BEAR STEARNS FINANCIAL
PRODUCTS INC.
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LaSalle Bank National Association, not
individually, but solely as Trustee on behalf
of the Supplemental Interest Trust with respect
to Bear Stearns Mortgage Funding
Trust 2006-SL4 Mortgage-Backed Certificates,
Series 2006-SL4
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Global
Securities and Trust Services
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Derivatives
Documentation
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REFERENCE NUMBER(S):
FXNSC8957-CXNS205195
The purpose of
this letter is to confirm the terms and conditions of the Novation
Transaction entered into between the parties and effective from the
Novation Date specified below. This Novation Confirmation
constitutes a “Confirmation” as referred to in the New
Agreement specified below.
1. The definitions and provisions contained in the
2004 ISDA Novation Definitions (the “Definitions”) and
the terms and provisions of the 2000 ISDA Definitions , as
published by the International Swaps and Derivatives Association,
Inc. and amended from time to time, are incorporated in this
Novation Confirmation. In the event of any inconsistency between
(i) the Definitions, (ii) the 2000 ISDA Definitions and/or (iii)
the Novation Agreement and this Novation Confirmation, this
Novation Confirmation will govern.
2. The terms of the Novation Transaction to which
this Novation Confirmation relates are as follows:
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Novation Trade
Date:
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November 29,
2006
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Novation
Date:
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November 29,
2006
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Novated
Amount:
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USD
3,004,711.90
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Transferor:
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BearBear Stearns Capital Markets
Inc
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Transferee:
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BearBear Stearns Financial Products
Inc.
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Remaining
Party:
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LaSalle Bank
National Association, not individually, but solely as Trustee on
behalf of the Supplemental Interest Trust with respect to Bear
Stearns Mortgage Funding Trust 2006-SL4 Mortgage-Backed
Certificates, Series 2006-SL4
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New Agreement
(between Transferee and Remaining Party):
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The Master
Agreement as defined in the New Confirmation
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3. The terms of the Old Transaction to which this
Novation Confirmation relates, for identification purposes, are as
follows:
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Trade Date of
Old Transaction:
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Effective Date
of Old Transaction:
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Termination
Date of Old Transaction:
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4. The terms of the New Transaction to which this
Novation Confirmation relates shall be as specified in the
New Confirmation attached hereto as Exhibit A including the
Credit Support Annex attached hereto as Annex A.
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Full First
Calculation Period:
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The parties
confirm their acceptance to be bound by this Novation Confirmation
as of the Novation Date by executing a copy of this Novation
Confirmation and returning a facsimile of the fully-executed
Novation Confirmation to 212-272-9857. The
Transferor, by its execution of a copy of this Novation
Confirmation, agrees to the terms of the Novation Confirmation as
it relates to the Old Transaction. The Transferee, by its execution
of a copy of this Novation Confirmation, agrees to the terms of the
Novation Confirmation as it relates to the New Transaction. For
inquiries regarding U.S. Transactions, please contact
Derivatives Documentation by telephone at
212-272-2711 . For all other inquiries please
contact Derivatives Documentation by telephone at
353-1-402-6223 .
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Bear
Stearns Financial Products Inc.
By: /s/
Annie Manevitz
Name: Annie
Manevitz
Title:
Authorized Signatory
Date: November
29, 2006
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Bear
Stearns Capital Markets
By: /s/
Susan Donlon
Name: Susan
Donlon
Title:
Authorized Signatory
Date: November
29, 2006
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L
aSalle Bank National Association, not individually, but
solely as Trustee on behalf of the Supplemental Interest Trust with
respect to Bear Stearns Mortgage Funding Trust 2006-SL4
Mortgage-Backed Certificates, Series 2006-SL4
By: /s/ Rita
Lopez
Name: Rita
Lopez
Title: Vice
President
Date: November
29, 2006
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BEAR STEARNS FINANCIAL
PRODUCTS INC.
