EXHIBIT 99.5
The ISDA Master Agreement
(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of November 15, 2006
BNP PARIBAS THE BANK OF NEW YORK, not in its
individual or corporate capacity but
solely as Swap Contract Administrator
for Alternative Loan Trust 2006-OC9,
pursuant to a Swap Contract
Administration Agreement
("Party A") and ("Party B")
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions. Accordingly, the parties agree as follows: --
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five
Local Business Days prior to the scheduled date for the payment or
delivery to which such change applies unless such other party gives timely
notice of a reasonable objection to such change.
(c) Netting. If on any date amounts would otherwise be payable: --
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will: --
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the Full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for: --
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
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(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that: --
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
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(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or perforating its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs: --
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(c) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
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described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof, (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer: --
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below: --
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
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6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
9
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
10
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
convened into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
11
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
12
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details, provided (see the
Schedule) and will be deemed effective as indicated: --
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answer back is
received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably: --
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement: --
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means: --
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
14
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
15
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
Faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market,
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
16
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
BNP PARIBAS THE BANK OF NEW YORK, not in its
individual or corporate capacity but
solely as Swap Contract Administrator
for Alternative Loan Trust 2006-OC9,
pursuant to a Swap Contract
Administration Agreement
("Party A") ("Party B")
------------------------------- ---------------------------------
(Name of Party) (Name of Party)
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory Title: Assistant Treasurer
By: /s/ Xxxxxxxxx Xxxxx Xxxxxx
Name: Xxxxxxxxx Xxxxx Xxxxxx
Title: Authorized Signatory
18
(Multicurrency-Cross Border)
SCHEDULE
to the
Master Agreement
dated as of November 15, 2006
between
BNP PARIBAS ("Party A"),
and
THE BANK OF NEW YORK, not in its individual or corporate capacity but solely as
Swap Contract Administrator for Alternative Loan Trust 2006-OC9, 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 for Alternative Loan Trust 2006-OC9 dated as of
October 1, 2006 among CWALT, Inc., as depositor, Park Granada LLC, as a seller,
Park Monaco Inc., as a seller, Park Sienna LLC, as a seller, Countrywide Home
Loans, Inc., as a seller, Countrywide Home Loans Servicing LP, as master
servicer, and The Bank of New York, as trustee (the "Pooling and Servicing
Agreement").
Part 1: Termination Provisions
For the purposes of this Agreement:-
(a) "Specified Entity" will not apply to Party A or Party B for any purpose.
(b) "Specified Transaction" will not apply to Party A or Party B for any
purpose.
(c) Events of Default.
The statement below that an Event of Default will apply to a specific
party means that upon the occurrence of such an Event of Default with
respect to such party, the other party shall have the rights of a
Non-defaulting Party under Section 6 of this Agreement; conversely, the
statement below that such event will not apply to a specific party means
that the other party shall not have such rights.
(i) The "Failure to Pay or Deliver" provisions of Section 5(a)(i) will
apply to Party A and will apply to Party B; provided, however, that
Section 5(a)(i) is hereby amended by replacing the word "third" with
the word "first"; provided, further, that notwithstanding anything
to the contrary in Section 5(a)(i), any failure by Party A to comply
with or perform any obligation to be complied with or performed by
Party A under the Credit Support Annex shall not constitute an Event
of Default under Section 5(a)(i) unless (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or more
Local Business Days and (B) such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to Party A.
(ii) The "Breach of Agreement" provisions of Section 5(a)(ii) will apply
to Party A and will not apply to Party B.
(iii) The "Credit Support Default" provisions of Section 5(a)(iii) will
apply to Party A and will not apply to Party B except that Section
5(a)(iii)(1) will apply to Party B solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit Support Annex;
provided, however, that notwithstanding anything to the contrary in
Section 5(a)(iii)(1), any failure by Party A to comply with or
perform any obligation to be complied with or performed by Party A
under the Credit Support Annex shall not constitute an Event of
Default under Section 5(a)(iii) unless (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or more
Local Business Days and (B) such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to Party A.
(iv) The "Misrepresentation" provisions of Section 5(a)(iv) will apply to
Party A and will not apply to Party B.
(v) The "Default under Specified Transaction" provisions of Section
5(a)(v) will not apply to Party A and will not apply to Party B.
(vi) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and will not apply to Party B. For purposes of Section
5(a)(vi), solely with respect to Party A:
"Specified Indebtedness" will have the meaning specified in Section
14.
"Threshold Amount" means with respect to Party A an amount equal to
three percent (3%) of the Shareholders' Equity of Party A or, if
applicable, the Eligible Guarantor.
"Shareholders' Equity" means with respect to an entity, at any time,
the sum (as shown in the most recent annual audited financial
statements of such entity) of (i) its capital stock (including
preferred stock) outstanding, taken at par value, (ii) its capital
surplus and (iii) its retained earnings, minus (iv) treasury stock,
each to be determined in accordance with generally accepted
accounting principles in the country in which Party A is organized.
(vii) The "Bankruptcy" provisions of Section 5(a)(vii) will apply to Party
A and will apply to Party B except that the provisions of Section
5(a)(vii)(2), (6) (to the extent that such provisions refer to any
appointment contemplated or effected by the Pooling and Servicing
Agreement or any appointment to which Party B has not become
subject), (7) and (9) will not apply to Party B; provided that, with
respect to Party B only, (i) Section 5(a)(vii)(4) is hereby amended
by adding after the words "against it" the words "(excluding any
proceeding or petition instituted or presented by Party A or its
Affiliates)" and (ii) Section 5(a)(vii)(8) is hereby amended by
deleting the words "to (7) (inclusive)" and inserting lieu thereof
", (3), (4) as amended, (5) and (6) as amended".
(viii) The "Merger Without Assumption" provisions of Section 5(a)(viii)
will apply to Party A and will apply to Party B.
(d) Termination Events.
The statement below that a Termination Event will apply to a specific
party means that upon the occurrence of such a Termination Event, if such
specific party is the Affected Party with respect to a Tax Event, the
Burdened Party with respect to a Tax Event Upon Merger (except as noted
below) or the non-Affected Party with respect to a Credit Event Upon
Merger, as the case may be, such specific party shall have the right to
designate an Early Termination Date in accordance with Section 6 of this
Agreement; conversely, the statement below that such an event will not
apply to a specific party means that such party shall not have such right;
provided, however, with respect to "Illegality" the statement that such
event will apply to a specific party means that upon the occurrence of
such a Termination Event with respect to such party, either party shall
have the right to designate an Early Termination Date in accordance with
Section 6 of this Agreement.
(i) The "Illegality" provisions of Section 5(b)(i) will apply to Party A
and will apply to Party B.
(ii) The "Tax Event" provisions of Section 5(b)(ii) will apply to Party A
except that, for purposes of the application of Section 5(b)(ii) to
Party A, Section 5(b)(ii) is hereby amended by deleting the words
"(x) any action taken by a taxing authority, or brought in a court
of competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y)",
and the "Tax Event" provisions of Section 5(b)(ii) will apply to
Party B.
(iii) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will
apply to Party A and will apply to Party B, provided that Party A
shall not be entitled to designate an Early Termination Date by
reason of a Tax Event upon Merger in respect of which it is the
Affected Party.
2
(iv) 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:
(i) Market Quotation will apply, provided, however, that, in the event
of a Derivative Provider Trigger Event, the following provisions
will apply:
(A) The definition of Market Quotation in Section 14 shall be
deleted in its entirety and replaced with the following:
"Market Quotation" means, with respect to one or more
Terminated Transactions, a Firm Offer which is (1) made by a
Reference Market-maker that is an Eligible Replacement, (2)
for an amount that would be paid to Party B (expressed as a
negative number) or by Party B (expressed as a positive
number) in consideration of an agreement between Party B and
such Reference Market-maker to enter into a Replacement
Transaction, and (3) made on the basis that Unpaid Amounts in
respect of the Terminated Transaction or group of Transactions
are to be excluded but, without limitation, any payment or
delivery that would, but for the relevant Early Termination
Date, have been required (assuming satisfaction of each
applicable condition precedent) after that Early Termination
Date is to be included.
(B) The definition of Settlement Amount shall be deleted in its
entirety and replaced with the following:
"Settlement Amount" means, with respect to any Early
Termination Date, an amount (as determined by Party B) equal
to:
(a) If a Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding on
or before the day falling ten Local Business Days after
the day on which the Early Termination Date is
designated, or such later day as Party B may specify in
writing to Party A, but in either case no later than one
Local Business Day prior to the Early Termination Date
(such day, the "Latest Settlement Amount Determination
Day"), the Termination Currency Equivalent of the amount
(whether positive or negative) of such Market Quotation;
(b) If, on the Latest Settlement Amount Determination Day,
no Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions has been
accepted by Party B so as to become legally binding and
one or more Market Quotations from Approved Replacements
have been made and remain capable of becoming legally
binding upon acceptance, the Settlement Amount shall
equal the Termination Currency Equivalent of the amount
(whether positive or negative) of the lowest of such
Market Quotations (for the avoidance of doubt, the
lowest of such Market Quotations shall be the lowest
Market Quotation of such Market Quotations expressed as
a positive number or, if any of such Market Quotations
is expressed as a negative number, the Market Quotation
expressed as a negative number with the largest absolute
value); or
(c) If, on the Latest Settlement Amount Determination Day,
no Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions is
accepted by Party B so as to become legally binding and
no Market Quotation from an Approved Replacement remains
capable of becoming legally binding
3
upon acceptance, the Settlement Amount shall equal Party
B's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for the relevant
Terminated Transaction or group of Terminated
Transactions.
