to Party A, not applicable.
6
With
respect to Party B, not applicable.
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(g)
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Credit
Support Provider.
|
Credit
Support Provider means in relation to Party A, not applicable.
Credit
Support Provider means in relation to Party B, not applicable.
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(h)
|
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(i)
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Netting
of Payments.
Subparagraph (ii) of Section 2(c) of this Agreement will apply to
all
Transactions (in each case starting from the date of this
Agreement).
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(j)
|
“Affiliate”
will have the meaning specified in Section 14 of this Agreement,
provided
that Party B shall be deemed to have no
Affiliates.
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(k)
|
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.
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(l)
|
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 suit, action
or
proceeding relating to this Agreement or any Credit Support Document.
Each
party certifies (i) that no representative, agent or attorney of
the other
party or any Credit Support Provider has represented, expressly or
otherwise, that such other party would not, in the event of such
a suit,
action or proceeding, seek to enforce the foregoing waiver and (ii)
acknowledges that it and the other party have been induced to enter
into
this Agreement and provide for any Credit Support Document, as applicable,
by, among other things, the mutual waivers and certifications in
this
Section.
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(m)
|
Consent
to Recording.
Each party consents to the recording of the telephone conversations
of
trading and marketing personnel of the parties and their Affiliates
in
connection with this Agreement or any potential transaction.
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(n)
|
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
illegal, 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 illegal, 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.
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Part
5. Other Provisions.
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(a)
|
Definitions.
This Agreement, including each Confirmation and each Swap Transaction,
is
subject to the 2000 ISDA Definitions, as amended, supplemented, updated,
and superseded from time to time (the “Definitions”), as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”) and will be
governed in all respects by the Definitions (except that references
to
“Swap Transactions” shall be deemed to be references to “Transactions”).
The Definitions are incorporated by reference in, and made part of,
this
Agreement and each Confirmation as if set forth in full in this Agreement
and such Confirmations. In the event of any inconsistency between
the
provisions of this Agreement and the Definitions, this Agreement
will
prevail (and, in the event of any inconsistency between any Confirmation
and the Definitions, the Confirmation will control). Any reference
in a
Confirmation to any Definitions which are amended or supplemented
in this
Schedule shall be deemed to be a reference to such Definitions as
so
amended or supplemented, unless the Confirmation states, by specific
reference to any such amendment or supplement, that such amendment
or
supplement will not apply in respect of the Transaction to which
such
Confirmation relates.
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7
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(b)
|
Downgrade
Provisions.
|
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(1)
|
It
shall be a collateralization event (“Collateralization
Event”)
if (A) either (i) the unsecured, long-term senior debt obligations of
Party A are rated below “A1” by Xxxxx’x Investors Service, Inc.
(“Moody’s”)
or are rated “A1” by Moody’s and such rating is on watch for possible
downgrade to below “A1” (but only for so long as it is on watch for
possible downgrade) or (ii) the unsecured, short-term debt
obligations of Party A are rated below “P-1” by Moody’s or are rated
“P-1” by Moody’s and such rating is on watch for possible downgrade to
below “P-1” (but only for so long as it is on watch for possible
downgrade), (B) no short-term rating is available from Moody’s and the
unsecured, long-term senior debt obligations of Party A are rated
below “Aa3” by Moody’s or are rated “Aa3” by Moody’s and such rating is on
watch for possible downgrade to below “Aa3” (but only for so long as it is
on watch for possible downgrade), (C) or either (i) the unsecured,
short-term debt obligations of Party A are rated below “A-1” by
Standard & Poor’s Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc. (“S&P”)
or (ii) if Party A does not have a short-term rating from S&P,
the unsecured, long-term senior debt obligations of Party A are rated
below “A+” by S&P, or (D) the unsecured, long-term senior debt
obligations or financial strength ratings of Party A are rated below
“A”
by Fitch, Inc. (“Fitch”).
