Exhibit 99.6
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of March 30, 2007 ("Assignment
Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW
YORK ("Assignee"), not in its individual or corporate capacity but solely as
Swap Contract Administrator for CWHEQ Home Equity Loan Trust, Series 2007-S3,
pursuant to a Swap Contract Administration Agreement (the "Swap Contract
Administration Agreement") dated as of March 30, 2007, and BEAR XXXXXXX
CAPITAL MARKETS INC. ("Remaining Party").
W I T N E S S E T H:
WHEREAS, effective as of March 30, 2007, Assignor desires to assign all
of its rights and delegate all of its duties and obligations to Assignee under
a certain Transaction (the "Assigned Transaction") as evidenced by a certain
confirmation with a Trade Date of March 27, 2007, whose BEAR XXXXXXX CAPITAL
MARKETS INC. reference number is CXCWL07S3 (the "Confirmation"), a copy of
which is attached hereto as Exhibit I;
WHEREAS, the Confirmation supplements, forms a part of, and is subject
to, an agreement in the form of the 1992 Multicurrency - Cross-Border Master
Agreement published by the International Swaps and Derivatives Association,
Inc. (the "ISDA Form Master Agreement");
WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction and the Confirmation, including any modifications that may be
agreed to by Assignee and Remaining Party; and
WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party
desires to grant such consent in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Assignment and Assumption. Effective as of and from March 30, 2007
(the "Effective Date"), Assignor hereby assigns all of its rights and
delegates all of its duties and obligations to Assignee and Assignee hereby
assumes all Assignor's rights, duties, and obligations under the Assigned
Transaction and the Confirmation arising on or after the Effective Date.
2. Release. Effective as of and from the Effective Date, Remaining Party
and Assignor hereby release one another from all duties and obligations owed
under and in respect of the Assigned Transaction and the Confirmation, and
Assignor hereby terminates its rights under and in respect of the Assigned
Transaction.
3. Limitation on Liability. Assignor and Remaining Party agree to the
following: (a) The Bank of New York ("BNY") is entering into this Assignment
Agreement not in its individual or corporate capacity, but solely in its
capacity as Swap Contract Administrator under the Swap Contract Administration
Agreement and its liability under this Assignment Agreement and under the Swap
Contract Administration Agreement shall be as set forth in the Swap Contract
Administration Agreement; (b) in no case shall BNY (or any person acting as
successor Swap Contract Administrator under the Swap Contract Administration
Agreement) be personally liable for or on account of any of the statements,
representations, warranties, covenants or obligations stated to be those of
Assignee under the terms of the Assigned Transaction, all such personal
liability, if any, being expressly waived by Assignor and Remaining Party and
any person claiming by, through or under either such party; and (c) recourse
against BNY shall be limited to the assets available under the Swap Contract
Administration Agreement or the pooling and servicing agreement for CWHEQ Home
Equity Loan Trust, Series 2007-S3 dated as of March 1, 2007 among CWHEQ, Inc.,
as depositor, Park Monaco Inc., as a seller, Park Granada LLC, 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").
4. Consent and Acknowledgment of Remaining Party. Remaining Party hereby
consents to the assignment and delegation by Assignor to Assignee of all the
rights, duties, and obligations of Assignor under the Assigned Transaction
pursuant to this Assignment Agreement.
5. Governing Agreement. Following the assignment of the Assigned
Transaction pursuant to the terms hereof, the Assigned Transaction and the
Confirmation shall form a part of, and be subject to, the ISDA Form Master
Agreement, as if Assignee and Remaining Party had executed such agreement on
the trade date of the Transaction (the "Assignee Agreement"). The
Confirmation, together with all other documents referring to the ISDA Form
Master Agreement confirming transactions entered into between Assignee and
Remaining Party, shall form a part of, and be subject to, the Assignee
Agreement. For the purposes of this paragraph, capitalized terms used herein
and not otherwise defined shall have the meanings assigned in the ISDA Form
Master Agreement. For the avoidance of doubt, in interpreting the Assignee
Agreement, the Counterparty shall be the Trust Fund created under the Pooling
and Servicing Agreement for whom the Assignee is acting on behalf of as Swap
Contract Administrator, so that, for example, a Bankruptcy pursuant to Section
5(a)(vii) of the ISDA Form Master Agreement (as amended by the Confirmation)
shall refer to a Bankruptcy of the Trust Fund, not a Bankruptcy of either the
Assignor or of Bank of New York in its individual or corporate capacity or any
other capacity.
6. Representations. Each party hereby represents and warrants to the
other parties as follows:
(a) It is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization or incorporation;
(b) It has the power to execute and deliver this Assignment Agreement;
(c) 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
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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;
(d) All governmental and other consents that are required to have been
obtained by it with respect to this Assignment Agreement have been
obtained and are in full force and effect and all conditions of
any such consents have been complied with; and
(e) Its obligations under this Assignment Agreement constitute its
legal, valid and binding obligations, enforceable in accordance
with their respective terms.
As of the Effective Date, each of Assignor and Remaining Party
represents that no event or condition has occurred that constitutes an Event
of Default, a Potential Event of Default or, to the party's knowledge, a
Termination Event (as such terms are defined in the Confirmation and Assignee
Agreement), with respect to the party, and no such event would occur as a
result of the party's entering into or performing its obligations under this
Assignment Agreement.
7. Indemnity. Assignor hereby agrees to indemnify and hold harmless
Assignee with respect to any and all claims arising under the Assigned
Transaction prior to the Effective Date. Assignee (subject to the limitations
set forth in paragraph 3 above) hereby agrees to indemnify and hold harmless
Assignor with respect to any and all claims arising under the Assigned
Transaction on or after the Effective Date.
8. Governing Law. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to conflicts of law provisions thereof other than New York General Obligations
Law Sections 5-1401 and 5-1402.
9. Notices. For the purposes of this Assignment Agreement and Section
12(a) of the ISDA Form Master Agreement of the Assigned Transaction, the
addresses for notices or communications are as follows: (i) in the case of
Assignor, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxxxxxx, with a copy to the same
address, Attention: Legal Department, or such other address as may be
hereafter furnished in writing to Assignee and Remaining Party; (ii) in the
case of Assignee, The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust MBS Administration, CWHEQ, Series 2007-S3 or
such other address as may be hereafter furnished in writing to Assignor and
Remaining Party, with a copy to MBIA Insurance Corporation, 000 Xxxx Xxxxxx,
Xxxxxx, Xxx Xxxx 00000, Attention: IPM-Structured Mortgage; and (iii) in the
case of Remaining Party,
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager - 36th Floor
Telex No. 000-000-0000
copy to: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Telex No: 000-000-0000
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copy to: MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx,
Xxx Xxxx 00000
Attention: IPM-Structured Mortgage
such other address as may be hereafter furnished in writing to Assignor
and Assignee.
10. Payments. All payments (if any) remitted by Remaining Party under
the Assigned Transaction shall be made by wire transfer according to the
following instructions:
The Bank of New York
New York, NY
ABA # 000-000-000
GLA # 111-565
For Further Credit: TAS A/C 540752
Attn: Xxxxxxx Xxxxxx 000-000-0000
Fax: 000-000-0000
11. Optional Termination. In connection with the optional termination of
the trust fund pursuant to Section 9.01 of the Pooling and Servicing
Agreement, with effect following all distributions on the final Distribution
Date under the Pooling and Servicing Agreement (such date, the "Optional
Termination Distribution Date"):
(a) (1) (A) Assignee hereby assigns all of its rights and delegates
all of its liabilities and obligations to Countrywide Home Loans,
Inc., (for purposes of this Section 11 "CHL") and CHL hereby
assumes all of Assignee's rights, liabilities, and obligations,
under the Assigned Transaction and the Confirmation arising after
the final distributions on the Optional Termination Distribution
Date (such transaction and confirmation, collectively, the "New
Assigned Transaction") and (B) Remaining Party hereby consents to
such assignment, delegation and assumption;
(2) Remaining Party and CHL agree to enter into the New Assigned
Transaction as evidenced by a confirmation (the "New
Confirmation") such New Confirmation evidencing a complete and
binding agreement between Remaining Party and CHL and such New
Confirmation will constitute a Confirmation (as that word is
defined in the New Agreement, defined below) that supplements,
forms a part of, and is subject to, an agreement (the "New
Agreement") in the form of the 1992 Multicurrency - Cross Border
Master Agreement in the form published by the International Swaps
and Derivatives Association, Inc. (the "ISDA Form"), as if on the
date Remaining Party and CHL enter into the New Assigned
Transaction Remaining Party and CHL had executed an agreement in
such form, but without any Schedule (as that word is defined in
the New Agreement) except for the elections made therein.
Remaining Party and CHL further agree that such New Confirmation
shall have substantially identical terms to the Assigned
Transaction and Confirmation.
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(b) Remaining Party and Assignee are each released and discharged from
further obligations owed under and in respect of the Assigned
Transaction and their respective rights against each other
thereunder are cancelled;
(c) Remaining Party and CHL hereby agree that the Confirmation shall
be amended as follows:
(1) Section 4 of the Confirmation shall be deleted in its
entirety.
(d) Remaining Party hereby agrees that CHL may do one of the following
with the New Assigned Transaction and the New Confirmation:
(i) retain such New Assigned Transaction and New Confirmation;
(ii) assign all of its rights and delegate all of its liabilities
and obligations under the New Assigned Transaction and the New
Confirmation to a third party, such assignment and delegation to
be effective upon the receipt of written consent thereto from
Remaining Party (in its sole and absolute discretion); or
(iii) terminate the New Assigned Transaction by giving three
Business Days' prior written notice to Remaining Party (the
"Optional Swap Termination"). In connection with the Optional Swap
Termination, if any, a termination payment (if any) shall be
payable by CHL or Remaining Party, as applicable, as determined by
the Calculation Agent by the application of Section 6(e)(ii) of
the ISDA Form Master Agreement, with Market Quotation and Second
Method being the applicable method for determining the termination
payment. The exercise of the right to terminate under this
provision shall not be an Event of Default under any of the other
Transactions between CHL and Bear Xxxxxxx Capital Markets Inc. For
purposes of the Optional Swap Termination, CHL shall be the sole
Affected Party.
(e) If CHL exercises its right to retain the New Assigned Transaction
and New Confirmation pursuant to Section 11(d)(i) of this
Assignment Agreement, then Remaining Party has the right to do one
of the following with the New Assigned Transaction and the New
Confirmation:
(i) retain such New Assigned Transaction and New Confirmation;
(ii) assign all of its rights and delegate all of its liabilities
and obligations under the New Assigned Transaction to a subsidiary
of The Bear Xxxxxxx Companies, Inc. without the consent of CHL; or
(iii) assign all of its rights and delegate all of its liabilities
and obligations under the New Assigned Transaction to a third
party with the consent of CHL;
provided, however, that if Remaining Party exercises its right to
assign the Assigned Transaction under (ii) or (iii) above the
assignee shall be an entity that
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(1) has executed an ISDA Master Agreement with CHL, (2) has
executed an Item 1115 Regulation AB Agreement with CHL and (3)
agrees to accept all of the terms and conditions of the Assigned
Transaction and New Confirmation without amendment or supplement.
12. Counterparts. This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission), each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement
as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
----------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
THE BANK OF NEW YORK, NOT IN ITS
INDIVIDUAL OR CORPORATE CAPACITY
BUT SOLELY AS SWAP CONTRACT
ADMINISTRATOR FOR CWHEQ HOME
EQUITY LOAN TRUST, SERIES 2007-S3
By: /s/ Xxxxxxxx Xxxxxx
-------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
BEAR XXXXXXX CAPITAL MARKETS INC.