(C) If Party B requests Party A in writing to obtain Market
Quotations, Party A shall use its reasonable efforts to
do so before the Latest Settlement Amount Determination
Day.
(D) If the Settlement Amount is a negative number, Section
6(e)(i)(3) shall be deleted in its entirety and replaced
with the following:
"(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, (I) Party B shall pay
to Party A an amount equal to the absolute value of the
Settlement Amount in respect of the Terminated
Transactions, (II) Party B shall pay to Party A the
Termination Currency Equivalent of the Unpaid Amounts
owing to Party A and (III) Party A shall pay to Party B
the Termination Currency Equivalent of the Unpaid
Amounts owing to Party B; provided, however, that (x)
the amounts payable under the immediately preceding
clauses (II) and (III) shall be subject to netting in
accordance with Section 2(c) of this Agreement and (y)
notwithstanding any other provision of this Agreement,
any amount payable by Party A under the immediately
preceding clause (III) shall not be netted-off against
any amount payable by Party B under the immediately
preceding clause (I)."
(E) At any time on or before the Latest Settlement Amount
Determination Day at which two or more Market Quotations
from Approved Replacements remain capable of becoming
legally binding upon acceptance, Party B shall be
entitled to accept only the lowest of such Market
Quotations (for the avoidance of doubt, the lowest of
such Market Quotations shall be the lowest Market
Quotation of such Market Quotations expressed as a
positive number or, if any of such Market Quotations is
expressed as a negative number, the Market Quotation
expressed as a negative number with the largest absolute
value).
(ii) The Second Method will apply.
(g) "Termination Currency" means USD.
(h) Additional Termination Events. Additional Termination Events will apply as
provided in Part 5(c).
Part 2: Tax Representations
(a) Tax Representations.
(i) Payer Representations. For the purpose of Section 3(e) of this
Agreement:
(A) Party A makes the following representation(s):
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: 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)
4
and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal
or commercial position.
(B) Party B makes the following representation(s):
None.
(ii) Payee Representations. For the purpose of Section 3(f) of this
Agreement:
(A) Party A makes the following representation(s):
It is a "foreign person" within the meaning of the applicable
U.S. Treasury Regulations concerning information reporting and
backup withholding tax (as in effect on January 1, 2001),
unless Party A provides written notice to Party B that it is
no longer a foreign person. In respect of any Transaction it
enters into through an office or discretionary agent in the
United States or which otherwise is allocated for United
States federal income tax purposes to such United States trade
or business, each payment received or to be received by it
under such Transaction will be effectively connected with its
conduct of a trade or business in the United States.
(B) Party B makes the following representation(s):
None.
(b) Tax Provisions.
(i) Gross Up. Section 2(d)(i)(4) shall not apply to Party B as X, and
Section 2(d)(ii) shall not apply to Party B as Y, in each case such
that Party B shall not be required to pay any additional amounts
referred to therein.
(ii) Indemnifiable Tax. The definition of "Indemnifiable Tax" in Section
14 is deleted in its entirety and replaced with the following:
"Indemnifiable Tax" means, in relation to payments by Party A, any
Tax and, in relation to payments by Party B, no Tax.
5
Part 3: Agreement to Deliver Documents
(a) Tax forms, documents or certificates to be delivered are:
-----------------------------------------------------------------------------------------------------------------------------------
Party required to deliver document Form/Document/Certificate Date by which to be delivered
-----------------------------------------------------------------------------------------------------------------------------------
Party A and Party B Any document required or reasonably Promptly after the earlier of (i)
requested to allow the other party to reasonable demand by either party or
make payments under this Agreement (ii) within 30 days of the execution.
without any deduction or withholding
for or on the account of any Tax or
with such deduction or withholding at
a reduced rate.
-----------------------------------------------------------------------------------------------------------------------------------
(b) Other Documents to be delivered are:
-----------------------------------------------------------------------------------------------------------------------------------
Party required to deliver Form/Document/Certificate Date by which to be Covered by Section 3(d)
document delivered representation
-----------------------------------------------------------------------------------------------------------------------------------
Party A and Party B Any documents required or reasonably Upon demand. Yes
requested by the 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.
-----------------------------------------------------------------------------------------------------------------------------------
Party A and Party B A certificate of an authorized officer of Upon execution Yes
the party, as to the incumbency and
authority of the respective officers of
the party signing this Agreement, any
relevant Credit Support Document, or any
Confirmation, as the case may be.
-----------------------------------------------------------------------------------------------------------------------------------
Party A Annual Report of Party A containing Annually, after becoming Yes
consolidated financial statements publicly available
certified by independent certified public
accountants and prepared in accordance
with generally accepted accounting
principles in the country in which Party
A is organized and delivered via internet
at xxxx://xxx.xxxxxxxxxx.xxx/
-----------------------------------------------------------------------------------------------------------------------------------
6
-----------------------------------------------------------------------------------------------------------------------------------
Party A and Party B An opinion of counsel to such party Upon execution No
reasonably satisfactory in form and
substance to the other party regarding
the enforceability of this Agreement, any
Confirmation, and any Credit Support
Documents to which it is a party.
-----------------------------------------------------------------------------------------------------------------------------------
Party B Executed copy of the Pooling and Upon execution Yes
Servicing Agreement
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Part 4: Miscellaneous
(a) Addresses for Notices. For the purposes of Section 12(a) of this
Agreement:
Party A:
Address for notices or communications to Party A:-
BNP Paribas,
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal and Transaction Management Group - ISDA
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
BNP Paribas, Paris, 0 Xxx Xxxxxxxx, 00000 Xxxxx
Legal and Transaction Management Group - ISDA
Telephone No: (33) (0) 0 0000 0000
Facsimile No: (33) (0) 0 0000 0000 / 7511
Party B:
Address for notices or communications to Party B:-
Address: The Bank of New York
000 Xxxxxxx Xxxxxx - 0X Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration MBS Administration, CWALT,
Series 2006-OC9
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) Process Agent. For the purposes 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 not apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
7
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A; provided however, if
an Event of Default occurs and is continuing with respect to Party A, then
Party B shall be entitled to appoint a financial institution which would
qualify as a Reference Market-maker to act as Calculation Agent, the cost
for which shall be borne by Party A.
(f) Credit Support Document. Credit Support Document means
Party A: The Credit Support Annex, and any guarantee in support
of Party A's obligations under this Agreement.
Party B: The Credit Support Annex, solely in respect of Party B's
obligations under Paragraph 3(b) of the Credit Support
Annex.
(g) Credit Support Provider.
Party A: The guarantor under any guarantee in support of Party
A's obligations under this Agreement.
Party B: None.
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole,
without regard to the conflict of law provisions thereof other than New
York General Obligations Law Sections 5-1401 and 5-1402.
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to all Transactions.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement, provided, however, that Party B shall be deemed to have no
Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii).
Part 5: Other Provisions
(a) Definitions. Unless otherwise specified in a Confirmation, this Agreement
and each Transaction under this Agreement are subject to the 2000 ISDA
Definitions as published and copyrighted in 2000 by the International
Swaps and Derivatives Association, Inc. (the "Definitions"), and will be
governed in all relevant respects by the provisions set forth in the
Definitions, without regard to any amendment to the Definitions subsequent
to the date hereof. The provisions of the Definitions are hereby
incorporated by reference in and shall be deemed a part of this Agreement,
except that (i) references in the Definitions to a "Swap Transaction"
shall be deemed references to a "Transaction" for purposes of this
Agreement, and (ii) references to a "Transaction" in this Agreement shall
be deemed references to a "Swap Transaction" for purposes of the
Definitions.
(b) Amendments to ISDA Master Agreement.
(i) Single Agreement. Section 1(c) is hereby amended by the adding the
words "including, for the avoidance of doubt, the Credit Support
Annex" after the words "Master Agreement".