For the avoidance of doubt, the parties hereby acknowledge and agree
that
notwithstanding the occurrence of a Collateralization Event, this
Agreement and each Transaction hereunder shall continue to be as
a Swap
Agreement for purposes of the Trust Agreement. Within 30 days from
the
date a Collateralization Event has occurred and
so long as such Collateralization Event is continuing, Party A shall,
at its sole expense, either (i) post collateral according to the
terms of
an ISDA 1994 New York Law Credit Support Annex, which shall receive
prior
written confirmation from each of the Rating Agencies (as defined
in the
Trust Agreement) that their then-current ratings of the Offered
Certificates will not be downgraded or withdrawn by such Rating Agency
(the “Rating
Agency Condition”),
or (ii) obtain a substitute counterparty that (a) is reasonably acceptable
to Party B and satisfies the Rating Agency Condition, (b) satisfies
the Hedge Counterparty Ratings Requirement (as defined herein) and
(c)
assumes the obligations of Party A under this Agreement (through an
assignment and assumption agreement in form and substance reasonably
satisfactory to Party B) or replaces the outstanding Transactions
hereunder with transactions on identical terms, except that Party A
shall be replaced as counterparty, provided
that such substitute counterparty, as of the date of such assumption
or
replacement, will not, as a result thereof, be required to withhold
or
deduct on account of tax under the Agreement or the new transactions,
as
applicable, and such assumption or replacement will not lead to a
termination event or event of default occurring under the Agreement
or new
transactions, as applicable.
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(2)
|
It
shall be a ratings event (“Ratings
Event”)
if at any time after the date hereof Party A shall fail to satisfy
the Hedge Counterparty Ratings Threshold or Party A is no longer
rated by
S&P. Hedge
Counterparty Ratings Threshold
shall mean (A) the unsecured, long-term senior debt obligations of
Party A are rated at least “BBB-” by S&P, (B) either (i) the
unsecured, long-term senior debt obligations of Party A are rated at
least “A2” by Moody’s (and such rating is not on watch for possible
downgrade to below “A2”) and the unsecured, short-term debt obligations of
Party A are rated at least “P-1” by Moody’s
(and such rating is not on watch for possible downgrade to below
“P-1”) or
(ii) if Party A does not have a short-term rating from Moody’s, the
unsecured, long-term senior debt obligations of Party A are rated at
least “A1” by Moody’s,
and (C)
either (i) the unsecured, senior debt obligations or financial strength
ratings of Party A , are rated at least “A” by Fitch or (ii) the
unsecured, short-term debt obligations (if any) of Party A , are
rated at least “F1” by Fitch. For the avoidance of all doubts, the parties
hereby acknowledge and agree that notwithstanding the occurrence
of a
Ratings Event, this Agreement and each Transaction hereunder shall
continue to be a Swap Agreement for purposes of the Trust Agreement.
Within 30 days (or, in the case of a failure to meet the requirements
of
subparagraph (A) of the definition of “Hedge Counterparty Ratings
Threshold” or Party A is no longer rated by S&P, within 10 business
days) from the date a Ratings Event has occurred and
so long as such Ratings Event is continuing, Party A shall, at its
sole expense, (i) obtain a substitute counterparty that (A) satisfies
the
Rating Agency Condition, (B) satisfies the Hedge Counterparty Ratings
Requirement (as defined below) and (C) assumes the obligations of
Party A under this Agreement (through an assignment and assumption
agreement in form and substance reasonably satisfactory to Party B)
or replaces the outstanding Transactions hereunder with transactions
on
identical terms, except that Party A shall be replaced as
counterparty, provided
that such substitute counterparty, as of the date of such assumption
or
replacement, will not, as a result thereof, be required to withhold
or
deduct on account of tax under the Agreement or the new transactions,
as
applicable, and such assumption or replacement will not lead to a
termination event or event of default occurring under the Agreement
or new
transactions, as applicable, and (ii) on or prior to the expiration
of
such period, be required to post collateral according to the terms
of an
ISDA 1994 New York Law Credit Support Annex, which shall satisfy
the
Rating Agency Condition.
|
8
Notwithstanding
anything contained herein to the contrary, if Party A is required to transfer
its rights and obligations under this Agreement pursuant to this Part 5(b)(2)
as
a result of a rating issued by S&P, Party A shall, prior to such transfer,
be required to post collateral in accordance with (i) the terms of an ISDA
1994
New York Law Credit Support Annex, which shall satisfy the Rating Agency
Condition or (ii) an agreement with Party B providing for the posting of
collateral, which agreement shall satisfy the Rating Agency Condition and
require Party A to post the required collateral.
