EXHIBIT 10.1
[Bank of America LOGO]
To: Wells Fargo Bank, N.A., solely as Trustee on
behalf of Banc of America Alternative Loan Trust
2007-1
9062 Old Annapolis Road
Columbia, MD 21046 USA
Attn: Client Manager - BOALT 2007-1
Telephone: 410 884 2000
Fax: 410 715 2380
cc: Jonathan Hartwig
Telephone: 704 683 4650
Fax: 704 719 5165
From: Bank of America, N.A.
233 South Wacker Drive - Suite 2800
Chicago
Illinois 60606
U.S.A.
Department: Swaps Operations
Telephone: (+1) 312 234 2732
Fax: (+1) 866 255 1444
Date: 19th March 2007
Our Reference No: 5132645
Reference Name: Suzanne Buchta
Internal Tracking No: 2567825
Dear Sir/Madam,
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Wells Fargo Bank, N.A., solely as Trustee
on behalf of Banc of America Alternative Loan Trust 2007-1 and Bank of America,
N.A. (each a "party" and together "the parties") on the Trade Date specified
below (the "Transaction"). This letter agreement constitutes a "Confirmation" as
referred to in the ISDA Master Agreement specified below (the "Agreement").
The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc., (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern.
This Confirmation supplements, forms part of, and is subject to, the ISDA Master
Agreement dated as of March 29, 2007, as amended and supplemented from time to
time, between the parties. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.
In this Confirmation "Party A" means Bank of America, N.A. and "Party
B" means Wells Fargo Bank, N.A., solely as Trustee on behalf of Banc of
America Alternative Loan Trust 2007-1
General Terms:
The terms of the particular Transaction to which this Confirmation relates are
as follows:
Notional Amount: For each Calculation Period, the Notional
Amount shall equal the lesser of:
(i) the Scheduled Notional Amount for such Calculation
Period as detailed in the Schedule of Notional
Amounts attached hereto
(ii) the Class Certificate Balance of the Class 3-A-11
Certificates prior to distributions on the
Distribution Date (as defined in the Pooling and
Servicing Agreement dated March 29, 2007) related
to the Calculation Period. The Trustee shall make
available each month via its website a statement
containing the Class Certificate Balance of the
Class 3-A-11 Certificates for such Calculation
Period. The Trustee's internet website shall
initially be located at www.ctslink.com and
assistance in using the website can be obtained by
calling the Trustee's investor relations desk at
(301) 815-6600.
Trade Date: 13th March 2007
Effective Date: 25th March 2007
Termination Date: 25th July 2010
Fixed Amounts:
Fixed Rate Payer: Party B
Fixed Rate Payer
Payment Dates: 30th March 2007, subject to adjustment in
accordance with the Following Business Day
Convention.
Fixed Amount: USD [ ]
Floating Amounts:
Floating Rate Payer: Party A
Cap Rate: 5.40000 per cent
Floating Rate Payer
Payment Dates: Early Payments shall be applicable - 2 Business
Days prior to each Floating Rate Payer Period
End Date.
Floating Rate Payer
Period End Dates: The 25th of each Month, commencing on 25th
April2007 and ending on the Termination Date.
No Adjustment.
Floating Amount: The product of (a) the Notional Amount (b) the
Floating Rate Day Count Fraction and (c) the
Settlement Spread which shall be calculated in
accordance with the following formula:
If USD-LIBOR-BBA is greater than the Cap Rate for the
applicable Calculation Period, then Settlement Spread =
(USD-LIBOR-BBA - applicable Cap Rate).
If 1 Month USD-LIBOR-BBA is less than or equal to the
Cap Rate for the applicable Calculation Period, then
Settlement Spread = Zero.
Floating Rate for
initial Calculation
Period: 5.32000 per cent
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: None
Floating Rate Day
Count Fraction: 30/360
Reset Dates: First day of each Calculation Period.
Business Days: New York
Calculation Agent: Party A
Account Details:
Party A: Payments to Bank of America, N.A:
USD Fedwire
Name: Bank of America, N.A. - New York
ABA #: 026009593
Attn: BOFAUS3N
Name: Bank of America, N.A.
City: Charlotte
Acct#: 6550219386
Attn: Rate Derivative Settlements
Attn: BOFAUS6SGDS
Party B: Name: Wells Fargo Bank N.A.- San Francisco, CA
ABA: 121000248
ACCT: 3970771416
ACCT Name: SAS Clearing
FFC: 50999401
Offices:
The Office of
Party A for this
Transaction is: Charlotte - NC, United States
Please send reset notices to fax no.
(+1) 866 218 8487
The Office of
Party B for this
Transaction is: Wells Fargo Bank, N.A.
9062 Old Annapolis Rd.
Columbia, MD 21045
ATTN: Client Manager - BOALT 2007-1
Please confirm that the foregoing correctly sets forth the terms and conditions
of our agreement by returning via telecopier an executed copy of this
Confirmation in its entirety to the attention of Global FX and Derivative
Operations (fax no.(+1) 866255 1444).
Accepted and confirmed as of the date first written:
Bank of America, N.A. Wells Fargo Bank, N.A., solely as
Trustee on behalf of Banc of America
Alternative Loan Trust 2007-1
Authorized Signatory By: ___________________________
Name:
Title:
Calculation
Period
Scheduled to
Commence On: Notional (USD)
------------ --------------
3/25/2007 31,318,000.00
4/25/2007 31,036,583.00
5/25/2007 30,625,987.00
6/25/2007 30,088,801.00
7/25/2007 29,428,028.00
8/25/2007 28,647,150.00
9/25/2007 27,750,118.00
10/25/2007 26,741,345.00
11/25/2007 25,625,681.00
12/25/2007 24,411,583.00
1/25/2008 23,136,954.00
2/25/2008 21,879,743.00
3/25/2008 20,663,404.00
4/25/2008 19,486,912.00
5/25/2008 18,349,266.00
6/25/2008 17,249,488.00
7/25/2008 16,186,624.00
8/25/2008 15,159,743.00
9/25/2008 14,167,932.00
10/25/2008 13,210,306.00
11/25/2008 12,285,994.00
12/25/2008 11,394,151.00
1/25/2009 10,533,949.00
2/25/2009 9,704,580.00
3/25/2009 8,905,256.00
4/25/2009 8,135,206.00
5/25/2009 7,393,680.00
6/25/2009 6,679,943.00
7/25/2009 5,993,278.00
8/25/2009 5,332,986.00
9/25/2009 4,698,384.00
10/25/2009 4,088,806.00
11/25/2009 3,503,599.00
12/25/2009 2,942,129.00
1/25/2010 2,403,776.00
2/25/2010 1,887,933.00
3/25/2010 1,394,009.00
4/25/2010 921,428.00
5/25/2010 469,626.00
6/25/2010 38,053.00
Our Reference Number: 5132645
Internal Tracking No: 2567825
ISDA
International Swaps and Derivatives Association, Inc.
2002 MASTER AGREEMENT
dated as of March 29, 2007
WELLS FARGO BANK, N.A., AS
TRUSTEE, ON BEHALF OF BANC OF
AMERICA ALTERNATIVE LOAN TRUST
BANK OF AMERICA, N.A. and 2007-1
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this 2002 Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties or otherwise
effective for the purpose of confirming or evidencing those Transactions. This
2002 Master Agreement and the Schedule are together referred to as this "Master
Agreement".
Accordingly, the parties agree as follows:-
1. Interpretation
(a) Definitions. The terms defined in Section 14 and elsewhere in this Master
Agreement will have the meanings therein specified for the purpose of this
Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement, such Confirmation will prevail for the
purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
Copyright (c) 2002 by
International Swaps and Derivatives Association, Inc.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other condition specified in this Agreement to be a condition
precedent for the purpose of this Section 2(a)(iii).
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the Scheduled Settlement Date for the payment or delivery
to which such change applies unless such other party gives timely notice of a
reasonable objection to such change.
(c) Netting of Payments. If on any date amounts would otherwise be payable:-
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by which the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
and payment obligation will be determined in respect of all amounts payable on
the same date in the same currency in respect of those Transactions, regardless
of whether such amounts are payable in respect of the same Transaction. The
election may be made in the Schedule or any Confirmation by specifying that
"Multiple Transaction Payment Netting" applies to the Transactions identified as
being subject to the election (in which case clause (ii) above will not apply to
such Transactions). If Multiple Transaction Payment Netting is applicable to
Transactions, it will apply to those Transactions with effect from the starting
date specified in the Schedule or such Confirmation, or, if a starting date is
not specified in the Schedule or such Confirmation, the starting date otherwise
agreed by the parties in writing. This election may be made separately for
different groups of Transactions and will apply separately to each pairing of
Offices through which the parties make and receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:-
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:-
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction,
after a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a party to
this Agreement) or (II) a Change in Tax Law.
(ii) Liability. If:-
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
3. Representations
Each party makes the representations contained in Sections 3(a), 3(b), 3(c),
3(d), 3(e) and 3(f) and, if specified in the Schedule as applying, 3(g) to the
other party (which representations will be deemed to be repeated by each party
on each date on which a Transaction is entered into and, in the case of the
representations in Section 3(f), at all times until the termination of this
Agreement). If any "Additional Representation" is specified in the Schedule or
any Confirmation as applying, the party or parties specified for such Additional
Representation will make and, if applicable, be deemed to repeat such Additional
Representation at the time or times specified for such Additional
Representation.
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it, any of its Credit Support Providers or any of its applicable
Specified Entities any action, suit or proceeding at law or in equity or before
any court, tribunal, governmental body, agency or official or any arbitrator
that is likely to affect the legality, validity or enforceability against it of
this Agreement or any Credit Support Document to which it is a party or its
ability to perform its obligations under this Agreement or such Credit Support
Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
(g) No Agency. It is entering into this Agreement, including each Transaction,
as principal and not as agent of any person or entity.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under clause (iii) below, to such government or taxing authority
as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to allow
such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of such
demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and
to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply With Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled or considered to have its seat, or where an Office through which it
is acting for the purpose of this Agreement is located ("Stamp Tax
Jurisdiction"), and will indemnify the other party against any Stamp Tax levied
or imposed upon the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which is not
also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes (subject to Sections 5(c)
and 6(e)(iv)) an event of default (an "Event of Default") with respect to such
party:-
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or
9(h)(i)(2) or (4) required to be made by it if such failure is not
remedied on or before the first Local Business Day in the case of any such
payment or the first Local Delivery Day in the case of any such delivery
after, in each case, notice of such failure is given to the party;
(ii) Breach of Agreement; Repudiation of Agreement.
(1) Failure by the party to comply with or perform any agreement or
obligation (other than an obligation to make any payment under this
Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) or
to give notice of a Termination Event or any agreement or obligation
under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if such
failure is not remedied within 30 days after notice of such failure
is given to the party; or
(2) the party disaffirms, disclaims, repudiates or rejects, in whole
or in part, or challenges the validity of, this Master Agreement,
any Confirmation executed and delivered by that party or any
Transaction evidenced by such a Confirmation (or such action is
taken by any person or entity appointed or empowered to operate it
or act on its behalf);
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document, or any
security interest granted by such party or such Credit Support
Provider to the other party pursuant to any such Credit Support
Document, to be in full force and effect for the purpose of this
Agreement (in each case other than in accordance with its terms)
prior to the satisfaction of all obligations of such party under
each Transaction to which such Credit Support Document relates
without the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document (or such action is taken
by any person or entity appointed or empowered to operate it or act
on its behalf);
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or 3(f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default Under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party:-
(1) defaults (other than by failing to make a delivery) under a
Specified Transaction or any credit support arrangement relating to
a Specified Transaction and, after giving effect to any applicable
notice requirement or grace period, such default results in a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction;
(2) defaults, after giving effect to any applicable notice
requirement or grace period, in making any payment due on the last
payment or exchange date of, or any payment on early termination of,
a Specified Transaction (or, if there is no applicable notice
requirement or grace period, such default continues for at least one
Local Business Day);
(3) defaults in making any delivery due under (including any
delivery due on the last delivery or exchange date of) a Specified
Transaction or any credit support arrangement relating to a
Specified Transaction and, after giving effect to any applicable
notice requirement or grace period, such default results in a
liquidation of, an acceleration of obligations under, or an early
termination of, all transactions outstanding under the documentation
applicable to that Specified Transaction; or
(4) disaffirms, disclaims, repudiates or rejects, in whole or in
part, or challenges the validity of, a Specified Transaction or any
credit support arrangement relating to a Specified Transaction that
is, in either case, confirmed or evidenced by a document or other
confirming evidence executed and delivered by that party, Credit
Support Provider or Specified Entity (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(vi) Cross-Default. If "Cross-Default" is specified in the Schedule as
applying to the party, the occurrence or existence of:-
(1) a default, event of default or other similar condition or event
(however described) in respect of such party, any Credit Support
Provider of such party or any applicable Specified Entity of such
party under one or more agreements or instruments relating to
Specified Indebtedness of any of them (individually or collectively)
where the aggregate principal amount of such agreements or
instruments, either alone or together with the amount, if any,
referred to in clause (2) below, is not less than the applicable
Threshold Amount (as specified in the Schedule) which has resulted
in such Specified Indebtedness becoming, or becoming capable at such
time of being declared, due and payable under such agreements or
instruments before it would otherwise have been due and payable; or
(2) a default by such party, such Credit Support Provider or such
Specified Entity (individually or collectively) in making one or
more payments under such agreements or instruments on the due date
for payment (after giving effect to any applicable notice
requirement or grace period) in an aggregate amount, either alone or
together with the amount, if any, referred to in clause (1) above,
of not less than the applicable Threshold Amount;
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:-
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4)(A) institutes or has instituted against it, by a regulator,
supervisor or any similar official with primary insolvency,
rehabilitative or regulatory jurisdiction over it in the
jurisdiction of its incorporation or organisation or the
jurisdiction of its head or home office, a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation by it or such regulator, supervisor or similar official,
or (B) has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights, or
a petition is presented for its winding-up or liquidation, and such
proceeding or petition is instituted or presented by a person or
entity not described in clause (A) above and either (I) results in a
judgment of insolvency or bankruptcy or the entry of an order for
relief or the making of an order for its winding-up or liquidation
or (II) is not dismissed, discharged, stayed or restrained in each
case within 15 days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or
merger); (6) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a distress,
execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets
and such secured party maintains possession, or any such process is
not dismissed, discharged, stayed or restrained, in each case within
15 days thereafter; (8) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction,
has an analogous effect to any of the events specified in clauses
(1) to (7) above (inclusive); or (9) takes any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, or reorganises,
reincorporates or reconstitutes into or as, another entity and, at the
time of such consolidation, amalgamation, merger, transfer,
reorganisation, reincorporation or reconstitution:-
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes (subject to Section 5(c))
an Illegality if the event is specified in clause (i) below, a Force Majeure
Event if the event is specified in clause (ii) below, a Tax Event if the event
is specified in clause (iii) below, a Tax Event Upon Merger if the event is
specified in clause (iv) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to clause (v) below or an
Additional Termination Event if the event is specified pursuant to clause (vi)
below:-
(i) Illegality. After giving effect to any applicable provision,
disruption fallback or remedy specified in, or pursuant to, the relevant
Confirmation or elsewhere in this Agreement, due to an event or
circumstance (other than any action taken by a party or, if applicable,
any Credit Support Provider of such party) occurring after a Transaction
is entered into, it becomes unlawful under any applicable law (including
without limitation the laws of any country in which payment, delivery or
compliance is required by either party or any Credit Support Provider, as
the case may be), on any day, or it would be unlawful if the relevant
payment, delivery or compliance were required on that day (in each case,
other than as a result of a breach by the party of Section 4(b)):-
(1) for the Office through which such party (which will be the
Affected Party) makes and receives payments or deliveries with
respect to such Transaction to perform any absolute or contingent
obligation to make a payment or delivery in respect of such
Transaction, to receive a payment or delivery in respect of such
Transaction or to comply with any other material provision of this
Agreement relating to such Transaction; or
(2) for such party or any Credit Support Provider of such party
(which will be the Affected Party) to perform any absolute or
contingent obligation to make a payment or delivery which such party
or Credit Support Provider has under any Credit Support Document
relating to such Transaction, to receive a payment or delivery under
such Credit Support Document or to comply with any other material
provision of such Credit Support Document;
(ii) Force Majeure Event. After giving effect to any applicable provision,
disruption fallback or remedy specified in, or pursuant to, the relevant
Confirmation or elsewhere in this Agreement, by reason of force majeure or
act of state occurring after a Transaction is entered into, on any day:-
(1) the Office through which such party (which will be the Affected
Party) makes and receives payments or deliveries with respect to
such Transaction is prevented from performing any absolute or
contingent obligation to make a payment or delivery in respect of
such Transaction, from receiving a payment or delivery in respect of
such Transaction or from complying with any other material provision
of this Agreement relating to such Transaction (or would be so
prevented if such payment, delivery or compliance were required on
that day), or it becomes impossible or impracticable for such Office
so to perform, receive or comply (or it would be impossible or
impracticable for such Office so to perform, receive or comply if
such payment, delivery or compliance were required on that day); or
(2) such party or any Credit Support Provider of such party (which
will be the Affected Party) is prevented from performing any
absolute or contingent obligation to make a payment or delivery
which such party or Credit Support Provider has under any Credit
Support Document relating to such Transaction, from receiving a
payment or delivery under such Credit Support Document or from
complying with any other material provision of such Credit Support
Document (or would be so prevented if such payment, delivery or
compliance were required on that day), or it becomes impossible or
impracticable for such party or Credit Support Provider so to
perform, receive or comply (or it would be impossible or
impracticable for such party or Credit Support Provider so to
perform, receive or comply if such payment, delivery or compliance
were required on that day),
so long as the force majeure or act of state is beyond the control of such
Office, such party or such Credit Support Provider, as appropriate, and
such Office, party or Credit Support Provider could not, after using all
reasonable efforts (which will not require such party or Credit Support
Provider to incur a loss, other than immaterial, incidental expenses),
overcome such prevention, impossibility or impracticability;
(iii) Tax Event. Due to (1) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, after a Transaction is
entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (2) a Change in Tax Law, the
party (which will be the Affected Party) will, or there is a substantial
likelihood that it will, on the next succeeding Scheduled Settlement Date
(A) be required to pay to the other party an additional amount in respect
of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 9(h)) or (B) receive a payment from which an amount
is required to be deducted or withheld for or on account of a Tax (except
in respect of interest under Section 9(h)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iv) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Settlement Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 9(h)) or (2)
receive a payment from which an amount has been deducted or withheld for
or on account of any Tax in respect of which the other party is not
required to pay an additional amount (other than by reason of Section
2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating
or amalgamating with, or merging with or into, or transferring all or
substantially all its assets (or any substantial part of the assets
comprising the business conducted by it as of the date of this Master
Agreement) to, or reorganising, reincorporating or reconstituting into or
as, another entity (which will be the Affected Party) where such action
does not constitute a Merger Without Assumption;
(v) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, a Designated Event (as defined
below) occurs with respect to such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party (in each case,
"X") and such Designated Event does not constitute a Merger Without
Assumption, and the creditworthiness of X or, if applicable, the
successor, surviving or transferee entity of X, after taking into account
any applicable Credit Support Document, is materially weaker immediately
after the occurrence of such Designated Event than that of X immediately
prior to the occurrence of such Designated Event (and, in any such event,
such party or its successor, surviving or transferee entity, as
appropriate, will be the Affected Party). A "Designated Event" with
respect to X means that:-
(1) X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets (or any substantial
part of the assets comprising the business conducted by X as of the
date of this Master Agreement) to, or reorganises, reincorporates or
reconstitutes into or as, another entity;
(2) any person, related group of persons or entity acquires directly
or indirectly the beneficial ownership of (A) equity securities
having the power to elect a majority of the board of directors (or
its equivalent) of X or (B) any other ownership interest enabling it
to exercise control of X; or
(3) X effects any substantial change in its capital structure by
means of the issuance, incurrence or guarantee of debt or the
issuance of (A) preferred stock or other securities convertible into
or exchangeable for debt or preferred stock or (B) in the case of
entities other than corporations, any other form of ownership
interest; or
(vi) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties will be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Hierarchy of Events.