(ii) Conditions Precedent. Section 2(a)(iii) is hereby amended by adding
the following at the end thereof:
Notwithstanding anything to the contrary in Section 2(a)(iii)(1), if
an Event of Default with respect to Party B or Potential Event of
Default with respect to Party B has occurred and been continuing for
more than 30 Local Business Days and no Early Termination Date in
respect of the Affected Transactions has occurred or been
effectively designated by Party A, the obligations of Party A under
Section 2(a)(i) shall cease to be subject to the condition precedent
set forth in Section
8
2(a)(iii)(1) with respect to such specific occurrence of such Event
of Default or such Potential Event of Default (the "Specific
Event"); provided, however, for the avoidance of doubt, the
obligations of Party A under Section 2(a)(i) shall be subject to the
condition precedent set forth in Section 2(a)(iii)(1) (subject to
the foregoing) with respect to any subsequent occurrence of the same
Event of Default with respect to Party B or Potential Event of
Default with respect to Party B after the Specific Event has ceased
to be continuing and with respect to any occurrence of any other
Event of Default with respect to Party B or Potential Event of
Default with respect to Party B that occurs subsequent to the
Specific Event.
(iii) Change of Account. Section 2(b) 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".
(iv) Representations. Section 3 is hereby amended by adding at the end
thereof the following subsection (g):
"(g) Relationship Between Parties.
(1) Nonreliance. (i) It is not relying on any statement or
representation of the other party regarding the
Transaction (whether written or oral), other than the
representations expressly made in this Agreement or the
Confirmation in respect of that Transaction and (ii) it
has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors
to the extent it has deemed necessary, and it has made
its own investment, hedging and trading decisions based
upon its own judgment and upon any advice from such
advisors as it has deemed necessary and not upon any
view expressed by the other party.
(2) Evaluation and Understanding. (i) It has the capacity to
evaluate (internally or through independent professional
advice) the Transaction and has made its own decision
subject to Section 6(n) of this Agreement to enter into
the Transaction and (ii) It understands the terms,
conditions and risks of the Transaction and is willing
and able to accept those terms and conditions and to
assume those risks, financially and otherwise.
(3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments,
hedging its underlying assets or liabilities or in
connection with a line of business.
(4) Status of Parties. The other party is not acting as an
agent, fiduciary or advisor for it in respect of the
Transaction.
(5) Eligible Contract Participant. It is an "eligible swap
participant" as such term is defined in, Section
35.1(b)(2) of the regulations (17 C.F.R. 35) promulgated
under, and an "eligible contract participant" as defined
in Section 1(a)(12) of the Commodity Exchange Act, as
amended."
(v) Transfer to Avoid Termination Event. Section 6(b)(ii) is
hereby amended by (i) deleting the words "or if a Tax Event
Upon Merger occurs and the Burdened Party is the Affected
Party," and (ii) by deleting the words "to transfer" and
inserting the words "to effect a Permitted Transfer" in lieu
thereof.
(vi) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting
in the second line of subparagraph (i) thereof the word
"non-", (ii) deleting "; and" from the end of subparagraph 1
and inserting "." in lieu thereof, and (iii) deleting the
final paragraph thereof.
9
(vii) Local Business Day. The definition of Local Business Day in
Section 14 is hereby amended by the addition of the words "or
any Credit Support Document" after "Section 2(a)(i)" and the
addition of the words "or Credit Support Document" after
"Confirmation".
(c) Additional Termination Events. The following Additional Termination
Events will apply:
(i) First Rating Trigger Collateral. If (A) it is not the case
that a Xxxxx'x Second Trigger Ratings Event has occurred and
been continuing for 30 or more Local Business Days and (B)
Party A has failed to comply with or perform any obligation to
be complied with or performed by Party A in accordance with
the Credit Support Annex, 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.
(ii) Second Rating Trigger Replacement. If (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or
more Local Business Days and (B) (i) at least one Eligible
Replacement has made a Firm Offer to be the transferee of all
of Party A's rights and obligations under this Agreement (and
such Firm Offer remains an offer that will become legally
binding upon such Eligible Replacement upon acceptance by the
offeree) and/or (ii) an Eligible Guarantor has made a Firm
Offer to provide an Eligible Guarantee (and such Firm Offer
remains an offer that will become legally binding upon such
Eligible Guarantor immediately upon acceptance by the
offeree), 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.
(iii) Supplemental Pooling and Servicing Agreement Without Party A's
Prior Written Consent. If 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 (excluding, for the avoidance of doubt, any amendment
to the Pooling and Servicing Agreement that is entered into
solely for the purpose of appointing a successor master
servicer or trustee) without the prior written consent (such
consent not to be unreasonably withheld) of Party A, then an
Additional Termination Event shall have occurred with respect
to Party B and Party B shall be the sole Affected Party with
respect to such Additional Termination Event. Party B agrees
with Party A that Party A shall be an express third-party
beneficiary of the Pooling and Servicing Agreement.
(iv) [Reserved]
(v) [Reserved]
(d) Required Ratings Downgrade Event. In the event that no Relevant
Entity has credit ratings at least equal to the Required Ratings
Threshold (such event, a "Required Ratings Downgrade Event"), then
Party A shall, as soon as reasonably practicable and so long as a
Required Ratings Downgrade Event is in effect, at its own expense,
using commercially reasonable efforts, procure either (A) a
Permitted Transfer or (B) an Eligible Guarantee from an Eligible
Guarantor.
(e) Regulation AB Compliance. Party A and Party B hereby agree that the
terms of the Item 1115 Agreement dated as of March 15, 2006 (the
"Regulation AB Agreement"), between Countrywide Home Loans, Inc.,
CWABS, Inc., CWMBS, Inc., CWALT, Inc., CWHEQ, Inc. and BNP Paribas
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 A.
(f) Transfers.
(i) Section 7 is hereby amended to read in its entirety as
follows:
"Subject to Section 6(b)(ii), Part 5(d) and the Regulation AB
Agreement 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
10
part any of its rights, obligations or interests under the
Agreement or any Transaction without (a) the prior written
consent of the other party or (b) satisfaction of the Rating
Agency Condition with respect to S&P."
(ii) If an Eligible Replacement has made a Firm Offer (which
remains an offer that will become legally binding upon
acceptance by Party B) to be the transferee pursuant to a
Permitted Transfer, Party B shall, at Party A's written
request and at Party A's expense, take any reasonable steps
required to be taken by Party B to effect such transfer.
(g) Non-Recourse. Party A acknowledges and agree that, notwithstanding
any provision in this Agreement to the contrary, the obligations of
Party B hereunder are limited recourse obligations of Party B,
payable solely from the Swap Trust and the proceeds thereof, in
accordance with the priority of payments and other terms of the
Pooling and Servicing Agreement and that Party A will not have any
recourse to any of the directors, officers, employees, shareholders
or affiliates of the Party B with respect to any claims, losses,
damages, liabilities, indemnities or other obligations in connection
with any transactions contemplated hereby. In the event that the
Swap Trust and the proceeds thereof, should be insufficient to
satisfy all claims outstanding and following the realization of the
account held by the Swap Trust and the proceeds thereof, any claims
against or obligations of Party B under the ISDA Master Agreement or
any other confirmation thereunder still outstanding shall be
extinguished and thereafter not revive. Party B shall not have
liability for any failure or delay in making a payment hereunder to
Party A due to any failure or delay in receiving amounts in the
account held by the Swap Trust from the Trust created pursuant to
the Pooling and Servicing Agreement.
(h) Timing of Payments by Party B upon Early Termination.
Notwithstanding anything to the contrary in Section 6(d)(ii), to the
extent that all or a portion (in either case, the "Unfunded Amount")
of any amount that is calculated as being due in respect of any
Early Termination Date under Section 6(e) from Party B to Party A
will be paid by Party B from amounts other than any upfront payment
paid to Party B by an Eligible Replacement that has entered a
Replacement Transaction with Party B, then such Unfunded Amount
shall be due on the next subsequent Distribution Date following the
date on which the payment would have been payable as determined in
accordance with Section 6(d)(ii), and on any subsequent Distribution
Dates until paid in full (or if such Early Termination Date is the
final Distribution Date, on such final Distribution Date); provided,
however, that if the date on which the payment would have been
payable as determined in accordance with Section 6(d)(ii) is a
Distribution Date, such payment will be payable on such Distribution
Date.
(i) Rating Agency Notifications. Notwithstanding any other provision of
this Agreement, no Early Termination Date shall be effectively
designated hereunder by Party B and no transfer of any rights or
obligations under this Agreement shall be made by either party
unless each Swap Rating Agency has been given prior written notice
of such designation or transfer.
(j) No Set-off. Except as expressly provided for in Section 2(c),
Section 6, Paragraph 8 of the Credit Support Annex or Part
1(f)(i)(D) hereof, and notwithstanding any other provision of this
Agreement or any other existing or future agreement, each party
irrevocably waives any and all rights it may have to set off, net,
recoup or otherwise withhold or suspend or condition payment or
performance of any obligation between it and the other party
hereunder against any obligation between it and the other party
under any other agreements. Section 6(e) shall be amended by
deleting the following sentence: "The amount, if any, payable in
respect of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off.".