Hedge
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, (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 Moody’s (and if rated “A1” by Moody’s, such rating is not on watch for
possible downgrade to below “A1”) and the unsecured, short-term debt obligations
of such substitute counterparty (or its Credit Support Provider) are rated
at
least “P-1” by Moody’s (and if rated “P-1” by Moody’s, 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 Moody’s, the unsecured, long-term senior debt
obligations of such substitute counterparty (or its Credit Support Provider)
are
rated at least “Aa3” by Moody’s (and if rated “Aa3” by Moody’s, such rating is
not on watch for possible downgrade to below “Aa3”), and (c) either (i) the
unsecured, long-term senior debt obligations of such substitute counterparty
(or
its Credit Support Provider) are rated at least “A” by Fitch or (ii) the
unsecured, short-term debt obligations of such substitute counterparty (or
its
Credit Support Provider) are rated at least “F1” by Fitch. For the purpose of
this definition, no direct or indirect recourse against one or more shareholders
of the substitute counterparty (or against any Person in control of, or
controlled by, or under common control with, any such shareholder) shall be
deemed to constitute a guarantee, security or support of the obligations of
the
substitute counterparty.
|
(c)
|
Section
3(a) of this Agreement is hereby amended to include the following
additional representations after paragraph
3(a)(v):
|
|
(vi)
|
Eligible
Contract Participant.
It
is an “eligible contract participant” as defined in the U.S. Commodity
Exchange Act.
|
9
|
(vii)
|
Individual
Negotiation.
This Agreement and each Transaction hereunder is subject to individual
negotiation by the parties.
|
|
(viii)
|
Relationship
between Party A and Party B.
Each of Party A and Party B will be deemed to represent to the other
on
the date on which it enters into a Transaction or an amendment thereof
that (absent a written agreement between Party A and Party B that
expressly imposes affirmative obligations to the contrary for that
Transaction):
|
|
(1)
|
Principal.
It
is acting as principal and not as agent when entering into this Agreement
and each Transaction.
|
|
(2)
|
Non-Reliance.
It
is acting for its own account and it 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 advisors 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.
|
|
(3)
|
Evaluation
and Understanding. It
is capable of evaluating and understanding (on its own behalf or
through
independent professional advice), and understands and accepts, the
terms,
conditions and risks of this Agreement and each Transaction hereunder.
It
is also capable of assuming, and assumes, all financial and other
risks of
this Agreement and each Transaction hereunder.
|
|
(4)
|
Status
of Parties. The
other party is not acting as a fiduciary or an advisor for it in
respect
of that Transaction.
|
|
(d)
|
Section
4 is hereby amended by adding the following new agreement:
|
(f)
Actions
Affecting Representations. Party
B
agrees not to take any action during the term of this Agreement or any
Transaction hereunder that renders or could render any of the representations
and warranties in this Agreement untrue, incorrect, or incomplete, and if any
event or condition occurs that renders or could render any such representation
untrue, incorrect, or incomplete, Party B will immediately give written notice
thereof to Party A.
|
(e)
|
Section
1(c). For
purposes of Section 1(c) of the Agreement, the Transactions evidenced
by
Confirmations with Reference ID: 4039611, and Reference ID: 4039454,
each
dated October 30, 2006, between Party A and Party B, as amended from
time
to time, shall be the sole Transactions under the Agreement.
|
|
(f)
|
Transfer.
Section
7 is hereby amended to read in its entirety as
follows:
|
Except
as
stated under Section 6(b)(ii), in this Section 7, and Part 5(b) of the Schedule,
neither Party A nor Party B is permitted to assign, novate or transfer (whether
by way of security or otherwise) as a whole or in part any of its rights,
obligations or interests under this Agreement or any Transaction without the
prior written consent of the other party; provided, however, that (i) Party
A
may make such a transfer of this Agreement pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of substantially all
of
its assets to, another entity, or an incorporation, reincorporation or
reconstitution, and (ii) Party A may transfer this Agreement to any Person,
including, without limitation, another of Party A’s offices, branches or
affiliates (any such Person, office, branch or affiliate, a “Transferee”) on at
least five Business Days’ prior written notice to Party B and the Trustee;
provided that, with respect to clause (ii), (A) as of the date of such transfer
the Transferee will not be required to withhold or deduct on account of a Tax
from any payments under this Agreement unless the Transferee will be required
to
make payments of additional amounts pursuant to Section 2(d)(i)(4) of this
Agreement in respect of such Tax (B) a Termination Event or Event of Default
does not occur under this Agreement as a result of such transfer; (C) such
notice is accompanied by a written instrument pursuant to which the Transferee
acquires and assumes the rights and obligations of Party A so transferred;
and
(D) Party A will be responsible for any costs or expenses incurred in connection
with such transfer. Party B will execute such documentation as is reasonably
deemed necessary by Party A for the effectuation of any such transfer.