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LaSalle Bank National Association, not
individually, but solely as Trustee on
behalf of the Supplemental Interest Trust with
respect to Bear Stearns
Mortgage Funding Trust 2006-SL4 Mortgage-Backed
Certificates, Series
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Global
Securities and Trust Services
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Derivatives
Documentation
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Fixed Income
Derivatives Confirmation and Agreement
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REFERENCE NUMBER: FXNSC8957
The purpose of
this long-form confirmation (
“Confirmation” ) is to confirm the
terms and conditions of the current Transaction entered into on the
Trade Date specified below (the
“Transaction” ) between Bear Stearns
Financial Products Inc. ( “Party A” )
and LaSalle Bank National Association, not
individually, but solely as trustee (the “Supplemental
Interest Trust Trustee”) on behalf of the supplemental
interest trust with respect to the Bear Stearns Mortgage Funding
Trust 2006-SL4 Mortgage-Backed Certificates, Series 2006-SL4 (the
“Supplemental Interest Trust”) ( “Party
B” ) created under the Pooling and Servicing
Agreement, dated as of October 1, 2006, among Bear Stearns Asset
Backed Securities I LLC, a Delaware limited liability company, as
depositor (the “Depositor”), EMC Mortgage Corporation,
a Delaware corporation, as seller (in such capacity, the
“Seller”) and as master servicer (in such capacity, the
“Master Servicer”), and LaSalle Bank National
Association, a national banking association (the
“Trustee”) . (the
“Pooling and Servicing Agreement” ).
This Confirmation evidences a complete and binding agreement
between you and us to enter into the Transaction on the terms set
forth below and replaces any previous agreement between us with
respect to the subject matter hereof. This Confirmation constitutes
a “Confirmation” and also constitutes
a “Schedule” as referred to in the
ISDA Master Agreement, and Paragraph 13 of a Credit Support Annex
to the Schedule.
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1.
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This
Confirmation shall supplement, form a part of, and be subject to an
agreement in the form of the ISDA Master Agreement (Multicurrency -
Cross Border) as published and copyrighted in 1992 by the
International Swaps and Derivatives Association, Inc. (the
“ISDA Master Agreement” ), as if Party
A and Party B had executed an agreement in such form on the date
hereof, with a Schedule as set forth in Item 3 of this
Confirmation, and an ISDA Credit Support Annex (Bilateral Form -
ISDA Agreements Subject to New York Law Only version) as published
and copyrighted in 1994 by the International Swaps and Derivatives
Association, Inc., with Paragraph 13 thereof as set forth in Annex
A hereto (the “Credit Support Annex”
). For the avoidance of doubt, the Transaction described herein
shall be the sole Transaction governed by such ISDA Master
Agreement. In the event of any inconsistency among any of the
following documents, the relevant document first listed shall
govern: (i) this Confirmation, exclusive of the provisions set
forth in Item 3 hereof and Annex A hereto; (ii) the provisions set
forth in Item 3 hereof, which are incorporated by reference into
the Schedule; (iii) the Credit Support Annex; (iv) the Definitions;
and (v) the ISDA Master Agreement. Terms capitalized but not
defined herein shall have the meanings attributed to them in the
Pooling and Servicing Agreement.
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Each reference
herein to a “Section” (unless specifically referencing
the Pooling and Servicing Agreement) or to a “Section of this
Agreement” will be construed as a reference to a Section of
the ISDA Master Agreement; each herein reference to a
“Part” will be construed as a reference to the
provisions herein deemed incorporated in a Schedule to the ISDA
Master Agreement; each reference herein to a
“Paragraph” will be construed as a reference to a
Paragraph of the Credit Support Annex.
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The terms of
the particular Transaction to which this Confirmation relates are
as follows:
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Type of
Transaction:
Interest Rate Swap
Notional
Amount:
With respect to any Calculation Period, the amount set forth for
such period on Schedule I attached hereto.
Trade
Date: November
28, 2006
Effective
Date:
November 10, 2006, provided however for purposes of
calculating the initial Fixed and Floating Amounts such date shall
be November 25, 2006.
Termination
Date: July
25, 2010, subject to adjustment in accordance with the Business Day
Convention; provided, however, that for the purpose of determining
the final Fixed Rate Payer Period End Date, Termination Date shall
be subject to No Adjustment.
Fixed Rate
Payer:
Party B
Period End
Dates:
The 25 th calendar day of each month during the
Term of this Transaction, commencing December 25, 2006, and ending
on the Termination Date, with No Adjustment.
Payment
Dates:
Early Payment shall be applicable. The Fixed Rate Payer Payment
Date shall be one Business Day preceding each Fixed Rate Payer
Period End Date.
Fixed
Amount:
To be determined in accordance with the following
formula:
100*Fixed Rate*Notional Amount*Fixed Rate Day Count
Fraction
Floating Rate
Payer: Party
A
Period End
Dates:
The 25 th calendar day of each month during the
Term of this Transaction, commencing December 25, 2006, and ending
on the Termination Date, subject to adjustment in accordance with
the Business Day Convention.