(k) Amendment. Notwithstanding any provision to the contrary in this
Agreement, no amendment of either this Agreement or any Transaction
under this Agreement shall be permitted by either party unless each
of the Swap Agencies has been provided prior written notice of the
same and S&P confirms in writing (including by facsimile
transmission) that it will not downgrade, withdraw or otherwise
modify its then-current ratings of the Certificates.
11
(l) 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
and to each Swap Rating Agency notice of such event or condition;
provided that failure to provide notice of such event or condition
pursuant to this Part 5(l) shall not constitute an Event of Default
or a Termination Event.
(m) Proceedings. No Relevant Entity shall institute against, or cause
any other person to institute against, or join any other person in
instituting against Party B, the Swap Trust, or the Trust formed
pursuant to the Pooling and Servicing Agreement, in any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under any federal or state bankruptcy or
similar law for a period of one year (or, if longer, the applicable
preference period) and one day following payment in full of the
Certificates. This provision will survive the termination of this
Agreement.
(n) Swap Contract Administrator Liability Limitations. 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
for Alternative Loan Trust 2006-OC9; (b) in no case shall BNY (or
any person acting as successor Swap Contract Administrator for
Alternative Loan Trust 2006-OC9) 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 Pooling and Servicing Agreement. This Part 5(n)
shall survive the termination of this Agreement.
(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)
in any respect, 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; 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 in connection with any such Section) shall be so
held to be invalid or unenforceable.
The parties shall endeavor to engage in good faith negotiations to
replace any invalid or unenforceable term, provision, covenant or
condition with a valid or enforceable term, provision, covenant or
condition, the economic effect of which comes as close as possible
to that of the invalid or unenforceable term, provision, covenant or
condition.
(p) [Reserved]
(q) Escrow Payments. If (whether by reason of the time difference
between the cities in which payments are to be made or otherwise) it
is not possible for simultaneous payments to be made on any date on
which both parties are required to make payments hereunder, either
Party may at its option and in its sole discretion notify the other
Party that payments on that date are to be made in escrow. In this
case deposit of the payment due earlier on that date shall be made
by 2:00 pm (local time at the place for the earlier payment) on that
date with an escrow agent selected by the notifying party,
accompanied by irrevocable payment instructions (i) to release the
deposited payment to the intended recipient upon receipt by the
escrow agent of the required deposit of any corresponding payment
payable by the other party on the same date accompanied by
irrevocable payment instructions to the same effect or (ii) if the
required deposit of the corresponding payment is not made on that
same date, to return the payment deposited to the party that paid it
into escrow. The party that elects to have payments made in escrow
shall pay all costs of the escrow arrangements.
(r) Consent to Recording. Each party hereto consents to the monitoring
or recording, at any time and from time to time, by the other party
of any and all communications between trading, marketing, and
operations
12
personnel of the parties and their Affiliates, waives any further
notice of such monitoring or recording, and agrees to notify such
personnel of such monitoring or recording.
(s) Waiver of Jury Trial. Each party waives any right it may have to a
trial by jury in respect of any in respect of any suit, action or
proceeding relating to this Agreement or any Credit Support
Document.
(t) [Reserved]
(u) [Reserved]
(v) Additional representations.
(i) Capacity. Party A represents to Party B on the date on which
Party A enters into this Agreement that it is entering into
the Agreement and the Transaction as principal and not as
agent of any person. Party B represents to Party A on the date
on which Party B enters into this Agreement it is entering
into the Agreement and the Transaction in its capacity as Swap
Contract Administrator.
(w) Acknowledgements.
(i) Substantial financial transactions. Each party hereto is
hereby advised and acknowledges as of the date hereof that the
other party has engaged in (or refrained from engaging in)
substantial financial transactions and has taken (or refrained
from taking) other material actions in reliance upon the entry
by the parties into the Transaction being entered into on the
terms and conditions set forth herein and in the Pooling and
Servicing Agreement relating to such Transaction, as
applicable. This paragraph shall be deemed repeated on the
trade date of each Transaction.
(ii) Bankruptcy Code. Subject to Part 5(m), without limiting the
applicability if any, of any other provision of the U.S.
Bankruptcy Code as amended (the "Bankruptcy Code") (including
without limitation Sections 362, 546, 556, and 560 thereof and
the applicable definitions in Section 101 thereof), the
parties acknowledge and agree that all Transactions entered
into hereunder will constitute "forward contracts" or "swap
agreements" as defined in Section 101 of the Bankruptcy Code
or "commodity contracts" as defined in Section 761 of the
Bankruptcy Code, that the rights of the parties under Section
6 of this Agreement will constitute contractual rights to
liquidate Transactions, that any margin or collateral provided
under any margin, collateral, security, pledge, or similar
agreement related hereto will constitute a "margin payment" as
defined in Section 101 of the Bankruptcy Code, and that the
parties are entities entitled to the rights under, and
protections afforded by, Sections 362, 546, 556, and 560 of
the Bankruptcy Code.
(x) [Reserved]
(y) [Reserved]
(z) Additional Definitions.
As used in this Agreement, the following terms shall have the
meanings set forth below, unless the context clearly requires
otherwise:
"Approved Ratings Threshold" means each of the S&P Approved Ratings
Threshold and the Moody's First Trigger Ratings Threshold.
"Approved Replacement" means, with respect to a Market Quotation, an
entity making such Market Quotation, which entity would satisfy
conditions (a), (b), (c) and (e) of the definition of Permitted
Transfer (as determined by Party B in its sole discretion, acting in
a commercially reasonable manner) if such entity were a Transferee,
as defined in the definition of Permitted Transfer.
13
"Derivative Provider Trigger Event" means (i) an Event of Default
with respect to which Party A is a Defaulting Party, (ii) a
Termination Event with respect to which Party A is the sole Affected
Party or (iii) an Additional Termination Event with respect to which
Party A is the sole Affected Party.
"Eligible Guarantee" means an unconditional and irrevocable
guarantee of all present and future obligations (for the avoidance
of doubt, not limited to payment obligations) of Party A or an
Eligible Replacement to Party A under this Agreement that is
provided by an Eligible Guarantor as principal debtor rather than
surety and that is directly enforceable by Party B, the form and
substance of which guarantee are subject to the Rating Agency
Condition with respect to S&P, and either (A) a law firm has given a
legal opinion confirming that none of the guarantor's payments to
Party B under such guarantee will be subject to Tax collected by
withholding or (B) such guarantee provides that, in the event that
any of such guarantor's payments to Party B are subject to Tax
collected by withholding, such guarantor is required to pay such
additional amount as is necessary to ensure that the net amount
actually received by Party B (free and clear of any Tax collected by
withholding) will equal the full amount Party B would have received
had no such withholding been required.
"Eligible Guarantor" means an entity that (A) has credit ratings at
least equal to the Approved Ratings Threshold or (B) has credit
ratings at least equal to the Required Ratings Threshold, provided,
for the avoidance of doubt, that an Eligible Guarantee of an
Eligible Guarantor with credit ratings below the Approved Ratings
Threshold will not cause a Collateral Event (as defined in the
Credit Support Annex) not to occur or continue.
"Eligible Replacement" means an entity (A) (i) that has credit
ratings at least equal to the Approved Ratings Threshold, (ii) has
credit ratings at least equal to the Required Ratings Threshold,
provided, for the avoidance of doubt, that an Eligible Guarantee of
an Eligible Guarantor with credit ratings below the Approved Ratings
Threshold will not cause a Collateral Event (as defined in the
Credit Support Annex) not to occur or continue, or (iii) the present
and future obligations (for the avoidance of doubt, not limited to
payment obligations) of which entity to Party B under this Agreement
are guaranteed pursuant to an Eligible Guarantee provided by an
Eligible Guarantor and (B) that has executed an Item 1115 Agreement
with the Depositor.
"Estimated Swap Termination Payment" means, with respect to an Early
Termination Date, an amount determined by Party A in good faith and
in a commercially reasonable manner as the maximum payment that
could be owed by Party B to Party A in respect of such Early
Termination Date pursuant to Section 6(e) of the ISDA Master
Agreement, taking into account then current market conditions.
"Firm Offer" means (A) with respect to an Eligible Replacement, a
quotation from such Eligible Replacement (i) in an amount equal to
the actual amount payable by or to Party B in consideration of an
agreement between Party B and such Eligible Replacement to replace
Party A as the counterparty to this Agreement by way of novation or,
if such novation is not possible, an agreement between Party B and
such Eligible Replacement to enter into a Replacement Transaction
(assuming that all Transactions hereunder become Terminated
Transactions), and (ii) that constitutes an offer by such Eligible
Replacement to replace Party A as the counterparty to this Agreement
or enter a Replacement Transaction that will become legally binding
upon such Eligible Replacement upon acceptance by Party B, and (B)
with respect to an Eligible Guarantor, an offer by such Eligible
Guarantor to provide an Eligible Guarantee that will become legally
binding upon such Eligible Guarantor upon acceptance by the offeree.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
thereto.