Notwithstanding the foregoing, no such transfer or assignment (including a
transfer or assignment made pursuant to Section 6(b)(ii)) shall be made unless
the transferring party obtains a written acknowledgment from each of the Rating
Agencies that, notwithstanding such transfer or assignment, the then-current
ratings of the Offered Certificates will not be reduced or withdrawn.
10
Except
as
specified otherwise in the documentation evidencing a transfer, a transfer
of
all the obligations of Party A made in compliance with this Section 7 will
constitute an acceptance and assumption of such obligations (and any related
interests so transferred) (including an acceptance and assumption of the
Disclosure Agreements by the transferor) by the Transferee, a novation of the
transferee in place of Party A with respect to such obligations (and any related
interests so transferred), and a release and discharge by Party B of Party
A
from, and an agreement by Party B not to make any claim for payment, liability,
or otherwise against Party A with respect to, such obligations from and after
the effective date of the transfer.
|
(g)
|
Trustee
Capacity. It
is expressly understood and agreed by the parties hereto that (i)
this
Agreement is executed and delivered by the Trustee not individually
or
personally but solely as trustee of Supplemental Interest Trust,
BNC
Mortgage Loan Trust 2006-2,
in the exercise of the powers and authority conferred and vested
in it
under the Trust Agreement, (ii) each of the representations, undertakings
and agreements herein made on the part of Supplemental Interest Trust,
BNC
Mortgage Loan Trust 2006-2 is made and intended not as personal
representations, undertakings and agreements by the Trustee but is
made
and intended for the purpose of binding only Supplemental Interest
Trust,
BNC Mortgage Loan Trust 2006-2, (iii) nothing herein contained shall
be
construed as creating any liability on the part of U.S. Bank National
Association, individually or personally, to perform any covenant
either
expressed or implied contained herein, all such liability, if any,
being
expressly waived by the parties hereto and by any Person claiming
by,
through or under the parties hereto and (iv) under no circumstances
shall
the Trustee be personally liable for the payment of any indebtedness
or
expenses of the Trust or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken
by
Supplemental Interest Trust, BNC Mortgage Loan Trust 2006-2 under
this
Agreement or any other related
documents.
|
|
(h)
|
Proceedings.
Party A shall not institute against or cause any other person to
institute
against, or join any other person in instituting against BNC Mortgage
Loan
Trust 2006-2 any bankruptcy, reorganization, arrangement, insolvency
or
liquidation proceedings, or other proceedings under any federal or
state
bankruptcy, dissolution or similar law, for a period of one year
and one
day following indefeasible payment in full of the
Certificates.
Nothing shall preclude, or be deemed to stop, Party A (i) from taking
any
action prior to the expiration of the aforementioned one year and
one day
period, or if longer the applicable preference period then in effect,
in
any case or proceeding voluntarily filed or commenced by Party B,
or (ii)
from commencing against Party B or any of the Collateral any legal
action
which is not a bankruptcy, reorganization, arrangement, insolvency,
moratorium, liquidation or similar
proceeding.
|
|
(i)
|
Amendment
to Events of Default. The
“Failure to Pay or Deliver” provision in Section 5(a)(i) of the Agreement
is hereby amended by deleting the word “third” in the third line thereof
and inserting the word “first” in place
thereof.
|
11
|
(j)
|
Change
of Account.
Section 2(b) of this Agreement is hereby amended by the addition
of the
following after the word “delivery” in the first line
thereof:-
|
“to
another account in the same legal and tax jurisdiction as the original
account”
|
(k)
|
Trust
Agreement.
|
|
(1)
|
Capitalized
terms used in this Agreement that are not defined herein and are
defined
in the Trust Agreement shall have the respective meanings assigned
to them
in the Trust Agreement.
|
|
(2)
|
Party
B will provide at least ten days’ prior written notice to Party A of any
proposed amendment or modification to the Trust
Agreement.
|
|
(l)
|
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 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 and the
Confirmation, and if applicable, any Credit Support Annex hereto).
|
|
(m)
|
Notice
of Certain Events or Circumstances.