Payment
Dates:
Early Payment shall be applicable. The Floating Rate Payer Payment
Date shall be one Business Day preceding each Fixed Rate Payer
Period End Date.
Floating Rate
Option: USD-LIBOR-BBA
Floating
Amount:
To be determined in accordance with the following
formula:
100*Floating Rate Option*Notional Amount*Floating Rate Day Count
Fraction
Designated
Maturity:
One month
Count
Fraction:
Actual/360
Reset
Dates:
The first day of each Calculation Period.
Compounding:
Inapplicable
Business
Days:
New York and Illinois
Business Day Convention:
Following
Calculation
Agent:
Party A
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3.
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Provisions
Deemed Incorporated in a Schedule to the ISDA Master
Agreement:
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Part
1.
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Termination Provisions.
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For the purposes of this Agreement:-
(a)
“Specified
Entity” will
not apply to Party A or Party B for any purpose.
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“Specified
Transaction” will have the meaning specified in Section
14.
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The statement
below that an Event of Default will apply to a specific party means
that upon the occurrence of such an Event of Default with respect
to such party, the other party shall have the rights of a
Non-defaulting Party under Section 6 of this Agreement; conversely,
the statement below that such event will not apply to a specific
party means that the other party shall not have such
rights.
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(i)
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The
“Failure to Pay or Deliver” provisions
of Section 5(a)(i) will apply to Party A and will apply to Party B;
provided, however, that Section 5(a)(i) is hereby amended by
replacing the word “third” with the word
“second”; provided, further, that notwithstanding
anything to the contrary in Section 5(a)(i) and Paragraph 7 of the
Credit Support Annex, any failure by Party A to comply with or
perform any obligation to be complied with or performed by Party A
under the Credit Support Annex shall not constitute an Event of
Default under Section 5(a)(i) unless (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or more
Local Business Days and (B) such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to Party A.
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(ii)
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The
“Breach of Agreement” provisions of
Section 5(a)(ii) will apply to Party A and will not apply to Party
B.
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(iii)
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The
“Credit Support Default” provisions of
Section 5(a)(iii) will apply to Party A and will not apply to Party
B except that Section 5(a)(iii)(1) will apply to Party B solely in
respect of Party B’s obligations under Paragraph 3(b) of the
Credit Support Annex; provided, however, that notwithstanding
anything to the contrary in Section 5(a)(iii)(1), any failure by
Party A to comply with or perform any obligation to be complied
with or performed by Party A under the Credit Support Annex shall
not constitute an Event of Default under Section 5(a)(iii) unless
(A) a Required Ratings Downgrade Event has occurred and been
continuing for 30 or more Local Business Days and (B) such failure
is not remedied on or before the third Local Business Day after
notice of such failure is given to Party A.
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(iv)
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The
“Misrepresentation” provisions of
Section 5(a)(iv) will apply to Party A and will not apply to Party
B.
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(v)
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The
“Default under Specified Transaction”
provisions of Section 5(a)(v) will apply to Party A and will not
apply to Party B.
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(vi)
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The
“Cross Default” provisions of Section
5(a)(vi) will apply to Party A and will not apply to Party B. For
purposes of Section 5(a)(vi), solely with respect to Party
A:
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“Specified Indebtedness” will have
the meaning specified in Section 14.
“Threshold Amount” means with
respect to Party A USD 100,000,000
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(vii)
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The
“Bankruptcy” provisions of Section
5(a)(vii) will apply to Party A and will apply to Party B except
that the provisions of Section 5(a)(vii)(2), (6) (to the extent
that such provisions refer to any appointment contemplated or
effected by the Pooling and Servicing Agreement or any appointment
to which Party B has not become subject), (7) and (9) will not
apply to Party B; provided that, with respect to Party B only,
Section 5(a)(vii)(4) is hereby amended by adding after the words
“against it” the words “(excluding any proceeding
or petition instituted or presented by Party A or its
Affiliates)”, and Section 5(a)(vii)(8) is hereby amended by
deleting the words “to (7) inclusive” and inserting
lieu thereof “, (3), (4) as amended, (5), (6) as amended, or
(7)”.
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(viii)
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The
“Merger Without Assumption” provisions
of Section 5(a)(viii) will apply to Party A and will apply to Party
B.