By:
Name:
Title:
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Exhibit I
[LOGO] BEAR XXXXXXX
BEAR XXXXXXX CAPITAL MARKETS INC.
000 XXXXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
TEL: 000-000-0000
DATE: March 30, 2007
TO: Countrywide Home Loans, Inc.
ATTENTION: Xx. Xxxx Xxxxx
TELEPHONE: 0-000-000-0000
FACSIMILE: 0-000-000-0000
FROM: Derivatives Documentation
TELEPHONE: 000-000-0000
FACSIMILE: 000-000-0000
SUBJECT: Mortgage Derivatives Confirmation and Agreement
REFERENCE NUMBER: CXCWL07S3
The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the Transaction entered into on the Trade Date specified below
(the " Transaction") between Bear Xxxxxxx Capital Markets Inc. ("Bear Xxxxxxx")
and Countrywide Home Loans, Inc. ("Counterparty"). This letter agreement
constitutes the sole and complete "Confirmation," as referred to in the "ISDA
Master Agreement" (as defined below), as well as a "Schedule" as referred to in
the ISDA Master Agreement
(1) This Confirmation is subject to the 2000 ISDA Definitions (the
"Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA"). Any reference to a "Swap Transaction" in the
Definitions is deemed to be a reference to a "Transaction" for purposes of
this Agreement, and any reference to a "Transaction" in this Agreement is
deemed to be a reference to a "Swap Transaction" for purposes of the
Definitions. This Confirmation shall supplement, form a part of, and be
subject to an agreement in the form of the ISDA Master Agreement
(Multicurrency - Cross Border) as published and copyrighted in 1992 by the
International Swaps and Derivatives Association, Inc. (the "ISDA Master
Agreement"), as if Bear Xxxxxxx and Counterparty had executed an agreement
in such form on the date hereof, with a Schedule as set forth in Item 4 of
this Confirmation (the "Schedule"), and an ISDA Credit Support Annex
(Bilateral Form - ISDA Agreements Subject to New York Law Only version) as
published and copyrighted in 1994 by the International Swaps and
Derivatives Association, Inc., with Paragraph 13 thereof as set forth in
Annex A hereto (the "Credit Support Annex"). For the avoidance of doubt,
the Transaction described herein shall be the sole Transaction governed by
such ISDA Master Agreement. In the event of any inconsistency among any of
the following documents, the relevant document first listed shall govern:
(i) this Confirmation, exclusive of the provisions set forth in Item 4
hereof and Annex A hereto; (ii) the Schedule; (iii) the Credit Support
Annex; (iv) the Definitions; and (v) the ISDA Master Agreement. Terms
capitalized but not defined herein shall have the meanings attributed to
them in the Pooling and Servicing Agreement dated as of March 1, 2007 among
CWHEQ Inc., as depositor, Park Monaco Inc., as a seller, Park Granada LLC,
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").
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 2 of 33
Each reference herein to a "Section" (unless specifically referencing the
Pooling and Servicing Agreement or to a "Section" "of this Agreement" will
be construed as a reference to a Section of the ISDA Master Agreement; each
herein reference to a "Part" will be construed as a reference to Schedule;
each reference herein to a "Paragraph" will be construed as a reference to
a Paragraph of the Credit Support Annex.
(2) The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: With respect to any Calculation Period,
the lesser of (i) the amount set forth for
such period on the Schedule I attached
hereto and (ii) the aggregate Certificate
Principal Balance of the Class 2 and Class
3 Certificates (initially USD 401,546,000)
immediately prior to the Distribution Date
occurring in the calendar month in which
such Calculation Period ends; provided
that upon the occurrence of an Optional
Termination, with respect to each
Calculation Period beginning on or after
the final Distribution Date with respect
to such Optional Termination, the Notional
Amount shall equal the Scheduled Amount
for such Calculation Period as set forth
in the Schedule I attached hereto
multiplied by the quotient of (A) the
Notional Amount for the Calculation Period
immediately prior to such Optional
Termination divided by (B) the Scheduled
Amount for the Calculation Period
immediately prior to such Optional
Termination as set forth in the Schedule I
attached hereto.
Trade Date: March 27, 2007
Effective Date: Xxxxx 00, 0000
Xxxxxxxxxxx Date: March 25, 2014, subject to adjustment in
accordance with the Business Day
Convention; provided, however, that for
the purpose of determining the final
Fixed Rate Payer Period End Date,
Termination Date shall be subject to No
Adjustment.
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Period End Dates: The 25th calendar day of each month during
the Term of this Transaction, commencing
April 25, 2007 and ending on March 25,
2014, with No Adjustment.
Fixed Rate Payer
Payment Dates: The 25th calendar day of each month during
the Term of this Transaction, commencing
April 25, 2007 and ending on the
Termination Date, subject to adjustment in
accordance with the Business Day
Convention.
Fixed Rate: 5.20%
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 3 of 33
Fixed Rate Day
Count Fraction: 30/360
Floating Amounts:
Floating Rate Payer: Bear Xxxxxxx
Floating Rate Payer
Period End Dates: The 25th calendar day of each month during
the Term of this Transaction, commencing
April, 25, 2007 and ending on the
Termination Date, subject to adjustment in
accordance with the Business Day
Convention.
Floating Rate Payer
Payment Dates: Early Payment shall be applicable. One
Business Day prior to each Fixed Rate
Payer Period End Date.
Floating Rate for initial
Calculation Period: To be determined
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One month, except with respect to the
initial Calculation Period for which the
Designated Maturity shall be the Linear
Interpolation of the two week and the one
month.
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Business Days: New York
Business Day Convention: Following
Calculation Agent: Bear Xxxxxxx
Netting: Notwithstanding anything to the contrary
in Section 2(c) of the ISDA Master
Agreement; amounts that are payable with
respect to Calculation Periods which end
in the same calendar month (prior to any
adjustment of period end dates) shall be
netted, as provided in Section 2(c) of the
ISDA Master Agreement, even if such
amounts are not due on the same payment
date. For avoidance of doubt any payments
pursuant to Section 6(e) of the ISDA
Master Agreement shall not be subject to
netting.
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 4 of 33
(3) Additional Provisions: For each Calculation Period, Counterparty
will make the Monthly Report available on
its website
xxxxx://xxx.xxxxxxxxxxxxxxxxxxxx.xxx
indicating the outstanding principal
balance of the Class 2 and Class 3
Certificates as of the first day of the
month in which such Calculation Period
begins
(4) Provisions Deemed Incorporated in a Schedule to the ISDA Master Agreement:
Part 1. Termination Provisions.
For purposes of the ISDA Master Agreement:
(a) "Specified Entity" will not apply to Bear Xxxxxxx or Counterparty for any
purpose.
(b) "Specified Transactions" will not apply to Bear Xxxxxxx or Counterparty for
any purpose.
(c) The "Failure to Pay or Deliver" provisions of Section 5(a)(i) will apply to
Bear Xxxxxxx and will apply to Counterparty; provided that notwithstanding
anything to the contrary in Section 5(a)(i) or Paragraph 7 of the Credit
Support Annex, any failure by Bear Xxxxxxx to comply with or perform any
obligation to be complied with or performed by Bear Xxxxxxx under the
Credit Support Annex shall not constitute an Event of Default under Section
5(a)(i) unless (A) a Xxxxx'x Second Level Downgrade 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 Bear Xxxxxxx.
(d) The "Breach of Agreement" provisions of Section 5(a)(ii) will apply to Bear
Xxxxxxx and will not apply to Counterparty.
(e) The "Credit Support Default" provisions of Section 5(a)(iii) will apply to
(x) Bear Xxxxxxx; provided that notwithstanding anything to the contrary in
Section 5(a)(iii)(1), any failure by Bear Xxxxxxx to comply with or perform
any obligation to be complied with or performed by Bear Xxxxxxx under the
Credit Support Annex shall not constitute an Event of Default under Section
5(a)(iii) unless (A) a Xxxxx'x Second Level Downgrade 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 Bear Xxxxxxx and (y) Counterparty solely in respect of
Counterparty's obligations under Paragraph 3(b) of the Credit Support
Annex.
(f) The "Misrepresentation" provisions of Section 5(a)(iv) will apply to Bear
Xxxxxxx and will not apply to Counterparty.
(g) The "Default under Specified Transaction" provisions of Section 5(a)(v)
will not apply to Bear Xxxxxxx or Counterparty.
(h) The "Cross Default" provisions of Section 5(a)(vi) will apply to Bear
Xxxxxxx and will not apply to Counterparty.
"Specified Indebtedness" will have the meaning specified in Section
14.
"Threshold Amount" means USD 100,000,000.
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 5 of 33
(i) The "Bankruptcy" provisions of Section 5(a)(vii) will apply to Bear Xxxxxxx
and will apply to Counterparty 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 Counterparty has not become subject to), (7)
and (9) will not apply to Counterparty; provided that, with respect to
Counterparty only, 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 Bear Xxxxxxx)", and Section 5(a)(vii)(8) is
hereby amended by deleting the words "to (7) inclusive" and inserting lieu
thereof ", (3), (4) as amended, (5) or (6) as amended".
(j) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will apply to
Bear Xxxxxxx and will apply to Counterparty; provided that Bear Xxxxxxx
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.
(k) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to Bear Xxxxxxx or Counterparty.
(l) The "Automatic Early Termination" provision of Section 6(a) will not apply
to Bear Xxxxxxx or to Counterparty.
(m) Payments on Early Termination. For the purpose of Section 6(e) of the ISDA
Master Agreement:
(1) Market Quotation will apply; and
(2) the Second Method will apply;
provided that if Bear Xxxxxxx is the Defaulting Party or the sole
Affected Party, the following provisions will apply:
(A) Section 6(e) of the ISDA Master Agreement will be amended by
inserting on the first line "or is effectively designated"
after "If an Early Termination Date occurs";
(B) 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, and a party making the
determination, an amount determined on the basis of Firm
Offers from Reference Market-makers that are Eligible
Replacements. Each Firm Offer will be (1) for an amount that
would be paid to Counterparty (expressed as a negative
number) or by Counterparty (expressed as a positive number)
in consideration of an agreement between Counterparty and
such Reference Market-maker to enter into a Replacement
Transaction and (2) 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. The party making the
determination (or its agent) will request each Reference
Market-maker to provide its Firm Offer to the extent
reasonably practicable as of the same day and time (without
regard to different time
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 6 of 33
zones) on or as soon as reasonably practicable after the
relevant Early Termination Date. The day and time as of
which those Firm Offers 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. The Market Quotation shall be
the Firm Offer actually accepted by Counterparty no later
than the Business Day preceding the Early Termination Date.
If no Firm Offers are provided by the Business Day preceding
the Early Termination Date, it will be deemed that the
Market Quotation in respect of such Terminated Transaction
or group of Transactions cannot be determined.
(C) Counterparty shall use best efforts to accept a Firm Offer
that would determine the Market Quotation. If more than one
Firm Offer (which, if accepted, would determine the Market
Quotation) is provided, Counterparty shall use commercially
reasonable efforts to accept the Firm Offer (among such Firm
Offers) which would require either (x) the lowest payment by
the Counterparty to the Reference Market-maker, to the
extent Counterparty would be required to make a payment to
the Reference Market-maker or (y) the highest payment from
the Reference Market-maker to Counterparty, to the extent
the Reference Market-maker would be required to make a
payment to the Counterparty. If only one Firm Offer (which,
if accepted, would determine the Market Quotation) is
provided, Counterparty shall use commercially reasonable
efforts to accept such Firm Offer.