Each party agrees, upon learning of the occurrence or existence of
any
event or condition that constitutes (or that with the giving of notice
or
passage of time or both would constitute) an Event of Default or
Termination Event with respect to such party, promptly to give the
other
party notice of such event or condition (or, in lieu of giving notice
of
such event or condition in the case of an event or condition that
with the
giving of notice or passage of time or both would constitute an Event
of
Default or Termination Event with respect to the party, to cause
such
event or condition to cease to exist before becoming an Event of
Default
or Termination Event); provided
that failure to provide notice of such event or condition pursuant
to this
Part 5(n) shall not constitute an Event of Default or a Termination
Event;
provided, further, that Party B shall not be deemed to have knowledge
of
any such event or condition unless a Responsible Officer of Party
B has
actual knowledge.
|
|
(n)
|
Regarding
Party A.
Party
B acknowledges and agrees that Party A has had and will have no
involvement in and, accordingly Party A accepts no responsibility
for: (i)
the establishment, structure, or choice of assets of Party B; (ii)
the
selection of any person
performing services for or acting on behalf of Party B; (iii) the
selection of Party A as the Counterparty;
(iv) the terms of the Certificates; (v) other than as provided in
the
Disclosure Agreements, the preparation of or passing on the disclosure
and
other information contained in any offering circular or offering
document
for the Certificates, the Trust Agreement, or any other agreements
or
documents used by Party B or any other party in connection with the
marketing and sale of the Certificates; (vi) the ongoing operations
and
administration of Party B, including the furnishing of any information
to
Party B which is not specifically required under this Agreement or
the
Disclosure Agreements; or (vii) any other aspect of Party B’s
existence.
|
|
(o)
|
Regarding
Party B.
The liability of Party B under this Agreement is limited in recourse
to
the assets of the Trust Fund and the Supplemental Interest Trust
(each
term, as defined in the Trust Agreement), and to distributions of
interest
proceeds and principal proceeds thereon applied in accordance with
the
terms of the Trust Agreement. Upon application of and exhaustion
of all of
the assets of the Trust Fund and the Supplemental Interest Trust
(and
proceeds thereof) in accordance with the Trust Agreement, Party A
shall
not be entitled to take any further steps against Party
B or any other person or
recover any sums due but still unpaid hereunder or thereunder, all
claims
in respect of which shall be extinguished. Notwithstanding the foregoing
or anything herein to the contrary, Party A shall not be precluded
from
declaring an Event of Default or from exercising any other right
or remedy
as set forth in this Agreement or the Trust
Agreement.
|
12
|
(p)
|
Rating
Agency Condition.
This Agreement will not be amended unless the Rating Agency Condition
is
satisfied.
|
[Signature
page follows]
13
IN
WITNESS WHEREOF,
the
parties have executed this document by their duly authorized officers with
effect from the date so specified on the first page hereof.
|
ABN
AMRO BANK N.V.
|
SUPPLEMENTAL
INTEREST TRUST,
|
|
|
By:
U.S. Bank, National Association, not in its individual capacity,
but
solely as Trustee
|
||
|
/s/
Xxxxxxxxx X. Xxxxxx
|
/s/
Xxxxx X. Xxxxxx
|
|
|
Name:
Xxxxxxxxx X. Xxxxxx
|
Name:
Xxxxx X. Xxxxxx
|
|
|
Title:
Regional Manager Documentation North America
|
Title:
Vice President
|
|
|
Date:
10/30/06
|
Date:
10/30/06
|
|
|
/s/
Xxxxxxxxxxx Xxxx
|
||
|
Name:
Xxxxxxxxxxx Xxxx
|
||
|
Title:
Vice President
|
||
|
Date:
10/30/06
|
14
|
DATE:
|
October
30, 2006
|
|
TO:
|
Supplemental
Interest Trust,
|
|
c/o
U.S. Bank National Association
|
|
|
0
Xxxxxxx Xxxxxx, 0xx
Xxxxx
|
|
|
Xxxxxx,
Xxxxxxxxxxxxx 00000
|
|
|
Attention:
Structured Finance - BNC 2006-2
|
|
|
("Party B")
|
|
|
FROM:
|
ABN
AMRO BANK N.V.