"Moody's First Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee or an Eligible
Replacement, (i) if such entity has both a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's and a
short-term unsecured and unsubordinated debt rating from Moody's, a
long-term unsecured and unsubordinated debt rating or counterparty
rating from Moody's of "A2" and a short-term unsecured and
unsubordinated debt rating from Moody's of "Prime-1", or (ii) if
such entity has only a long-term unsecured and unsubordinated debt
rating or counterparty rating from Moody's, a long-term unsecured
and unsubordinated debt rating or counterparty rating from Moody's
of "A1".
14
"Moody's Second Trigger Ratings Event" means that no Relevant Entity
has credit ratings from Moody's at least equal to the Moody's Second
Trigger Rating Threshold.
"Moody's Second Trigger Ratings Threshold" means, with respect to
Party A, the guarantor under an Eligible Guarantee or an Eligible
Replacement, (i) if such entity has both a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody's and a
short-term unsecured and unsubordinated debt rating from Moody's, a
long-term unsecured and unsubordinated debt rating or counterparty
rating from Moody's of "A3" or a short-term unsecured and
unsubordinated debt rating from Moody's of "Prime-2", or (ii) if
such entity has only a long-term unsecured and unsubordinated debt
rating or counterparty rating from Moody's, a long-term unsecured
and unsubordinated debt rating or counterparty rating from Moody's
of "A3".
"Permitted Transfer" means a transfer by novation by Party A to a
transferee (the "Transferee") of all, but not less than all, of
Party A's rights, liabilities, duties and obligations under this
Agreement, with respect to which transfer each of the following
conditions is satisfied: (a) the Transferee is an Eligible
Replacement that is a recognized dealer in interest rate swaps
organized under the laws of the United States of America or a
jurisdiction located in the United States of America (or another
jurisdiction reasonably acceptable to Party B), (b) an Event of
Default or Termination Event would not occur as a result of such
transfer, (c) pursuant to a written instrument (the "Transfer
Agreement"), the Transferee acquires and assumes all rights and
obligations of Party A under the Agreement and the relevant
Transaction, (d) Party B shall have determined, in its sole
discretion, acting in a commercially reasonable manner, that such
Transfer Agreement is effective to transfer to the Transferee all,
but not less than all, of Party A's rights and obligations under the
Agreement and all relevant Transactions; (e) Party A will be
responsible for any costs or expenses incurred in connection with
such transfer (including any replacement cost of entering into a
replacement transaction); (f) Moody's has been given prior written
notice of such transfer and the Rating Agency Condition is satisfied
with respect to S&P and (g) such transfer otherwise complies with
the terms of the Pooling and Servicing Agreement.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder and each Swap Rating
Agency specified in connection with such proposed act or omission,
that the party acting or failing to act must consult with each of
the specified Swap Rating Agencies and receive from each such Swap
Rating Agency a prior written confirmation that the proposed action
or inaction would not cause a downgrade or withdrawal of the
then-current rating of any Certificates.
"Relevant Entity" means Party A and, to the extent applicable, a
guarantor under an Eligible Guarantee.
"Replacement Transaction" means, with respect to any Terminated
Transaction or group of Terminated Transactions, a transaction or
group of transactions that (i) would have the effect of preserving
for Party B the economic equivalent of any payment or delivery
(whether the underlying obligation was absolute or contingent and
assuming the satisfaction of each applicable condition precedent) by
the parties under Section 2(a)(i) in respect of such Terminated
Transaction or group of Terminated Transactions that would, but for
the occurrence of the relevant Early Termination Date, have been
required after that Date, and (ii) has terms which are substantially
the same as this Agreement, including, without limitation, rating
triggers, Regulation AB compliance, and credit support
documentation, save for the exclusion of provisions relating to
Transactions that are not Terminated Transactions, as determined by
Party B in its sole discretion, acting in a commercially reasonable
manner.
"Required Ratings Downgrade Event" shall have the meaning assigned
thereto in Part 5(d).
"Required Ratings Threshold" means each of the S&P Required Ratings
Threshold and the Moody's Second Trigger Ratings Threshold.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor thereto.
15
"S&P Approved Ratings Threshold" means, with respect to Party A, the
guarantor under an Eligible Guarantee or an Eligible Replacement, a
short-term unsecured and unsubordinated debt rating from S&P of
"A-1", or, if such entity does not have a short-term unsecured and
unsubordinated debt rating from S&P, a long-term unsecured and
unsubordinated debt rating from S&P of "A+".
"S&P Required Ratings Threshold" means, with respect to Party A, the
guarantor under an Eligible Guarantee or an Eligible Replacement, a
long-term unsecured and unsubordinated debt rating from S&P of
"BBB+".
"Swap Rating Agencies" means, with respect to any date of
determination, each of S&P and Moody's, to the extent that each such
rating agency is then providing a rating for any of the
Certificates.
16
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.
BNP PARIBAS THE BANK OF NEW YORK, not in its individual or
corporate capacity but solely as Swap Contract
Administrator for Alternative Loan Trust 2006-OC9,
pursuant to a Swap Contract Administration Agreement
("Party A") ("Party B")
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
--------------------------- ------------------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory Title: Assistant Treasurer
By: /s/ Xxxxxxxxx Xxxxx Xxxxxx
-----------------------------
Name: Xxxxxxxxx Xxxxx Xxxxxx
Title: Authorized Signatory
17
EXHIBIT A
Regulation AB Agreement
18
ISDA(R)
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA Master Agreement
dated as of November 15, 2006 between
BNP PARIBAS (hereinafter referred to as "Party A" or "Pledgor"),
and
THE BANK OF NEW YORK, not in its individual or corporate capacity but solely as
Swap Contract Administrator for Alternative Loan Trust 2006-OC9, pursuant to a
Swap Contract Administration Agreement (hereinafter referred to as "Party B" or
"Secured Party")
Paragraph 13. Elections and Variables.
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations:
With respect to Party A: not applicable.
With respect to Party B: not applicable.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph 3(a)
as amended (I) by deleting the words "upon a demand made by
the Secured Party on or promptly following a Valuation Date"
and inserting in lieu thereof the words "not later than the
close of business on each Valuation Date" and (II) by deleting
in its entirety the sentence beginning "Unless otherwise
specified in Paragraph 13" and ending "(ii) the Value as of
that Valuation Date of all Posted Credit Support held by the
Secured Party." and inserting in lieu thereof the following:
The "Delivery Amount" applicable to the Pledgor for any
Valuation Date will equal the greatest of
(1) the amount by which (a) the S&P Credit Support Amount
for such Valuation Date exceeds (b) the S&P Value as of
such Valuation Date of all Posted Credit Support held by
the Secured Party,
(2) the amount by which (a) the Moody's First Trigger Credit
Support Amount for such Valuation Date exceeds (b) the
Moody's First Trigger Value as of such Valuation Date of
all Posted Credit Support held by the Secured Party, and
(3) the amount by which (a) the Moody's Second Trigger
Credit Support Amount for such Valuation Date exceeds
(b) the Moody's Second Trigger Value as of such
Valuation Date of all Posted Credit Support held by the
Secured Party.
(B) "Return Amount" has the meaning specified in Paragraph 3(b) as
amended by deleting in its entirety the sentence beginning
"Unless otherwise specified in Paragraph 13" and ending "(ii)
the Credit Support Amount." and inserting in lieu thereof the
following:
The "Return Amount" applicable to the Secured Party for any
Valuation Date will equal the least of
(1) the amount by which (a) the S&P Value as of such
Valuation Date of all Posted Credit Support held by the
Secured Party exceeds (b) the S&P Credit Support Amount
for such Valuation Date,
(2) the amount by which (a) the Moody's First Trigger Value
as of such Valuation Date of all Posted Credit Support
held by the Secured Party exceeds (b) the Moody's First
Trigger Credit Support Amount for such Valuation Date,
and
(3) the amount by which (a) the Moody's Second Trigger Value
as of such Valuation Date of all Posted Credit Support
held by the Secured Party exceeds (b) the Moody's Second
Trigger Credit Support Amount for such Valuation Date.
(C) "Credit Support Amount" shall not apply. For purposes of
calculating any Delivery Amount or Return Amount for any
Valuation Date, reference shall be made to the S&P Credit
Support Amount, the Moody's First Trigger Credit Support
Amount or the Moody's Second Trigger Credit Support Amount, in
each case for such Valuation Date, as provided in Paragraphs
13(b)(i)(A) and 13(b)(i)(B), above.
(ii) Eligible Collateral.
On any date, the following items will qualify as "Eligible
Collateral":
2
Moody's Moody's
First Trigger Second Trigger
S&P Valuation Valuation Valuation
Collateral Percentage Percentage Percentage
---------- ---------- ---------- ----------
(A) Cash 100% 100% 100%
(B) Fixed-rate negotiable USD denominated debt
obligations issued by the U.S. Treasury 98.5% 100% 100%
Department having a remaining maturity on
such date of not more than one year
(C) Fixed-rate negotiable USD denominated debt
obligations issued by the U.S. Treasury
Department having a remaining maturity on 89.9% 100% 94%
such date of more than one year but not more
than ten years
(D) Fixed-rate negotiable USD denominated debt
obligations issued by the U.S. Treasury 83.9% 100% 87%
Department having a remaining maturity on
such date of more than ten years
(iii) Other Eligible Support.