(D) Upon the written request by Counterparty to Bear Xxxxxxx,
Bear Xxxxxxx shall obtain the Market Quotations on behalf of
Counterparty.
(E) If the Settlement Amount is a negative number, Section
6(e)(i)(3) of the ISDA Master Agreement 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) Counterparty shall
pay to Bear Xxxxxxx an amount equal to the absolute value of
the Settlement Amount in respect of the Terminated
Transactions, (II) Counterparty shall pay to Bear Xxxxxxx
the Termination Currency Equivalent of the Unpaid Amounts
owing to Bear Xxxxxxx and (III) Bear Xxxxxxx shall pay to
Counterparty the Termination Currency Equivalent of the
Unpaid Amounts owing to Counterparty; 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 Bear Xxxxxxx under the immediately
preceding clause (III) shall not be netted-off against any
amount payable by Counterparty under the immediately
preceding clause (I)."
(n) "Termination Currency" means United States Dollars.
(o) Additional Termination Events. Additional Termination Events will apply:
(i) If, without the prior written consent(such consent not to be
reasonably withheld) of Bear Xxxxxxx where such consent is required
under the Pooling and Servicing Agreement, an amendment or
supplemental agreement is made to the Pooling and Servicing Agreement
which
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March 30, 2007
Page 7 of 33
amendment or supplemental agreement could reasonably be expected to
have a material adverse effect on the interests of Bear Xxxxxxx under
this Agreement, an Additional Termination Event shall have occurred
with respect to Counterparty, Counterparty shall be the sole Affected
Party and all Transactions hereunder shall be Affected Transaction.
(ii) If an Applied Realized Loss Amount is applied to reduce the
Certificate Principal Balance of any class of Class A Certificates,
then an Additional Termination Event shall have occurred with respect
to Counterparty and Counterparty shall be the sole Affected Party with
respect to such Additional Termination Event.
(iii) (A) If a S&P First Level Downgrade has occurred and is
continuing and Bear Xxxxxxx fails to take any action
described under Part (5)(f)(i)(1), within the time period
specified therein, then an Additional Termination Event
shall have occurred with respect to Bear Xxxxxxx, Bear
Xxxxxxx shall be the sole Affected Party with respect to
such Additional Termination Event and all Transactions
hereunder shall be Affected Transactions.
(B) If a S&P Second Level Downgrade has occurred and is
continuing and Bear Xxxxxxx fails to take any action
described under Part (5)(f)(i)(2) within the time period
specified therein, then an Additional Termination Event
shall have occurred with respect to Bear Xxxxxxx, Bear
Xxxxxxx shall be the sole Affected Party with respect to
such Additional Termination Event and all Transactions
hereunder shall be Affected Transactions.
(C) If (A) a Xxxxx'x Second Level Downgrade has not occurred and
been continuing for 30 or more Local Business Days and (B)
Bear Xxxxxxx has failed to comply with or perform any
obligation to be complied with or performed by Bear Xxxxxxx
in accordance with the Credit Support Annex, then an
Additional Termination Event shall have occurred with
respect to Bear Xxxxxxx and Bear Xxxxxxx shall be the sole
Affected Party with respect to such Additional Termination
Event.
(D) If (A) a Xxxxx'x Second Level Downgrade has occurred and
been continuing for 30 or more Local Business Days and (B)
either (i) at least one Eligible Replacement has made a Firm
Offer to be the transferee or (ii) at least one entity that
satisfies the Xxxxx'x Approved Ratings Threshold has made a
Firm Offer to provide an Eligible Guaranty in respect of all
of Bear Xxxxxxx' present and future obligations under this
Agreement, then an Additional Termination Event shall have
occurred with respect to Bear Xxxxxxx, Bear Xxxxxxx shall be
the sole Affected Party with respect to such Additional
Termination Event and all Transactions hereunder shall be
Affected Transactions.
Part 2. Tax Matters.
(a) Tax Representations.
(i) Payer Representations. For the purpose of Section 3(e) of the ISDA
Master Agreement, each of Bear Xxxxxxx and the Counterparty will make the
following representations:
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March 30, 2007
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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 the ISDA Master Agreement) to be made by it to the
other party under this Agreement. In making this representation, it
may rely on:
(1) the accuracy of any representations made by the other party
pursuant to Section 3(f) of the ISDA Master Agreement;
(2) the satisfaction of the agreement contained in Sections
4(a)(i) and 4(a)(iii) of the ISDA Master Agreement and the
accuracy and effectiveness of any document provided by the other
party pursuant to Sections 4(a)(i) and 4(a)(iii) of the ISDA
Master Agreement; and
(3) the satisfaction of the agreement of the other party
contained in Section 4(d) of the ISDA Master Agreement, provided
that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not
deliver a form or document under Section 4(a)(iii) of the ISDA
Master Agreement by reason of material prejudice to its legal or
commercial position.
(ii) Payee Representations. For the purpose of Section 3(f) of the
ISDA Master Agreement, each of Bear Xxxxxxx and the Counterparty make
the following representations.
The following representation will apply to Bear Xxxxxxx:
Bear Xxxxxxx is a corporation organized under the laws of the
State of Delaware and its U.S. taxpayer identification number is
00-0000000.
The following representation will apply to the Counterparty:
Counterparty represents that it is a "United States person" as
such term is defined in Section 7701(a)(3) of the Internal
Revenue Code of 1986, as amended.
(b) Tax Provisions.
Notwithstanding the definition of "Indemnifiable Tax" in Section 14 of this
Agreement, all Taxes in relation to payments by Bear Xxxxxxx shall be
Indemnifiable Taxes (including any Tax imposed in respect of a Credit
Support Document) unless (i) such Taxes are assessed directly against
Counterparty and not by deduction or withholding by Bear Xxxxxxx or (ii)
arise as a result of a Change in Tax Law (in which case such Tax shall be
an Indemnifiable Tax only if such Tax satisfies the definition of
Indenmifiable Tax provided in Section 14). In relation to payments by
Counterparty, no Tax shall be an Indemnifiable Tax.
Part 3. Agreement to Deliver Documents. For the purpose of Section 4(a) of the
ISDA Master Agreement:
(i) Tax forms, documents, or certificates to be delivered are:
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March 30, 2007
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Party required to Form/Document/ Date by which to
deliver document Certificate be delivered
Bear Xxxxxxx An original properly completed (i) upon execution of this
and executed United States Agreement, (ii) on or before the
Internal Revenue Service Form first payment date under this
W-9 (or any successor thereto) Agreement, including any Credit
with respect to any payments Support Document, (iii) promptly
received or to be received by upon the reasonable demand by
Bear Xxxxxxx, that eliminates Counterparty, (iv) prior to the
U.S. federal withholding and expiration or obsolescence of any
backup withholding Tax on previously delivered form, and (v)
payments to Bear Xxxxxxx under promptly upon the information on any
this Agreement. such previously delivered form
becoming inaccurate or incorrect.
Counterparty An original properly completed (i) upon execution of this
and executed United States Agreement, (ii) on or before the
Internal Revenue Service Form first payment date under this
W-9 (or any successor thereto) Agreement, including any Credit
with respect to any payments Support Document, (iii) promptly
received or to be received by upon the reasonable demand by Bear
Counterparty. Xxxxxxx, (iv) prior to the
expiration or obsolescence of any
previously delivered form, and (v)
promptly upon the information on
any such previously delivered form
becoming inaccurate or incorrect.
(ii) Other documents to be delivered are:
Party required to Form/Document/ Date by which to Covered by Section
deliver document Certificate be delivered 3(d) Representation
Bear Xxxxxxx and the Any documents required by the Upon the execution Yes
Counterparty receiving party to evidence the and delivery of this
authority of the delivering Agreement and such
party or its Credit Support Confirmation
Provider, if any, for it 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 or its Credit Support
Provider to perform its
obligations under this
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Party required to Form/Document/ Date by which to Covered by Section
deliver document Certificate be delivered 3(d) Representation
Agreement, such Confirmation
and/or Credit Support Document,
as the case may be
Bear Xxxxxxx and the A certificate of an authorized Upon the execution Yes
Counterparty officer of the party, as to the and delivery of this
incumbency and authority of the Agreement and such
respective officers of the party Confirmation
signing this Agreement, any
relevant Credit Support Document,
or any Confirmation, as the case
may be
Bear Xxxxxxx and the An opinion of counsel of such Upon the execution No
Counterparty party regarding the and delivery of this
enforceability of this Agreement
Agreement in a form reasonably
satisfactory to the other party.
Counterparty An executed copy of the Pooling Concurrently with No
and Servicing Agreement and the filing of each draft
Swap Administration Agreement of the Pooling and
Servicing Agreement
with the U.S.
Securities and
Exchange Commission
Part 4. Miscellaneous.
(a) Address for Notices: For the purposes of Section 12(a) of the ISDA Master
Agreement:
Address for notices or communications to Bear Xxxxxxx:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: DPC Manager
Facsimile: (000) 000-0000
with a copy to:
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxx 00000
Attention: Derivative Operations - 7th Floor
Facsimile: (000) 000-0000
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and
Address: MBIA Insurance Corporation
000 Xxxx Xxxxxx, Xxxxxx
Xxx Xxxx 00000
Attention: IPM-Structured Mortgage
(For all purposes)
Address for notices or communications to the Counterparty:
Address: 0000 Xxxx Xxxxxxx
Xxxx Xxxx XX-000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Facsimile: 000-000-0000
Phone: 000-000-0000
With respect to Notices of Section 5 and 6 of the Agreement:
Address: MBIA Insurance Corporation
000 Xxxx Xxxxxx, Xxxxxx
Xxx Xxxx 00000
Attention: IPM-Structured Mortgage
(b) Account Details and Settlement Information:
Payments to Bear Xxxxxxx:
Citibank, N.A., New York
ABA Number: 000-0000-00, for the account of
Bear, Xxxxxxx Securities Corp.
Account Number: 0925-3186, for further credit to
Bear Xxxxxxx Capital Markets
Sub-account Number: 000-00000-00
Attention: Derivatives Operations
Payments to Counterparty:
See Assignment Agreement
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(c) Process Agent. For the purpose of Section 13(c) of the ISDA Master
Agreement:
Bear Xxxxxxx appoints as its
Process Agent: Not Applicable
The Counterparty appoints as its
Process Agent: Not Applicable
(d) Offices. The provisions of Section 10(a) of the ISDA Master Agreement will
not apply to this Agreement; neither Bear Xxxxxxx nor the Counterparty have
any Offices other than as set forth in the Notices Section.
(e) Multibranch Party. For the purpose of Section 10(c) of the ISDA Master
Agreement:
Bear Xxxxxxx is not a Multibranch Party.
The Counterparty is not a Multibranch Party.
(f) Credit Support Document.
Bear Xxxxxxx: The Credit Support Annex and any guaranty in
support of Bear Xxxxxxx' obligations under this Agreement.
Counterparty: The Credit Support Annex.
(g) Credit Support Provider.
Bear Xxxxxxx: The guarantor under any guaranty in support of
Bear Xxxxxxx' obligations under this Agreement.
Counterparty: Not Applicable
(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole,
without regard to the conflict of law provisions thereof other than New
York General Obligations Law Sections 5-1401 and 5-1402.
(i) 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.
(j) "Affiliate": Bear Xxxxxxx and Counterparty shall be deemed not to have any
Affiliates for purposes of this Agreement, including for purposes of
Section 6(b)(ii) of the ISDA Master Agreement.
(k) Netting of Payments. The parties agree that subparagraph (ii) of Section
2(c) of the ISDA Master Agreement will apply to each Transaction.