(i) An event or circumstance that constitutes or gives rise to an
Illegality or a Force Majeure Event will not, for so long as that is the
case, also constitute or give rise to an Event of Default under Section
5(a)(i), 5(a)(ii)(1) or 5(a)(iii)(1) insofar as such event or circumstance
relates to the failure to make any payment or delivery or a failure to
comply with any other material provision of this Agreement or a Credit
Support Document, as the case may be.
(ii) Except in circumstances contemplated by clause (i) above, if an event
or circumstance which would otherwise constitute or give rise to an
Illegality or a Force Majeure Event also constitutes an Event of Default
or any other Termination Event, it will be treated as an Event of Default
or such other Termination Event, as the case may be, and will not
constitute or give rise to an Illegality or a Force Majeure Event.
(iii) If an event or circumstance which would otherwise constitute or give
rise to a Force Majeure Event also constitutes an Illegality, it will be
treated as an Illegality, except as described in clause (ii) above, and
not a Force Majeure Event.
(d) Deferral of Payments and Deliveries During Waiting Period. If an Illegality
or a Force Majeure Event has occurred and is continuing with respect to a
Transaction, each payment or delivery which would otherwise be required to be
made under that Transaction will be deferred to, and will not be due until:-
(i) the first Local Business Day or, in the case of a delivery, the first
Local Delivery Day (or the first day that would have been a Local Business
Day or Local Delivery Day, as appropriate, but for the occurrence of the
event or circumstance constituting or giving rise to that Illegality or
Force Majeure Event) following the end of any applicable Waiting Period in
respect of that Illegality or Force Majeure Event, as the case may be; or
(ii) if earlier, the date on which the event or circumstance constituting
or giving rise to that Illegality or Force Majeure Event ceases to exist
or, if such date is not a Local Business Day or, in the case of a
delivery, a Local Delivery Day, the first following day that is a Local
Business Day or Local Delivery Day, as appropriate.
(e) Inability of Head or Home Office to Perform Obligations of Branch. If (i) an
Illegality or a Force Majeure Event occurs under Section 5(b)(i)(1) or
5(b)(ii)(1) and the relevant Office is not the Affected Party's head or home
office, (ii) Section 10(a) applies, (iii) the other party seeks performance of
the relevant obligation or compliance with the relevant provision by the
Affected Party's head or home office and (iv) the Affected Party's head or home
office fails so to perform or comply due to the occurrence of an event or
circumstance which would, if that head or home office were the Office through
which the Affected Party makes and receives payments and deliveries with respect
to the relevant Transaction, constitute or give rise to an Illegality or a Force
Majeure Event, and such failure would otherwise constitute an Event of Default
under Section 5(a)(i)or 5(a)(iii)(1) with respect to such party, then, for so
long as the relevant event or circumstance continues to exist with respect to
both the Office referred to in Section 5(b)(i)(1) or 5(b)(ii)(1), as the case
may be, and the Affected Party's head or home office, such failure will not
constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1).
6. Early Termination; Close-Out Netting
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event other than a Force Majeure Event
occurs, an Affected Party will, promptly upon becoming aware of it, notify
the other party, specifying the nature of that Termination Event and each
Affected Transaction, and will also give the other party such other
information about that Termination Event as the other party may reasonably
require. If a Force Majeure Event occurs, each party will, promptly upon
becoming aware of it, use all reasonable efforts to notify the other
party, specifying the nature of that Force Majeure Event, and will also
give the other party such other information about that Force Majeure Event
as the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If a Tax Event occurs and there
is only one Affected Party, or if a Tax Event Upon Merger occurs and the
Burdened Party is the Affected Party, the Affected Party will, as a
condition to its right to designate an Early Termination Date under
Section 6(b)(iv), use all reasonable efforts (which will not require such
party to incur a loss, other than immaterial, incidental expenses) to
transfer within 20 days after it gives notice under Section 6(b)(i) all
its rights and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If a Tax Event occurs and there are two
Affected Parties, each party will use all reasonable efforts to reach
agreement within 30 days after notice of such occurrence is given under
Section 6(b)(i) to avoid that Termination Event.
(iv) Right to Terminate.
(1) If:-
(A) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(B) a Credit Event Upon Merger or an Additional Termination
Event occurs, or a Tax Event Upon Merger occurs and the
Burdened Party is not the Affected Party,
the Burdened Party in the case of a Tax Event Upon Merger, any
Affected Party in the case of a Tax Event or an Additional
Termination Event if there are two Affected Parties, or the
Non-affected Party in the case of a Credit Event Upon Merger or an
Additional Termination Event if there is only one Affected Party
may, if the relevant Termination Event is then continuing, by not
more than 20 days notice to the other party, designate a day not
earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.
(2) If at any time an Illegality or a Force Majeure Event has
occurred and is then continuing and any applicable Waiting Period
has expired:-
(A) Subject to clause (B) below, either party may, by not more
than 20 days notice to the other party, designate (I) a day
not earlier than the day on which such notice becomes
effective as an Early Termination Date in respect of all
Affected Transactions or (II) by specifying in that notice the
Affected Transactions in respect of which it is designating
the relevant day as an Early Termination Date, a day not
earlier than two Local Business Days following the day on
which such notice becomes effective as an Early Termination
Date in respect of less than all Affected Transactions. Upon
receipt of a notice designating an Early Termination Date in
respect of less than all Affected Transactions, the other
party may, by notice to the designating party, if such notice
is effective on or before the day so designated, designate
that same day as an Early Termination Date in respect of any
or all other Affected Transactions.
(B) An Affected Party (if the Illegality or Force Majeure
Event relates to performance by such party or any Credit
Support Provider of such party of an obligation to make any
payment or delivery under, or to compliance with any other
material provision of, the relevant Credit Support Document)
will only have the right to designate an Early Termination
Date under Section 6(b)(iv)(2)(A) as a result of an Illegality
under Section 5(b)(i)(2) or a Force Majeure Event under
Section 5(b)(ii)(2) following the prior designation by the
other party of an Early Termination Date, pursuant to Section
6(b)(iv)(2)(A), in respect of less than all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or 6(b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 9(h)(i)
in respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date will be determined
pursuant to Sections 6(e) and 9(h)(ii).
(d) Calculations; Payment Date.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including any quotations, market data or information
from internal sources used in making such calculations), (2) specifying
(except where there are two Affected Parties) any Early Termination Amount
payable and (3) giving details of the relevant account to which any amount
payable to it is to be paid. In the absence of written confirmation from
the source of a quotation or market data obtained in determining a
Close-out Amount, the records of the party obtaining such quotation or
market data will be conclusive evidence of the existence and accuracy of
such quotation or market data.
(ii) Payment Date. An Early Termination Amount due in respect of any Early
Termination Date will, together with any amount of interest payable
pursuant to Section 9(h)(ii)(2), be payable (1) on the day on which notice
of the amount payable is effective in the case of an Early Termination
Date which is designated or occurs as a result of an Event of Default and
(2) on the day which is two Local Business Days after the day on which
notice of the amount payable is effective (or, if there are two Affected
Parties, after the day on which the statement provided pursuant to clause
(i) above by the second party to provide such a statement is effective) in
the case of an Early Termination Date which is designated as a result of a
Termination Event.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
amount, if any, payable in respect of that Early Termination Date (the "Early
Termination Amount") will be determined pursuant to this Section 6(e) and will
be subject to Section 6(f).
(i) Events of Default. If the Early Termination Date results from an Event
of Default, the Early Termination Amount will be an amount equal to (1)
the sum of (A) the Termination Currency Equivalent of the Close-out Amount
or Close-out Amounts (whether positive or negative) determined by the
Non-defaulting Party for each Terminated Transaction or group of
Terminated Transactions, as the case may be, and (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting
Party less (2) the Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party. If the Early Termination Amount is a
positive number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will pay the
absolute value of the Early Termination Amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:-
(1) One Affected Party. Subject to clause (3) below, if there is one
Affected Party, the Early Termination Amount will be determined in
accordance with Section 6(e)(i), except that references to the
Defaulting Party and to the Non-defaulting Party will be deemed to
be references to the Affected Party and to the Non-affected Party,
respectively.
(2) Two Affected Parties. Subject to clause (3) below, if there are
two Affected Parties, each party will determine an amount equal to
the Termination Currency Equivalent of the sum of the Close-out
Amount or Close-out Amounts (whether positive or negative) for each
Terminated Transaction or group of Terminated Transactions, as the
case may be, and the Early Termination Amount will be an amount
equal to (A) the sum of (I) one-half of the difference between the
higher amount so determined (by party "X") and the lower amount so
determined (by party "Y") and (II) the Termination Currency
Equivalent of the Unpaid Amounts owing to X less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y. If the Early
Termination Amount is a positive number, Y will pay it to X; if it
is a negative number, X will pay the absolute value of the Early
Termination Amount to Y.
(3) Mid-Market Events. If that Termination Event is an Illegality or
a Force Majeure Event, then the Early Termination Amount will be
determined in accordance with clause (1) or (2) above, as
appropriate, except that, for the purpose of determining a Close-out
Amount or Close-out Amounts, the Determining Party will:-
(A) if obtaining quotations from one or more third parties (or
from any of the Determining Party's Affiliates), ask each
third party or Affiliate (I) not to take account of the
current creditworthiness of the Determining Party or any
existing Credit Support Document and (II) to provide
mid-market quotations; and
(B) in any other case, use mid-market values without regard to
the creditworthiness of the Determining Party.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because Automatic Early Termination applies in
respect of a party, the Early Termination Amount will be subject to such
adjustments as are appropriate and permitted by applicable law to reflect
any payments or deliveries made by one party to the other under this
Agreement (and retained by such other party) during the period from the
relevant Early Termination Date to the date for payment determined under
Section 6(d)(ii).
(iv) Adjustment for Illegality or Force Majeure Event. The failure by a
party or any Credit Support Provider of such party to pay, when due, any
Early Termination Amount will not constitute an Event of Default under
Section 5(a)(i) or 5(a)(iii)(1) if such failure is due to the occurrence
of an event or circumstance which would, if it occurred with respect to
payment, delivery or compliance related to a Transaction, constitute or
give rise to an Illegality or a Force Majeure Event. Such amount will (1)
accrue interest and otherwise be treated as an Unpaid Amount owing to the
other party if subsequently an Early Termination Date results from an
Event of Default, a Credit Event Upon Merger or an Additional Termination
Event in respect of which all outstanding Transactions are Affected
Transactions and (2) otherwise accrue interest in accordance with Section
9(h)(ii)(2).
(v) Pre-Estimate. The parties agree that an amount recoverable under this
Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such
amount is payable for the loss of bargain and the loss of protection
against future risks, and, except as otherwise provided in this Agreement,
neither party will be entitled to recover any additional damages as a
consequence of the termination of the Terminated Transactions.
(f) Set-Off. Any Early Termination Amount payable to one party (the "Payee") by
the other party (the "Payer"), in circumstances where there is a Defaulting
Party or where there is one Affected Party in the case where either a Credit
Event Upon Merger has occurred or any other Termination Event in respect of
which all outstanding Transactions are Affected Transactions has occurred, will,
at the option of the Non-defaulting Party or the Non-affected Party, as the case
may be ("X") (and without prior notice to the Defaulting Party or the Affected
Party, as the case may be), be reduced by its set-off against any other amounts
("Other Amounts") payable by the Payee to the Payer (whether or not arising
under this Agreement, matured or contingent and irrespective of the currency,
place of payment or place of booking of the obligation). To the extent that any
Other Amounts are so set off, those Other Amounts will be discharged promptly
and in all respects. X will give notice to the other party of any set-off
effected under this Section 6(f).
For this purpose, either the Early Termination Amount or the Other Amounts (or
the relevant portion of such amounts) may be converted by X into the currency in
which the other is denominated at the rate of exchange at which such party would
be able, in good faith and using commercially reasonable procedures, to purchase
the relevant amount of such currency.
If an obligation is unascertained, X may in good faith estimate that obligation
and set off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.
Nothing in this Section 6(f) will be effective to create a charge or other
security interest. This Section 6(f) will be without prejudice and in addition
to any right of set-off, offset, combination of accounts, lien, right of
retention or withholding or similar right or requirement to which any party is
at any time otherwise entitled or subject (whether by operation of law, contract
or otherwise).
7. Transfer
Subject to Section 6(b)(ii) and to the extent permitted by applicable law,
neither this Agreement nor any interest or obligation in or under this Agreement
may be transferred (whether by way of security or otherwise) by either party
without the prior written consent of the other party, except that:-
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
Early Termination Amount payable to it by a Defaulting Party, together with any
amounts payable on or with respect to that interest and any other rights
associated with that interest pursuant to Sections 8, 9(h) and 11.
Any purported transfer that is not in compliance with this Section 7 will be
void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in good faith and using
commercially reasonable procedures in converting the currency so tendered into
the Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required to
make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in clause (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purpose of such
judgment or order and the rate of exchange at which such party is able, acting
in good faith and using commercially reasonable procedures in converting the
currency received into the Contractual Currency, to purchase the Contractual
Currency with the amount of the currency of the judgment or order actually
received by such party.