The following items will qualify as "Other Eligible Support" for the party
specified:
Not applicable.
(iv) Threshold.
(A) "Independent Amount" means zero with respect to Party A and Party B.
(B) "Threshold" means, with respect to Party A and any Valuation Date,
zero if a Collateral Event has occurred and has been continuing (x)
for at least 30 days or (y) since this Annex was executed;
otherwise, infinity.
"Threshold" means, with respect to Party B and any Valuation Date,
infinity.
(C) "Minimum Transfer Amount" means USD 100,000 with respect to Party A
and Party B; provided, however, that if the aggregate Class
Certificate Balance of the Certificates rated by S&P ceases to be
more than USD 50,000,000, the "Minimum Transfer Amount" shall be USD
50,000.
(D) Rounding: The Delivery Amount will be rounded up to the nearest
integral multiple of USD 10,000. The Return Amount will be rounded
down to the nearest integral multiple of USD 1,000.
3
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A; provided, however, that if an Event
of Default shall have occurred with respect to which Party A is the
Defaulting Party, Party B shall have the right to designate as
Valuation Agent an independent party, reasonably acceptable to Party
A, the cost for which shall be borne by Party A. All calculations by
the Valuation Agent must be made in accordance with standard market
practice, including, in the event of a dispute as to the Value of
any Eligible Credit Support or Posted Credit Support, by making
reference to quotations received by the Valuation Agent from one or
more Pricing Sources.
(ii) "Valuation Date" means each Local Business Day on which any of the
S&P Credit Support Amount, the Moody's First Trigger Credit Support
Amount or the Moody's Second Trigger Credit Support Amount is
greater than zero.
(iii) "Valuation Time" means the close of business in the city of the
Valuation Agent on the Local Business Day immediately preceding the
Valuation Date or date of calculation, as applicable; provided that
the calculations of Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "Notification Time" means 11:00 a.m., New York time, on a Local
Business Day.
(v) External Verification. Notwithstanding anything to the contrary in
the definitions of Valuation Agent or Valuation Date, at any time at
which Party A (or, to the extent applicable, its Credit Support
Provider) does not have a long-term unsubordinated and unsecured
debt rating of at least "BBB+" from S&P, the Valuation Agent shall
(A) calculate the Secured Party's Exposure and the S&P Value of
Posted Credit Suppport on each Valuation Date based on internal
marks and (B) verify such calculations with external marks monthly
by obtaining on the last Local Business Day of each calendar month
two external marks for each Transaction to which this Annex relates
and for all Posted Credit Suport; such verification of the Secured
Party's Exposure shall be based on the higher of the two external
marks. Each external xxxx in respect of a Transaction shall be
obtained from an independent Reference Market-maker that would be
eligible and willing to enter into such Transaction in the absence
of the current derivative provider, provided that an external xxxx
xxx not be obtained from the same Reference Market-maker more than
four times in any 12-month period. The Valuation Agent shall obtain
these external marks directly or through an independent third party,
in either case at no cost to Party B. The Valuation Agent shall
calculate on each Valuation Date (for purposes of this paragraph,
the last Local Business Day in each calendar month referred to above
shall be considered a Valuation Date) the Secured Party's Exposure
based on the greater of the Valuation Agent's internal marks and the
external marks received. If the S&P Value on any such Valuation Date
of all Posted Credit Support then held by the Secured Party is less
than the S&P Credit Support Amount on such Valuation Date (in each
case as determined pursuant to this paragraph), Party A shall,
within three Local Business Days of such Valuation Date, Transfer to
the Secured Party Eligible Credit Support having an S&P Value as of
the date of Transfer at least equal to such deficiency.
(vi) Notice to S&P. At any time at which Party A (or, to the extent
applicable, its Credit Support Provider) does not have a long-term
unsubordinated and unsecured debt rating of at least "BBB+" from
S&P, the Valuation Agent shall provide to S&P not later than the
Notification Time on the Local Business Day following each Valuation
Date its calculations of the Secured Party's Exposure and the S&P
Value of any Eligible Credit Support or Posted Credit Support for
that Valuation Date. The Valuation Agent shall also provide to S&P
any external marks received pursuant to the preceding paragraph.
4
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Events will be a "Specified Condition" for the party
specified (that party being the Affected Party if the Termination Event
occurs with respect to that party): With respect to Party A: any
Additional Termination Event with respect to which Party A is the sole
Affected Party. With respect to Party B: None.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. If specified here as applicable, then the Pledgor must
obtain the Secured Party's consent for any substitution pursuant to
Paragraph 4(d): Inapplicable.
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m. New York time on the Local
Business Day following the date on which the notice of the dispute
is given under Paragraph 5.
(ii) Value. Notwithstanding anything to the contrary in Paragraph 12, for
the purpose of Paragraphs 5(i)(C) and 5(ii), the S&P Value, Moody's
First Trigger Value and Moody's Second Trigger Value, on any date,
of Eligible Collateral other than Cash will be calculated as
follows:
For Eligible Collateral in the form of securities listed in
Paragraph 13(b)(ii): the sum of (A) the product of (1)(x) the bid
price at the Valuation Time for such securities on the principal
national securities exchange on which such securities are listed, or
(y) if such securities are not listed on a national securities
exchange, the bid price for such securities quoted at the Valuation
Time by any principal market maker for such securities selected by
the Valuation Agent, or (z) if no such bid price is listed or quoted
for such date, the bid price listed or quoted (as the case may be)
at the Valuation Time for the day next preceding such date on which
such prices were available and (2) the applicable Valuation
Percentage for such Eligible Collateral, and (B) the accrued
interest on such securities (except to the extent Transferred to the
Pledgor pursuant to Paragraph 6(d)(ii) or included in the applicable
price referred to in the immediately preceding clause (A)) as of
such date.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians. Party B (or any
Custodian) will be entitled to hold Posted Collateral pursuant to
Paragraph 6(b); provided that the following conditions applicable to
it are satisfied:
(1) The Custodian is a bank or trust company located in the United
States having total assets of at least $250,000,000 and a
short term unsecured debt or counterparty rating of "Prime-1"
from Moody's and "A-1" from Standard & Poor's.
Initially, the Custodian for Party B is: The Bank of New York.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c)(i) will
not apply to Party B, but the provisions of Paragraph 6(c)(ii) will
apply to Party B.
5
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" will be the actual interest rate
earned on Posted Collateral in the form of Cash that is held by
Party B or its Custodian.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made on the second Local Business Day following the end of
each calendar month and on any other Local Business Day on which
Posted Collateral in the form of Cash is Transferred to the Pledgor
pursuant to Paragraph 3(b); provided, however, that the obligation
of Party B to Transfer any Interest Amount to Party A shall be
limited to the extent that Party B has earned and received such
funds and such funds are available to Party B.
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(i) Additional Representation(s). There are no additional representations by
either party.
(j) Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other Posted
Support means: not applicable.
(ii) "Transfer" with respect to Other Eligible Support and Other Posted
Support means: not applicable.
(k) Demands and Notices.All demands, specifications and notices under this
Annex will be made pursuant to the Notices Section of this Agreement,
except that any demand, specification or notice shall be given to or made
at the following addresses, or at such other address as the relevant party
may from time to time designate by giving notice (in accordance with the
terms of this paragraph) to the other party:
If to Party A, at the address specified pursuant to the Notices Section of
this Agreement.
If to Party B, at the address specified pursuant to the Notices Section of
this Agreement.
If to Party B's Custodian, at the address specified for Party B pursuant
to the Notices Section of this Agreement
(l) Address for Transfers. Each Transfer hereunder shall be made to an address
specified in writing from time to time by the party to which such Transfer
will be made.
(m) Other Provisions.
(i) Collateral Account. Party B shall open and maintain a segregated
account upon the occurrence of a Collateral Event, which shall be an
Eligible Account, and hold, record and identify all Posted
Collateral in such segregated account.
(ii) Agreement as to Single Secured Party and Single Pledgor. Party A and
Party B hereby agree that, notwithstanding anything to the contrary
in this Annex, (a) the term "Secured Party" as used in this Annex
means only Party B, (b) the term "Pledgor" as used in this Annex
means only Party A, (c) only Party A makes the pledge and grant in
Paragraph 2, the acknowledgement in the final sentence of Paragraph
8(a) and the representations in Paragraph 9.