Part 5. Other Provisions.
(a) Section 3 of the ISDA Master Agreement is hereby amended by adding at the
end thereof the following subsection (g):
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"(g) Relationship Between Parties.
Each party represents to the other party on each date when it
enters into a Transaction that:
(1) Nonreliance. (i) It is acting for its own account, (ii) 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 (iii) it has
consulted with its own legal, regulatory, tax, business,
investment, financial and accounting advisors to the extent it
has deemed necessary, (iv) 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, (v) it has made
its own independent decisions to enter into the Transaction and
as to whether the Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such advisors as
it has deemed necessary, (vi) it is not relying on any
communication (written or oral) of the other party as investment
advice or as a recommendation to enter into this Transaction; it
being understood that information and explanations related to the
terms and conditions of this Transaction shall not be considered
investment advice or a recommendation to enter into this
Transaction and (vii) it has not received from the other party
any assurance or guaranty as to the expected results of this
Transaction.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or through
independent professional advice) the Transaction and
has made its own decision to enter into the
Transaction; and
(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 constitutes an "eligible
contract participant" as such term is defined in Section 1(a)12
of the Commodity Exchange Act, as amended.
(6) Line of Business. It has entered into this Agreement (including
each Transaction governed hereby) in conjunction with its line of
business or the financing of its business."
(b) Non-Recourse. Notwithstanding any provision herein or in the ISDA Master
Agreement to the contrary, the obligations of Counterparty hereunder are limited
recourse obligations of Counterparty, payable solely from the Swap Account and
the proceeds thereof, in accordance with the terms of the Pooling and Servicing
Agreement. In the event that the Swap Account and proceeds thereof should be
insufficient to satisfy all claims outstanding and following the realization of
the Swap Account and the proceeds thereof, any claims against or obligations of
Counterparty under the ISDA Master Agreement or any other confirmation
thereunder
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still outstanding shall be extinguished and thereafter not revive. The
Counterparty shall not have liability for any failure or delay in making a
payment hereunder to Bear Xxxxxxx due to any failure or delay in receiving
amounts in the Swap Account from the Trust created pursuant to the Pooling and
Servicing Agreement.
(c) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits
or expectations of the parties.
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.
(d) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to lime, by the other party of any and all
communications between officers or employees of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
(e) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.
(f) Rating Agency Downgrade.
(i) S&P Downgrade:
(1) In the event that a S&P First Level Downgrade occurs and is
continuing, then within 30 days after such rating downgrade, Bear
Xxxxxxx shall, at its own expense, either (i) procure a Permitted
Transfer, (ii) obtain an Eligible Guaranty or (iii) post
collateral in accordance with the Credit Support Annex.
(2) In the event that a S&P Second Level Downgrade occurs and is
continuing, then within 10 Local Business Days after such rating
withdrawal or downgrade, Bear Xxxxxxx shall, at its own expense,
either (i) procure a Permitted Transfer or (ii) obtain an
Eligible Guaranty.
(ii) Xxxxx'x Downgrade.
(1) In the event that a Xxxxx'x Second Level Downgrade occurs and is
continuing, Bear Xxxxxxx shall as soon as reasonably practicable
thereafter, at its own expense and using commercially reasonable
efforts, either (i) procure a Permitted Transfer or (ii) obtain
an Eligible Guaranty.
(g) Payment Instructions. Bear Xxxxxxx hereby agrees that, unless notified in
writing by the Swap Administrator of other payment instructions, any and all
amounts payable by Bear Xxxxxxx to the Counterparty under this Agreement shall
be paid to the Swap Contract Administrator at the account specified in the
Assignment Agreement.
Reference Number: CXCWL07S3
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March 30, 2007
Page 15 of 33
(h) Amendment. No amendment, waiver, supplement or other modification of this
Transaction shall be permitted by either party unless (i) each of S&P and
Xxxxx'x have been provided notice of the same and (ii) such amendment, waiver,
supplement, assignment or other modification satisfies the Rating Agency
Condition.
(i) Transfer.
(i) The first paragraph of Section 7 is hereby amended in its entirety as
follows:
"Subject to Section 6(b)(ii), Part 5(f) and Part 5(j), neither this
Agreement nor any interest or obligation in or under this Agreement
may be transferred (whether by way of security or otherwise) without
(a) the prior written consent of the other party (which consent shall
be deemed given by Counterparty if the transfer, novation or
assignment is to an Eligible Replacement) and (b) satisfaction of the
Rating Agency Condition with respect to S&P, except that:"
(ii) If an entity has made a Firm Offer (which remains an offer that will
become legally binding upon acceptance by Counterparty) to be the
transferee of a transfer, Counterparty shall, at Bear Xxxxxxx' written
request and at Bear Xxxxxxx' expense, take any reasonable steps
required to be taken by Counterparty to effect such transfer.
(j) 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) deleting the last paragraph thereof and
inserting the following:
"Notwithstanding anything to the contrary in Section 7 (as amended herein)
and Part 5(i), any transfer by Bear Xxxxxxx under this Section 6(b)(ii)
shall not require the consent of Counterparty; provided that:
(i) the transferee (the "Transferee") is an Eligible Replacement;
(ii) if the Transferee is domiciled in a different country or political
subdivision thereof from both Bear Xxxxxxx and Counterparty, such
transfer satisfies the Rating Agency Condition;
(iii) the Transferee will not, as a result of such transfer, be required on
the next succeeding Scheduled Payment Date to withhold or deduct on
account of any Tax (except in respect of default interest) amounts in
excess of that which Bear Xxxxxxx would, on the next succeeding
Scheduled Payment Date have been required to so withhold or deduct
unless the Transferee would be required to make additional payments
pursuant to Section 2(d) (i)(4) corresponding to such excess;
(iv) a Termination Event or Event of Default does not occur as a result of
such transfer; and
(v) the Transferee confirms in writing that it will accept all of the
interests and obligations in and under this Agreement which are to be
transferred to it in accordance with the terms of this provision.
On and from the effective date of any such transfer to the Transferee, Bear
Xxxxxxx will be fully released from any and all obligations hereunder."
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March 30, 2007
Page 16 of 33
(k) Proceedings. Bear Xxxxxxx shall not institute against or cause any other
person to institute against, or join any other person in instituting against,
the Trust any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy,
dissolution or similar law, for a period of one year and one day (or, if longer,
the applicable preference period) following indefeasible payment in full of the
Certificates.
(l) Compliance with Regulation AB.
Regulation AB Compliance. Bear Xxxxxxx and Counterparty agree that the terms of
the Item 1115 Agreement dated as of March 30, 2007 (the "Regulation AB
Agreement"), between Countrywide Home Loans, Inc., CWABS, INC., CWMBS, Inc.,
CWALT, Inc., CWHEQ, Inc. and Bear Xxxxxxx Capital Markets Inc. shall be
incorporated by reference into this Agreement so that Counterparty shall be an
express third party beneficiary of the Regulation AB Agreement. A copy of the
Regulation AB Agreement is attached hereto as Annex B.
(m) Substantial Financial Transaction. Each party hereto is hereby advised and
acknowledges that the other party has engaged in (or refrained from engaging in)
substantial financial transactions and has taken (or refrained from taking)
other material actions in reliance upon the entry by the parties into the
Transaction being entered into on the terms and conditions set forth herein and
in the Confirmation relating to such Transaction, as applicable. This paragraph
shall be deemed repeated on the trade date of each Transaction.
(n) Set-Off. Except as expressly provided for in Section 2(c), Section 6 or
Part 1(m)(E) 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."
(o) Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
(p) Swap Contract Administration Agreement. Bear Xxxxxxx shall be an express
third party beneficiary of the Swap Contract Administration Agreement, dated
as of March 30, 2007 (the "Swap Contract Administration Agreement"), among The
Bank of New York, as Swap Contract Administrator and not in its individual or
corporate capacity but solely as Trustee under the Pooling and Servicing
Agreement, and Countrywide Home Loans, Inc. A copy of the Swap Contract
Administration Agreement is attached hereto as Annex C.
(q) Additional Defined Terms.
(i) Capitalized terms used but nor defined herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
(ii) Additional Definitions:
"Eligible Guaranty" means an unconditional and irrevocable guaranty of
all present and future payment obligations and obligations to post
collateral of Bear Xxxxxxx or an Eligible Replacement to Counterparty
under this Agreement that is provided by an Eligible Guarantor as
principal debtor
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rather than surety and that is directly enforceable by Counterparty,
the form and substance of which guaranty are subject to the Rating
Agency Condition with respect to S&P.
"Eligible Guarantor" means an entity that has credit ratings at least
equal to the Moody's Required Ratings Threshold and S&P Approved
Ratings Threshold.
"Eligible Replacement" means an entity that either (i) satisfies the
S&P Approved Ratings Threshold and the Moody's Required Ratings
Threshold or (ii) provides an Eligible Guaranty from an Eligible
Guarantor.
"Firm Offer" means an offer which, when made, is capable of becoming
legally binding upon acceptance.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor.
"Moody's Approved Ratings Threshold" means, with respect to (i) Bear
Xxxxxxx, a Moody's counterparty rating of "A 1" or above and (ii) with
respect to any other entity (or its guarantor), (x) 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"
or above and a short-term unsecured and unsubordinated debt rating
from Moody's of "Prime-1" or above, or (y) 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 "Al" or above.
"Moody's First Level Downgrade" means that no Relevant Entity
satisfies the Moody's Approved Rating Threshold.
"Moody's Required Ratings Threshold" means, with respect to (i) Bear
Xxxxxxx, a counterparty rating of "A3" or above and (ii) with respect
to any other entity (or its guarantor), (x) 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 above or a
short-term unsecured and unsubordinated debt rating from Moody's of
"Prime-2" or above, or (y) 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" or above.
"Moody's Second Level Downgrade" means that no Relevant Entity
satisfies the Moody's Required Ratings Threshold.
"Permitted Transfer" means a transfer by novation by Bear Xxxxxxx to
an entity (the "Transferee") of all, but not less than all, of Bear
Xxxxxxx' 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 Counterparty), (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 Bear Xxxxxxx under the
Agreement and the relevant Transaction, (d) Bear Xxxxxxx will be
responsible for any costs or expenses
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incurred in connection with such transfer (including any replacement
cost of entering into a replacement transaction); (e) either (A)
Moody's has been given prior written notice of such transfer and the
Rating Agency Condition is satisfied with respect to S&P or (B) each
Rating Agency has been given prior written notice of such transfer and
such transfer is in connection with the assignment and assumption of
this Agreement without modification of its terms, other than party
names, dates relevant to the effective date of such transfer, tax
representations and any other representations regarding the status of
the substitute counterparty, notice information and account details
and other similar provisions; and (f) such transfer otherwise complies
with the terms of the Pooling and Servicing Agreement.
"Rating Agency" means each of Moody's and S&P.
"Rating Agency Condition" means, with respect to any particular
proposed act or omission to act hereunder that the party acting or
failing to act must consult with each Rating Agency then providing a
rating of the Certificates and any Notes and receive from each such
Rating Agency a prior written confirmation that the proposed action or
inaction would not cause a downgrade or withdrawal of its then-current
rating of the Certificates and any Notes.
"Relevant Entity" means Bear Xxxxxxx and any Eligible Guarantor under
an Eligible Guaranty with respect to Bear Xxxxxxx.
"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
Counterparty 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,
as determined by Counterparty in its sole discretion, acting in a
commercially reasonable manner.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"S&P Approved Ratings Threshold" means with respect to (i) Bear
Xxxxxxx, a counterparty rating of "A+" or above and (ii) with respect
to any other entity (or its guarantor), a short-term unsecured and
unsubordinated debt rating from S&P of "A-1" or above, 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+" or above.