(c) Separate Indemnities. To the extent permitted by applicable law, the
indemnities in this Section 8 constitute separate and independent obligations
from the other obligations in this Agreement, will be enforceable as separate
and independent causes of action, will apply notwithstanding any indulgence
granted by the party to which any payment is owed and will not be affected by
judgment being obtained or claim or proof being made for any other sums payable
in respect of this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter. Each of the
parties acknowledges that in entering into this Agreement it has not relied on
any oral or written representation, warranty or other assurance (except as
provided for or referred to in this Agreement) and waives all rights and
remedies which might otherwise be available to it in respect thereof, except
that nothing in this Agreement will limit or exclude any liability of a party
for fraud.
(b) Amendments. An amendment, modification or waiver in respect of this
Agreement will only be effective if in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or by an exchange of electronic messages on an electronic
messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission and by electronic messaging system), each of which
will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation will be entered into as soon as practicable and
may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes, by an exchange of
electronic messages on an electronic messaging system or by an exchange of
e-mails, which in each case will be sufficient for all purposes to
evidence a binding supplement to this Agreement. The parties will specify
therein or through another effective means that any such counterpart,
telex, electronic message or e-mail constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
(h) Interest and Compensation.
(i) Prior to Early Termination. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction:-
(1) Interest on Defaulted Payments. If a party defaults in the
performance of any payment obligation, it will, to the extent
permitted by applicable law and subject to Section 6(c), pay
interest (before as well as after judgment) on the overdue amount to
the other party on demand in the same currency as the overdue
amount, for the period from (and including) the original due date
for payment to (but excluding) the date of actual payment (and
excluding any period in respect of which interest or compensation in
respect of the overdue amount is due pursuant to clause (3)(B) or
(C) below), at the Default Rate.
(2) Compensation for Defaulted Deliveries. If a party defaults in
the performance of any obligation required to be settled by
delivery, it will on demand (A) compensate the other party to the
extent provided for in the relevant Confirmation or elsewhere in
this Agreement and (B) unless otherwise provided in the relevant
Confirmation or elsewhere in this Agreement, to the extent permitted
by applicable law and subject to Section 6(c), pay to the other
party interest (before as well as after judgment) on an amount equal
to the fair market value of that which was required to be delivered
in the same currency as that amount, for the period from (and
including) the originally scheduled date for delivery to (but
excluding) the date of actual delivery (and excluding any period in
respect of which interest or compensation in respect of that amount
is due pursuant to clause (4) below), at the Default Rate. The fair
market value of any obligation referred to above will be determined
as of the originally scheduled date for delivery, in good faith and
using commercially reasonable procedures, by the party that was
entitled to take delivery.
(3) Interest on Deferred Payments. If:-
(A) a party does not pay any amount that, but for Section
2(a)(iii), would have been payable, it will, to the extent
permitted by applicable law and subject to Section 6(c) and
clauses (B) and (C) below, pay interest (before as well as
after judgment) on that amount to the other party on demand
(after such amount becomes payable) in the same currency as
that amount, for the period from (and including) the date the
amount would, but for Section 2(a)(iii), have been payable to
(but excluding) the date the amount actually becomes payable,
at the Applicable Deferral Rate;
(B) a payment is deferred pursuant to Section 5(d), the party
which would otherwise have been required to make that payment
will, to the extent permitted by applicable law, subject to
Section 6(c) and for so long as no Event of Default or
Potential Event of Default with respect to that party has
occurred and is continuing, pay interest (before as well as
after judgment) on the amount of the deferred payment to the
other party on demand (after such amount becomes payable) in
the same currency as the deferred payment, for the period from
(and including) the date the amount would, but for Section
5(d), have been payable to (but excluding) the earlier of the
date the payment is no longer deferred pursuant to Section
5(d) and the date during the deferral period upon which an
Event of Default or Potential Event of Default with respect to
that party occurs, at the Applicable Deferral Rate; or
(C) a party fails to make any payment due to the occurrence of
an Illegality or a Force Majeure Event (after giving effect to
any deferral period contemplated by clause (B) above), it
will, to the extent permitted by applicable law, subject to
Section 6(c) and for so long as the event or circumstance
giving rise to that Illegality or Force Majeure Event
continues and no Event of Default or Potential Event of
Default with respect to that party has occurred and is
continuing, pay interest (before as well as after judgment) on
the overdue amount to the other party on demand in the same
currency as the overdue amount, for the period from (and
including) the date the party fails to make the payment due to
the occurrence of the relevant Illegality or Force Majeure
Event (or, if later, the date the payment is no longer
deferred pursuant to Section 5(d)) to (but excluding) the
earlier of the date the event or circumstance giving rise to
that Illegality or Force Majeure Event ceases to exist and the
date during the period upon which an Event of Default or
Potential Event of Default with respect to that party occurs
(and excluding any period in respect of which interest or
compensation in respect of the overdue amount is due pursuant
to clause (B) above), at the Applicable Deferral Rate.
(4) Compensation for Deferred Deliveries. If:-
(A) a party does not perform any obligation that, but for Section
2(a)(iii), would have been required to be settled by delivery;
(B) a delivery is deferred pursuant to Section 5(d); or
(C) a party fails to make a delivery due to the occurrence of an
Illegality or a Force Majeure Event at a time when any applicable
Waiting Period has expired,
the party required (or that would otherwise have been required) to
make the delivery will, to the extent permitted by applicable law
and subject to Section 6(c), compensate and pay interest to the
other party on demand (after, in the case of clauses (A) and (B)
above, such delivery is required) if and to the extent provided for
in the relevant Confirmation or elsewhere in this Agreement.
(ii) Early Termination. Upon the occurrence or effective designation of an
Early Termination Date in respect of a Transaction:-
(1) Unpaid Amounts. For the purpose of determining an Unpaid Amount
in respect of the relevant Transaction, and to the extent permitted
by applicable law, interest will accrue on the amount of any payment
obligation or the amount equal to the fair market value of any
obligation required to be settled by delivery included in such
determination in the same currency as that amount, for the period
from (and including) the date the relevant obligation was (or would
have been but for Section 2(a)(iii) or 5(d)) required to have been
performed to (but excluding) the relevant Early Termination Date, at
the Applicable Close-out Rate.
(2) Interest on Early Termination Amounts. If an Early Termination
Amount is due in respect of such Early Termination Date, that amount
will, to the extent permitted by applicable law, be paid together
with interest (before as well as after judgment) on that amount in
the Termination Currency, for the period from (and including) such
Early Termination Date to (but excluding) the date the amount is
paid, at the Applicable Close-out Rate.
(iii) Interest Calculation. Any interest pursuant to this Section 9(h)
will be calculated on the basis of daily compounding and the actual number
of days elapsed.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to and agrees with the other party that, notwithstanding the place of
booking or its jurisdiction of incorporation or organisation, its obligations
are the same in terms of recourse against it as if it had entered into the
Transaction through its head or home office, except that a party will not have
recourse to the head or home office of the other party in respect of any payment
or delivery deferred pursuant to Section 5(d) for so long as the payment or
delivery is so deferred. This representation and agreement will be deemed to be
repeated by each party on each date on which the parties enter into a
Transaction.
(b) If a party is specified as a Multibranch Party in the Schedule, such party
may, subject to clause (c) below, enter into a Transaction through, book a
Transaction in and make and receive payments and deliveries with respect to a
Transaction through any Office listed in respect of that party in the Schedule
(but not any other Office unless otherwise agreed by the parties in writing).
(c) The Office through which a party enters into a Transaction will be the
Office specified for that party in the relevant Confirmation or as otherwise
agreed by the parties in writing, and, if an Office for that party is not
specified in the Confirmation or otherwise agreed by the parties in writing, its
head or home office. Unless the parties otherwise agree in writing, the Office
through which a party enters into a Transaction will also be the Office in which
it books the Transaction and the Office through which it makes and receives
payments and deliveries with respect to the Transaction. Subject to Section
6(b)(ii), neither party may change the Office in which it books the Transaction
or the Office through which it makes and receives payments or deliveries with
respect to a Transaction without the prior written consent of the other party.
11. Expenses
A Defaulting Party will on demand indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees,
execution fees and Stamp Tax, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement or any Credit
Support Document to which the Defaulting Party is a party or by reason of the
early termination of any Transaction, including, but not limited to, costs of
collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner described below (except that a notice
or other communication under Section 5 or 6 may not be given by electronic
messaging system or e-mail) to the address or number or in accordance with
the electronic messaging system or e-mail details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date it is received by a
responsible employee of the recipient in legible form (it being agreed
that the burden of proving receipt will be on the sender and will not be
met by a transmission report generated by the sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date it is delivered or its
delivery is attempted;
(v) if sent by electronic messaging system, on the date it is received; or
(vi) if sent by e-mail, on the date it is delivered,
unless the date of that delivery (or attempted delivery) or that receipt,
as applicable, is not a Local Business Day or that communication is delivered
(or attempted) or received, as applicable, after the close of business on a
Local Business Day, in which case that communication will be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Details. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system or e-mail
details at which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
any dispute arising out of or in connection with this Agreement
("Proceedings"), each party irrevocably:-
(i) submits:-
(1) if this Agreement is expressed to be governed by English law, to
(A) the non-exclusive jurisdiction of the English courts if the
Proceedings do not involve a Convention Court and (B) the exclusive
jurisdiction of the English courts if the Proceedings do involve a
Convention Court; or
(2) if this Agreement is expressed to be governed by the laws of the
State of New York, to the non-exclusive jurisdiction of the courts
of the State of New York and the United States District Court
located in the Borough of Manhattan in New York City;
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party; and
(iii) agrees, to the extent permitted by applicable law, that the bringing
of Proceedings in any one or more jurisdictions will not preclude the
bringing of Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent, if
any, specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv).
Nothing in this Agreement will affect the right of either party to serve process
in any other manner permitted by applicable law.
(d) Waiver of Immunities. Each party irrevocably waives, to the extent permitted
by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction or order for specific performance or
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:-
"Additional Representation" has the meaning specified in Section 3.
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Force Majeure Event, Tax Event or Tax Event Upon
Merger, all Transactions affected by the occurrence of such Termination Event
(which, in the case of an Illegality under Section 5(b)(i)(2) or a Force Majeure
Event under Section 5(b)(ii)(2), means all Transactions unless the relevant
Credit Support Document references only certain Transactions, in which case
those Transactions and, if the relevant Credit Support Document constitutes a
Confirmation for a Transaction, that Transaction) and (b) with respect to any
other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Agreement" has the meaning specified in Section 1(c).
"Applicable Close-out Rate" means:-
(a) in respect of the determination of an Unpaid Amount:-
(i) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(ii) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate;
(iii) in respect of obligations deferred pursuant to Section 5(d), if
there is no Defaulting Party and for so long as the deferral period
continues, the Applicable Deferral Rate; and
(iv) in all other cases following the occurrence of a Termination Event
(except where interest accrues pursuant to clause (iii) above), the
Applicable Deferral Rate; and
(b) in respect of an Early Termination Amount:-
(i) for the period from (and including) the relevant Early Termination
Date to (but excluding) the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable:-
(1) if the Early Termination Amount is payable by a Defaulting
Party, the Default Rate;
(2) if the Early Termination Amount is payable by a Non-defaulting
Party, the Non-default Rate; and
(3) in all other cases, the Applicable Deferral Rate; and
(ii) for the period from (and including) the date (determined in
accordance with Section 6(d)(ii)) on which that amount is payable to (but
excluding) the date of actual payment:-
(1) if a party fails to pay the Early Termination Amount due to the
occurrence of an event or circumstance which would, if it occurred
with respect to a payment or delivery under a Transaction,
constitute or give rise to an Illegality or a Force Majeure Event,
and for so long as the Early Termination Amount remains unpaid due
to the continuing existence of such event or circumstance, the
Applicable Deferral Rate;
(2) if the Early Termination Amount is payable by a Defaulting Party
(but excluding any period in respect of which clause (1) above
applies), the Default Rate;
(3) if the Early Termination Amount is payable by a Non-defaulting
Party (but excluding any period in respect of which clause (1) above
applies), the Non-default Rate; and
(4) in all other cases, the Termination Rate.
"Applicable Deferral Rate" means:-
(a) for the purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant
payer to be a rate offered to the payer by a major bank in a relevant interbank
market for overnight deposits in the applicable currency, such bank to be
selected in good faith by the payer for the purpose of obtaining a
representative rate that will reasonably reflect conditions prevailing at the
time in that relevant market;
(b) for purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition
of Applicable Close-out Rate, the rate certified by the relevant payer to be a
rate offered to prime banks by a major bank in a relevant interbank market for
overnight deposits in the applicable currency, such bank to be selected in good
faith by the payer after consultation with the other party, if practicable, for
the purpose of obtaining a representative rate that will reasonably reflect
conditions prevailing at the time in that relevant market; and
(c) for purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and
(b)(ii)(1) of the definition of Applicable Close-out Rate, a rate equal to the
arithmetic mean of the rate determined pursuant to clause (a) above and a rate
per annum equal to the cost (without proof or evidence of any actual cost) to
the relevant payee (as certified by it) if it were to fund or of funding the
relevant amount.
"Automatic Early Termination" has the meaning specified in Section 6(a).
"Burdened Party" has the meaning specified in Section 5(b)(iv).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs after the parties enter into the relevant
Transaction.
"Close-out Amount" means, with respect to each Terminated Transaction or each
group of Terminated Transactions and a Determining Party, the amount of the
losses or costs of the Determining Party that are or would be incurred under
then prevailing circumstances (expressed as a positive number) or gains of the
Determining Party that are or would be realised under then prevailing
circumstances (expressed as a negative number) in replacing, or in providing for
the Determining Party the economic equivalent of, (a) the material terms of that
Terminated Transaction or group of Terminated Transactions, including the
payments and deliveries by the parties under Section 2(a)(i) in respect of that
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 (assuming satisfaction of the conditions precedent in Section
2(a)(iii)) and (b) the option rights of the parties in respect of that
Terminated Transaction or group of Terminated Transactions.
Any Close-out Amount will be determined by the Determining Party (or its agent),
which will act in good faith and use commercially reasonable procedures in order
to produce a commercially reasonable result. The Determining Party may determine
a Close-out Amount for any group of Terminated Transactions or any individual
Terminated Transaction but, in the aggregate, for not less than all Terminated
Transactions. Each Close-out Amount will be determined as of the Early
Termination Date or, if that would not be commercially reasonable, as of the
date or dates following the Early Termination Date as would be commercially
reasonable.
Unpaid Amounts in respect of a Terminated Transaction or group of Terminated
Transactions and legal fees and out-of-pocket expenses referred to in Section 11
are to be excluded in all determinations of Close-out Amounts.
In determining a Close-out Amount, the Determining Party may consider any
relevant information, including, without limitation, one or more of the
following types of information: -
(i) quotations (either firm or indicative) for replacement transactions supplied
by one or more third parties that may take into account the creditworthiness of
the Determining Party at the time the quotation is provided and the terms of any
relevant documentation, including credit support documentation, between the
Determining Party and the third party providing the quotation;
(ii) information consisting of relevant market data in the relevant market
supplied by one or more third parties including, without limitation, relevant
rates, prices, yields, yield curves, volatilities, spreads, correlations or
other relevant market data in the relevant market; or
(iii) information of the types described in clause (i) or (ii) above from
internal sources (including any of the Determining Party's Affiliates) if that
information is of the same type used by the Determining Party in the regular
course of its business for the valuation of similar transactions.
The Determining Party will consider, taking into account the standards and
procedures described in this definition, quotations pursuant to clause (i) above
or relevant market data pursuant to clause (ii) above unless the Determining
Party reasonably believes in good faith that such quotations or relevant market
data are not readily available or would produce a result that would not satisfy
those standards. When considering information described in clause (i), (ii) or
(iii) above, the Determining Party may include costs of funding, to the extent
costs of funding are not and would not be a component of the other information
being utilised. Third parties supplying quotations pursuant to clause (i) above
or market data pursuant to clause (ii) above may include, without limitation,
dealers in the relevant markets, end-users of the relevant product, information
vendors, brokers and other sources of market information.
Without duplication of amounts calculated based on information described in
clause (i), (ii) or (iii) above, or other relevant information, and when it is
commercially reasonable to do so, the Determining Party may in addition consider
in calculating a Close-out Amount any loss or cost incurred in connection with
its terminating, liquidating or re-establishing any hedge related to a
Terminated Transaction or group of Terminated Transactions (or any gain
resulting from any of them).
Commercially reasonable procedures used in determining a Close-out Amount may
include the following:-
(1) application to relevant market data from third parties pursuant to clause
(ii) above or information from internal sources pursuant to clause (iii) above
of pricing or other valuation models that are, at the time of the determination
of the Close-out Amount, used by the Determining Party in the regular course of
its business in pricing or valuing transactions between the Determining Party
and unrelated third parties that are similar to the Terminated Transaction or
group of Terminated Transactions; and
(2) application of different valuation methods to Terminated Transactions or
groups of Terminated Transactions depending on the type, complexity, size or
number of the Terminated Transactions or group of Terminated Transactions.