(iii) Calculation of Value. Paragraph 4(c) is hereby amended by deleting
the word "Value" and inserting in lieu thereof "S&P Value, Xxxxx'x
First Trigger Value, Xxxxx'x Second Trigger Value". Paragraph
4(d)(ii) is hereby amended by (A) deleting the words "a Value" and
inserting in
6
lieu thereof "an S&P Value, Xxxxx'x First Trigger Value, and Xxxxx'x
Second Trigger Value" and (B) deleting the words "the Value" and
inserting in lieu thereof "S&P Value, Xxxxx'x First Trigger Value,
and Xxxxx'x Second Trigger Value". Paragraph 5 (flush language) is
hereby amended by deleting the word "Value" and inserting in lieu
thereof "S&P Value, Xxxxx'x First Trigger Value, or Xxxxx'x Second
Trigger Value". Paragraph 5(i) (flush language) is hereby amended by
deleting the word "Value" and inserting in lieu thereof "S&P Value,
Xxxxx'x First Trigger Value, and Xxxxx'x Second Trigger Value".
Paragraph 5(i)(C) is hereby amended by deleting the word "the Value,
if" and inserting in lieu thereof "any one or more of the S&P Value,
Xxxxx'x First Trigger Value, or Xxxxx'x Second Trigger Value, as may
be". Paragraph 5(ii) is hereby amended by (1) deleting the first
instance of the words "the Value" and inserting in lieu thereof "any
one or more of the S&P Value, Xxxxx'x First Trigger Value, or
Xxxxx'x Second Trigger Value" and (2) deleting the second instance
of the words "the Value" and inserting in lieu thereof "such
disputed S&P Value, Xxxxx'x First Trigger Value, or Xxxxx'x Second
Trigger Value". Each of Paragraph 8(b)(iv)(B) and Paragraph 11(a) is
hereby amended by deleting the word "Value" and inserting in lieu
thereof "least of the S&P Value, Xxxxx'x First Trigger Value, and
Xxxxx'x Second Trigger Value".
(iv) [Reserved]
(v) Events of Default. Paragraph 7 will not apply to cause any Event of
Default to exist with respect to Party B except that Paragraph 7(i)
will apply to Party B solely in respect of Party B's obligations
under Paragraph 3(b) of the Credit Support Annex. Notwithstanding
anything to the contrary in Paragraph 7, any failure by Party A to
comply with or perform any obligation to be complied with or
performed by Party A under the Credit Support Annex shall only be an
Event of Default if (A) a Required Ratings Downgrade Event has
occurred and been continuing for 30 or more Local Business Days and
(B) such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to Party A.
(vi) Expenses. Notwithstanding anything to the contrary in Paragraph 10,
the Pledgor will be responsible for, and will reimburse the Secured
Party for, all transfer and other taxes and other costs involved in
any Transfer of Eligible Collateral.
(vii) Withholding. Paragraph 6(d)(ii) is hereby amended by inserting
immediately after "the Interest Amount" in the fourth line thereof
the words "less any applicable withholding taxes."
(viii) Notice of Failure to Post Collateral. Upon any failure by Party A
to post collateral as required under this Agreement, Party B shall,
no later than the next Business Day after the date such collateral
was required to be posted, give a written notice of such failure to
Party A and to the Depositor. For the avoidance of doubt,
notwithstanding anything in this Agreement to the contrary, the
failure of Party B to comply with the requirements of this paragraph
shall not constitute an Event of Default or Termination Event.
(ix) Additional Definitions. As used in this Annex:
"Collateral Event" means that no Relevant Entity has credit ratings
at least equal to the Approved Ratings Threshold.
"Exposure" has the meaning specified in Paragraph 12, except that
after the word "Agreement" the words "(assuming, for this purpose
only, that Part 1(f) of the Schedule is deleted)" shall be inserted.
"Local Business Day" means: any day on which (A) commercial banks
are open for business (including dealings in foreign exchange and
foreign currency deposits) in New York and the
7
location of Party A, Party B and any Custodian, and (B) in relation
to a Transfer of Eligible Collateral, any day on which the clearance
system agreed between the parties for the delivery of Eligible
Collateral is open for acceptance and execution of settlement
instructions (or in the case of a Transfer of Cash or other Eligible
Collateral for which delivery is contemplated by other means a day
on which commercial banks are open for business (including dealings
in foreign exchange and foreign deposits) in New York and the
location of Party A, Party B and any Custodian.
"Xxxxx'x First Trigger Credit Support Amount" means, for any
Valuation Date, the excess, if any, of
(I) (A) for any Valuation Date on which (I) a First Trigger
Failure Condition has occurred and has been continuing
(x) for at least 30 Local Business Days or (y) since
this Annex was executed and (II) it is not the case that
a Xxxxx'x Second Trigger Event has occurred and been
continuing for at least 30 Local Business Days, an
amount equal to the greater of (a) zero and (b) the sum
of the Secured Party's aggregate Exposure for all
Transactions and the aggregate of Xxxxx'x Additional
Collateralized Amounts for each Transaction.
For the purposes of this definition, the "Xxxxx'x
Additional Collateralized Amount" with respect to any
Transaction shall mean:
the product of the applicable Xxxxx'x First Trigger
Factor set forth in Table 1 and the Notional Amount for
such Transaction for the Calculation Period which
includes such Valuation Date; or
(B) for any other Valuation Date, zero, over
(II) the Threshold for Party A for such Valuation Date.
"First Trigger Failure Condition" means that no Relevant Entity has
credit ratings from Xxxxx'x at least equal to the Xxxxx'x First
Trigger Ratings Threshold.
"Xxxxx'x First Trigger Value" means, on any date and with respect to
any Eligible Collateral other than Cash, the bid price obtained by
the Valuation Agent multiplied by the Xxxxx'x First Trigger
Valuation Percentage for such Eligible Collateral set forth in
Paragraph 13(b)(ii).
"Xxxxx'x Second Trigger Event" means that no Relevant Entity has
credit ratings from Xxxxx'x at least equal to the Xxxxx'x Second
Trigger Ratings Threshold.
"Xxxxx'x Second Trigger Credit Support Amount" means, for any
Valuation Date, the excess, if any, of
(I) (A) for any Valuation Date on which it is the case that a
Second Trigger Failure Condition has occurred and been
continuing for at least 30 Local Business Days, an
amount equal to the greatest of (a) zero, (b) the
aggregate amount of the next payments due to be paid
by Party A under each Transaction and (c) the sum of the
Secured Party's aggregate Exposure and the aggregate of
Xxxxx'x Additional Collateralized Amounts for each
Transaction.
For the purposes of this definition, the "Xxxxx'x
Additional Collateralized Amount" with respect to any
Transaction shall mean:
8
if such Transaction is not a Transaction-Specific Hedge,
the product of the applicable Xxxxx'x Second Trigger
Factor set forth in Table 2 and the Notional Amount for
such Transaction for the Calculation Period which
includes such Valuation Date; or
if such Transaction is a Transaction-Specific Hedge,
the product of the applicable Xxxxx'x Second Trigger
Factor set forth in Table 3 and the Notional Amount for
such Transaction for the Calculation Period which
includes such Valuation Date; or
(B) for any other Valuation Date, zero, over
(II) the Threshold for Party A for such Valuation Date.
"Second Trigger Failure Condition" means that no Relevant Entity has
credit ratings from Xxxxx'x at least equal to the Xxxxx'x Second
Trigger Ratings Threshold.
"Xxxxx'x Second Trigger Value" means, on any date and with respect
to any Eligible Collateral other than Cash, the bid price obtained
by the Valuation Agent multiplied by the Xxxxx'x Second Trigger
Valuation Percentage for such Eligible Collateral set forth in
Paragraph 13(b)(ii).
"Pricing Sources" means the sources of financial information
commonly known as Bloomberg, Bridge Information Services, Data
Resources Inc., Interactive Data Services, International Securities
Market Association, Xxxxxxx Xxxxx Securities Pricing Service, Xxxxxx
Data Corporation, Reuters, Wood Gundy, Trepp Pricing, XX Xxxxx, S&P
and Telerate.
"S&P Credit Support Amount" means, for any Valuation Date, the
excess, if any, of
(I) (A) for any Valuation Date on which an S&P Rating Threshold
Event has occurred and been continuing for at least 30
days, an amount equal to the sum, for each Transaction
to which this Annex relates, of the sum of (1) 100.0%
of the Secured Party's Transaction Exposure for such
Valuation Date and (2) the product of the Volatility
Buffer for such Transaction and the Notional Amount of
such Transaction for the Calculation Period of such
Transaction which includes such Valuation Date, or
(B) for any other Valuation Date, zero, over
(II) the Threshold for Party A for such Valuation Date.
"S&P Rating Threshold Event" means, on any date, no Relevant Entity
has credit ratings from S&P which exceed the S&P Approved Ratings
Threshold.
"S&P Value" means, on any date and with respect to any Eligible
Collateral other than Cash, the product of (A) the bid price
obtained by the Valuation Agent for such Eligible Collateral and (B)
the S&P Valuation Percentage for such Eligible Collateral set forth
in paragraph 13(b)(ii).
"Transaction Exposure" means, for any Transaction, Exposure
determined as if such Transaction were the only Transaction between
the Secured Party and the Pledgor.