"S&P First Level Downgrade" means that no Relevant Entity satisfies
the S&P Approved Rating Threshold.
"S&P Required Ratings Threshold" means with respect to (i) Bear
Xxxxxxx, a counterparty rating of "BBB-" or above and (ii) with
respect to any other entity (or its guarantor), a long-term unsecured
and unsubordinated debt rating from S&P of "BBB-" or above.
"S&P Second Level Downgrade" means that no Relevant Entity satisfies
the S&P Required Rating Thresholds.
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 19 of 33
(q) Rating Agency Notifications. Except as otherwise provided herein, no Early
Termination Date shall be effectively designated hereunder shall be made by
either party unless each Rating Agency has been given prior written notice of
such designation.
NEITHER THE BEAR XXXXXXX COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE
OF THE BEAR XXXXXXX COMPANIES INC. OTHER THAN BEAR XXXXXXX IS AN OBLIGOR
OR A CREDIT SUPPORT PROVIDER ON THIS AGREEMENT
This Agreement may be executed in several counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to Bear Xxxxxxx a facsimile of the
fully-executed Confirmation to 000-000-0000. For inquiries regarding U.S.
Transactions, please contact Derivatives Documentation by telephone at
000-000-0000. For all other inquiries please contact Derivatives Documentation
by telephone at 000-0-000-0000. Originals will be provided for your execution
upon your request.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 20 of 33
Very truly yours,
BEAR XXXXXXX CAPITAL MARKETS INC.
By: /s/ Xxxxxxxxx Xxxxxx
-----------------------------
Name: XXXXXXXXX XXXXXX
Title: Authorized Signatory
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
COUNTRYWIDE HOME LOANS, INC.
By: _____________________________
As authorized agent or officer for Countrywide Home Loans, Inc.
Name:
Title:
cm
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 21 of 33
SCHEDULE I
(where for the purposes of (i) determining Floating Amounts, all such dates
subject to adjustment in accordance with the Following Business Day
Convention and (ii) determining Fixed Amounts, all such dates subject to No
Adjustment.)
--------------------------------------------------------------------------
From and including To but excluding Scheduled Amounts
--------------------------------------------------------------------------
Effective Date 25-Apr-07 401,546,000
-------------------------- ---------------------- ------------------------
25-Apr-07 25-May-07 401,546,000
-------------------------- ---------------------- ------------------------
25-May-07 25-Jun-07 401,546,000
-------------------------- ---------------------- ------------------------
25-Jun-07 25-Jul-07 401,546,000
-------------------------- ---------------------- ------------------------
25-Jul-07 25-Aug-07 401,546,000
-------------------------- ---------------------- ------------------------
25-Aug-07 25-Sep-07 401,546,000
-------------------------- ---------------------- ------------------------
25-Sep-07 25-Oct-07 401,546,000
-------------------------- ---------------------- ------------------------
25-Oct-07 25-Nov-07 401,546,000
-------------------------- ---------------------- ------------------------
25-Nov-07 25-Dec-07 401,546,000
-------------------------- ---------------------- ------------------------
25-Dec-07 25-Jan-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Jan-08 25-Feb-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Feb-08 25-Mar-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Mar-08 25-Apr-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Apr-08 25-May-08 401,546,000
-------------------------- ---------------------- ------------------------
25-May-08 25-Jun-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Jun-08 25-Jul-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Jul-08 25-Aug-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Aug-08 25-Sep-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Sep-08 25-Oct-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Oct-08 25-Nov-08 401,546,000
-------------------------- ---------------------- ------------------------
25-Nov-08 25-Dec-08 401,546;000
-------------------------- ---------------------- ------------------------
25-Dec-08 25-Jan-09 401,546,000
-------------------------- ---------------------- ------------------------
25-Jan-09 25-Feb-09 401,546,000
-------------------------- ---------------------- ------------------------
25-Feb-09 25-Mar-09 391,730,434
-------------------------- ---------------------- ------------------------
25-Mar-09 25-Apr-09 380,309,345
-------------------------- ---------------------- ------------------------
25-Apr-09 25-May-09 369,205,878
-------------------------- ---------------------- ------------------------
25-May-09 25-Jun-09 358,411,270
-------------------------- ---------------------- ------------------------
25-Jun-09 25-Jul-09 347,916,997
-------------------------- ---------------------- ------------------------
25-Jul-09 25-Aug-09 337,714,772
-------------------------- ---------------------- ------------------------
25-Aug-09 25-Sep-09 327,796,531
-------------------------- ---------------------- ------------------------
25-Sep-09 25-Oct-09 318,154,435
-------------------------- ---------------------- ------------------------
25-Oct-09 25-Nov-09 309,882,493
-------------------------- ---------------------- ------------------------
25-Nov-09 25-Dec-09 301,143,631
-------------------------- ---------------------- ------------------------
25-Dec-09 25-Jan-10 292,648,251
-------------------------- ---------------------- ------------------------
25-Jan-10 25-Feb-10 284,389,625
-------------------------- ---------------------- ------------------------
25-Feb-10 25-Mar-10 276,361,213
-------------------------- ---------------------- ------------------------
25-Mar-10 25-Apr-10 268,556,651
-------------------------- ---------------------- ------------------------
25-Apr-10 25-May-10 260,969,753
-------------------------- ---------------------- ------------------------
25-May-10 25-Jun-10 253,594,500
-------------------------- ---------------------- ------------------------
25-Jun-10 25-Jul-l0 246,425,040
-------------------------- ---------------------- ------------------------
25-Jul-10 25-Aug-10 239,455,682
-------------------------- ---------------------- ------------------------
25-Aug-10 25-Sep-10 232,680,891
--------------------------------------------------------------------------
Reference Number: CXCWL07S3
Countrywide Home Loans, Inc.
March 30, 2007
Page 22 or 33
--------------------------------------------------------------------------
25-Sep-10 25-Oct-10 226,095,284
-------------------------- --------------------- -------------------------
25-Oct-10 25-Nov-10 219,693,626
-------------------------- --------------------- -------------------------
25-Nov-10 25-Dec-10 213,470,826
-------------------------- --------------------- -------------------------
25-Dec-10 25-Jan-11 207,421,933
-------------------------- --------------------- -------------------------
25-Jan-11 25-Feb-11 201,542,132
-------------------------- --------------------- -------------------------
25-Feb-11 25-Mar-11 195,826,741
-------------------------- --------------------- -------------------------
25-Mar-11 25-Apr-11 190,271,206
-------------------------- --------------------- -------------------------
25-Apr-11 25-May-11 184,871,099
-------------------------- --------------------- -------------------------
25-May-11 25-Jun-11 179,622,113
-------------------------- --------------------- -------------------------
25-Jun-11 25-Jul-11 174,520,059
-------------------------- --------------------- -------------------------
25-Jul-11 25-Aug-11 169,560,867
-------------------------- --------------------- -------------------------
25-Aug-11 25-Sep-11 164,740,574
-------------------------- --------------------- -------------------------
25-Sep-11 25-Oct-11 160,055,329
-------------------------- --------------------- -------------------------
25-Oct-11 25-Nov-11 155,501,386
-------------------------- --------------------- -------------------------
25-Nov-11 25-Dec-11 151,075,104
-------------------------- --------------------- -------------------------
25-Dec-11 25-Jan-12 146,772,939
-------------------------- --------------------- -------------------------
25-Jan-12 25-Feb-12 142,591,448
-------------------------- --------------------- -------------------------
25-Feb-12 25-Mar-12 138,527,281
-------------------------- --------------------- -------------------------
25-Mar-12 25-Apr-12 134,577,180
-------------------------- --------------------- -------------------------
25-Apr-12 25-May-12 130,737,978
-------------------------- --------------------- -------------------------
25-May-12 25-Jun-12 127,006,595
-------------------------- --------------------- -------------------------
25-Jun-12 25-Jul-12 123,380,035
-------------------------- --------------------- -------------------------
25-Jul-12 25-Aug-12 119,855,385
-------------------------- --------------------- -------------------------
25-Aug-12 25-Sep-12 116,429,814
-------------------------- --------------------- -------------------------
25-Sep-12 25-Oct-12 113,100,566
-------------------------- --------------------- -------------------------
25-Oct-12 25-Nov-12 109,864,963
-------------------------- --------------------- -------------------------
25-Nov-12 25-Dec-12 106,720,401
-------------------------- --------------------- -------------------------
25-Dec-12 25-Jan-13 103,664,347
-------------------------- --------------------- -------------------------
25-Jan-13 25-Feb-13 100,694,338
-------------------------- --------------------- -------------------------
25-Feb-13 25-Mar-13 97,807,981
-------------------------- --------------------- -------------------------
25-Mar-13 25-Apr-13 95,002,945
-------------------------- --------------------- -------------------------
25-Apr-13 25-May-13 92,276,967
-------------------------- --------------------- -------------------------
25-May-13 25-Jun-13 89,627,845
-------------------------- --------------------- -------------------------
25-Jun-13 25-Jul-13 87,053,437
-------------------------- --------------------- -------------------------
25-Jul-13 25-Aug-13 84,551,663
-------------------------- --------------------- -------------------------
25-Aug-13 25-Sep-13 82,120,497
-------------------------- --------------------- -------------------------
25-Sep-13 25-Oct-13 79,667,854
-------------------------- --------------------- -------------------------
25-Oct-13 25-Nov-13 77,273,903
-------------------------- --------------------- -------------------------
25-Nov-13 25-Dec-13 74,947,590
-------------------------- --------------------- -------------------------
25-Dec-13 25-Jan-14 72,687,028
-------------------------- --------------------- -------------------------
25-Jan-14 25-Feb-14 70,490,383
-------------------------- --------------------- -------------------------
25-Feb-14 Termination Date 68,355,871
--------------------------------------------------------------------------
ANNEX A
UNILATERAL CSA SCHEDULE
Pledgor: BEAR XXXXXXX CAPITAL MARKETS INC. (the "Pledgor")
Secured Party: COUNTRYWIDE HOME LOANS, INC. (the "Secured Party")
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in this
Annex includes no "additional obligations" within the meaning of Paragraph
12.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(1) Delivery Amount. Paragraph 3(a) shall be amended by replacing
the words "upon a demand made by the Secured Party on or promptly
following a Valuation Date" with the words "on each Valuation Date".
The "Delivery Amount" with respect to Pledgor for any Valuation Date
shall equal the greatest of:
(A) the amount by which the S&P Collateral Amount exceeds the S&P
Value on such Valuation Date of all Posted Credit Support held by
the Secured Party;
(B) the amount by which the Moody's First Level Collateral Amount
exceeds the Moody's First Level Value on such Valuation Date of
all Posted Credit Support held by the Secured Party.
(C) the amount by which the Moody's Second Level Collateral
Amount exceeds the Moody's Second Level Value on such Valuation
Date of all Posted Credit Support held by the Secured Party.
(2) "Return Amount" applicable to Secured Party for any Valuation
Date shall equal the least of:
(A) the amount by which the S&P Value on such Valuation Date of
all Posted Credit Support held by the Secured Party exceeds the
S&P Collateral Amount;
(B) the amount by which the Xxxxx'x First Level Value on such
Valuation Date of all Posted Credit Support held by the Secured
Party exceeds the Xxxxx'x First Level Collateral Amount.
(C) the amount by which the Xxxxx'x Second Level Value on such
Valuation Date of all Posted Credit Support held by the Secured
Party exceeds the Xxxxx'x Second Level Collateral Amount.