"Confirmation" has the meaning specified in the preamble.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Contractual Currency" has the meaning specified in Section 8(a).
"Convention Court" means any court which is bound to apply to the Proceedings
either Article 17 of the 1968 Brussels Convention on Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters or Article 17 of the
1988 Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil
and Commercial Matters.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Cross-Default" means the event specified in Section 5(a)(vi).
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Designated Event" has the meaning specified in Section 5(b)(v).
"Determining Party" means the party determining a Close-out Amount.
"Early Termination Amount" has the meaning specified in Section 6(e).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"electronic messages" does not include e-mails but does include documents
expressed in markup languages, and "electronic messaging system" will be
construed accordingly.
"English law" means the law of England and Wales, and "English" will be
construed accordingly.
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Force Majeure Event" has the meaning specified in Section 5(b).
"General Business Day" means a day on which commercial banks are open for
general business (including dealings in foreign exchange and foreign currency
deposits).
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority),
and "unlawful" will be construed accordingly.
"Local Business Day" means (a) in relation to any obligation under Section
2(a)(i), a General Business Day in the place or places specified in the relevant
Confirmation and a day on which a relevant settlement system is open or
operating as specified in the relevant Confirmation or, if a place or a
settlement system is not so specified, as otherwise agreed by the parties in
writing or determined pursuant to provisions contained, or incorporated by
reference, in this Agreement, (b) for the purpose of determining when a Waiting
Period expires, a General Business Day in the place where the event or
circumstance that constitutes or gives rise to the Illegality or Force Majeure
Event, as the case may be, occurs, (c) in relation to any other payment, a
General Business Day in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment and, if that currency does not have a single recognised principal
financial centre, a day on which the settlement system necessary to accomplish
such payment is open, (d) in relation to any notice or other communication,
including notice contemplated under Section 5(a)(i), a General Business Day (or
a day that would have been a General Business Day but for the occurrence of an
event or circumstance which would, if it occurred with respect to payment,
delivery or compliance related to a Transaction, constitute or give rise to an
Illegality or a Force Majeure Event) in the place specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(e) in relation to Section 5(a)(v)(2), a General Business Day in the relevant
locations for performance with respect to such Specified Transaction.
"Local Delivery Day" means, for purposes of Sections 5(a)(i) and 5(d), a day on
which settlement systems necessary to accomplish the relevant delivery are
generally open for business so that the delivery is capable of being
accomplished in accordance with customary market practice, in the place
specified in the relevant Confirmation or, if not so specified, in a location as
determined in accordance with customary market practice for the relevant
delivery.
"Master Agreement" has the meaning specified in the preamble.
"Merger Without Assumption" means the event specified in Section 5(a)(viii).
"Multiple Transaction Payment Netting" has the meaning specified in Section
2(c).
"Non-affected Party" means, so long as there is only one Affected Party, the
other party.
"Non-default Rate" means the rate certified by the Non-defaulting Party to be a
rate offered to the Non-defaulting Party by a major bank in a relevant interbank
market for overnight deposits in the applicable currency, such bank to be
selected in good faith by the Non-defaulting Party for the purpose of obtaining
a representative rate that will reasonably reflect conditions prevailing at the
time in that relevant market.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Other Amounts" has the meaning specified in Section 6(f).
"Payee" has the meaning specified in Section 6(f).
"Payer" has the meaning specified in Section 6(f).
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Proceedings" has the meaning specified in Section 13(b).
"Process Agent" has the meaning specified in the Schedule.
"rate of exchange" includes, without limitation, any premiums and costs of
exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Schedule" has the meaning specified in the preamble.
"Scheduled Settlement Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect to any such transaction) now existing or
hereafter entered into between one party to this Agreement (or any Credit
Support Provider of such party or any applicable Specified Entity of such party)
and the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is not
a Transaction under this Agreement but (i) which is a rate swap transaction,
swap option, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option, credit protection transaction, credit swap,
credit default swap, credit default option, total return swap, credit spread
transaction, repurchase transaction, reverse repurchase transaction,
buy/sell-back transaction, securities lending transaction, weather index
transaction or forward purchase or sale of a security, commodity or other
financial instrument or interest (including any option with respect to any of
these transactions) or (ii) which is a type of transaction that is similar to
any transaction referred to in clause (i) above that is currently, or in the
future becomes, recurrently entered into in the financial markets (including
terms and conditions incorporated by reference in such agreement) and which is a
forward, swap, future, option or other derivative on one or more rates,
currencies, commodities, equity securities or other equity instruments, debt
securities or other debt instruments, economic indices or measures of economic
risk or value, or other benchmarks against which payments or deliveries are to
be made, (b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Stamp Tax Jurisdiction" has the meaning specified in Section 4(e).
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means, with respect to any Early Termination Date, (a)
if resulting from an Illegality or a Force Majeure Event, all Affected
Transactions specified in the notice given pursuant to Section 6(b)(iv), (b) if
resulting from any other Termination Event, all Affected Transactions and (c) if
resulting from an Event of Default, all Transactions in effect either
immediately before the effectiveness of the notice designating that Early
Termination Date or, if Automatic Early Termination applies, immediately before
that Early Termination Date.
"Termination Currency" means (a) if a Termination Currency is specified in the
Schedule and that currency is freely available, that currency, and (b)
otherwise, euro if this Agreement is expressed to be governed by English law or
United States Dollars if this Agreement is expressed to be governed by the laws
of the State of New York.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Close-out Amount is determined as of a later date, that later date,
with the Termination Currency at the rate equal to the spot exchange rate of the
foreign exchange agent (selected as provided below) for the purchase of such
Other Currency with the Termination Currency at or about 11:00 a.m. (in the city
in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later date.
The foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party and
otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Force Majeure Event, a Tax Event, a
Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon
Merger or an Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Threshold Amount" means the amount, if any, specified as such in the Schedule.
"Transaction" has the meaning specified in the preamble.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii) or due but for Section 5(d)) to such party under Section 2(a)(i) or
2(d)(i)(4) on or prior to such Early Termination Date and which remain unpaid as
at such Early Termination Date, (b) in respect of each Terminated Transaction,
for each obligation under Section 2(a)(i) which was (or would have been but for
Section 2(a)(iii) or 5(d)) required to be settled by delivery to such party on
or prior to such Early Termination Date and which has not been so settled as at
such Early Termination Date, an amount equal to the fair market value of that
which was (or would have been) required to be delivered and (c) if the Early
Termination Date results from an Event of Default, a Credit Event Upon Merger or
an Additional Termination Event in respect of which all outstanding Transactions
are Affected Transactions, any Early Termination Amount due prior to such Early
Termination Date and which remains unpaid as of such Early Termination Date, in
each case together with any amount of interest accrued or other compensation in
respect of that obligation or deferred obligation, as the case may be, pursuant
to Section 9(h)(ii)(1) or (2), as appropriate. The fair market value of any
obligation referred to in clause (b) above will be determined as of the
originally scheduled date for delivery, in good faith and using commercially
reasonable procedures, by the party obliged to make the determination under
Section 6(e) or, if each party is so obliged, it will be the average of the
Termination Currency Equivalents of the fair market values so determined by both
parties.
"Waiting Period" means:-
(a) in respect of an event or circumstance under Section 5(b)(i), other than in
the case of Section 5(b)(i)(2) where the relevant payment, delivery or
compliance is actually required on the relevant day (in which case no Waiting
Period will apply), a period of three Local Business Days (or days that would
have been Local Business Days but for the occurrence of that event or
circumstance) following the occurrence of that event or circumstance; and
(b) in respect of an event or circumstance under Section 5(b)(ii), other than in
the case of Section 5(b)(ii)(2) where the relevant payment, delivery or
compliance is actually required on the relevant day (in which case no Waiting
Period will apply), a period of eight Local Business Days (or days that would
have been Local Business Days but for the occurrence of that event or
circumstance) following the occurrence of that event or circumstance.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
WELLS FARGO BANK, N.A., AS TRUSTEE,
ON BEHALF OF BANC OF AMERICA
BANK OF AMERICA, N.A. ALTERNATIVE LOAN TRUST 2007-1
- ------------------------------------- ---------------------------------------
(Name of Party) (Name of Party)
By: By:
--------------------------------- ----------------------------------
Name: Name:
Title: Title:
Date: Date:
SCHEDULE
to the
Master Agreement
(Multicurrency-Cross Border)
dated as of
March 29, 2007
between
BANK OF AMERICA, N.A., a national banking association
organized under the laws of the United States
("Party A")
and
WELLS FARGO BANK, N.A., AS TRUSTEE, ON BEHALF OF BANC OF AMERICA
ALTERNATIVE LOAN TRUST 2007-1
a trust
organized and existing under the laws of the State of New York
("Party B")
Part 1
Definitions
Capitalized terms used herein and not otherwise defined shall have the
meaning specified in that certain Pooling and Servicing Agreement, dated March
29, 2007 (the "Pooling and Servicing Agreement") among Banc of America Mortgage
Securities, Inc., as depositor, Wells Fargo Bank, N.A., as Trustee, and Bank of
America, National Association, as servicer. For the avoidance of doubt,
references herein to a particular "Section" of this Agreement are references to
the corresponding sections of the Master Agreement.
Termination Provisions
In this Agreement:
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
in relation to Party B for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement.
(c) Application of Events of Default. The provisions of Section 5(a) of this
Agreement will apply to Party A and Party B as follows:
Section 5(a) Party A Party B
- ------------ ------- -------
(i) "Failure to Pay or Deliver" Applicable (except as Applicable.
provided below in Part
1(e)(i)).
(ii) "Breach of Agreement" Not Applicable. Not Applicable.
(iii) "Credit Support Default" Applicable (except as Applicable.
provided below in Part
1(e)(i).
(iv) "Misrepresentation" Not Applicable. Not Applicable.
(v) "Default Under Specified Transaction" Not Applicable. Not Applicable.
(vi) "Cross-Default" Not Applicable. Not Applicable.
(vii) "Bankruptcy" Applicable. Applicable (the provisions
of Section 5(a)(vii) clause
2 will not be applicable as
an Event of Default to the
extent such event relates to
nonpayment of indebtedness
other than that of the related
class of Certificates.
(viii) "Merger Without Assumption" Applicable. Applicable.
(d) Section 5(a)(iii)(1) will apply in respect of Party B's obligations under
Paragraph 3(b) of any credit support annex from time to time entered into
between Party A and Party B in relation to this Agreement.
(e) (i) Notwithstanding Sections 5(a)(i) and 5(a)(iii), any failure
by Party A to comply with or perform any obligation to be
complied with or performed by Party A under any credit support
annex from time to time entered into between Party A and Party B
in relation to this Agreement shall not be an Event of Default
unless (A) the Second Rating Trigger Requirements (defined below)
apply and at least 30 Local Business Days have elapsed since the
last time the Second Rating Trigger Requirements did not apply
and (B) such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to Party A.
(ii) With respect to Section 5(a)(vi):
"Specified Indebtedness" will have the meaning specified in Section 14,
provided that Specified Indebtedness shall not include deposits received
in the course of a party's ordinary banking business.
"Threshold Amount" means, with respect to Party A, 3% of shareholders'
equity of Bank of America Corporation as described in its most recently
published audited financial statements or its equivalent in any currency
(excluding deposits).
(f) Application of Events of Termination Events. The provisions of Section
5(b) of this Agreement will apply to Party A and Party B as follows:
Section 5(b) Party A Party B
- ------------ ------- -------
(i) "Illegality" Applicable. Applicable.
(ii) "Tax Event" Applicable. Applicable.
(iii) "Tax Event Upon Merger" Applicable. Applicable.
(iv) "Credit Event Upon Merger" Not Applicable. Not Applicable.
(g) Notwithstanding Section 5(b)(iii), Party A shall not be entitled to
designate an Early Termination Date by reason of a Tax Event Upon Merger
in respect of which it is the Affected Party.
(h) Section 6(b)(ii) will apply, Provided that the words "or if a Tax Event
Upon Merger occurs and the Burdened Party is the Affected Party" shall be
deleted.
(i) The "Automatic Early Termination" provision of Section 6(a) will not apply
to either Party A or to Party B.
(j) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
Market Quotation will apply and the Second Method will apply; provided,
however, with respect to an early termination in which Party A is the
Defaulting Party or sole Affected Party in respect of an Additional
Termination Event or Tax Event Upon Merger, notwithstanding Section 6 of
this Agreement, the following amendment to Agreement set forth in
paragraphs (i) to (ix) below shall apply:
(i) For the purposes of Section 6(d)(i), Party B's obligation with respect
to the extent of information to be provided with its calculations is
limited to information Party B has already received in writing which Party
B is able to release without breaching any contractual obligations or the
provisions of any law applicable to Party B.
(ii) The definition of "Market Quotation" shall be deleted in its entirety
and replaced with the following:
""Market Quotation" means, with respect to one or more Terminated
Transactions, a Firm Offer which is (1) made by a Reference Market-maker
that is an Eligible Replacement, (2) for an amount that would be paid to
Party B (expressed as a negative number) or by Party B (expressed as a
positive number) in consideration of an agreement between Party B and such
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of
each applicable condition precedent) by the parties under Section 2(a)(i)
in respect of such Terminated Transactions or group of Terminated
Transactions that would, but for the occurrence of the relevant Early
Termination Date, have been required after that date, (3) made on the
basis that Unpaid Amounts in respect of the Terminated Transaction or
group of Transactions are to be excluded but, without limitation, any
payment or delivery that would, but for the relevant Early Termination
Date, have been required (assuming satisfaction of each applicable
condition precedent) after that Early Termination Date is to be included
and (4) made in respect of a Replacement Transaction with commercial terms
substantially the same as those of this Agreement (save for the exclusion
of provisions relating to Transactions that are not Terminated
Transactions)."
(iii) The definition of "Settlement Amount" shall be deleted in its
entirety and replaced with the following:
""Settlement Amount" means, with respect to any Early Termination Date, an
amount (as determined by Party B) equal to:
(a) If a Market Quotation for the relevant Terminated Transaction or
group of Terminated Transactions is accepted by Party B so as to
become legally binding on or before the day falling ten Local
Business Days after the day on which the Early Termination Date is
designated (or such later day as Party B may specify in writing to
Party A, which in any event will not be later than the Early
Termination Date) (such day, the "Latest Settlement Amount
Determination Day"), the Termination Currency Equivalent of the
amount (whether positive or negative) of such Market Quotation; or
(b) If no Market Quotation for the relevant Terminated Transaction or
group of Terminated Transactions is accepted by Party B so as to
become legally binding on or before the Latest Settlement Amount
Determination Day, Party B's Loss (whether positive or negative and
without reference to any Unpaid amounts) for the relevant Terminated
Transaction or group of Terminated Transactions.
(iv) For the purpose of paragraph (4) of the definition of Market
Quotation, Party B shall determine in its sole discretion, acting in a
commercially reasonable manner, whether a Firm Offer is made in respect of
a Replacement Transaction with commercial terms substantially the same as
those of this Agreement (save for the exclusion of provisions relating to
Transactions that are not Terminated Transactions).
(v) Party B undertakes to use its reasonable efforts to obtain at least
one Market Quotation before the Latest Settlement Amount Determination
Day.
(vi) Party B will be deemed to have discharged its obligations under (v)
above if it requests Party A to obtain Market Quotations, where such
request is made in writing within two Local Business Days after the day on
which the Early Termination Date is designated.
(vii) if Party B requests Party A in writing to obtain Market Quotations,
Party A shall use its reasonable efforts to do so before the Latest
Settlement Amount Determination Day.
(viii) Any amount calculated as being due in respect of an Early
Termination Date will be payable in accordance with Section 6(d)(ii),
provided that if such payment is owed to Party B, it will be payable on
the day that notice of the amount payable is given to Party A.
(ix) If the Settlement Amount is a negative number, Section 6(e)(i)(3) of
this Agreement shall be deleted in its entirety and replaced with the
following:
"Second Method and Market Quotation. If Second Method and Market Quotation
apply, (1) Party B shall pay to Party A an amount equal to the absolute
value of the Settlement Amount in respect of the Terminated Transactions,
(2) Party B shall pay to Party A the Termination Currency Equivalent of
the Unpaid Amounts owing to Party A and (3) Party A shall pay to Party B
the Termination Currency Equivalent of the Unpaid Amounts owing to Party
B, Provided that, (i) the amounts payable under (2) and (3) shall be
subject to netting in accordance with Section 2(c) of this Agreement and
(ii) notwithstanding any other provision of this Agreement, any amount
payable by Party A under (3) shall not be netted-off against any amount
payable by Party B under (1).".
(k) "Termination Currency" means United States Dollars.