9
"Transaction-Specific Hedge" means any Transaction that is an
interest rate cap, interest rate floor or interest rate swaption, or
an interest rate swap if (x) the notional amount of the interest
rate swap is "balance guaranteed" or (y) the notional amount of the
interest rate swap for any Calculation Period otherwise is not a
specific dollar amount that is fixed at the inception of the
Transaction.
"Valuation Percentage" shall mean, for purposes of determining the
S&P Value, Xxxxx'x First Trigger Value, or Xxxxx'x Second Trigger
Value with respect to any Eligible Collateral or Posted Collateral,
the applicable S&P Valuation Percentage, Xxxxx'x First Trigger
Valuation Percentage, or Xxxxx'x Second Trigger Valuation Percentage
for such Eligible Collateral or Posted Collateral, respectively, in
each case as set forth in Paragraph 13(b)(ii).
"Value" shall mean, in respect of any date, the related S&P Value,
the related Xxxxx'x First Trigger Value and the related Xxxxx'x
Second Trigger Value.
"Volatility Buffer" means, for any Transaction, the related
percentage set forth in the following table.
-------------------------------------------------------------------------------------------
The higher of the S&P Remaining Remaining Remaining Remaining
short-term credit rating Weighted Weighted Weighted Weighted
of (i) Party A and (ii) Average Average Average Average
the Credit Support Maturity Maturity Maturity Maturity
Provider of Party A, if up to 3 years up to 5 years up to 10 years up to 30 years
applicable
-------------------------------------------------------------------------------------------
At least "A-2" 2.75% 3.25% 4.00% 4.75%
-------------------------------------------------------------------------------------------
"A-3" 3.25% 4.00% 5.00% 6.25%
-------------------------------------------------------------------------------------------
"BB+" or lower 3.50% 4.50% 6.75% 7.50%
-------------------------------------------------------------------------------------------
[Remainder of this page intentionally left blank]
10
Table 1
-------
Xxxxx'x First Trigger Factor
----------------------------
If "Valuation Date" means each Local Business Day, the "Daily Collateral
Posting" column will apply and the Weekly Collateral Posting Column will be
deleted.
If "Valuation Date" means the first Local Business Day in each week, the "Weekly
Collateral Posting" column will apply and the Daily Collateral Posting Column
will be deleted.
Remaining Daily Weekly
Weighted Average Life Collateral Collateral
of Hedge in Years Posting Posting
1 or less 0.15% 0.25%
More than 1 but not more than 2 0.30% 0.50%
More than 2 but not more than 3 0.40% 0.70%
More than 3 but not more than 4 0.60% 1.00%
More than 4 but not more than 5 0.70% 1.20%
More than 5 but not more than 6 0.80% 1.40%
More than 6 but not more than 7 1.00% 1.60%
More than 7 but not more than 8 1.10% 1.80%
More than 8 but not more than 9 1.20% 2.00%
More than 9 but not more than 10 1.30% 2.20%
More than 10 but not more than 11 1.40% 2.30%
More than 11 but not more than 12 1.50% 2.50%
More than 12 but not more than 13 1.60% 2.70%
More than 13 but not more than 14 1.70% 2.80%
More than 14 but not more than 15 1.80% 3.00%
More than 15 but not more than 16 1.90% 3.20%
More than 16 but not more than 17 2.00% 3.30%
More than 17 but not more than 18 2.00% 3.50%
More than 18 but not more than 19 2.00% 3.60%
More than 19 but not more than 20 2.00% 3.70%
More than 20 but not more than 21 2.00% 3.90%
More than 21 but not more than 22 2.00% 4.00%
More than 22 but not more than 23 2.00% 4.00%
More than 23 but not more than 24 2.00% 4.00%
More than 24 but not more than 25 2.00% 4.00%
More than 25 but not more than 26 2.00% 4.00%
More than 26 but not more than 27 2.00% 4.00%
More than 27 but not more than 28 2.00% 4.00%
More than 28 but not more than 29 2.00% 4.00%
More than 29 2.00% 4.00%
11
Table 2
-------
Xxxxx'x Second Trigger Factor for Interest Rate Swaps with
Fixed Notional Amounts
----------------------
If "Valuation Date" means each Local Business Day, the "Daily Collateral
Posting" column will apply and the Weekly Collateral Posting Column will be
deleted.
If "Valuation Date" means the first Local Business Day in each week, the "Weekly
Collateral Posting" column will apply and the Daily Collateral Posting Column
will be deleted.
Remaining Daily Weekly
Weighted Average Life Collateral Collateral
of Hedge in Years Posting Posting
1 or less 0.50% 0.60%
More than 1 but not more than 2 1.00% 1.20%
More than 2 but not more than 3 1.50% 1.70%
More than 3 but not more than 4 1.90% 2.30%
More than 4 but not more than 5 2.40% 2.80%
More than 5 but not more than 6 2.80% 3.30%
More than 6 but not more than 7 3.20% 3.80%
More than 7 but not more than 8 3.60% 4.30%
More than 8 but not more than 9 4.00% 4.80%
More than 9 but not more than 10 4.40% 5.30%
More than 10 but not more than 11 4.70% 5.60%
More than 11 but not more than 12 5.00% 6.00%
More than 12 but not more than 13 5.40% 6.40%
More than 13 but not more than 14 5.70% 6.80%
More than 14 but not more than 15 6.00% 7.20%
More than 15 but not more than 16 6.30% 7.60%
More than 16 but not more than 17 6.60% 7.90%
More than 17 but not more than 18 6.90% 8.30%
More than 18 but not more than 19 7.20% 8.60%
More than 19 but not more than 20 7.50% 9.00%
More than 20 but not more than 21 7.80% 9.00%
More than 21 but not more than 22 8.00% 9.00%
More than 22 but not more than 23 8.00% 9.00%
More than 23 but not more than 24 8.00% 9.00%
More than 24 but not more than 25 8.00% 9.00%
More than 25 but not more than 26 8.00% 9.00%
More than 26 but not more than 27 8.00% 9.00%
More than 27 but not more than 28 8.00% 9.00%
More than 28 but not more than 29 8.00% 9.00%
More than 29 8.00% 9.00%
12
Table 3
-------
Xxxxx'x Second Trigger Factor for Transaction-Specific Xxxxxx
-------------------------------------------------------------
If "Valuation Date" means each Local Business Day, the "Daily Collateral
Posting" column will apply and the Weekly Collateral Posting Column will be
deleted.
If "Valuation Date" means the first Local Business Day in each week, the "Weekly
Collateral Posting" column will apply and the Daily Collateral Posting Column
will be deleted.
Remaining Daily Weekly
Weighted Average Life Collateral Collateral
of Hedge in Years Posting Posting
1 or less 0.65% 0.75%
More than 1 but not more than 2 1.30% 1.50%
More than 2 but not more than 3 1.90% 2.20%
More than 3 but not more than 4 2.50% 2.90%
More than 4 but not more than 5 3.10% 3.60%
More than 5 but not more than 6 3.60% 4.20%
More than 6 but not more than 7 4.20% 4.80%
More than 7 but not more than 8 4.70% 5.40%
More than 8 but not more than 9 5.20% 6.00%
More than 9 but not more than 10 5.70% 6.60%
More than 10 but not more than 11 6.10% 7.00%
More than 11 but not more than 12 6.50% 7.50%
More than 12 but not more than 13 7.00% 8.00%
More than 13 but not more than 14 7.40% 8.50%
More than 14 but not more than 15 7.80% 9.00%
More than 15 but not more than 16 8.20% 9.50%
More than 16 but not more than 17 8.60% 9.90%
More than 17 but not more than 18 9.00% 10.40%
More than 18 but not more than 19 9.40% 10.80%
More than 19 but not more than 20 9.70% 11.00%
More than 20 but not more than 21 10.00% 11.00%
More than 21 but not more than 22 10.00% 11.00%
More than 22 but not more than 23 10.00% 11.00%
More than 23 but not more than 24 10.00% 11.00%
More than 24 but not more than 25 10.00% 11.00%
More than 25 but not more than 26 10.00% 11.00%
More than 26 but not more than 27 10.00% 11.00%
More than 27 but not more than 28 10.00% 11.00%
More than 28 but not more than 29 10.00% 11.00%
More than 29 10.00% 11.00%
13
IN WITNESS WHEREOF, the parties have executed this Annex by their duly
authorized representatives as of the date of the Agreement.
BNP PARIBAS THE BANK OF NEW YORK, not in its individual or corporate
capacity but solely as Swap Contract Administrator for
Alternative Loan Trust 2006-OC9, pursuant to a Swap Contract
Administration Agreement
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxx
----------------------------------- ------------------------------------------------
Name Xxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory Title: Assistant Treasurer
Date: Date: 11/15/06
By: /s/ Xxxxxxxxx Xxxxx Xxxxxx
-----------------------------------
Name Xxxxxxxxx Xxxxx Xxxxxx
Title: Authorized Signatory
Date:
14