(3) "Credit Support Amount" shall be deleted in its entirety.
(ii) Eligible Collateral. The items set forth on the Collateral
Schedule attached as Schedule A hereto will qualify as "Eligible
Collateral" for the party specified.
11
(iii) Other Eligible Support. None
(iv) Thresholds.
(A) "Independent Amount" means:
Pledgor: Not applicable.
Secured Party: Not applicable.
(B) "Threshold" means:
Pledgor: Not applicable.
Secured Party: Not applicable.
(C) "Minimum Transfer Amount" means USD100,000; provided, that if the
aggregate Certificate Principal Balance of Certificates rated by
S&P is less than USD 50,000,000, the "Minimum Transfer Amount"
shall mean USD50,000.
(D) Rounding. The Delivery Amount will be rounded up and the Return
Amount will be rounded down to the nearest integral multiple of
USD 10,000.
(c) Valuation and Timing.
(i) "Valuation Agent" means Pledgor.
(ii) "Valuation Date" means each Local Business Day.
(iii) "Valuation Time" means the close of business on the Local Business
Day in the city where the Valuation Agent is located 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).
(v) Transfer Timing and Calculations. Paragraphs 4(b) and 4(c) are hereby
amended and restated in entirety as set forth below.
"(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless
otherwise specified, if a demand for the Transfer of Eligible
Credit Support or Posted Credit Support is made by the
Notification Time, then the relevant Transfer will be made not
later than the close of business on the Valuation Date; if a
demand is made after the Notification Time, then the relevant
Transfer will be made not later than the close of business on the
next Local Business Day thereafter.
(c) Calculations. All calculations of Value and Exposure for
purposes of Paragraphs 3 and 6(d) will be made by the Valuation
Agent as of the Valuation Time. The Valuation Agent will notify
each party (or the other party, if the Valuation Agent is a
party) of its calculations not later than the Notification Time
on the applicable Valuation Date (or in the case of Paragraph
6(d), the Local Business Day following the day on which such
relevant calculations are performed)."
(d) Conditions Precedent. There shall be no "Specified Condition" with respect
to either party for
12
purposes of this Annex.
(e) Substitution
(i) "Substitution Date" means (A) the Local Business Day on which the
Secured Party receives the Substitute Credit Support, if notice of
substitution is received by the Notification Time on such date, and
(B) the Local Business Day following the date on which the Secured
Party receives the Substitute Credit Support, if notice of
substitution is received after the Notification Time.
(ii) Consent of Secured Party for Substitution. Inapplicable.
(iii) Amendment of Paragraph 4(d)(ii). Paragraph 4(d)(ii) is amended and
restated in its entirety as set forth below:
"(ii) subject to Paragraph 4(a) of this Annex, the Secured Party
will Transfer the items of Posted Credit Support specified by the
Pledgor in its notice not later than the close of business on the
Substitution Date, provided, however, that if the Secured Party
shall not have received the Substitute Credit Support prior to
1:00 P.M. (New York time) on the Substitution Date, then the
Secured Party shall Transfer the applicable items of Posted
Credit Support not later than the close of business on the Local
Business Day immediately following the day on which the Secured
Party receives the Substitute Credit Support. Notwithstanding the
foregoing, the Secured Party will only be obligated to Transfer
Posted Credit Support with a Value as of the Substitution Date
equal to the Value of the Substitute Credit Support delivered by
the Pledgor in exchange therefor."
(f) Dispute Resolution.
(i) "Resolution Time" means 12:00 noon, New York time, on the Local
Business Day for both parties following the date the Disputing Party
gives notice of a dispute pursuant to Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), disputes over
the Value of Posted Credit Support will be resolved by the Valuation
Agent seeking bid-side quotations as of the relevant Recalculation
Date or date of Transfer, as applicable, from three parties that
regularly act as dealers in the securities in question. The Value will
be the arithmetic mean of the quotations obtained by the Valuation
Agent, multiplied by the applicable Valuation Percentage, if any. If
no quotations are available for a particular security, then the
Valuation Agent's original calculation of Value thereof will be used
for that security.
(iii) Alternative. Subject to item (iv) below, the provisions of Paragraph
5 will apply.
(iv) Modification of Paragraph 5. The introductory paragraph of Paragraph 5
shall be amended and restated to read in its entirety as follows:
"If a party (a `Disputing Party') disputes (I) the Valuation
Agent's calculation of a Delivery Amount or a Return Amount or
(II) the Value of any Transfer of Eligible Credit Support or
Posted Credit Support, then:
(A) the Disputing Party will (x) notify the other party and,
if applicable, the Valuation Agent of the amount it is disputing,
(y) indicate what it believes the correct amount to be and (z)
provide a statement showing, in reasonable detail, how
13
it arrived at such amount and the appropriate party will deliver
the undisputed amount to the other party not later than (i) (a)
the close of business on the Valuation Date, if the demand made
under Paragraph 3 in the case of (I) above is made by the
Notification Time, or (b) the close of business of the Local
Business Day following the date on which the demand is made under
Paragraph 3 in the case of (I) above, if such demand is made
after the Notification Time, or (ii) the close of business of the
xxxx of Transfer, in the case of (II) above;
(B) the parties will consult with each other and provide such
information as the other party shall reasonably request in an
attempt to resolve the dispute; and
(C) if they fail to resolve the dispute by the Resolution Time,
then:"
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians. The Secured Party
and its Custodian (if any) will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b), provided that the following conditions
applicable to it are satisfied:
(1) it is not a Defaulting Party;
(2) Posted Collateral consisting of Cash or certificated securities
that cannot be paid or delivered by book-entry may be held only in any
state of the United States which has adopted the Uniform Commercial
Code;
(3) the short-term rating of any Custodian shall be at least "A-1" by
S&P
There shall be no Custodian for Pledgor.
(ii) Use of Posted Collateral The provisions of Paragraph 6(c) will not
apply to Secured Party and Secured Party will not have any right to
use the Posted Collateral or take any action specified in Paragraph
6(c).
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" will be the "Federal Funds
(Effective)" rate as such rate is displayed on Telerate page 118 for
such day under the caption "Effective".
(ii) Amendment of Paragraph 6(d)(i) - Distributions. Clause (d)(i) of
Paragraph 6 shall be amended by deleting each occurrence of the words
"or is deemed to receive."
(iii) Amendment of Paragraph 6(d)(ii) - Interest Amount. Clause
(d)(ii) of Paragraph 6 shall be amended and restated to read in its
entirety as follows:
"(ii) Interest Amount. In lieu of any interest, dividends or
other amounts paid with respect to Posted Collateral in the form
of cash (all of which may be retained by the Secured Party), the
Secured Party will credit to Pledgor on the 20'" day of each
calendar month (or if such day is not a Local Business Day, the
next Local Business Day) the Interest Amount. The Interest Amount
will constitute Posted Collateral and will be subject to the
security interest granted under Paragraph 2. For purposes of
calculating the Interest Amount the amount of interest calculated
for each day of the interest period shall be compounded monthly."
Secured Party
14
shall not be obliged to credit any Interest Amount unless and
until it has received such amount.
(i) Demands and Notices.
All demands, specifications and notices under this Annex will be made
pursuant to the Notices Section of this Agreement.
(j) Addresses for Transfers.
Pledgor: To be provided in writing by Pledgor to Secured Party.
Secured Party: To be provided in writing by Secured Party to Pledgor.
(k) Other Provision(s).
(i) Amendment of Paragraph 7 - Events of Default. Clause (iii) of
Paragraph 7 shall not apply to Secured Party.
(ii) Non-Reliance. Notwithstanding the obligations of the Secured
Party under Paragraph 6(a), and without limiting the generality of the
final sentence of Paragraph 6(a), each party, as Pledgor, acknowledges
that it has the means to monitor all matters relating to all
valuations, payments, defaults and rights with respect to Posted
Collateral without the need to rely on the other party, in its
capacity as Secured Party, and that, given the provisions of this
Annex on substitution, responsibility for the preservation of the
rights of the Pledgor with respect to all such matters is reasonably
allocated hereby to the Pledgor.
(iii) Agreement as to Single Secured Party and Pledgor. Each of Pledgor and
Secured Party agree that, notwithstanding anything to the contrary in
the recital to this Annex, Paragraph 1(b) or Paragraph 2 or the
definitions in Paragraph 12, (a) the term "Secured Party" as used in
this Annex means only Secured Party, (b) the term "Pledgor" as used in
this Annex means only Pledgor, (c) only Pledgor makes the pledge and
grant in Paragraph 2, the acknowledgement in the final sentence of
Paragraph 8(a) and the representations in Paragraph 9 and (d) only
Pledgor will be required to make Transfers of Eligible Credit Support
hereunder.
(iv) Trustee. The Trustee is hereby authorized to (i) make demands on
behalf of the Secured Party pursuant to Paragraph 3 hereunder and (ii)
provide notice on behalf of the Secured Party pursuant to Paragraph 7
hereunder.
(v) Collateral Account. Secured Party shall at all times maintain all
Posted Collateral in a segregated trust account.
(vi) External Calculations. At any time at which Pledgor (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 (at its own expense) obtain external
calculations of the Secured Party's Exposure from at least two
Reference Market-makers on the last Local Business Day of each
calendar month. Any determination of the S&P Collateral Amount shall
be based on the greatest of the Secured Party's Exposure determined by
the Valuation Agent and such Reference Market-makers. Such external
calculation may not be obtained from the same Reference Market-maker
more than four times in any 12-month period.
15
(vii) Notice to S&P. At any time at which Pledgor (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 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 of the Secured Party's Exposure.
(viii) Expenses. Pledgor shall be responsible for all reasonable costs and
expenses incurred by Secured Party in connection with the Transfer of
any Eligible Collateral under this Annex.
(ix) Additional Defined Terms.
"DV01" means, with respect to a Transaction and any date of
determination, the sum of the estimated change in the Secured Party's
Exposure with respect to such Transaction that would result from a one
basis point change in the relevant swap curve on such date, as
determined by the Valuation Agent in good faith and in a commercially
reasonable manner. The Valuation Agent shall, upon request of Secured
Party, provide to Secured Party a statement showing in reasonable
detail such calculation.
"Xxxxx'x First Level Additional Collateralized Amount" means, with
respect to any Transaction, the lesser of (x) the product of 15 and
DV01 for such Transaction and such Valuation Date and (y) the product
of 2% and the Notional Amount for such Transaction for the Calculation
Period which includes such Valuation Date.
"Xxxxx'x First Level Collateral Amount" means, (A) for any Valuation
Date on which (I) a Xxxxx'x First Level Downgrade 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 Level Downgrade 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 First Level Additional
Collateralized Amounts for each Transaction and (B)for any other
Valuation Date, zero.
"Xxxxx'x First Level Value" means, for any date that the Xxxxx'x First
Level Collateral Amount is determined and the Value of any Eligible
Collateral or Posted Collateral that is a security, the bid price for
such security obtained by the Valuation Agent multiplied by the
Xxxxx'x First Level Valuation Percentage for such security set forth
on Schedule A hereto.
"Xxxxx'x Second Level Additional Collateralized Amount" means, with
respect to any Transaction,
(1) if such Transaction is not a Transaction-Specific Hedge, the
lesser of (i) the product of the 50 and DV01 for such Transaction
and such Valuation Date and (ii) the product of 8% and the
Notional Amount for such Transaction for the Calculation Period
(as defined in the related Transaction) which includes such
Valuation Date; or
(2) if such Transaction is a Transaction-Specific Hedge, the
lesser of (i) the product of the 65 and DV01 for such Transaction
and such Valuation Date and (ii) the product of 10% and the
Notional Amount for such Transaction for the Calculation Period
(as defined in the related Transaction) which includes such
Valuation Date.