|
|
000
Xxxxxxxxxxx,
|
|
|
Xxxxxx
XX0X 0XX,
|
|
|
Xxxxxx
Xxxxxxx
|
|
|
Attention:
Fixed Income Derivatives Documentation
|
|
|
Telex:
887366 Answerback: ABNALN G
|
|
|
Fax:
00 00 0000 0000
|
|
|
Telephone:
00 00 0000 0000
|
|
|
Electronic
Messaging System Details: Swift ABNA XX 0X
|
|
|
("Party
A")
|
|
|
RE:
|
Interest
Rate Cap Transaction
|
Dear
Sir
or Madam:
The
purpose of this letter agreement (this “Confirmation”) is to confirm the terms
and conditions of the Transaction entered into between us on the Trade Date
specified below (the “Transaction”).
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 provisions and this Confirmation, this Confirmation will
govern.
This
Confirmation constitutes a “Confirmation” as referred to in, and supplements,
forms part of and is subject to, the ISDA Master Agreement dated as of October
30, 2006, as amended and supplemented from time to time (the “Agreement”)
between Party A and Party B. All provisions contained in the Agreement govern
this Confirmation except as expressly modified below.
OUR
REF.: 4039454
|
1.
|
The
Cap Transaction to which this Confirmation relates is a Rate Cap
Transaction, the terms of which are as
follow:
|
|
General
Terms
|
|||
|
Trade
Date:
|
October
24, 2006
|
||
|
Effective
Date:
|
September
25, 2007, subject to adjustment in accordance with the Following
Business
Day Convention
|
||
|
Termination
Date:
|
October
25, 2011, subject to adjustment in accordance with the Following
Business
Day Convention
|
||
|
Notional
Amount:
|
See
Amortization Schedule, Schedule A
|
||
|
Fixed
Amounts (Premium):
|
|||
|
Fixed
Rate Payer:
|
Party
B
|
||
|
Fixed
Rate Payer Payment
Date:
|
October
30, 2006, subject to adjustment in accordance with the Following
Business
Day Convention.
|
||
|
Fixed
Amount:
|
USD
$509,000; To be paid by Xxxxxx Brothers Holdings Inc. (on behalf
of Party
B) to Party A
|
||
|
Floating
Amounts:
|
|||
|
Floating
Rate Payer:
|
Party
A
|
||
|
Cap
Rate:
|
6.50%
|
||
|
Floating
Rate Payer Period
End
Dates:
|
The
25th
day of each month of each year, commencing on October 25, 2007 to
and
including the Termination Date, subject to adjustment in accordance
with
the Following Business Day Convention.
|
||
|
Floating
Rate Payer Payment Dates:
|
Early
Payment, one (1) Business Day preceding each Floating Rate Payer
Period
End Date.
|
||
|
Floating
Rate Option:
|
USD-LIBOR-BBA
|
||
|
Designated
Maturity:
|
One
(1) month
|
||
|
Spread:
|
None
|
||
|
Floating
Rate Day
Count
Fraction:
|
Actual/360
|
||
|
Reset
Dates:
|
The
first day of each Calculation
Period.
|
||
OUR
REF.: 4039454
|
Compounding:
|
Inapplicable
|
||
|
Business
Days:
|
Any
day other than (i) a Saturday or a Sunday, or (ii) a day on which
banking
institutions in (1) the city in which the Corporate Trust Office
is
located or (2) the States of New York, Massachusetts, Maryland, Minnesota
or Colorado are closed.
|
||
|
2.
|
Procedural
Terms:
|
||
|
Calculation
Agent:
|
Party
A
|
||
|
Offices:
|
The
Office of Party A for this Cap Transaction is London.
The
Office of Party B for this Cap Transaction is Boston,
Massachusetts.
|
||
|
Account
Details:
|
|||
|
Payments
to Party A:
|
ABN
AMRO Bank N.V., New York, ABNAUS33
CHIPS
007535
ABA
No. 000000000
A/C
Name: ABN Amro Bank N.V., London
A/C
No. /661001036741
Ref.