(l) Additional Termination Event will apply. Each of the following events
shall constitute an Additional Termination Event hereunder:
(i) If Party A determines that the Agreement or any Transaction
hereunder constitutes a prohibited transaction under the
Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of
1986 (the "Code") for which no exemption is available, or a
violation of similar effect of any pension investment law
applicable to one or more "governmental plans" as defined
in ERISA and the Code then it shall be an Additional
Termination Event as to which Party B shall be the sole
Affected Party;"
(ii) A termination pursuant to Section 10.01 of the Pooling and Servicing
Agreement. For purposes of Section 6 of this Agreement, Party B
shall be the sole Affected Party.
(iii) An amendment and/or supplement to the Pooling and Servicing
Agreement is made without the prior written consent of Party A (such
consent not to be unreasonably withheld), if such amendment and/or
supplement would: (a) adversely affect any of Party A's rights or
obligations under this Agreement; or (b) modify the obligations of,
or impair the ability of, Party B to fully perform any of Party B's
obligations under this Agreement. For purposes of Section 6 of this
Agreement, Party B shall be the sole Affected Party.
(iv) Downgrade of Party A. The following shall constitute Additional
Termination Event in which Party A is the sole Affected Party:
(A) S&P Downgrade. If a Ratings Event (as defined below) shall occur
and be continuing with respect to Party A, then Party A shall (A)
within 5 Business Days of such Ratings Event, give notice to Party B
of the occurrence of such Ratings Event, and (B) use reasonable
efforts to transfer (at its own cost) Party A's rights and
obligations under this Agreement and all Confirmations to another
party, subject to satisfaction of the Rating Agency Condition (as
defined below). Unless such a transfer by Party A has occurred
within 20 Business Days after the occurrence of a Ratings Event,
Party A post Eligible Collateral (as designated in the approved
Credit Support Annex), to secure Party B's exposure or potential
exposure to Party A, and such Eligible Collateral shall be provided
in accordance with a Credit Support Annex attached hereto.
Notwithstanding the posting of Eligible Collateral, Party A shall
continue to use reasonable efforts to transfer its rights and
obligations under this Agreement to an acceptable third party;
provided, however, that Party A's obligations to find a transferee
and to post Eligible Collateral under such Credit Support Annex
shall remain in effect only for so long as a Ratings Event is
continuing with respect to Party A. For the purpose of this Part
1(l), a "Ratings Event" shall occur with respect to Party A if the
long-term and short-term senior unsecured deposit ratings of Party A
cease to be at least A and A-1 by Standard & Poor's Ratings Service
or any successor thereto ("S&P"), to the extent such obligations are
rated by S&P. "Rating Agency Condition" means, with respect to any
action taken or to be taken, a condition that is satisfied when S&P
has confirmed that such action would not result in the downgrade,
qualification (if applicable) or withdrawal of the rating then
assigned by such Rating Agency to the applicable class of
Certificates. In addition, if the long-term unsecured and
unsubordinated debt rating of Party A ceases to be at least BBB- or
is withdrawn by S&P, then Party A shall (at its own cost) (A) within
10 General Business Days of such event use reasonable efforts to
transfer Party A's rights and obligations under this Agreement to
another party, subject to satisfaction of the Rating Agency
Condition or (B) obtain a guaranty or contingent agreement of
another person, which has the ratings set forth in the definition of
"Ratings Event" to honor Party A's obligations under this Agreement,
subject to satisfaction of the Rating Agency Condition. The failure
by Party A to post Eligible Collateral in accordance herewith or to
transfer its rights and obligations hereunder shall constitute an
Additional Termination Event for which Party A shall be the sole
Affected Party.
(B) Moody's First Rating Trigger Collateral. Party A has failed to
comply with or perform any obligation to be complied with or
performed by Party A in accordance with the Credit Support Annex
from time to time entered into between Party A and Party B in
relation to this Agreement and either (x) the Moody's Second Rating
Trigger Requirements do not apply or (y) less than 30 Local Business
Days have elapsed since the last time the Moody's Second Rating
Trigger Requirements did not apply.
(C) Moody's Second Rating Trigger Replacement. (x) The Moody's
Second Rating Trigger Requirements apply and 30 or more Local
Business Days have elapsed since the last time the Moody's Second
Rating Trigger Requirements did not apply and (y) (i) at least one
Eligible Replacement has made a Firm Offer (which remains capable of
becoming legally binding upon acceptance) to be the transferee of a
transfer to be made in accordance with Part 5(m) below and/or (ii)
at least one entity with the Moody's First Trigger Required Ratings
and/or the Moody's Second Trigger Required Ratings has made a Firm
Offer (which remains capable of becoming legally binding upon
acceptance by the offeree) to provide an Eligible Guarantee in
respect of all of Party A's present and future obligations under
this Agreement.
For the purpose of sub-paragraph (B) and (C) above:
"Eligible Guarantee" means an unconditional and irrevocable
guarantee that is provided by a guarantor as principal debtor rather
than surety and is directly enforceable by Party B, where either (A)
a law firm has given a legal opinion confirming that none of the
guarantor's payments to Party B under such guarantee will be subject
to withholding for tax or (B) such guarantee provides that, in the
event that any of such guarantor's payments to Party B are subject
to withholding for tax, such guarantor is required to pay such
additional amount as is necessary to ensure that the net amount
actually received by Party B (free and clear of any withholding tax)
will equal the full amount Party B would have received had no such
withholding been required.
"Eligible Replacement" means an entity (A) with the Moody's First
Trigger Required Ratings and/or the Moody's Second Trigger Required
Ratings that is the subject of a legal opinion given by a law firm
confirming that none of its payments to Party B will be subject to
withholding for tax or (B) whose present and future obligations
owing to Party B are guaranteed pursuant to an Eligible Guarantee
provided by a guarantor with the Moody's First Trigger Required
Ratings and/or the Moody's Second Trigger Required Ratings.
"Firm Offer" means an offer which, when made, was capable of
becoming legally binding upon acceptance.
"Moody's Short-term Rating" means a rating assigned by Moody's under
its short-term rating scale in respect of an entity's short-term,
unsecured and unsubordinated debt obligations
"Relevant Entities" means Party A and any guarantor under an
Eligible Guarantee in respect of all of Party A's present and future
obligations under this Agreement.
An entity shall have the "Moody's First Trigger Required Ratings"
(x) where such entity is the subject of a Moody's Short-term Rating,
if such rating is "Prime-1" and its long-term, unsecured and
unsubordinated debt obligations are rated "A2" or above by Moody's
and (y) where such entity is not the subject of a Moody's Short-term
Rating, if its long-term, unsecured and unsubordinated debt
obligations are rated "A1" or above by Moody's.
(i) The "Moody's Second Rating Trigger Requirements" shall apply so
long as no Relevant Entity has the Second Trigger Required Ratings.
An entity shall have the "Moody's Second Trigger Required Ratings"
(x) where such entity is the subject of a Moody's Short-term Rating,
if such rating is "Prime-2" or above and its long-term, unsecured
and unsubordinated debt obligations are rated "A3" or above by
Moody's and (y) where such entity is not the subject of a Moody's
Short-term Rating, if its long-term, unsecured and unsubordinated
debt obligations are rated "A3" or above by Moody's.
(ii) So long as the Moody's Second Rating Trigger Requirements
apply, Party A will at its own cost use commercially reasonable
efforts to, as soon as reasonably practicable, procure either (x) an
Eligible Guarantee in respect of all of Party A's present and future
obligations under this Agreement to be provided by a guarantor with
the Moody's First Trigger Required Ratings and/or the Moody's Second
Trigger Required Ratings or (y) a transfer in accordance with Part
5(m)(ii) below.
Part 2
Tax Representations
(a) Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A and Party B make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii), or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement, and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement, and (iii) the satisfaction of the agreement
of the other party contained in Section 4(d) of this Agreement, provided
that it shall not be a breach of this representation where reliance is
placed on clause (ii) and the other party does not deliver a form or
document under Section 4(a)(iii) by reason of material prejudice to its
legal or commercial position.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the following representations:
(i) Party A represents that it is a "U.S. Person" (as that term is used
in section 1.1441-4(a)(3)(ii) of the United States Treasury
Regulations for United States federal income tax purposes and an
"Exempt recipient" (within the meaning of Section 1.6049-4(c)(1)(ii)
of United States Treasury Regulations) for United States federal
income tax purposes.
(ii) Party B represents that it is a New York law common trust and it is
a "U.S Person" (as that term is used in section 1.1441-4(a)(3)(ii)
of the United States Treasury Regulations for United States federal
income tax purposes and an "Exempt recipient" (within the meaning of
Section 1.6049-4(c)(1)(ii) of United States Treasury Regulations)
for United States federal income tax purposes.
Part 3
Agreement to Deliver Documents
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each Party agrees
to deliver the following documents as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party Required to
deliver Document Form/Document/Certificate Date by which to Delivered
- ----------------- ------------------------- --------------------------
Party B. An executed U.S. Internal (i) Before the first Payment
Revenue Service Form W-9 Date under this Agreement,
(or any successor thereto). (ii) promptly upon reasonable
demand by Party A and (iii)
promptly upon learning that
any such form previously
provided to Party A has
become obsolete or incorrect.
(b) Other documents to be delivered are:
Party
Required Covered by
to deliver Form/Document/ Date by which Section 3(d)
Document Certificate to be Delivered Representation
- ----------- ------------------------------------------ -------------------------------- --------------
Party B. Credit Support Document, if any, specified Concurrently with the execution Yes.
in Part 4 hereof, such Credit Support of this Agreement.
Document being duly executed if required.
Party A/ Incumbency certificate or other documents Concurrently with the execution Yes.
Party B. evidencing the authority of the party of this Agreement or of any other
entering into this Agreement or any other documents executed in connection
document executed in connection with this with this Agreement.
Agreement.
Party B. Monthly statement setting forth the To be made available on Yes.
information specified in Section 5.04 of www.ctslink.com as soon as
the Pooling and Servicing Agreement available.
Party A and Legal opinion from counsel (which may be Concurrently with the execution No.
Party B. in house counsel) concerning due of this Agreement.
authorization, enforceability and related
matters, addressed to the other party and
acceptable to such other party.
Party-A and Certified copies of all corporate, Upon execution and delivery of Yes
Party-B. partnership or membership authorizations, this Agreement or promptly upon
as the case may be, and any other receipt in the case of Party B
documents with respect to the execution,
delivery and performance of this Agreement
and any Credit Support Document
Party-A. Annual Report of Bank of America To be made available on Yes
Corporation containing audited, www.bankofamerica.com/investor/
consolidated financial statements as soon as available and in any
certified by independent certified public event within 90 days after the
accountants and prepared in accordance end of each fiscal year of Party-A
with generally accepted accounting
principles in the country in which such
party is organized
Party-A. Quarterly Financial Statements of Bank of To be made available on Yes
America Corporation containing unaudited, www.bankofamerica.com/investor/
consolidated financial statements of such as soon as available and in any
party's fiscal quarter prepared in event within 30 days after the
accordance with generally accepted end of each fiscal quarter of
accounting principles in the country in Party-A
which such party is organized
[remainder of page intentionally left blank]
Part 4
Miscellaneous
(a) Addresses for Notices: For the purpose of Section 12(a) of this Agreement:
Address for notices or communications to Party A:
Bank of America, N.A.
Sears Tower
233 South Wacker Drive, Suite 2800
Chicago, IL 60606
Attention: Swap Operations
Telephone No.: 312-234-2732
Facsimile No.: 866-255-1444
with a copy to:
Bank of America, N.A.
100 N. Tryon St., NC1-007-13-01
Charlotte, North Carolina 28255
Attention: Global Markets Trading Agreements
Facsimile No.: 704-386-4113
(For all purposes).
Address for notices or communications to Party B:
c/o Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, MD 21045
Attention: Client Manager - BOAALT 2007-1
Telephone No.: 410.884.2000
Facsimile No.: 410.715.2380
(For all purposes).
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is a Multibranch Party and may act through its Charlotte, North
Carolina, Chicago, Illinois, San Francisco, California, New York, New
York, Boston, Massachusetts or London, England Office, or such other
Office as may be agreed to by the parties in connection with a
Transaction.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document:
Each of the following, as amended, extended, supplemented or otherwise
modified in writing from time to time, is a "Credit Support Document":
Party A: the 1994 ISDA Credit Support Annex and paragraph 13 thereto dated
as of the date hereof and attached hereto.
Party B: the Pooling and Servicing Agreement.
Party B agrees that any security interests in collateral granted to Party
A under the foregoing Credit Support Documents shall secure the
obligations of Party B to Party A under this Agreement.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A, Not
Applicable
Credit Support Provider means in relation to Party B, Not
Applicable.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
its conflict of laws provisions, except for Sections 5-1401 and 5-1402 of
the New York General Obligations Law).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) shall apply to all
Transactions; provided, however, if the parties otherwise so agree, then
subparagraph (ii) of Section 2(c) shall not apply.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
Part 5
Other Provisions
(a) Representations. Section 3(a)(iii) is hereby amended by inserting the
words "or investment policies, or guidelines, procedures, or
restrictions," immediately following the word "documents."
(b) Financial Statements. Section 3(d) is hereby amended by adding in the
third line thereof after the word "respect" and before the period:
"or, in the case of financial statements, a fair presentation of the
financial condition of the relevant party."
(c) Additional Representations. For purposes of Section 3, the following shall
be added, immediately following paragraph (f) thereto:
(g) It (in the case of Party B, the Issuing Entity) is an "eligible contract
participant" within the meaning of Section 1(a)(12) of the Commodity
Exchange Act, as amended.
(h) It (in the case of Party B, the Issuing Entity) has entered into this
Agreement (including each Transaction evidenced hereby) in conjunction
with its line of business (including financial intermediation services) or
the financing of its business.
(i) It (in the case of Party B, the Issuing Entity) is entering into this
Agreement, any Credit Support Document to which it is a party, each
Transaction and any other documentation relating to this Agreement or any
Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise).
In addition, the parties each represent that:
Non-Reliance. Each party (in the case of Party B, the Issuing Entity)
represents to the other party (which representation will be deemed to be
repeated by each party on each date on which a Transaction is entered into
or amended, extended or otherwise modified) that: (1) it is acting for its
own account and has made its own independent decisions to enter into this
Agreement and any Transaction hereunder and as to whether this Agreement
and any Transaction hereunder is appropriate or proper for it based on its
own judgment and upon advice from such advisors as it has deemed
necessary; (2) 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 Agreement or any Transaction hereunder, it being understood that
information and explanations related to the terms and conditions of this
Agreement and any Transaction hereunder shall not be considered investment
advice or a recommendation to enter into this Agreement or any Transaction
hereunder; (3) no communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as to the expected
results of any Transaction hereunder; and (4) it is capable of evaluation
and understanding (on its own behalf or through independent professional
advice), and understand and accepts, the terms, conditions and risks of
that Transaction; and (5) it is capable of assuming, and assumes, the
financial and other risks of that Transaction.
In addition, Party B makes the following representations to Party A (which
representations will be deemed to be repeated by Party B at all times
until the termination of this Agreement):
(A) ERISA Prohibited Transactions.
this Agreement and the Transactions contemplated under this Agreement do
not and will not constitute a prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or the
Internal Revenue Code of 1986, as amended (the "Code"), by reason that all
of the conditions of the Underwriter Exemption, Prohibited Transaction
Exemption 93-31, have been satisfied;
In addition, Party A represents that:
Pari Passu: Its obligations under this Agreement rank pari passu
with all of its other unsecured, unsubordinated obligations except
those obligations preferred by operation of law.
(d) Method of Notice. Section 12(a)(ii) of this Agreement is deleted in its
entirety.
(e) Set-off. Without affecting the provisions of this Agreement requiring the
calculation of certain net payment amounts, as a result of an Event of
Default or Additional Termination Event or otherwise, all payments under
this Agreement will be made without setoff or counterclaim. Section 6(f)
of this Agreement is deleted in its entirety
(f) Escrow. If by reason of the time difference between the cities in which
payments are to be made, it is not possible for simultaneous payments to
be made on any date on which both parties are required to make payments
hereunder, either party may, at its option and in its sole discretion,
notify the other party that payments on that date are to be made in
escrow. In this case, deposit of the payment due earlier on that date
shall be made by 2:00 p.m. (local time at the place for the earlier
payment) on that date with an escrow agent selected by the notifying party
(and reasonably acceptable to the notified party), accompanied by
irrevocable payment instructions (i) to release the deposited payment to
the intended recipient upon receipt by the escrow agent of the required
deposit of the corresponding payment from the other party on the same date
accompanied by irrevocable payment instructions to the same effect or (ii)
if the required deposit of the corresponding payment is not made on that
same date, to return the payment deposited to the party that paid it in
escrow. The party that elects to have payments made in escrow shall pay
the costs of the escrow arrangements and shall cause those arrangements to
provide that the intended recipient of the payment due to be deposited
first shall be entitled to interest on that deposited payment for each day
in the period of its deposit at the rate offered by the escrow agent for
that day for overnight deposits in the relevant currency in the office
where it holds that deposited payment (at 11:00 a.m. local time on that
day) if that payment is not released by 5:00 p.m. local time on the date
it is deposited for any reason, other than the intended recipient's
failure to make the escrow deposit it is required to make hereunder in a
timely fashion.