16
"Xxxxx'x Second Level Collateral Amount" means, (A) for any
Valuation Date on which it is the case that a Xxxxx'x Second
Level Downgrade 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 for all Next
Payment Dates and (c) the sum of the Secured Party's aggregate
Exposure and the aggregate of Xxxxx'x Second Level Additional
Collateralized Amounts for each Transaction and (B) for any other
Valuation Date, zero.
"Xxxxx'x Second Level Value" means, for any date that the Xxxxx'x
Second Level Collateral Amount is determined and the Value of any
Eligible Collateral or Posted Collateral that is a security, the
bid price for such security obtained by the Valuation Agent
multiplied by the Xxxxx'x Second Level Valuation Percentage for
such security set forth on Schedule A hereto.
"Next Payment" means, in respect of each Next Payment Date, the
greater of (i) the amount of any payments due to be made by the
Pledgor pursuant to Section 2(a) on such Next Payment Date less
any payments due to be made by the Secured Party under Section
2(a) on such Next Payment Date (in each case, after giving effect
to any applicable netting under Section 2(c)) and (ii) zero.
"Next Payment Date" means the next scheduled payment date under
any Transaction.
"Remaining Weighted Average Maturity" means, with respect to a
Transaction, the expected weighted average maturity for such
Transaction as determined by the Valuation Agent.
"S&P Collateral Amount" means, (A) for any Valuation Date on
which a S&P First Level Downgrade has occurred and been
continuing for at least 30 days or on which a S&P Second Level
Downgrade has occurred and is continuing, an amount equal to the
sum of (1) 100.0% of the Secured Party's Exposure for such
Valuation Date and (2) the product of the Volatility Buffer for
each Transaction and the Notional Amount of such Transaction for
the Calculation Period (as defined in the related Transaction) of
such Transaction which includes such Valuation Date, or (B) for
any other Valuation Date, zero.
"S&P Value" means, for any date that the S&P Collateral Amount is
determined and the Value of any Eligible Collateral or Posted
Collateral that is a security, the bid price for such security
obtained by the Valuation Agent multiplied by the S&P Valuation
Percentage for such security set forth on Schedule A hereto.
"Transaction-Specific Hedge" means any Transaction that is a cap,
floor or swaption or a Transaction in respect of which (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.
"Volatility Buffer" means, for any Transaction, the related
percentage set forth in the following table:
--------------------------------------------------------------------------------------------------
The higher of the S&P
short-term credit Remaining
rating of (i) Pledgor Weighted Remaining Remaining Remaining
and (ii) the Credit Average Weighted Average Weighted Average Weighted Average
Support Provider of Maturity up Maturity up to 5 Maturity up to Maturity up to 30
Pledgor, if applicable to 3 years years 10 years years
--------------------------------------------------------------------------------------------------
"A-2" or higher 2.75% 3.25% 4.00% 4.75%
------------------------ --------------- ------------------- ------------------ -------------------
17
--------------------------------------------------------------------------------------------------
"A-3" 3.25% 4.00% 5.00% 6.25%
------------------------ --------------- ------------------- ------------------ -------------------
"BB+" or lower 3.50% 4.50% 6.75% 7.50%
--------------------------------------------------------------------------------------------------
18
IN WITNESS WHEREOF, the parties have executed this Annex on the respective
dates specified below with effect from the date specified on the first page of
this document.
BEAR XXXXXXX CAPITAL MARKETS INC.
By: /s/ Xxxxxxxxx Xxxxxx
-----------------------------------
Name: XXXXXXXXX XXXXXX
Title: Authorized Signatory
Date:
COUNTRYWIDE HOME LOANS, INC.
By: _____________________________
Name:
Title:
19
SCHEDULE A
----------
COLLATERAL SCHEDULE
-------------------
The Xxxxx'x First Level Valuation Percentages shall be used in determining the
Xxxxx'x First Level Collateral Amount.
The Xxxxx'x Second Level Valuation Percentages shall be used in determining the
Xxxxx'x Second Level Collateral Amount.
The S&P Valuation Percentages shall be used in determining the S&P Collateral
Amount.
----------------------------------------------------------------------------------------------------------------------
ISDA Collateral Asset Remaining Maturity Xxxxx'x First Level Xxxxx'x Second Level S&P Valuation
Definition (ICAD) Code Valuation Percentage Valuation Percentage Percentage
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
US-CASH N/A l00% 100% 100%
EU-CASH N/A 98% 94% 92.5%
GB-CASH N/A 98% 95% 94.1%
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
< 1 Year 100% 100% 98.9%
1 to 2 years 100% 99% 98.0%
US-TBILL 2 to 3 years 100% 98% 97.4%
US-TNOTE 3 to 5 years l00% 97% 95.5%
US-TBOND 5 to 7 years 100% 96% 93.7%
(fixed rate) 7 to 10 years 100% 94% 95.5%
10 to 20 years 100% 90% 91.1%
> 20 years 100% 88% 88.6%
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
US-TBILL
US-TNOTE All Maturities 100% 99% Not Eligible
US-TBOND Collateral
(floating rate)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
< 1 Year 100% 99% 98.5%
1 to 2 years 100% 99% 97.7%
2 to 3 years 100% 98% 97.3%
GA-US-AGENCY 3 to 5 years 100% 96% 94.5%
(fixed rate) 5 to 7 years 100% 93% 93.1%
7 to 10 years 100% 93% 90.7%
10 to 20 years 100% 89% 87.7%
> 20 years 100% 87% 84.4%
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
GA-US-AGENCY All Maturities 100% 98% Not Eligible
(floating rate) Collateral
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
20
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Rated Aa3 or better Rated Aa3 or better by Rated AAA or
by Xxxxx'x Xxxxx'x better by S&P
< 1 Year 98% 94% 98.8%
GA-EUROZONE- 1 to 2 years 98% 93% 97.9%
GOV (other than 2 to 3 years 98% 92% 97.1%
EU-CASH) (fixed 3 to 5 years 98% 90% 91.2%
rate) 5 to 7 years 98% 89% 87.5%
7 to 10 years 98% 88% 83.8%
10 to 20 years 98% 84% 75.5%
> 20 years 98% 82% Not Eligible
Collateral
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
GA-EUROZONE-GOV (other Rated Aa3 or better Rated Aa3 or better by Rated AAA or
than EU-CASH) by Xxxxx'x Xxxxx'x better by S&P
(floating rate) All Maturities 98% 93% Not Eligible
Collateral
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
< 1 Year 98% 94% Not Eligible
Collateral
1 to 2 years 98% 93% Not Eligible
Collateral
2 to 3 years 98% 92% Not Eligible
Collateral
GA-GB-GOV 3 to 5 years 98% 91% Not Eligible
(other than GB- Collateral
CASH) (fixed rate) 5 to 7 years 98% 90% Not Eligible
Collateral
7 to 10 years 98% 89% Not Eligible
Collateral
10 to 20 years 98% 86% Not Eligible
Collateral
> 20 years 98% 84% Not Eligible
Collateral
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
GA-GB-GOV
(other than GB- All Maturities 98% 94% Not Eligible
CASH)(floating rate) Collateral
----------------------------------------------------------------------------------------------------------------------
The ISDA Collateral Asset Definition (ICAD) Codes used in this Collateral
Schedule shall have the meanings set forth in the Collateral Asset Definitions
(First Edition - June 2003) as published and copyrighted in 2003 by the
International Swaps and Derivatives Association, Inc.
21
Annex B
Item 1115 Agreement dated as of March 30, 2007 (this "Agreement"), between
COUNTRYWIDE HOME LOANS, INC., a New York corporation ("CHL"), CWABS, INC., a
Delaware corporation ("CWABS"), CWMBS, Inc., a Delaware corporation ("CWMBS"),
CWALT, Inc., a Delaware corporation ("CWALT"), CWHEQ, Inc., a Delaware
corporation ("CWHEQ") and BEAR XXXXXXX CAPITAL MARKETS INC., as counterparty
(the "Counterparty").
RECITALS
WHEREAS, CWABS, CWMBS, CWALT and CWHEQ each have filed Registration
Statements on Form S-3 (each, a "Registration Statement") with the Securities
and Exchange Commission (the "Commission") for purposes of offering mortgage
backed or asset-backed notes and/or certificates (the "Securities") through
special purpose vehicles (each, an "SPV").
WHEREAS, from time to time, on the closing date (the "Closing Date") of a
transaction pursuant to which Securities are offered (each, a "Transaction"),
the Counterparty and CHL or an underwriter or dealer with respect to the
Transaction, enter into certain derivative agreements (each, a "Derivative
Agreement"), including interest rate or currency swaps, for purposes of
providing certain yield enhancements that are assigned to the SPV or the related
trustee on behalf of the SPV or a swap or corridor contract administrator (each,
an "Administrator").
NOW, THEREFORE, in consideration of the mutual agreements set forth herein
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the parties hereby agree as follows:
Section 1. Application and Definitions
(a) Application. This Agreement shall only apply to a Derivative
Agreement entered into on or after the date hereof which
incorporates the terms of this Agreement.
(b) Definitions.
Business Day: Any day other than a Saturday, a Sunday or any day on
which banking institutions in the states where the parties are located are
authorized or obligated by law, executive order or government decree to be
closed.
Company Information: As defined in Section 4(a)(i).
Company Financial Information: As defined in Section 2(a)(ii).
Depositor: Means CWABS, CWMBS, CWALT or CWHEQ with respect to the
related Registration Statement for which the entity of the registrant.
GAAP: As defined in Section 3(a)(v).
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Exchange Act: The Securities Exchange Act of 1934, as amended and
the rules and regulations promulgated thereunder.
Exchange Act Reports: All Distribution Reports on Form 10-D, Current
Reports on Form 8-K and Annual Reports on Form 10-K that are to be filed with
respect to the related SPV pursuant to the Exchange Act.
Master Agreement: The ISDA Master Agreement between the Counterparty
and CHL, or if no such Master Agreement exists, the ISDA Master Agreement
assumed to apply to the Derivative Agreement pursuant to its terms.
Offering Document: The prospectus, free writing prospectus,
prospectus supplement, offering circular or any other document prepared in
connection with the public offering and sale of the related Securities.
Prospectus Supplement: The prospectus supplement prepared in
connection with the public offering and sale of the related Securities.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
Section 2. Information to be Provided by the Counterparty.
(a) Prior to printing the related Prospectus Supplement,
(i) the Counterparty shall provide to the related Depositor such
information regarding the Counterparty, as a derivative
instrument counterparty, as is reasonably requested by the
related Depositor for the purpose of compliance with Item
1115(a)(1) of Regulation AB. Such information shall include,
at a minimum:
(A) The Counterparty's legal name (and any d/b/a);
(B) the organizational form of the Counterparty;
(C) a description of the general character of the business
of the Counterparty; and
2
(D) a description of any affiliation or relationship between
the Counterparty and any of the following parties:
(1) any servicer or master servicer identified to the
Counterparty by CHL (to the extent such servicer
or master servicer is not an affiliate of CHL);
(2) The Bank of New York (or any other trustee
identified to the Counterparty by CHL);
(3) any originator identified to the Counterparty by
CHL;
(4) any enhancement or support provider identified to
the Counterparty by CHL; and
(5) any other material Transaction party identified in
writing to the Counterparty by CHL.