DCM
|
||
|
Payments
to Party B:
|
U.S.
Bank Corporate Trust Services
ABA#
000-000-000
DDA#
000-000-000-000
Acct#
106790003
Ref:
BNC 2006-2 // Interest Rate Cap
Account
|
||
OUR
REF.: 0000000
Please
confirm that the foregoing correctly sets forth the terms and conditions of
our
agreement by executing this Confirmation and returning to us by fax/telex to
ABN
AMRO Bank N.V. to the attention of Derivatives Documentation Unit:
|
Fax
Number
|
:0000
000 0000000/9430
|
|
Telephone
Number
|
:0000
000 0000000/3196
|
ABN
AMRO
BANK N.V., LONDON BRANCH
By:
/s/
Xxxxxx Xxxxxxx
Authorized Signatory
Authorized Signatory
By:
/s/
Xxxxxxxx Xxxxxxx
Authorized Signatory
Authorized Signatory
Accepted
and confirmed as of the Trade Date written above:
SUPPLEMENTAL
INTEREST TRUST,
By:
U.S. Bank National Association, not in its individual capacity, but solely
as
Trustee
By:
/s/
Xxxxx X. Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Vice President
OUR
REF.: 4039454
SCHEDULE
A
to the
Confirmation dated as of October 30, 2006,
Re:
Reference Number 4039454
Amortization
Schedule, *subject
to adjustment in accordance with the Following Business Day
Convention
|
Calculation
Period in
respect
of the
Payment
Date
scheduled
to occur
on*:
|
Notional
Amount (USD)
|
|
10/24/2007
|
146,000.00
|
|
11/23/2007
|
291,000.00
|
|
12/24/2007
|
437,000.00
|
|
1/24/2008
|
583,000.00
|
|
2/22/2008
|
728,000.00
|
|
3/24/2008
|
874,000.00
|
|
4/24/2008
|
1,019,000.00
|
|
5/23/2008
|
1,165,000.00
|
|
6/24/2008
|
1,311,000.00
|
|
7/24/2008
|
6,415,000.00
|
|
8/22/2008
|
11,600,000.00
|
|
9/24/2008
|
16,821,000.00
|
|
10/24/2008
|
22,068,000.00
|
|
11/24/2008
|
71,746,000.00
|
|
12/24/2008
|
93,176,000.00
|
|
1/23/2009
|
110,819,000.00
|
|
2/24/2009
|
121,873,000.00
|
|
3/24/2009
|
128,429,000.00
|
|
4/24/2009
|
131,796,000.00
|
|
5/22/2009
|
132,838,000.00
|
|
6/24/2009
|
132,146,000.00
|
|
7/24/2009
|
130,141,000.00
|
|
8/24/2009
|
127,126,000.00
|
|
9/24/2009
|
124,125,000.00
|
|
10/23/2009
|
121,147,000.00
|
|
11/24/2009
|
118,192,000.00
|
|
12/24/2009
|
115,262,000.00
|
|
1/22/2010
|
112,360,000.00
|
|
2/24/2010
|
109,489,000.00
|
|
3/24/2010
|
106,651,000.00
|
|
4/23/2010
|
103,849,000.00
|
|
5/24/2010
|
101,083,000.00
|
|
6/24/2010
|
98,357,000.00
|
OUR
REF.: 4039454
|
Calculation
Period in
respect
of the
Payment
Date
scheduled
to occur
on*:
|
Notional
Amount (USD)
|
|
7/23/2010
|
95,670,000.00
|
|
8/24/2010
|
93,024,000.00
|
|
9/24/2010
|
90,421,000.00
|
|
10/22/2010
|
87,862,000.00
|
|
11/24/2010
|
85,345,000.00
|
|
12/24/2010
|
82,875,000.00
|
|
1/24/2011
|
80,449,000.00
|
|
2/24/2011
|
78,069,000.00
|
|
3/24/2011
|
75,735,000.00
|
|
4/22/2011
|
73,446,000.00
|
|
5/24/2011
|
71,204,000.00
|
|
6/24/2011
|
69,008,000.00
|
|
7/22/2011
|
66,858,000.00
|
|
8/24/2011
|
64,755,000.00
|
|
9/23/2011
|
62,698,000.00
|
|
10/24/2011
|
60,692,000.00
|
OUR
REF.: 4039454