(g) Consent to Recording. The parties agree that each may electronically
record all telephonic conversations between marketing and trading
personnel in connection with this Agreement and that any such recordings
may be submitted in evidence in any Proceedings relating to the Agreement.
(h) Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY CREDIT SUPPORT DOCUMENT OR ANY
TRANSACTION CONTEMPLATED HEREUNDER.
(i) Definitions. Capitalized terms used within this Agreement or in the
Confirmations to the Transaction but not defined herein or therein shall
have the meanings assigned to such terms in the Pooling and Servicing
Agreement.
(j) Additional Acknowledgments and Agreements of the Parties.
(i) No Amendment without Prior Confirmation by Rating Agencies. Section
9(b) of this Agreement is hereby amended by adding the following at
the end of such Section: ", and unless the Rating Agencies confirm
that such amendment will not cause the reduction, suspension or
withdrawal of the then current rating on any of the Certificates,
unless such amendment clarifies any term or provision, corrects any
inconsistency, cures any ambiguity, or corrects any typographical
error in the Agreement (in which case copies of such proposed
amendment will be provided to the Rating Agencies prior to the
effectiveness of such amendment)."
(ii) Consent by Party A to Amendments to Certain Documents. Before any
amendment or supplement is made to the Pooling and Servicing
Agreement and/or any other Transaction Document which would
adversely affect any of Party A's rights or obligations under this
Agreement, or modify the obligations of or impair the ability of
Party B to fully perform any of Party B's obligations under this
Agreement, Party B shall provide Party A with a copy of the proposed
amendment or supplement and shall obtain the written consent of
Party A (which consent shall not be unreasonably withheld) to such
amendment or supplement prior to its adoption, as well as
satisfaction of the Rating Agency Condition. For the avoidance of
doubt, any Transaction Document may be amended, supplemented or
otherwise modified in accordance with the terms thereof without the
consent of Party A to cure any typographical error or ambiguity,
provided that such actions shall not adversely affect in any
respects the interests of Party A.
(k) Transfers.
(i) Section 7 of this Agreement shall not apply to Party A and, subject
to Section 6(b)(ii) and Part 5(m)(ii) below, Party A may not
transfer (whether by way of security or otherwise) any interest or
obligation in or under this Agreement without the prior written
consent of Party B and satisfaction of Rating Agency Condition.
(ii) Party A may (at its own cost) transfer all or substantially all of
its rights and obligations with respect to this Agreement to any
other entity (a "Transferee") that is an Eligible Replacement,
provided that Party B shall determine in its sole discretion, acting
in a commercially reasonable manner, whether or not a transfer
relates to all or substantially all of Party A's rights and
obligations under this Agreement. Following such transfer, all
references to Party A shall be deemed to be references to the
Transferee and satisfaction of Rating Agency Condition.
(iii) If an entity has made a Firm Offer (which remains capable of
becoming legally binding upon acceptance) to be the transferee of a
transfer to be made in accordance with (ii) above, Party B shall (at
Party A's cost) at Party A's written request, take any reasonable
steps required to be taken by it to effect such transfer and
satisfaction of Rating Agency Condition.
(l) Non-Petition. Party A hereby agrees that it will not, prior to
the date which is one year and one day after all Certificates (as
such term is defined in the Pooling and Servicing Agreement)
issued by the Issuing Entity pursuant to the Pooling and
Servicing Agreement have been paid in full, acquiesce, petition
or otherwise invoke or cause Party B, or Banc of America
Alternative Loan Trust 2007-1 Trust (the "Issuing Entity") to
invoke the process of any court or governmental authority for the
purpose of commencing or sustaining a case against Party B or the
Issuing Entity under any federal or state bankruptcy, insolvency
or similar law or for the purpose of appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other
similar official for Party B or the Issuing Entity or any
substantial part of the property of Party B or the Issuing
Entity, or for the purpose of ordering the winding up or
liquidation of the affairs of Party B or the Issuing Entity.
Nothing herein shall prevent Party A from participating in any
such proceeding once commenced.
(m) USA PATRIOT Act Notice. Party A hereby notifies Party B that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), it is required to obtain,
verify and record information that identifies Party B, which information
includes the name and address of Party B and other information that will
allow Party A to identify Party B in accordance with the Act.
(n) Limited Recourse. The obligations of Party B under this Agreement are
limited recourse obligations of the Issuing Entity, payable solely from
the amounts provided under the Pooling and Servicing Agreement, subject to
and in accordance with the terms of the Pooling and Servicing Agreement,
and, following payment of such amounts, any claims of Party A against
Party B shall be extinguished. It is understood that the foregoing
provisions shall not (i) prevent recourse to the assets of the Issuing
Entity for the sums due or to become due under any security, instrument or
agreement which is secured by such assets (subject to the priority of
payments set forth in the Pooling and Servicing Agreement) or (ii)
constitute a waiver, release or discharge of any obligation of Party B
arising under this Agreement until such assets have been realized and the
proceeds applied in accordance with the Pooling and Servicing Agreement,
whereupon any outstanding obligation of Party B under this Agreement shall
be extinguished. Notwithstanding the foregoing (or anything to the
contrary in this Agreement), Party B shall be liable for its own fraud,
negligence, willful misconduct and/or bad faith.
(o) Jurisdiction. Section 13(b) of this Agreement is hereby amended by: (i)
deleting the word "non-" in the second line of subparagraph (i) thereof;
and (ii) adding the words "except as necessary to pursue enforcement of
the judgment of any such court in other jurisdictions" to the last line of
subparagraph (i) thereof.
(p) Delivery of Confirmations. For each Transaction entered into hereunder,
Party A shall promptly send to Party B a Confirmation (which may be via
facsimile transmission). Party B agrees to respond to such Confirmation
promptly, either confirming agreement thereto or requesting a correction
of any error(s) contained therein. Failure by Party A to send a
Confirmation or of Party B to respond within such period shall not affect
the validity or enforceability of such Transaction. Absent manifest error,
there shall be a presumption that the terms contained in such Confirmation
are the terms of the Transaction.
(q) Additional Events of Default with respect to Party B. The occurrence of
any of the following events shall constitute an Event of Default with
respect to Party B as though specified as such in Section 5(a) of this
Agreement:
(i) Loss of Exemption and Prohibited Transaction. If Party A determines
that the Underwriter Exemption (as defined above) does not apply to this
Agreement or any Transaction hereunder and that the execution, delivery or
performance of the Agreement or any Transaction hereunder constitutes a
prohibited transaction under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code
of 1986 (the "Code") for which no exemption is available, or a violation
of similar effect of any pension investment law applicable to one or more
"governmental plans" as defined in ERISA and the Code.
(r) Safe Harbors. Each party to this Agreement acknowledges that:
(i) This Agreement, including any Credit Support Document, is a "master
netting agreement" as defined in the U.S. Bankruptcy Code (the
"Code"), and a "netting contract" as defined in the netting
provisions of the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA"), and this Agreement, including any Credit
Support Document, and each Transaction hereunder is of a type set
forth in Section 561(a)(1)-(5) of the Code;
(ii) Party A is a "master netting agreement participant," a "financial
institution," a "financial participant," a "forward contract
merchant" and a "swap participant" as defined in the Code, and a
"financial institution" as defined in the netting provisions of
FDICIA;
(iii) The remedies provided herein, and in any Credit Support Document,
are the remedies referred to in Section 561(a), Sections 362(b)(6),
(7), (17) and (27), and Section 362(o) of the Code, and in Section
11(e)(8)(A) and (C) of the Federal Deposit Insurance Act;
(iv) All transfers of cash, securities or other property under or in
connection with this Agreement, any Credit Support Document or any
Transaction hereunder are "margin payments," "settlement payments"
and "transfers" under Sections 546(e), (f), (g) or (j), and under
Section 548(d)(2) of the Code; and
(v) Each obligation under this Agreement, any Credit Support Document or
any Transaction hereunder is an obligation to make a "margin
payment," "settlement payment" and "payment" within the meaning of
Sections 362, 560 and 561 of the Code.
(s) Tax.
(i) Notwithstanding the definition of "Indemnifiable Tax" in Section 14
of this Agreement, in relation to payments by Party A, any Tax shall
be an Indemnifiable Tax and, in relation to payments by Party B, no
Tax shall be an Indemnifiable Tax.
(ii) Section 2(d)(i)(4) of this Agreement shall be deleted in its
entirety and replaced with the words "if such Tax is an
Indemnifiable Tax, pay to Y, in addition to the payment to which Y
is otherwise entitled under this Agreement, such additional amount
as is necessary to ensure that the net amount actually received by Y
(free and clear of Indemnifiable Taxes, whether assessed against X
or Y) will equal the full amount Y would have received had no such
deduction or withholding been required".
(t) Limitation of Trustee's Liability. It is expressly understood and agreed
by the parties hereto that insofar as this Agreement or the Confirmation
is executed by Wells Fargo Bank, N.A., (i) the same is executed and
delivered by it not in its individual capacity but solely as Trustee under
(and as defined in) the Pooling and Servicing Agreement, in the exercise
of the powers and authority conferred upon and vested in it thereunder and
pursuant to instructions set forth herein, (ii) each of the
representations, undertakings and other agreements herein made on behalf
of Party B is made and intended not as a personal representation,
undertaking or agreement of Wells Fargo Bank, N.A. in its individual
capacity, but is made and intended solely for the purpose of binding only
Party B, and (iii) under no circumstances shall Wells Fargo Bank, N.A., in
its individual capacity, be personally liable for the payment of any
indebtedness or expenses or be personally liable for the breach or failure
of any obligation, representation, warranty, covenant or other agreement
made or undertaken by it on behalf of Party B under this Agreement or any
Confirmation hereunder. Notwithstanding the foregoing (or anything to the
contrary herein), the Trustee shall be liable for its own fraud,
negligence, willful misconduct and/or bad faith
(u) Compliance with Regulation AB. In connection with the Pooling and
Servicing Agreement, Party B represents that this Agreement is a
derivative instrument as described in Item 1115 of Regulation AB under the
Securities Act of 1933 and the Securities Exchange Act of 1934, as amended
("Regulation AB"), and not a credit support contract described in Item
1114 of Regulation AB.
(a) In accordance with Regulation AB, Party A represents that: (i) the
name of the derivative counterparty is Bank of America, N.A.; (ii) the
organizational form of the derivative counterparty is a national banking
association organized under the laws of the United States; and (iii) the
general character of the business of the derivative counterparty is to be
engaged in a general consumer banking, commercial banking and trust
business, offering a wide range of commercial, corporate, international,
financial market, retail and fiduciary banking services.
(b) Party A has been advised that the Depositor and the Issuing Entity are
required under Regulation AB to disclose certain financial information
regarding Party A depending on the applicable "significance percentage" of
this Agreement, as calculated from time to time in accordance with Item
1115 of Regulation AB (as discussed in the Pooling and Servicing
Agreement). Party A has been advised by the Sponsor that the applicable
"significance percentage" of this Agreement is less than 10% as of the
date of initial issuance of the Certificates, and accordingly, no
financial information regarding Party A need be disclosed as of such date
in accordance with Item 1115 of Regulation AB.
(c) If required, Party A shall provide to the Trustee the applicable
financial information described under Item 1115(b)(1) or (b)(2), as
applicable, of Regulation AB, including agreed upon procedures letters and
related consents of certified public accountants with respect thereto (the
"Reg AB Information") within five (5) Local Business Days of receipt of a
written request for such Reg AB Information by Party B (the "Response
Period"), so long as the Sponsor has reasonably determined, in good faith,
that such information is required under Regulation AB; provided, however,
that if Party A, in good faith, determines that it is unable to provide
the Reg AB Information within the Response Period, then, subject to the
Rating Agency Condition, Party A shall use reasonable efforts to cause a
Reg AB Approved Entity (as defined below) to replace Party A as party to
this Agreement on terms substantially similar to this Agreement and
provide the required Reg AB Information prior to the expiration of the
Response Period; and provided, further, that if Party A makes such
determination and is not able to cause such a replacement, an Additional
Termination Event shall occur, as to which Party A shall be the sole
Affected Party.
(d) "Reg AB Approved Entity" means any entity that (i) has the ability to
provide the Reg AB Information and (ii) meets or exceeds the Approved
Rating Thresholds (as defined below). If Party B requests (in writing) the
Reg AB Information from Party A, then Party B shall promptly (and in any
event within two (2) Local Business Days of the date of the request for
the Reg AB Information) provide Party A with a written explanation of how
the significance percentage was calculated.
(e) "Approved Rating Thresholds" means an entity that has a long-term and
short-term senior unsecured deposit rating of at least A and A-1 by S&P
and A1 and P-1 by Moody's, to the extent such obligations are rated by S&P
and Moody's.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized officers as of the date hereof.
BANK OF AMERICA, N.A. WELLS FARGO BANK, N.A., AS TRUSTEE, ON
BEHALF OF BANC OF AMERICA ALTERNATIVE
LOAN TRUST 2007-1
______________________________ ______________________________
Name: Name:
Title: Title:
(Unilateral Form) (ISDA Agreements Subject to New York Law Only)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
Master Agreement
dated as of March 29, 2007
between
BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A., AS TRUSTEE,
ON BEHALF OF BANC OF AMERICA
ALTERNATIVE LOAN TRUST 2007-1
- ------------------------------- ----------------------------------------
("Party A") ("Party B")
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly, the parties agree as follows:
Paragraph 1. Interpretation
(a) Definitions and Inconsistency. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant
to Paragraph 12, and all references in this Annex to Paragraphs are to
Paragraphs of this Annex. In the event of any inconsistency between this
Annex and the other provisions of this Schedule, this Annex will prevail,
and in the event of any inconsistency between Paragraph 13 and the other
provisions of this Annex, Paragraph 13 will prevail.
(b) Secured Party and Pledgor. All references in this Annex to the "Secured
Party" will be to either party when acting in that capacity and all
corresponding references to the "Pledgor" will be to the other party when
acting in that capacity; provided, however, that if Other Posted Support
is held by a party to this Annex, all references herein to that party as
the Secured Party with respect to that Other Posted Support will be to
that party as the beneficiary thereof and will not subject that support or
that party as the beneficiary thereof to provisions of law generally
relating to security interests and secured parties.
Paragraph 2. Security Interest
Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
Paragraph 3. Credit Support Obligations
(a) Delivery Amount. Subject to Paragraphs 4 and 5, upon a demand made by the
Secured Party on or promptly following a Valuation Date, if the Delivery
Amount for that Valuation Date equals or exceeds the Pledgor's Minimum
Transfer Amount, then the Pledgor will Transfer to the Secured Party
Eligible Credit Support having a Value as of the date of Transfer at least
equal to the applicable Delivery Amount (rounded pursuant to Paragraph
13). Unless otherwise specified in Paragraph 13, the "Delivery Amount"
applicable to the Pledgor for any Valuation Date will equal the amount by
which:
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of all Posted Credit Support held
by the Secured Party.
(b) Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the
Pledgor on or promptly following a Valuation Date, if the Return Amount
for that Valuation Date equals or exceeds the Secured Party's Minimum
Transfer Amount, then the Secured Party will Transfer to the Pledgor
Posted Credit Support specified by the Pledgor in that demand having a
Value as of the date of Transfer as close as practicable to the applicable
Return Amount (rounded pursuant to Paragraph 13). Unless otherwise
specified in Paragraph 13, the "Return Amount" applicable to the Secured
Party for any Valuation Date will equal the amount by which:
(i) the Value as of that Valuation Date of all Posted Credit Support held
by the Secured Party
exceeds
(ii) the Credit Support Amount.
"Credit Support Amount" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and
Substitutions
(a) Conditions Precedent. Each Transfer obligation of the Pledgor under
Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii),
5 and 6(d) is subject to the conditions precedent that:
(i) no Event of Default, Potential Event of Default or Specified
Condition has occurred and is continuing with respect to the other
party; and
(ii) no Early Termination Date for which any unsatisfied payment
obligations exist has occurred or been designated as the result of
an Event of Default or Specified Condition with respect to the other
party.
(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 next Local Business Day;
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 second 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 Local Business Day following the applicable Valuation Date
(or in the case of Paragraph 6(d), following the date of
calculation).
(d) Substitutions.