(ii) if requested by the related Depositor for the purpose of
compliance with Item 1115(b) with respect to a Transaction,
the Counterparty shall:
(A) provide the financial data required by Item 1115(b)(1)
or (b)(2) of Regulation AB (as specified by the related
Depositor to the Counterparty) with respect to the
Counterparty (or any entity that consolidates the
Counterparty) and any affiliated entities providing
derivative instruments to the SPV (the "Company
Financial Information"), in a form appropriate for use
in the Prospectus Supplement and in an XXXXX-compatible
form; and
(B) if required under the Exchange Act, cause its
accountants to issue their consent to the filing of such
financial statements in the Registration Statement.
(b) Following the Closing Date with respect to a Transaction,
(i) for the period from the closing date of the related
Transaction to December 31 of the calendar year in which the
closing date of the related Transaction occurs (and any
additional period if notified in writing by the related
Depositor that the Depositor will file Exchange Act reports in
respect of the related SPV after such period) no later than
the 25th calendar day of each month, the Counterparty shall
(i) notify the related Depositor in writing of any
affiliations or relationships that develop following the
Closing Date between the Counterparty and any of the parties
specified in Section 2(a)(i)(D) (and any other parties
identified in writing by the related Depositor) and provide to
the related Depositor a description of such affiliations or
relationships; and
3
(ii) if the Counterparty provided Company Financial Information to
the related Depositor for the Prospectus Supplement, within 5
Business Days of the release of any updated financial data,
the Counterparty shall (1) provide current Company Financial
Information as required under Item 1115(b) of Regulation AB to
the related Depositor in an XXXXX-compatible form, and (2) if
required under the Exchange Act, cause its accountants to
issue their consent to filing or incorporation by reference of
such financial statements in the Exchange Act Reports of the
SPV;
(iii) if the related Depositor requests Company Financial
Information from the Counterparty, for the purpose of
compliance with Item 1115(b) of Regulation AB following the
Closing Date, the Counterparty shall upon five Business Days
written notice either (A), (1) provide current Company
Financial Information as required under Item 1115(b) of
Regulation AB to the related Depositor in an XXXXX-compatible
form and (2) if required under the Exchange Act, cause its
accountants to issue their consent to filing or incorporation
by reference of such financial statements in the Exchange Act
Reports of the SPV, (B) assign the Derivative Agreement as
provided below, (C) if the Securities and Exchange Commission
expressly permits an affiliate guarantor's financial
information to be used to satisfy the financial information
requirements of Item 1115(b) of Regulation AB in lieu of the
Counterparty's financial information, obtain a guaranty of the
Counterparty's obligations under each Derivative Agreement
entered into in connection with the relevant Transaction from
an affiliate of the Counterparty, which affiliate has agreed
to comply with the immediately preceding clause (A) above and
which guaranty meets all applicable Securities and Exchange
Commission requirements or (D) with the consent of the
Depositor related to the relevant Transaction, post collateral
in an amount sufficient to reduce the "significance
percentage" for purposes of Item 1115 of Regulation AB with
respect to any Derivative Agreement relating to such
Transaction.
(iv) within 5 Business Days of the release of any updated financial
data if such update is released (A) during the period from the
closing date of the related Transaction to December 31 of the
calendar year in which the closing date of the related
Transaction occurs (and any additional period if notified in
writing by the related Depositor that the Depositor will file
Exchange Act reports in respect of the related SPV after such
period) and (B) when the "significance percentage" for any
Derivative Agreement relating to such Transaction exceeds the
thresholds provided in Item 1115(b) of Regulation AB,
Counterparty shall provide current Company Financial
Information as required under Item 1115(b) of Regulation AB to
the related Depositor in an XXXXX-compatible form and if
applicable, cause its accountants to issue their consent to
filing or incorporation by reference of such financial
statements in the Exchange Act Reports of the SPV.
4
Section 3. Representations and Warranties and Covenants of the
Counterparty.
(a) The Counterparty represents and warrants to the related Depositor,
as of the date on which information is first provided to the related
Depositor under Section 2(a)(ii), Section 2(b)(ii) or Section
2(b)(iii)(A), that, except as disclosed in writing the related
Depositor prior to such date:
(i) The accountants who certify the financial statements and
supporting schedules included in the Company Financial
Information (if applicable) are independent registered public
accountants as required by the Securities Act;
(ii) If applicable, the financial statements included in the
Company Financial Information present fairly the consolidated
financial position of the Counterparty (or the entity that
consolidates the Counterparty) and its consolidated
subsidiaries as at the dates indicated and the consolidated
results of their operations and cash flows for the periods
specified; except as otherwise stated in the Company Financial
Information, said financial statements have been prepared in
conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis; and the supporting
schedules included in the Company Financial Information
present fairly in accordance with GAAP the information
required to be stated therein;
(iii) The selected financial data and summary financial information
included in the Company Financial Information present fairly
the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements
of the Counterparty; and
(iv) The Company Financial Information and other Company
Information included or incorporated by reference in the
Registration Statement (including through filing on an
Exchange Act Report), at the time they were or hereafter are
filed with the Commission, complied in all material respects
with the requirements of Item 1115(b) of Regulation AB (in the
case of the Company Financial Information) and, did not and
will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(b) The Counterparty agrees that the terms of this Agreement shall be
incorporated by reference into any Derivative Agreement so that each
SPV who is a beneficiary of a Derivative Agreement shall be an
express third party beneficiary of this Agreement.
5
Section 4. Indemnification; Remedies
(a) The Counterparty shall indemnify CHL and the related Depositor, each
person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
SPV, or for execution of a certification pursuant to Rule 13a-14(d)
or Rule 15d-14(d) under the Exchange Act; each broker dealer acting
as underwriter, each person who controls any of such parties (within
the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act); and the respective present and former directors,
officers, employees and agents of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
certification, accountants' consent or other material provided
in written or electronic form under Section 2 by or on behalf
of the Counterparty (collectively, the "Company Information"),
or (B) the omission or alleged omission to state in the
Company Information a material fact required to be stated in
the Company Information or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; or
(ii) any breach by the Counterparty of a representation or warranty
set forth in Section 3(a) and made as of a date prior to the
Closing Date, to the extent that such breach is not cured by
the Closing Date, or any breach by the Counterparty of a
representation or warranty pursuant to Section 3 to the extent
made as of a date subsequent to the Closing Date.
(b) (i) Any failure by the Counterparty to deliver any information,
report, certification, accountants' consent or other material when
and as required under Section 2 or any breach by the Counterparty of
a representation or warranty set forth in Section 3 and made as of a
date prior to the Closing Date, to the extent that such breach is
not cured by the Closing Date (or in the case of information needed
for purposes of printing the Prospectus Supplement, the date of
printing of the Prospectus Supplement), or any breach by the
Counterparty of a representation or warranty pursuant to Section 3
to the extent made as of a date subsequent to such closing date,
shall, except as provided in clause (ii) of this paragraph,
constitute an Additional Termination Event (as defined in the Master
Agreement) with the Counterparty as the sole Affected Party (as
defined in the Master Agreement) under the Derivative Agreement.
(ii) If the Counterparty has failed to deliver any information,
report, certification or accountants' consent when and as
required under Section 2, which continues unremedied for the
lesser of ten calendar days after the date on which such
information, report, certification or accountants'
6
consent was required to be delivered or such period in which
the applicable Exchange Act Report for which such information
is required can be timely filed (without taking into account
any extensions permitted to be filed), and the Counterparty
has not, at its own cost, within the period in which the
applicable Exchange Act Report for which such information is
required can be timely filed caused another entity (which
meets any ratings related requirement of the applicable rating
agencies at such time) to replace the Counterparty as party to
the Derivative Agreement that (i) has signed an agreement with
CHL and the Depositors substantially in the form of this
Agreement, (ii) has agreed to deliver any information, report,
certification or accountants' consent when and as required
under Section 2 hereof and (iii) is approved by the Depositor
(which approval shall not be unreasonably withheld and which
approval is not needed if such assignment is to a subsidiary
of The Bear Xxxxxxx Companies, Inc., provided the Depositor is
given notice) and any rating agency, if applicable, on terms
substantially similar to the Derivative Agreement, then such
failure shall constitute an Additional Termination Event (as
defined in the Master Agreement) under the related Derivative
Agreement with the Counterparty as the sole Affected Party (as
defined in the Master Agreement).
(iii) In the event that the Counterparty or the SPV has found a
replacement entity in accordance with Section 2(b)(ii), the
Counterparty shall promptly reimburse the SPV for all
reasonable incidental expenses incurred by the SPV, as such
are incurred, in connection with the termination of the
Counterparty as counterparty and the entry into a new
Derivative Instrument. The provisions of this paragraph shall
not limit whatever rights the SPV may have under other
provisions of this Agreement or otherwise, whether in equity
or at law, such as an action for damages, specific performance
or injunctive relief.
(c) CHL and the related Depositor, jointly and severally, indemnify
Counterparty, each person who controls Counterparty (within the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act); and the respective present and former directors,
officers, employees and agents of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon (A) any untrue
statement of a material fact contained or alleged to be contained in
the related Offering Document (other than the Company Information),
or (B) the omission or alleged omission to state in related Offering
Document (other than the Company Information) a material fact
required to be stated in the Offering Document or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
7
Section 5. Miscellaneous.
(a) Construction. Throughout this Agreement, as the context requires,
(a) the singular tense and number includes the plural, and the
plural tense and number includes the singular; (b) the past tense
includes the present, and the present tense includes the past; and
(c) references to parties, sections, schedules, and exhibits mean
the parties, sections, schedules, and exhibits of and to this
Agreement. The section headings in this Agreement are inserted only
as a matter of convenience, and in no way define, limit, extend, or
interpret the scope of this Agreement or of any particular section.
(b) Assignment. None of the parties may assign their rights under this
Agreement without the prior written consent of the other parties.
Subject to the foregoing, this Agreement shall be binding on and
inure to the benefit of the parties and their respective successors
and permitted assigns.
(c) No Third-Party Benefits Except as Specified. None of the provisions
of this Agreement are intended to benefit, or to be enforceable by,
any third-party beneficiaries except the related SPV and any trustee
of an SPV or any Administrator.
(d) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without
regard to the conflict of laws principles thereof.
(e) Amendment and Waiver. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto. No
waiver of any provision of this Agreement or of any rights or
obligations of any party under this Agreement shall be effective
unless in writing and signed by the party or parties waiving
compliance, and shall be effective only in the specific instance and
for the specific purpose stated in that writing.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(g) Additional Documents. Each party hereto agrees to execute any and
all further documents and writings and to perform such other actions
which may be or become necessary or expedient to effectuate and
carry out this Agreement.
(h) Severability. Any provision hereof which is prohibited or
unenforceable shall be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof.
(i) Integration. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof. There are no
restrictions, agreements, promises, representations, warranties,
covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth or referred to herein.
8
This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter.
(j) Upon the Counterparty's request, CHL agrees to provide to the
Counterparty the methodology for its estimate of maximum probable
exposure represented by the Derivative Agreements.
(k) Notices. All notices and other communications hereunder will be in
writing (including by facsimile) and effective only upon receipt,
and, if sent to the Counterparty will be mailed or delivered to Bear
Xxxxxxx Capital Markets Inc., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Head of Interest Rate Derivatives,
if sent to the Countrywide Home Loan, Inc., 0000 Xxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, with a copy to
the same address, Attention: Legal Department.
9
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
CWABS, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
CWMBS, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
CWALT, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
CWHEQ, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
10
BEAR XXXXXXX CAPITAL MARKETS INC.
By:
----------------------------------------
Name:
Title:
11