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The statement
below that a Termination Event will apply to a specific party means
that upon the occurrence of such a Termination Event, if such
specific party is the Affected Party with respect to a Tax Event,
the Burdened Party with respect to a Tax Event Upon Merger (except
as noted below) or the non-Affected Party with respect to a Credit
Event Upon Merger, as the case may be, such specific party shall
have the right to designate an Early Termination Date in accordance
with Section 6 of this Agreement; conversely, the statement below
that such an event will not apply to a specific party means that
such party shall not have such right; provided, however, with
respect to “Illegality” the statement that such event
will apply to a specific party means that upon the occurrence of
such a Termination Event with respect to such party, either party
shall have the right to designate an Early Termination Date in
accordance with Section 6 of this Agreement.
(i)
The
“Illegality” provisions of Section
5(b)(i) will apply to Party A and will apply to Party B.
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The
“Tax Event” provisions of Section
5(b)(ii) will apply to Party A except that, for purposes of the
application of Section 5(b)(ii) to Party A, Section 5(b)(ii) is
hereby amended by deleting the words “(x) any action taken by
a taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is
entered into (regardless of whether such action is taken or brought
with respect to a party to this Agreement) or (y)”, and the
“Tax Event” provisions of Section
5(b)(ii) will apply to Party B.
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The
“Tax Event Upon Merger” provisions of
Section 5(b)(iii) will apply to Party A and will apply to Party B,
provided that Party A shall not be entitled to designate an Early
Termination Date by reason of a Tax Event upon Merger in respect of
which it is the Affected Party.
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The
“Credit Event Upon Merger” provisions
of Section 5(b)(iv) will not apply to Party A and will not apply to
Party B.
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The
“Automatic Early Termination”
provision of Section 6(a) will not apply to Party A and will not
apply to Party B.
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(f)
Payments on Early
Termination. For the purpose of Section 6(e) of this
Agreement:
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(i)
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Market
Quotation will apply, provided, however, that, in the event of a
Derivative Provider Trigger Event, the following provisions will
apply:
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The definition
of Market Quotation in Section 14 shall be deleted in its entirety
and replaced with the following:
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“Market Quotation”
means, with respect to one or more
Terminated Transactions, a Firm Offer which is (1) made by a
Reference Market-maker that is an Eligible Replacement, (2) for an
amount that would be paid to Party B (expressed as a negative
number) or by Party B (expressed as a positive number) in
consideration of an agreement between Party B and such Reference
Market-maker to enter into a Replacement Transaction, and (3) made
on the basis that Unpaid Amounts in respect of the Terminated
Transaction or group of Transactions are to be excluded but,
without limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required (assuming
satisfaction of each applicable condition precedent) after that
Early Termination Date is to be included. The party making the
determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably
practicable as of the same day and time (without regard to
different time zones) on or as soon as reasonably practicable after
the relevant Early Termination Date. The day and time as of which
those quotations are to be obtained will be selected in good faith
by the party obliged to make a determination under Section 6(e),
and, if each party is so obliged, after consultation with the
other.
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The definition
of Settlement Amount shall be deleted in its entirety and replaced
with the following:
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“Settlement Amount”
means, with respect to any Early
Termination Date, an amount (as determined by Party B) equal
to:
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If a Market
Quotation for the relevant Terminated Transaction or group of
Terminated Transactions is accepted by Party B so as to become
legally binding on or before the day falling ten Local Business
Days after the day on which the Early Termination Date is
designated, or such later day as Party B may specify in writing to
Party A, but in either case no later than one Local Business Day
prior to the Early Termination Date (such day, the “Latest
Settlement Amount Determination Day”), the Termination
Currency Equivalent of the amount (whether positive or negative) of
such Market Quotation;
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If, on the
Latest Settlement Amount Determination Day, no Market Quotation for
the relevant Terminated Transaction or group of Terminated
Transactions has been accepted by Party B so as to become legally
binding and one or more Market Quotations from Approved
Replacements have been made and remain capable of becoming legally
binding upon acceptance, the Settlement Amount shall equal the
Termination Currency Equivalent of the amount (whether positive or
negative) of the lowest of such Market Quotations (for the
avoidance of doubt, the lowest of such Market Quotations shall be
the lowest Market Quotation of such Market Quotations expressed as
a positive number or, if any of such Market Quotations is expressed
as a negative number, the Market Quotation expressed as a negative
number with the largest absolute value); or
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If, on the
Latest Settlement Amount Determination Day, no Market Quotation for
the relevant Terminated Transaction or group of Terminated
Transactions is accepted by Party B so as to become legally binding
and no Market Quotation from an Approved Replacement remains
capable of becoming legally binding upon acceptance, the Settlement
Amount shall equal Party B’s Loss (whether positive or
negative and without reference to any Unpaid Amounts) for the
relevant Terminated Transaction or group of Terminated
Transactions.
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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.
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If the
Settlement Amount is a negative number, Section 6(e)(i)(3) shall be
deleted in its entirety and replaced with the following:
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“(3)
Second Method and Market Quotation. If the Second Method
and Market Quotation apply, (I) Party B shall pay to Party A an
amount equal to the absolute value of the Settlement Amount in
respect of the Terminated Transactions, (II) Party B shall pay to
Party A the Termination Currency Equivalent of the Unpaid Amounts
owing to Party A and (III) Party A shall pay to Party B the
Termination Currency Equivalent of the Unpaid Amounts owing to
Party B; provided, however, that (x) the amounts payable under the
immediately preceding clauses (II) and (III) shall be subject to
netting in accordance with Section 2(c) of this Agreement and (y)
notwithstanding any other provision of this Agreement, any amount
payable by Party A under the immediately preceding clause (III)
shall not be netted-off against any amount payable by Party B under
the immediately preceding clause (I).”
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At any time on
or before the Latest Settlement Amount Determination Day at which
two or more Market Quotations from Approved Replacements remain
capable of becoming legally binding upon acceptance, Party B shall
be entitled to accept only the lowest of such Market Quotations
(for the avoidance of doubt, the lowest of such Market Quotations
shall be the lowest Market Quotation of such Market Quotations
expressed as a positive number or, if any of such Market Quotations
is expressed as a negative number, the Market Quotation expressed
as a negative number with the largest absolute value).
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(ii)
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The Second
Method will apply.
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(g)
“Termination
Currency” means USD.
(h)
Additional Termination
Events. Additional
Termination Events will apply as provided in Part 5(c).
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Payer
Representations. For
the purpose of Section 3(e) of this Agreement:
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(A) Party A makes the following
representation(s):
It is not
required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account
of any Tax from any payment (other than interest under Section
2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it to the
other party under this Agreement. In making this representation, it
may rely on: the accuracy of any representations made by the other
party pursuant to Section 3(f) of this Agreement; (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement and the accuracy and effectiveness of
any document provided by the other party pursuant to Section
4(a)(i) or 4(a)(iii) of this Agreement; and (iii) the satisfaction
of the agreement of the other party contained in Section 4(d) of
this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the
other party does not deliver a form or document under Section
4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(B)
Party B makes the following
representation(s):
(ii)
Payee
Representations. For
the purpose of Section 3(f) of this Agreement:
(A) Party A makes the following
representation(s):
Party A is a
corporation created or organized in the United States or under the
laws of the United States or of any State or of the District of
Columbia. Party A is a “United States person” for U.S.
federal tax purposes as that term is defined in Section 7701(a)(30)
(or any applicable successor provision) of the U.S. Internal
Revenue Code of 1986, as amended. Party A’s U.S. taxpayer
identification number is 13-3866307.
(B)
Party B makes the following
representation(s):
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Gross
Up. Section
2(d)(i)(4) shall not apply to Party B as X, and Section 2(d)(ii)
shall not apply to Party B as Y, in each case such that Party B
shall not be required to pay any additional amounts referred to
therein.
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Indemnifiable Tax. The definition of “Indemnifiable
Tax” in Section 14 is deleted in its entirety and replaced
with the following:
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“Indemnifiable Tax”
means, in relation to payments by
Party A, any Tax (including any Tax imposed in respect of a payment
under a Credit Support Document) and, in relation to payments by
Party B, no Tax.
Part
3.
Agreement to Deliver
Documents.
(a)
For the purpose of Section 4(a)(i),
tax forms, documents, or certificates to be delivered
are:
Party
required to deliver document
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An original
properly completed and executed United States Internal Revenue
Service Form W- 9 (or any successor thereto) with
respect to any payments received or to be received by Party A, that
eliminates U.S. federal withholding and backup withholding Tax on
payments to Party A under this Agreement.
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(i) upon
execution of this Agreement, (ii) on or before the first payment
date under this Agreement, including any Credit Support Document,
(iii) promptly upon the reasonable demand by Party B, (iv) prior to
the expiration or obsolescence of any previously delivered form,
and (v) promptly upon the information on any such previously
delivered form becoming inaccurate or incorrect.
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