(i) Unless otherwise specified in Paragraph 13, upon notice to the
Secured Party specifying the items of Posted Credit Support to be
exchanged, the Pledgor may, on any Local Business Day, Transfer to
the Secured Party substitute Eligible Credit Support (the
"Substitute Credit Support"); and
(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the
Pledgor the items of Posted Credit Support specified by the Pledgor
in its notice not later than the Local Business Day following the
date on which the Secured Party receives the Substitute Credit
Support, unless otherwise specified in Paragraph 13 (the
"Substitution Date"); provided that the Secured Party only will be
obligated to Transfer Posted Credit Support with a Value as of the
date of Transfer of that Posted Credit Support equal to the Value as
of that date of the Substitute Credit Support.
Paragraph 5. Dispute Resolution
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 (1) the Disputing Party
will notify the other party and the Valuation Agent and the other party (if the
Valuation Agent is not the other party) not later than the close of business on
the Local Business Day following (X) the date that the demand is made under
Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of
(II) above, (2) subject to Paragraph 4(a), the appropriate party will Transfer
the undisputed amount to the other party not later than the close of business on
the Local Business Day following (X) the date that the demand is made under
Paragraph 3 in the case of (I) above or (Y) the date of Transfer in the case of
(II) above, (3) the parties will consult with each other in an attempt to
resolve the dispute and (4) if they fail to resolve the dispute by the
Resolution Time, then:
(i) In the case of a dispute involving a Delivery Amount or Return
Amount, unless otherwise specified in Paragraph 13, the Valuation
Agent will recalculate the Exposure and the Value as of the
Recalculation Date by:
(A) utilizing any calculations of Exposure for the Transactions
(or Swap Transactions) that the parties have agreed are not in
dispute;
(B) calculating the Exposure for the Transactions (or Swap
Transactions) in dispute by seeking four actual quotations at
mid-market from Reference Market-makers for purposes of
calculating Market Quotation, and taking the arithmetic
average of those obtained; provided that if four quotations
are not available for a particular Transaction (or Swap
Transaction), then fewer than four quotations may be used for
that Transaction (or Swap Transaction); and if no quotations
are available for a particular Transaction (or Swap
Transaction), then the Valuation Agent's original calculations
will be used for that Transaction (or Swap Transaction); and
(C) utilizing the procedures specified in Paragraph 13 for
calculating the Value, if disputed, of Posted Credit Support.
(ii) In the case of a dispute involving the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, the Valuation
Agent will recalculate the Value as of the date of Transfer pursuant
to Paragraph 13.
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.
Paragraph 6. Holding and Using Posted Collateral
(a) Care of Posted Collateral. Without limiting the Secured Party's
rights under Paragraph 6(c), the Secured Party will exercise
reasonable care to assure the safe custody of all Posted
Collateral to the extent required by applicable law, and in any
event the Secured Party will be deemed to have exercised
reasonable care if it exercises at least the same degree of care
as it would exercise with respect to its own property. Except as
specified in the preceding sentence, the Secured Party will have
no duty with respect to Posted Collateral, including, without
limitation, any duty to collect any Distributions, or enforce or
preserve any rights pertaining thereto.
(b) Eligibility to Hold Posted Collateral; Custodians.
(i) General. Subject to the satisfaction of any conditions specified in
Paragraph 13 for holding Posted Collateral, the Secured Party will
be entitled to hold Posted Collateral or to appoint an agent (a
"Custodian") to hold Posted Collateral for the Secured Party. Upon
notice by the Secured Party to the Pledgor of the appointment of a
Custodian, the Pledgor's obligations to make any Transfer will be
discharged by making the Transfer to that Custodian. The holding of
Posted Collateral by a Custodian will be deemed to be the holding of
that Posted Collateral by the Secured Party for which the Custodian
is acting.
(ii) Failure to Satisfy Conditions. If the Secured Party or its Custodian
fails to satisfy any conditions for holding Posted Collateral, then
upon a demand made by the Pledgor, the Secured Party will, not later
than five Local Business Days after the demand, Transfer or cause
its Custodian to Transfer all Posted Collateral held by it to a
Custodian that satisfies those conditions or to the Secured Party if
it satisfies those conditions.
(iii) Liability. The Secured Party will be liable for the acts or
omissions of its Custodian to the same extent that the Secured Party
would be liable hereunder for its own acts or omissions.
(c) Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and
without limiting the rights and obligations of the parties under
Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a
Defaulting Party or an Affected Party with respect to a Specified
Condition and no Early Termination Date has occurred or been designated as
the result of an Event of Default or Specified Condition with respect to
the Secured Party, then the Secured Party will, notwithstanding Section
9-207 of the New York Uniform Commercial Code, have the right to:
(i) sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any Posted
Collateral it holds, free from any claim or right of any nature
whatsoever of the Pledgor, including any equity or right of
redemption by the Pledgor; and
(ii) register any Posted Collateral in the name of the Secured Party, its
Custodian or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.
(d) Distributions and Interest Amount.
(i) Distributions. Subject to Paragraph 4(a), if the Secured
Party receives or is deemed to receive Distributions on a
Local Business Day, it will Transfer to the Pledgor not
later than the following Local Business Day any
Distributions it receives or is deemed to receive to the
extent that a Delivery Amount would not be created or
increased by that Transfer, as calculated by the Valuation
Agent (and the date of calculation will be deemed to be a
Valuation Date for this purpose).
(ii) Interest Amount. Unless otherwise specified in Paragraph 13 and
subject to Paragraph 4(a), in lieu of any interest, dividends or
other amounts paid or deemed to have been 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 Transfer to the
Pledgor at the times specified in Paragraph 13 the Interest Amount
to the extent that a Delivery Amount would not be created or
increased by that Transfer, as calculated by the Valuation Agent
(and the date of calculation will be deemed to be a Valuation Date
for this purpose). The Interest Amount or portion thereof not
Transferred pursuant to this Paragraph will constitute Posted
Collateral in the form of Cash and will be subject to the security
interest granted under Paragraph 2.
Paragraph 7. Events of Default
For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:
(i) that party fails (or fails to cause its Custodian) to make, when
due, any Transfer of Eligible Collateral, Posted Collateral or the
Interest Amount, as applicable, required to be made by it and that
failure continues for two Local Business Days after notice of that
failure is given to that party;
(ii) that party fails to comply with any restriction or prohibition
specified in this Annex with respect to any of the rights specified
in Paragraph 6(c) and that failure continues for five Local Business
Days after notice of that failure is given to that party; or
(iii) that party fails to comply with or perform any agreement or
obligation other than those specified in Paragraphs 7(i) and 7(ii)
and that failure continues for 30 days after notice of that failure
is given to that party.
Paragraph 8. Certain Rights and Remedies
(a) Secured Party's Rights and Remedies. If at any time (1) an Event
of Default or Specified Condition with respect to the Pledgor has
occurred and is continuing or (2) an Early Termination Date has
occurred or been designated as the result of an Event of Default
or Specified Condition with respect to the Pledgor, then, unless
the Pledgor has paid in full all of its Obligations that are then
due, the Secured Party may exercise one or more of the following
rights and remedies:
(i) all rights and remedies available to a secured party under
applicable law with respect to Posted Collateral held by the Secured
Party;
(ii) any other rights and remedies available to the Secured Party under
the terms of Other Posted Support, if any;
(iii) the right to Set-off any amounts payable by the Pledgor with respect
to any Obligations against any Posted Collateral or the Cash
equivalent of any Posted Collateral held by the Secured Party (or
any obligation of the Secured Party to Transfer that Posted
Collateral); and
(iv) the right to liquidate any Posted Collateral held by the Secured
Party through one or more public or private sales or other
dispositions with such notice, if any, as may be required under
applicable law, free from any claim or right of any nature
whatsoever of the Pledgor, including any equity or right of
redemption by the Pledgor (with the Secured Party having the right
to purchase any or all of the Posted Collateral to be sold) and to
apply the proceeds (or the Cash equivalent thereof) from the
liquidation of the Posted Collateral to any amounts payable by the
Pledgor with respect to any Obligations in that order as the Secured
Party may elect.
Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.
(b) Pledgor's Rights and Remedies. If at any time an Early
Termination Date has occurred or been designated as the result of
an Event of Default or Specified Condition with respect to the
Secured Party, then (except in the case of an Early Termination
Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its
obligations that are then due under Section 6(e) of this
Agreement):
(i) the Pledgor may exercise all rights and remedies available to a
pledgor under applicable law with respect to Posted Collateral held
by the Secured Party;
(ii) the Pledgor may exercise any other rights and remedies available to
the Pledgor under the terms of Other Posted Support, if any;
(iii) the Secured Party will be obligated immediately to Transfer all
Posted Collateral and the Interest Amount to the Pledgor; and
(iv) to the extent that Posted Collateral or the Interest Amount is not
so Transferred pursuant to (iii) above, the Pledgor may:
(A) Set-off any amounts payable by the Pledgor with respect to any
Obligations against any Posted Collateral or the Cash
equivalent of any Posted Collateral held by the Secured Party
(or any obligation of the Secured Party to Transfer that
Posted Collateral); and
(B) to the extent that the Pledgor does not Set-off under (iv)(A)
above, withhold payment of any remaining amounts payable by
the Pledgor with respect to any Obligations, up to the Value
of any remaining Posted Collateral held by the Secured Party,
until that Posted Collateral is Transferred to the Pledgor.
(c) Deficiencies and Excess Proceeds. The Secured Party will Transfer to the
Pledgor any proceeds and Posted Credit Support remaining after
liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b)
after satisfaction in full of all amounts payable by the Pledgor with
respect to any Obligations; the Pledgor in all events will remain liable
for any amounts remaining unpaid after any liquidation, Set-off and/or
application under Paragraphs 8(a) and 8(b).
(d) Final Returns. When no amounts are or thereafter may become payable by the
Pledgor with respect to any Obligations (except for any potential
liability under Section 2(d) of this Agreement), the Secured Party will
Transfer to the Pledgor all Posted Credit Support and the Interest Amount,
if any.
Paragraph 9. Representations
Each party represents to the other party (which representations will be deemed
to be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it has the power to grant a security interest in and lien on any
Eligible Collateral it Transfers as the Pledgor and has taken all
necessary actions to authorize the granting of that security
interest and lien;
(ii) it is the sole owner of or otherwise has the right to Transfer all
Eligible Collateral it transfers to the Secured Party hereunder,
free and clear of any security interest, lien, encumbrance or other
restrictions other than the security interest and lien granted under
Paragraph 2;
(iii) upon the Transfer of any Eligible Collateral to the Secured Party
under the terms of this Annex, the Secured Party will have a valid
and perfected first priority security interest therein (assuming
that any central clearing corporation or any third-party financial
intermediary or other entity not within the control of the Pledgor
involved in the Transfer of that Eligible Collateral gives the
notices and takes the action required of it under applicable law for
perfection of that interest); and
(iv) the performance by it of its obligations under this Annex will not
result in the creation of any security interest, lien or other
encumbrance on any Posted Collateral other than the security
interest and lien granted under Paragraph 2.
Paragraph 10. Expenses
(a) General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each
party will pay its own costs and expenses in connection with performing
its obligations under this Annex and neither party will be liable for any
costs and expenses incurred by the other party in connection herewith.
(b) Posted Credit Support. The Pledgor will promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to
Posted Credit Support held by the Secured Party upon becoming aware of the
same, regardless of whether any portion of that Posted Credit Support is
subsequently disposed of under Paragraph 6(c), except for those taxes,
assessments and charges that result from the exercise of the Secured
Party's rights under Paragraph 6(c).
(c) Liquidation/Application of Posted Credit Support. All reasonable costs and
expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit
Support under Paragraph 8 will be payable, on demand and pursuant to the
Expenses Section of this Agreement, by the Defaulting Party or, if there
is no Defaulting Party, equally by the parties.
Paragraph 11. Miscellaneous
(a) Default Interest. A Secured Party that fails to make, when due, any
Transfer of Posted Collateral or the Interest Amount will be obligated to
pay the Pledgor (to the extent permitted under applicable law) an amount
equal to interest at the Default Rate multiplied by the Value of the items
of property that were required to be Transferred, from (and including) the
date that Posted Collateral or Interest Amount was required to be
Transferred to (but excluding) the date of Transfer of that Posted
Collateral or Interest Amount. This interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(b) Further Assurances. Promptly following a demand made by a party, the other
party will execute, deliver, file and record any financing statement,
specific assignment or other document and take any other action that may
be necessary or desirable and reasonably requested by that party to
create, preserve, perfect or validate any security interest or lien
granted under Paragraph 2, to enable that party to exercise or enforce its
rights under this Annex with respect to Posted Credit Support or an
Interest Amount or to effect or document a release of a security interest
on Posted Collateral or an Interest Amount.
(c) Further Protection. The Pledgor will promptly give notice to the Secured
Party of, and defend against, any suit, action, proceeding or lien that
involves Posted Credit Support Transferred by the Pledgor or that could
adversely affect the security interest and lien granted by it under
Paragraph 2, unless that suit, action, proceeding or lien results from the
exercise of the Secured Party's rights under Paragraph 6(c).
(d) Good Faith and Commercially Reasonable Manner. Performance of all
obligations under this Annex including, but not limited to, all
calculations, valuations and determinations made by either party, will be
made in good faith and in a commercially reasonable manner.
(e) Demands and Notices. All demands and notices made by a party under this
Annex will be made as specified in the Notices Section of this Agreement,
except as otherwise provided in Paragraph 13.
(f) Specifications of Certain Matters. Anything referred to in this Annex as
being specified in Paragraph 13 also may be specified in one or more
Confirmations or other documents and this Annex will be construed
accordingly.
Paragraph 12. Definitions
As used in this Annex:--
"Cash" means the lawful currency of the United States of America.
"Credit Support Amount" has the meaning specified in Paragraph 3.
"Custodian" has the meaning specified in Paragraphs 6(b)(i) and 13.
"Delivery Amount" has the meaning specified in Paragraph 3(a).
"Disputing Party" has the meaning specified in Paragraph 5.
"Distributions" means with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.
"Eligible Collateral" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"Eligible Credit Support" means Eligible Collateral and Other Eligible
Support.
"Exposure" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; provided that Market
Quotation will be determined by the Valuation Agent using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").
"Independent Amount" means, with respect to a party, the amount specified as
such for that party in Paragraph 13; if no amount is specified, zero.
"Interest Amount" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:
(x) the amount of that Cash on that day; multiplied by
(y) the Interest Rate in effect for that day; divided by
(z) 360.
"Interest Period" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.
"Interest Rate" means the rate specified in Paragraph 13.
"Local Business Day", unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.
"Minimum Transfer Amount" means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.
"Notification Time" has the meaning specified in Paragraph 13.
"Obligations" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.
"Other Eligible Support" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"Other Posted Support" means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.
"Pledgor" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).
"Posted Collateral" means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.
"Posted Credit Support" means Posted Collateral and Other Posted
Support.
"Recalculation Date" means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.
"Resolution Time" has the meaning specified in Paragraph 13.
"Return Amount" has the meaning specified in Paragraph 3(b).
"Secured Party" means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.
"Specified Condition" means, with respect to a party, any event specified as
such for that party in Paragraph 13.
"Substitute Credit Support" has the meaning specified in Paragraph 4(d)(i).
"Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
"Threshold" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.
"Transfer" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into one
or more bank accounts specified by the recipient;
(ii) in the case of certificated securities that cannot be paid or
delivered by book-entry, payment or delivery in appropriate physical
form to the recipient or its account accompanied by any duly
executed instruments of transfer, assignments in blank, transfer tax
stamps and any other documents necessary to constitute a legally
valid transfer to the recipient;
(iii) in the case of securities that can be paid or delivered by
book-entry, the giving of written instructions to the relevant
depository institution or other entity specified by the recipient,
together with a written copy thereof to the recipient, sufficient if
complied with to result in a legally effective transfer of the
relevant interest to the recipient; and
(iv) in the case of Other Eligible Support or Other Posted Support, as
specified in Paragraph 13.
"Valuation Agent" has the meaning specified in Paragraph 13.
"Valuation Date" means each date specified in or otherwise determined pursuant
to Paragraph 13.
"Valuation Percentage" means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.
"Valuation Time" has the meaning specified in Paragraph 13.
"Value" means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to:
(i) Eligible Collateral or Posted Collateral that is:
(A) Cash, the amount thereof; and
(B) a security, the bid price obtained by the Valuation Agent
multiplied by the applicable Valuation Percentage, if any;
(ii) Posted Collateral that consists of items that are not specified as
Eligible Collateral, zero; and
(iii) Other Eligible Support and Other Posted Support, as specified in
Paragraph 13.
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in this
Annex includes no additional obligations with respect to Party A or Party
B.
(b) Credit Support Obligations.
(i) "Delivery Amount", "Return Amount" will have the meanings specified
in Paragraphs 3(a), 3(b) and 3, respectively, except that the words
"upon a demand made by the Transferee on or promptly following a
Valuation Date" shall be deleted and replaced by the words "on each
Valuation Date".
(ii) "Credit Support Amount" (x) means the Amount required under
Paragraph 13(o) (in the case of a Party A Rating Event relating to
an action taken by S&P); (y) has the meaning specified under the
relevant definition of Ratings Criteria (in the case of Moody's
First Trigger Event or Moody's Second Trigger Event); or (z) means
Party B's Exposure under the Agreement to which this Annex relates
(in the case of a Party A Rating Event relating to an action taken
by Fitch), in each case as calculated on a daily basis by the
Valuation Agent. The Credit Support Amount shall be calculated by
reference to the provisions set forth in this Annex which would
result in Party A transferring the greatest amount of Eligible
Credit Support to Party B. In circumstances where more than one of
the Ratings Criteria apply, the Credit Support Amount shall be
calculated by reference to the Ratings Criteria which would result
in Party A transferring the greatest amount of Eligible Credit
Support.
(iii) Eligible Collateral. The following items will qualify as "Eligible
Collateral":
Moody's Moody's
First Second
Valuation Ratings Ratings
Percentage:* Trigger Trigger S&P
------------ ------- ------- ----
(A) Cash: US Dollars 100% 100% 100%
in depository
account form.
(B) U.S. Treasury 100%% 100% 98%
Securities:
negotiable debt
obligations issued
by the U.S.
Treasury
Department
("Treasuries")
having a
remaining
maturity of up to
and not more than
1 year.
(C) Treasuries having a 100% 99% (1-2yr) 90%
remaining maturity 98% (2-3yr)
of greater than 1 97% (3-5yr)
year but not more 95% (5-7yr)
than 10 years. 94% (7-10yr)
(D) Treasuries having a 100% 89% (10-20yr) 84%
remaining maturity 87% (>20yr)
of greater than 10
years.
(E) Agency Securities: 100% 99% 98%
negotiable debt 94% (5-7yr)
obligations of the 93% (7-10yr)
Federal National
Mortgage
Association (FNMA),
Federal Home Loan
Mortgage
Corporation
(FHLMC), Federal
Home Loan Banks
(FHLB), Federal
Farm Credit Banks
(FFCB), Student
Loan Marketing
Association
(SLMA), Tennessee
Valley Authority
(TVA)
(collectively,
"Agency
Securities")
having a
remaining
maturity of not
more than 1 year.
(F) Agency Securities 100% 98% (1-2yr) 92%
having a remaining 97% (2-3yr)
maturity of greater 96% (3-5yr)
than 1 year but not
more than 5 years.
(G) Agency Securities 100% 94% (5-7yr) 88%
having a remaining 93% (7-10yr)
maturity of greater
than 5 years but
not more than 10
years.
(H) Agency Securities 100% 88% 79%
having a remaining
maturity of greater
than 10 years but
not more than 20
years.
(I) Agency Securities 100% 86% 76%
having a remaining
maturity of greater
than 20 years but
not more than 30
years.
(J) FHLMC 81% 81% 81%
Certificates.
Mortgage
participation
certificates issued
by FHLMC evidencing
undivided interests
or participations
in pools of first
lien conventional
or FHA/VA
residential
mortgages or deeds
of trust,
guaranteed by
FHLMC, and having a
remaining maturity
of not more than 30
years.
(K) FNMA Certificates. 81% 81% 81%
Mortgage-backed
pass-through
certificates issued
by FNMA evidencing
undivided interests
in pools of first
lien mortgages or
deeds of trust on
residential
properties,
guaranteed by FNMA,
having a remaining
maturity of not
more than 30 years.
(L) GNMA Certificates. 81% 81% 81%
Mortgage-backed
pass-through
certificates issued
by private
entities,
evidencing
undivided interests
in pools of first
lien mortgages or
deeds of trust on
single family
residences,
guaranteed by the
Government National
Mortgage
Association (GNMA)
with the full faith
and credit of the
United States, and
having a remaining
maturity of not
more than 30 years.
(M) Commercial Paper. 80% 80% 99.0%
Commercial Paper
with a rating of at
least P-1 by
Moody's, at least
F-1 by Fitch and at
least A-1+ by S&P
and having a
remaining maturity
of not more than 30
days.
(N) Other. Other items % to be % to be % to be
of Credit Support determine determined determined
approved by each
applicable rating
agency with such
valuation
percentages as
determined by each
applicable rating
agency.
- ----------
* The Valuation Percentage shall equal the percentage specified under such
Rating Agency's name above. If Party A is rated by more than one Rating Agency
specified above, the Valuation Percentage shall equal the lowest of the
applicable percentages specified above.
(iv) There shall be no "Other Eligible Support" for Party A for purposes
of this Annex.
(v) Thresholds.
(A) "Independent Amount" means with respect to Party A: Not
Applicable.
"Independent Amount" means with respect to Party B: Not
Applicable.
(B) "Threshold" means with respect to Party A: Infinity; provided
that for so long as Party A is not above the Moody's First
Trigger Required Ratings and S&P's Ratings Event and either
(i) Party A had been below the Moody's First Trigger Required
Ratings or below S&P's Ratings Event since this Annex was
executed or (ii) at least 30 Local calendar Days have elapsed
since the last time Party A was above both theMoody's First
Trigger Required Ratings and S&P's Ratings Event, the
Threshold with respect to Party A shall be zero; further,
provided, if a Ratings Event has occurred and is continuing
pursuant to Part 1(l)(v) of the Agreement, the Threshold shall
be zero in the event Party A fails to assign all of its rights
and obligations under the Agreement on or before the 20th day
after the date of a Ratings Event (as described in Part
1(l)(v) of the Schedule) continues to exist. Party A will post
Eligible Collateral on or prior to the 20th day following a
Ratings Event.
"Threshold" means with respect to Party B: Not
Applicable.
(C) "Minimum Transfer Amount" means with respect to Party A: $
10,000.
"Minimum Transfer Amount" means with respect to Party B: $
10,000.
(D) Rounding. The Delivery Amount will be rounded up and the
Return Amount will be rounded down to the nearest integral
multiple of $10,000.00, respectively.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A; provided, however, that
notwithstanding anything to the contrary set forth in this Annex,
the Valuation Agent shall not be required to notify Party B of any
of the Valuation Agent's calculations of Value, Exposure, Delivery
Amount or Return Amount under this Annex unless requested to do so
(either verbally or in writing) by Party B in each instance.
(ii) "Valuation Date" means: each local Business Day which if treated as
a Valuation Date would result in a Delivery Amount or Return Amount.
(iii) "Valuation Time" means:
[_] the close of business in the city of the Valuation Agent on
the Valuation Date or date of calculation, as applicable;
[X] the close of business on the Local Business Day before 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 1:00 p.m., New York time, on a Local
Business Day.
(d) Conditions Precedent. No event shall constitute a "Specified Condition".
(e) Substitution.
(i) "Substitution Date" means the Local Business Day in New York on
which the Secured Party is able to confirm irrevocable receipt of
the Substitute Credit Support, provided that (x) such receipt is
confirmed before 3:00 p.m. (New York time) on such Local Business
Day in New York and (y) the Secured Party has received, before 1:00
p.m. (New York time) on the immediately preceding Local Business Day
in New York, the notice of substitution described in Paragraph
4(d)(i).
(ii) Consent. The Pledgor is not required to obtain the Secured Party's
consent for any substitution pursuant to Paragraph 4(d).
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m., New York time, on the Local
Business Day following the date on which a notice is given that
gives rise to a dispute under Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of
Posted Credit Support will be calculated as follows: for Cash, the
U.S. dollar value thereof, and for each item of Eligible Collateral
(except for Cash), an amount in U.S. dollars equal to the product of
(i) either (A) the bid price for such security quoted on such day by
a principal market-maker for such security selected in good faith by
the Secured Party or (B) the most recent publicly available bid
price for such security as reported by a quotation service or in a
medium selected in good faith and in a commercially reasonable
manner by Secured Party, multiplied by (ii) the percentage figure
listed in Paragraph 13(b)(ii) hereof with respect to such security.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians. Party B and its
Custodian will be entitled to hold Posted Collateral, as applicable,
pursuant to Paragraph 6(b); provided that the following conditions
applicable to each party are satisfied:
(A) Party B, as the Secured Party, is not a Defaulting Party.
(B) Party B hereby covenants and agrees that it will cause all
Posted Collateral received from the other party to be entered
in one or more accounts (each, a "Collateral Account") with a
domestic office of a commercial bank, trust company or
financial institution organized under the laws of the United
States (or any state or a political subdivision thereof)
having assets of at least $10 billion and a long term debt or
deposit rating of at least (i) Baa2 from Moody's and (ii) BBB
from S&P (a "Qualified Institution"), each of which accounts
may include property of other parties but will bear a title
indicating the Secured Party's interest in said account and
the Posted Collateral in such account. In addition the Secured
Party may direct the Pledgor to transfer or deliver Eligible
Collateral directly into the Secured Party's Collateral
Account(s). If otherwise qualified, the Secured Party may act
as such Qualified Institution and the Secured Party may move
the Collateral Accounts from one Qualified Institution to
another upon reasonable notice to the Pledgor. The Secured
Party shall cause statements concerning the Posted Collateral
transferred or delivered by the Pledgor to be sent to the
Pledgor on request, which may not be made more frequently than
once in each calendar month.
Initially, the Custodian for Party B is Wells Fargo Bank, N.A.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will not
apply to Party B.
(h) Distributions and Interest Amount.
(i) The "Interest Rate" with respect to Eligible Collateral in the form
of Cash, for any day, will be the interest rate actually earned by
Party B prior thereto.
(ii) The "Transfer of Interest Amount" will be made within 3 Local
Business Days after the last Local Business Day of each calendar
month.
(iii) Alternative Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(iv) Paragraph 12 is hereby amended by replacing the definition of
"Interest Period" with the following:
"'Interest Period' means the period from (and including) the first
day of each calendar month to (and including) the last day of each
calendar month."
(i) Additional Representations. None.
(j) Other Eligible Support and Other Posted Support. Not Applicable.
(k) Demands and Notices. All demands, specifications and notices made by a
party to this Annex will be made to the following:
Party A: Bank of America, N.A.
Sears Tower
233 South Wacker Drive, Suite 2800
Chicago, Illinois 60606-6306
Telephone No.: (312) 234-3030
Facsimile: (312) 234-2731
Party B: As set forth in the Schedule.
(l) Addresses for Transfers.
Party A: Cash/Interest Payments: (USD Only)
Bank of America, New York
ABA 026009593
Account # 6550-619389
F/O Bank of America, Charlotte-Collateral
Eligible Collateral (other than cash):
BK AMERICA NC/INV
ABA # 053 000 196
Party B: Wells Fargo Bank, National Association
San Francisco, CA
ABA 121000248
Account No.: 3970771416
Account Name: SAS Clearing
FFC: 50999403, BOALT 2007-1 Posted Collateral Account
Treasury Securities:
Wells Fargo Bank, National Association
San Francisco, CA
ABA 121000248
Account No. 50999403, BOALT 2007-1 Posted Collateral Account
(m) Other Provisions.
(i) This Credit Support Annex is a Security Agreement under the New York
UCC.
(ii) Paragraph 1(b) of this Annex is amended by deleting it and restating
it in full as follows:
"(b) Secured Party and Pledgor. All references in this Annex to the
"Secured Party" mean Party B, and all references in this Annex to
the "Pledgor" mean Party A; provided, however, that if Other Posted
Support is held by Party B, all references herein to the Secured
Party with respect to that Other Posted Support will be to Party B
as the beneficiary thereof and will not subject that support or
Party B as the beneficiary thereof to provisions of law generally
relating to security interests and secured parties."
(iii) Paragraph 2 of this Annex is amended by deleting the first sentence
thereof and restating that sentence in full as follows:
"Party A, as the Pledgor, hereby pledges to Party B, as the Secured
Party, as security for the Pledgor's Obligations, and grants to the
Secured Party a first priority continuing security interest in, lien
on and right of Set-off against all Posted Collateral Transferred to
or received by the Secured Party hereunder."
(iv) Only Party A makes the representations contained in Paragraph 9 of
this Annex.
(v) Paragraph 12 of this Annex is amended by deleting the definitions of
"Pledgor" and "Secured Party" and replacing them with the
following:"
" 'Secured Party' means Party B.
'Pledgor' means Party A."
(vi) Paragraph 12 is hereby amended by adding, in alphabetical order, the
following:
"Moody's" means Moody's Investor Services, Inc., or any
successor to the rating business of such entity."
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor to the rating business
of such entity."
(vii) The obligations of Party A, as Pledgor hereunder, to post Eligible
Collateral for the benefit of Party B will only become effective if
a Ratings Event has occurred and is continuing with respect to Party
A and Party A has not satisfied the requirements of Part 1(l)(v) of
the Agreement within 20 days of the occurrence of such Ratings Event
or 30 Local Business Days from the occurrence of a Moody's First
Trigger Event or Moody's Second Trigger Event.
(o) S&P Credit Support Amount. With respect to a Ratings Event relating to an
action taken by S&P, the "Credit Support Amount" shall mean with respect
to a Pledgor on a Valuation Date the sum of:
(i) the greater of MTM and $0, plus
(ii) VB
where:
"MTM" means Secured Party's Exposure;
"VB" means the Notional Amount (as defined in the Confirmation for each
outstanding Transaction under this Agreement) times the relevant
percentage set out in Table A below:
TABLE A
Volatility Buffer
Less than 5
years to Less than 10 years,
Termination but more than 5 years Greater than 10 years to
Date of the to Termination Date of Termination Date of the
Counterparty Transaction. the Transaction. Transaction.
- ------------------------------------ ------------ ---------------------- ------------------------
The rating by S&P of 3.25% 4.00% 4.75%
Party A's long-term
unsecured,
unsubordinated
obligations is at least equal to "A"
The rating by S&P of 4.00% 5.00% 6.25%
Party A's long-term
unsecured,
unsubordinated
obligations is equal to
"A-"
The rating by S&P of 4.50% 6.75% 7.50%
Party A's long-term unsecured,
unsubordinated
obligations is equal to
or less than "BB+"
(p) Moody's Ratings Criteria.
"Ratings Criteria" means, the criteria used by Moody's ("Moody's
Criteria") for the purposes of determining the amount of Eligible Credit
Support Party A is required to transfer at any time when the Threshold
with respect to Party A is zero.
Moody's Criteria
Moody's Credit Support Amount.* With respect to a Ratings Event relating
to an action taken by Moody's, the "Credit Support Amount" shall mean with
respect to a Pledgor on a Valuation Date the sum of:
(i) With respect to a Moody's First Trigger Event:
(A) the greater of the Secured Party's Exposure and $0, plus
(B) Notional Amount times the relevant percentage set out in Table
B below.
(ii) With respect to a Moody's Second Trigger Event:
(A) the greater of the Secured Party's Exposure, $0 or the amount
owed by Party A on the next Payment Date (as such term is
defined in the Confirmation for each outstanding Transaction
under this Agreement), plus
(B) Notional Amount times the relevant percentage set out in Table
B below.
* To the extent that both the Moody's Credit Support Amount and the S&P Credit
Support Amount apply, the greater of the two amounts shall be the Credit Support
Amount.
TABLE B
Weighted
Average Moody's First Moody's Second
Life of Hedge Trigger Event Trigger Event
in Years has Occurred has Occurred
- ------------- ------------ ------------
1 0.15% 0.50%
2 0.30% 1.00%
3 0.40% 1.50%
4 0.60% 1.90%
5 0.70% 2.40%
6 0.80% 2.80%
7 1.00% 3.20%
8 1.10% 3.60%
9 1.20% 4.00%
10 1.30% 4.40%
11 1.40% 4.70%
12 1.50% 5.00%
13 1.60% 5.40%
14 1.70% 5.70%
15 1.80% 6.00%
16 1.90% 6.30%
17 2.00% 6.60%
18 2.00% 6.90%
19 2.00% 7.20%
20 2.00% 7.50%
21 2.00% 7.80%
22 2.00% 8.00%
23 2.00% 8.00%
24 2.00% 8.00%
25 2.00% 8.00%
26 2.00% 8.00%
27 2.00% 8.00%
28 2.00% 8.00%
29 2.00% 8.00%
30 2.00% 8.00%
Accepted and agreed:
BANK OF AMERICA, N.A. WELLS FARGO BANK, N.A., AS TRUSTEE,
ON BEHALF OF BANC OF AMERICA
ALTERNATIVE LOAN TRUST 2007-1
By: By:
------------------------------ ------------------------------------
Name: Name:
Title: Title:
Date: Date: