(Multicurrency-Cross Border)
ISDA®
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of May 30, 2007
XXXXX FARGO BANK, N.A., not in its individual or corporate capacity but
CREDIT SUISSE INTERNATIONAL solely as Supplemental Interest Trust Trustee on behalf of the
and Supplemental Interest Trust created under the Pooling and Servicing
Agreement for the Adjustable Rate Mortgage Trust 2007-2
_______________________________________ _________________________________________
("Party A") ("Party B")
have entered and/or anticipate entering into one or more transactions (each a "Transaction") that are or will
be governed by this Master Agreement, which includes the schedule (the "Schedule"), and the documents
and other confirming evidence (each a "Confirmation") exchanged between the parties confirming those Transactions.
Accordingly, the parties agree as follows:-
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein
specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other
provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail
for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement
and all Confirmations form a single agreement between the parties (collectively referred to as
this "Agreement"), and the parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each Confirmation to be made by it,
subject to the other provisions of this Agreement.
(ii) Payments under this Agreement will be made on the due date for value on that date in the place
of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required currency. Where settlement
is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date
in the manner customary for the relevant obligation unless otherwise specified in the relevant
Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent
that no Event of Default or Potential Event of Default with respect to the other party has occurred
and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant
Transaction has occurred or been effectively designated and (3) each other applicable condition
precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a payment or delivery by giving
notice to the other party at least five Local Business Days prior to the scheduled date for the payment or
delivery to which such change applies unless such other party gives timely notice of a reasonable objection to
such change.
(c) Netting. If on any date amounts would otherwise be payable:-
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make payment of any such amount will
be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by
one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an
obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party
the excess of the larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of
all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether
such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a
Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being
subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will
cease to, apply to such Transactions from such date). This election may be made separately for different groups
of Transactions and will apply separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any deduction or withholding
for or on account of any Tax unless such deduction or withholding is required by any applicable law, as
modified by the practice of any relevant governmental revenue authority, then in effect. If a party is
so required to deduct or withhold, then that party ("X") will:-
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be deducted or withheld
(including the full amount required to be deducted or withheld from any additional amount paid
by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction
or withholding is required or receiving notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy), or other documentation
reasonably acceptable to Y, evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is
otherwise entitled under this Agreement, such additional amount as is necessary to ensure that
the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed
against X or Y) will equal the full amount Y would have received had no such deduction or
withholding been required. However, X will not be required to pay any additional amount to Y
to the extent that it would not be required to be paid but for:-
(A) the failure by Y to comply with or perform any agreement contained in
Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and
true unless such failure would not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or after the date on which a
Transaction is entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax Law.
(ii) Liability. If:-
(1) X is required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, to make any deduction or withholding in respect of which X
would not be required to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against X,
then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y
will promptly pay to X the amount of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before
as well as after judgment) on the overdue amount to the other party on demand in the same currency as such
overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date
of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and
the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination
Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be
settled by delivery, it will compensate the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed to be repeated by each party on
each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all
times until the termination of this Agreement) that:-
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of the jurisdiction of its
organisation or incorporation and, if relevant under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other documentation relating to
this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to
this Agreement that it is required by this Agreement to deliver and to perform its obligations under
this Agreement and any obligations it has under any Credit Support Document to which it is a party and
has taken all necessary action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict
with any law applicable to it, any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to have been obtained by it
with respect to this Agreement or any Credit Support Document to which it is a party have been obtained
and are in full force and effect and all conditions of any such consents have been complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to
which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with
their respective terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether enforcement is sought in a proceeding in equity
or at law)).
(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 or any of its
Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body,
agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it
of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations
under this Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on
behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of
the date of the information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the
purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the
purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have any obligation under this
Agreement or under any Credit Support Document to which it is a party:-
(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under
subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:
(i) any forms, documents or certificates relating to taxation specified in the Schedule or any
Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that may be required or
reasonably requested in writing in order to allow such other party or its Credit Support Provider to
make a payment under this Agreement or any applicable Credit Support Document without any deduction or
withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so
long as the completion, execution or submission of such form or document would not materially prejudice
the legal or commercial position of the party in receipt of such demand), with any such form or document
to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed
and to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as
reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all
consents of any governmental or other authority that are required to be obtained by it with respect to this
Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any
that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which
it may be subject if failure so to comply would materially impair its ability to perform its obligations under
this Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to
be accurate and true promptly upon learning of such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in
respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated,
organised, managed and controlled, or considered to have its seat, or in which a branch or office through which
it is acting for the purpose of this Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other
party against any Stamp Tax levied or imposed upon the other party or in respect of the other party's execution
or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction
with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or any Specified Entity of such party of any of the following events constitutes
an event of default (an "Event of Default") with respect to such party:-
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this
Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not
remedied on or before the third Local Business Day after notice of such failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation
(other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such party to comply with or perform any
agreement or obligation to be complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or the failing or ceasing of such
Credit Support Document to be in full force and effect for the purpose of this Agreement (in either
case other than in accordance with its terms) prior to the satisfaction of all obligations of such
party under each Transaction to which such Credit Support Document relates without the written
consent of the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in
whole or in part, or challenges the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or (f)) made
or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such
party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in
any material respect when made or repeated or deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any
applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving
effect to any applicable notice requirement or grace period, there occurs a liquidation of, an
acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults,
after giving effect to any applicable notice requirement or grace period, in making any payment or
delivery due on the last payment, delivery or exchange date of, or any payment on early termination of,
a Specified Transaction (or such default continues for at least three Local Business Days if there is no
applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in
whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or
empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as applying to the party, the
occurrence or existence of (1) a default, event of default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of such party or any applicable
Specified Entity of such party under one or more agreements or instruments relating to Specified
Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified
Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due and payable or (2) a default by such
party, such Credit Support Provider or such Specified Entity (individually or collectively) in making
one or more payments on the due date thereof in an aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments (after giving effect to any applicable notice
requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified
Entity of such party:-
(1)is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment, arrangement or composition with
or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights, or a petition is presented for
its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or
presented against it, such proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days
of the institution or presentation thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a consolidation, amalgamation or
merger); (6) seeks or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all
or substantially all its assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and such secured party
maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in
each case within 30 days thereafter; (8) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events
specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates
or amalgamates with, or merges with or into, or transfers all or substantially all its assets to,
another entity and, at the time of such consolidation, amalgamation, merger or transfer:-
(1) the resulting, surviving or transferee entity fails to assume all the obligations of such
party or such Credit Support Provider under this Agreement or any Credit Support Document to which
it or its predecessor was a party by operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend (without the consent of the other
party) to the performance by such resulting, surviving or transferee entity of its obligations
under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an
Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax
Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event
Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is
specified pursuant to (v) below:-
(i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on
which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation
by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after
such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for
such party (which will be the Affected Party):-
(1) to perform any absolute or contingent obligation to make a payment or delivery or to
receive a payment or delivery in respect of such Transaction or to comply with any other
material provision of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to perform, any contingent or
other obligation which the party (or such Credit Support Provider) has under any Credit Support
Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in
Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it
will, on the next succeeding Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required
to be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section
2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next succeeding Scheduled
Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2)
receive a payment from which an amount has been deducted or withheld for or on account of any
Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other
than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or
amalgamating with, or merging with or into, or transferring all or substantially all its assets to,
another entity (which will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified in the Schedule as
applying to the party, such party ("X"), any Credit Support Provider of X or any applicable Specified
Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially
all its assets to, another entity and such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially
weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is specified in the
Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected
Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or
such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute or give
rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not
constitute an Event of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a
party (the "Defaulting Party") has occurred and is then continuing, the other party (the "Non-defaulting Party")
may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate
a day not earlier than the day such notice is effective as an Early Termination Date in respect of all
outstanding Transactions. If, however, "Automatic Early Termination" is specified in the Schedule as applying to
a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon
the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6)
or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the
relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party
of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of
it, notify the other party, specifying the nature of that Termination Event and each Affected
Transaction and will also give such other information about that Termination Event as the other party
may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under Section 5(b)(i)(1) or a Tax
Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early
Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party
to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after it gives
notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the
Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to
exist.
If the Affected Party is not able to make such a transfer it will give notice to the other party to that
effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the
prior written consent of the other party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into transactions with the transferee on the
terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and
there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30
days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event.
(iv) Right to Terminate. If:-
(1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may
be, has not been effected with respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional
Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger,
any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than
one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon
Merger or an Additional Termination Event if there is only one Affected Party may, by not
more than 20 days notice to the other party and provided that the relevant Termination Event is then
continuing, designate a day not earlier than the day such notice is effective as an Early Termination
Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early
Termination Date will occur on the date so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments
or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required
to be made, but without prejudice to the other provisions of this Agreement. The amount, if any,
payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early
Termination Date, each party will make the calculations on its part, if any, contemplated by Section
6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such
calculations (including all relevant quotations and specifying any amount payable under Section 6(e))
and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the
absence of written confirmation from the source of a quotation obtained in determining a Market
Quotation, the records of the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under
Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of
an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the
day which is two Local Business Days after the day on which notice of the amount payable is effective
(in the case of an Early Termination Date which is designated as a result of a Termination Event). Such
amount will be paid together with (to the extent permitted under applicable law) interest thereon
(before as well as after judgment) in the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest
will be calculated on the basis of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions shall
apply based on the parties' election in the Schedule of a payment measure, either "Market Quotation" or "Loss",
and a payment method, either the "First Method" or the "Second Method". If the parties fail to designate a
payment measure or payment method in the Schedule, it will be deemed that "Market Quotation" or the "Second
Method", as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event of Default:-
(1) First Method and Market Quotation. If the First Method and Market Quotation apply, the
Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the
Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay
to the Non-defaulting Party, if a positive number, the Non-defaulting Party's Loss in respect
of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an
amount will be payable equal to (A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a
positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value of that amount to the
Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable
equal to the Non-defaulting Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value of that amount to the
Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a Termination Event:-
(1) One Affected Party. If there is one Affected Party, the amount payable will be determined
in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if
Loss applies, except that, in either case, references to the Defaulting Party and to the
Non-defaulting Party will be deemed to be references to the Affected Party and the party which
is not the Affected Party, respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in respect of all Terminated
Transactions.
(2) Two Affected Parties. If there are two Affected Parties:-
(A) if Market Quotation applies, each party will determine a Settlement Amount in
respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum
of (a) one-half of the difference between the Settlement Amount of the party with the
higher Settlement Amount ("X") and the Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination Currency Equivalent of the Unpaid Amounts
owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y;
and
(B) if Loss applies, each party will determine its Loss in respect of this
Agreement (or, if fewer than all the Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal to one-half of the difference
between the Loss of the party with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X
will pay the absolute value of that amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because
"Automatic Early Termination" applies in respect of a party, the amount determined under this Section
6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments
or deliveries made by one party to the other under this Agreement (and retained by such other party)
during the period from the relevant Early Termination Date to the date for payment determined under
Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under
this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for
the loss of bargain and the loss of protection against future risks and except as otherwise provided in
this Agreement neither party will be entitled to recover any additional damages as a consequence of such
losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may
be transferred (whether by way of security or otherwise) by either party without the prior written consent of the
other party, except that:-
(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or
merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice
to any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a
Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant
currency specified in this Agreement for that payment (the "Contractual Currency"). To the extent permitted by
applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be
discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent
such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner
and in good faith in converting the currency so tendered into the Contractual Currency, of the full amount in the
Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the
Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this
Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If
for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency
payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such
excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency
other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or
(iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii)
above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled
pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any
shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency
and will refund promptly to the other party any excess of the Contractual Currency received by such party as a
consequence of sums paid in such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is converted into the currency of the
judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is
able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual
Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually
received by such party. The term "rate of exchange" includes, without limitation, any premiums and costs of
exchange payable in connection with the purchase of or conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute separate
and independent obligations from the other obligations in this Agreement, will be enforceable as separate and
independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment
is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums
payable in respect of this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate
that it would have suffered a loss had an actual exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with
respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective unless
in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or
confirmed by an exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the
parties under this Agreement will survive the termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges
provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and
delivered in counterparts (including by facsimile transmission), each of which will be deemed an
original.
(ii) The parties intend that they are legally bound by the terms of each Transaction from the moment
they agree to those terms (whether orally or otherwise). A Confirmation shall he entered into as soon
as practicable and may he executed and delivered in counterparts (including by facsimile transmission)
or be created by an exchange of telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this
Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or
privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege
or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of reference only and are not to
affect the construction of or to be taken into consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction
through an Office other than its head or home office represents to the other party that, notwithstanding the
place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such
party are the same as if it had entered into the Transaction through its head or home office. This representation
will be deemed to be repeated by such party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives payments or deliveries for the
purpose of a Transaction without the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and
receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office
through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the
relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all reasonable
out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement or any Credit Support Document to which the
Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited
to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any
manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by
facsimile transmission or electronic messaging system) to the address or number or in accordance with the
electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is received by a responsible
employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on
the sender and will not be met by a transmission report generated by the sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt
requested), on the date that mail is delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business
Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on
a Local Business Day, in which case that communication shall be deemed given and effective on the first following
day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile
number or electronic messaging system details at which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in
the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement
("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by
English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York City, if this Agreement is
expressed to be governed by the laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying of venue of any Proceedings
brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such Proceedings, that such court does not
have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if
this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of
the Civil Jurisdiction and Judgments Xxx 0000 or any modification, extension or re-enactment thereof for the time
being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if any) specified opposite its
name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any
reason any party's Process Agent is unable to act as such, such party will promptly notify the other party and
within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent
to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law,
with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on
the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief
by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets
(whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues
or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably
agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:-
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or
Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect
to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any entity controlled, directly or
indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of any entity or person means
ownership of a majority of the voting power of the entity or person.
"Applicable Rate" means:-
(a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by
a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date
(determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would have been but for
Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification of, or any change in or
amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption, notice, filing, registration or
exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the
relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section 6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in respect of a payment under this
Agreement but for a present or former connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such recipient (including, without
limitation, a connection arising from such recipient or related person being or having been a citizen or resident
of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such
jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction,
but excluding a connection arising solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of
any relevant governmental revenue authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under
Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise
agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in
this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such payment, (c) in relation to any
notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the
address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the
place where the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant
locations for performance with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a
party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement
or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a
result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any
gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or
delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or
(3) or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and out-of-pocket expenses referred to
under Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not
reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers
in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated Transactions and a party making the determination,
an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive
number) in consideration of an agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a
transaction (the "Replacement Transaction") that would have the effect of preserving for such party the economic
equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming
the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such
Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early
Termination Date, havebeen required after that date. For this purpose, Unpaid Amounts in respect of the Terminated
Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery
that would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each
applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction
would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to
the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as
soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those
quotations are to be obtained will be selected in good faith by the party obliged to make a determination under
Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations
are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations
having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be
the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one
quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer
than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the
Non-defaulting Party (as certified by it) if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or home office.
"Potential Event of Default" means any event which, with the giving of notice or the lapse of time or both, would
constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market selected by the party determining a
Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the
criteria that such party applies generally at the time in deciding whether to offer or to make an extension of
credit and (b) to the extent practicable, from among such dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in which the party is incorporated,
organised, managed and controlled or considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in
relation to any payment, from or through which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be made under Section 2(a)(i) with
respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or withholding or similar right or
requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this
Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination Date, the sum of:-
(a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each
Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any Unpaid Amounts) for each
Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or
would not (in the reasonable belief of the party making the determination) produce a commercially reasonable
result.
"Specified Entity" has the meanings specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether present or future, contingent or
otherwise, as principal or surety or otherwise) in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction (including an agreement with respect
thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement
(or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which
is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency
rate swap transaction, currency option or any other similar transaction (including any option with respect to any
of these transactions), (b) any combination of these transactions and (c) any other transaction identified as a
Specified Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including
interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Agreement other than a stamp, registration, documentation or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a) if resulting from a Termination
Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case)
in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if
"Automatic Early Termination" applies, immediately before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in the Termination Currency, such
Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination
Currency (the "Other Currency"), the amount in the Termination Currency determined by the party making the
relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early
Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later
date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign
exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency
at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make
a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the
parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be
applicable, a Credit Event Upon Merger or an Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of
any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in
respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for
Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain
unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation
under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery
to such party on or prior to such Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted
under applicable law) interest, in the currency, of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. The fair market value of any obligation referred to in clause
(b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if
each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.
XXXXX FARGO BANK, N.A., NOT IN ITS INDIVIDUAL OR CORPORATE CAPACITY BUT
SOLELY AS SUPPLEMENTAL INTEREST TRUST TRUSTEE ON BEHALF OF THE
SUPPLEMENTAL INTEREST TRUST CREATED UNDER THE POOLING AND SERVICING
CREDIT SUISSE INTERNATIONAL AGREEMENT FOR THE ADJUSTABLE RATE MORTGAGE TRUST 2007-2
("Party A") ("Party B")
By:______________________________________________ By:________________________________________________
Name: Name:
Title: Title:
By:______________________________________________
Name:
Title:
Swap Schedule
SCHEDULE
to the
Master Agreement
(Multicurrency-Cross Border)
dated as of May 30, 2007
between
XXXXX FARGO BANK, N.A., not in its individual or corporate capacity but solely
CREDIT SUISSE INTERNATIONAL and as Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust created under the Pooling and Servicing Agreement for the Adjustable
Rate Mortgage Trust 2007-2
_______________________________________ _________________________________________
("Party A") ("Party B")
Capitalized terms used herein and not otherwise defined shall have the meaning specified in that certain
series supplement dated as of May 1, 2007 to the Standard Terms of the Pooling and Servicing Agreement,
dated as of May 1, 2007 (the "PSA" or the "Pooling and Servicing Agreement") among Credit Suisse First
Boston Mortgage Securities Corp., as the depositor; DLJ Mortgage Capital, Inc., as the seller; Xxxxx
Fargo Bank, N.A., as the master servicer, as a servicer and as the trust administrator; Select Portfolio
Servicing, Inc., as a servicer, as the special servicer and as the modification oversight agent; and
U.S. Bank National Association, as the trustee. For the avoidance of doubt, references herein to a
particular "Section" of this Agreement are references to the corresponding sections of the Master
Agreement.
Part 1
Termination Provisions
(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
and in relation to Party B for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
(b) "Specified Transaction" will have the meaning specified in Section 14 of this Agreement.
(c) Certain Events of Default. Subject to Part 1(h) below, the following Events of Default will apply
to the parties as specified below, and the definition of "Event of Default" in Section 14 is deemed
to be modified accordingly:
Section 5(a)(i) (Failure to Pay or Deliver) will apply to Party A and Party B.
Section 5(a)(ii) (Breach of Agreement) will apply to Party A and will not apply to Party B;
except that Section 5(a)(ii) will not apply to Party A with respect to Party A's failure to
comply with Part 5(b) herein.
Section 5(a)(iii) (Credit Support Default) will apply to Party A and will not apply to Party B,
unless Party A has posted collateral under the Credit Support Annex, in which case 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.
Section 5(a)(iv) (Misrepresentation) will apply to Party A and will not apply to Party B.
Section 5(a)(v) (Default under Specified Transaction) will not apply to Party A or Party B.
Section 5(a)(vi) (Cross Default) will apply to Party A and will not apply to Party B.
"Specified Indebtedness" shall have the meaning specified in Section 14 of this Agreement and
"Threshold Amount" means 3% of shareholder's equity of the Relevant Entity.
Section 5(a)(vii) (Bankruptcy) will apply to Party A and Party B; provided that in respect of
Party B, (i) clause (2) thereof shall not apply, (ii) clause (4) thereof shall not apply to
Party B to the extent that the relevant proceeding is instituted by a Relevant Entity in breach
of Party A's agreement in Part 5(g) of this Schedule, (iii) the words "seeks or" shall be
deleted from clause (6) thereof and any appointment that is effected by or pursuant to the PSA
and/or any other document pertaining thereto (collectively with the PSA, the "Transaction
Documents") shall not constitute an Event of Default under such clause (6), (iv) clause (7)
thereof shall not apply, (v) clause (8) thereof shall apply only to the extent not inconsistent
with clauses (i) to (iv) of this sentence and (vi) clause (9) thereof shall not apply.
Section 5(a)(viii) (Merger without Assumption) will apply to Party A and will not apply to
Party B.
Notwithstanding anything to the contrary in Sections 5(a)(i) and 5(a)(iii) of this Agreement,
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 Document shall not be an Event of Default under
Section 5(a)(i) or Section 5(a)(iii) unless (A) a Xxxxx'x Ratings Event has occurred and is
continuing and at least 30 Local Business Days have elapsed since the last time such Xxxxx'x
Ratings Event first occurred and (B) such failure is not remedied on or before the third Local
Business Day after notice of such Ratings Event is received by Party A.
(d) Termination Events. The following Termination Events will apply to the parties as specified below:
Section 5(b)(i) (Illegality) will apply to Party A and Party B.
Section 5(b)(ii) (Tax Event) will apply to Party A and Party B; provided that 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)" shall be deleted.
Section 5(b)(iii) (Tax Event Upon Merger) will apply to Party A and Party B; provided that in
the event that Party A is the Affected Party in respect of an event described in Section
5(b)(iii), Party A shall not be entitled to designate an Early Termination Date pursuant to
such Section 5(b)(iii).
Section 5(b)(iv) (Credit Event Upon Merger) will not apply to Party A or Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) of this Agreement will not apply to
Party A or Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this Agreement:
(i) Loss will apply; subject to Part 5(y).
(ii)The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
(h) Additional Termination Events. The following Additional Termination Events will apply, in each
case with respect to Party B as the sole Affected Party (unless otherwise provided below):
(i) Each of the following shall constitute an Additional Termination Event with Party A as the sole
Affected Party:
(a) An S&P Collateralization Event has occurred and is continuing and Party A has
failed to comply with or perform any obligation to be complied with or performed
by Party A in accordance with the "Downgrade Provisions" as set forth in Part
5(b)(2) and a Ratings Event has neither occurred nor is continuing. Any event
which constitutes an Additional Termination Event pursuant to this Section
1(h)(i)(a) shall not constitute an Event of Default.
(b) A Xxxxx'x Collateralization Event has occurred and is continuing, and Party A has
failed to comply with or perform any obligation to deliver collateral under the
Credit Support Annex and 30 Local Business Days or more have elapsed since the
last time that no Xxxxx'x Collateralization Event had occurred and was
continuing. Any event which constitutes an Additional Termination Event pursuant
to this Section 1(h)(i)(b) shall not constitute an Event of Default (unless such
event constitutes a failure to post collateral pursuant to the terms of the Credit
Support Annex in breach of Part 5(b)(4)).
(c) Reserved.
(d) A Ratings Event has occurred and is continuing and Party A has failed to comply
with or perform any obligation to be complied with or performed by Party A in
accordance with the "Downgrade Provisions" as set forth in Part 5(b)(4) and, in
the case of a Xxxxx'x Ratings Event, (i) at least one Eligible Replacement has
made a Firm Offer that would, assuming the occurrence of an Early Termination
Date, qualify as a Market Quotation (on the basis that paragraphs (i) and (ii) of
Part 5(y) (Calculations) apply) and which remains capable of becoming legally
binding upon acceptance and (ii) 30 Local Business Days or more have elapsed since
the last time that no Xxxxx'x Rating Event had occurred and was continuing. The
failure by Party A to comply with or perform any obligation (other than the
obligation to post collateral pursuant to the terms of the Credit Support Annex)
to be complied with or performed by Party A in accordance with the "Downgrade
Provisions" as set forth in Part 5(b)(4) will constitute an Additional Termination
Event and not an Event of Default.
(ii)An amendment and/or supplement to the PSA (or any other Transaction Document) is made without
the prior written consent of Party A where such consent is required to be obtained under the
PSA (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 impact the ability of, Party B to fully perform any of Party B's
obligations under this Agreement.
(iii) The delivery of any irrevocable notice of any termination (or the actual termination)
of the Supplemental Interest Trust pursuant to Section 11.01 of the PSA, provided, however,
that notwithstanding Section 6(b)(iv) of this Agreement, either party may designate an Early
Termination Date in respect of this Additional Termination Event.
(iv)Upon the occurrence of a Swap Disclosure Event (as defined in Part 5(u) below) Party A has not,
within 10 days after such Swap Disclosure Event, complied with any of the provisions set forth
in Part 5(u)(iii) below. For all purposes of this Agreement, Party A shall be the sole
Affected Party with respect to the occurrence of an Additional Termination Event described in
this Part 1(h)(iv).
Part 2
Tax Representations
(a) Payer Representations. For the purpose of Section 3(e) of this Agreement, neither Party A nor Party
B will make any representations.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement, neither Party A nor Party
B will make any representations.
Part 3
Agreement to Deliver Documents
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the
following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:- None
(b) Other documents to be delivered are:-
____________________________________________________________________________________________________________________________________________________________________
Party required to Form/Document/Certificate Date by which to be delivered Covered by Section 3(d)
deliver document Representation
____________________________________________________________________________________________________________________________________________________________________
Party A and Party B Certified copy of the board of directors resolution (or equivalent authorizing Concurrently with the Yes
documentation) which sets forth the authority of each signatory to this Agreement execution and delivery of
and each Credit Support Document (if any) signing on its behalf and the authority this Agreement.
of such party to enter into Transactions contemplated and performance of its
obligations hereunder.
____________________________________________________________________________________________________________________________________________________________________
Party A and Party B Incumbency certificate (or, if available the current authorized signature book or Concurrently with the Yes
equivalent authorizing documentation) specifying the names, titles, authority and execution and delivery of
specimen signatures of the persons authorized to execute this Agreement which this Agreement unless
sets forth the specimen signatures of each signatory to this Agreement, each previously delivered and
Confirmation and each Credit Support Document (if any) signing on its behalf. still in full force and
effect.
____________________________________________________________________________________________________________________________________________________________________
Party A An opinion of counsel to such party as to the enforceability of this Agreement Concurrently with the No
that is reasonably satisfactory in form and substance to the other party. execution and delivery of
the Confirmation unless
previously delivered and
still in full force and
effect.
____________________________________________________________________________________________________________________________________________________________________
Party B Such other information in connection with the Certificates or the PSA in the Promptly upon request. Yes
possession of Party B as Party A may reasonably request from time to time.
____________________________________________________________________________________________________________________________________________________________________
Party B A duly executed copy of the PSA. Upon finalizing the PSA. Yes
____________________________________________________________________________________________________________________________________________________________________
Part 4
Miscellaneous
(a) Addresses for Notices. For the purposes of Section 12(a) of this Agreement:
Party A:
(1) Address for notices or communications to Party A (other than by facsimile):-
Address: One Cabot Square Attention: (1) Head of Credit Risk Management;
Xxxxxx X00 0XX (2) Managing Director -
England Operations Department;
(3) Managing Director - Legal Department
Telex No.: 264521 Answerback: CSI G
(For all purposes.)
(2) For the purpose of facsimile notices or communications under this Agreement (other than a
notice or communication under Section 5 or 6):-
Facsimile No.: 44 20 7888 2686
Attention: Managing Director - Legal Department
Telephone number for oral confirmation of receipt of facsimile in legible form: 44 20 7888 2028
Designated responsible employee for the purposes of Section 12(a)(iii): Senior Legal Secretary
Party B:
Address for notices or communications to Party B:
Address: Xxxxx Fargo Bank Attention: Client Manager, CSFB ARMT 07-2
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000 0000 Facsimile No.: (000) 000 0000
(For all purposes.)
(b) Process Agent. For the purposes of Section 13(c) of this Agreement:
Party A appoints as its Process Agent:
Credit Suisse Securities (USA) LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Legal and Compliance Department
Party B appoints as its Process Agent: Not applicable.
(c) Offices. With respect to Party A, 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 not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A; provided, however, that if an Event of Default
shall have occurred with respect to Party A, the Depositor shall have the right to appoint as
Calculation Agent a third party, reasonably acceptable to Party A, the cost for which shall be
borne by Party A.
(f) Credit Support Document. Credit Support Document means:-
With respect to Party A: The Credit Support Annex and any guarantee that is provided to Party B
pursuant to Part 5(b) below.
With respect to Party B: The Credit Support Annex.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Not applicable or, if a guarantee is
provided to Party B pursuant to Part 5(b) below, the guarantor providing such guarantee.
Credit Support Provider means in relation to Party B: Not applicable.
(h) Governing Law. This Agreement and, to the fullest extent permitted by applicable law, all matters
arising out of or relating in any way to this Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to choice of law doctrine
other than New York General Obligations Law Sections 5-1401 and 5-1402).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will apply to each
Transaction hereunder.
(j) "Affiliate." "Affiliate" shall have the meaning specified in Section 14 of this Agreement,
provided, however, that Party B shall be deemed to have no Affiliates and, for purposes of Section
3(c) of this Agreement, Party A shall be deemed to have no Affiliates.
Part 5
Other Provisions
(a) Definitions.
Any capitalized terms used but not otherwise defined in this Agreement shall have the meanings
assigned to them (or incorporated by reference) in the PSA. In the event of any inconsistency
between the terms of this Agreement and the terms of the PSA, this Agreement will govern.
(b) Downgrade Provisions.
(1) It shall be a collateralization event (Collateralization Event) if:
(A) with respect to each Relevant Entity, so long as Xxxxx'x Investors Service, Inc.
(Xxxxx'x) is currently rating the Certificates and either (i) such Relevant Entity has both
a long-term and short-term rating by Moody's and (x) the unsecured, unguaranteed and
otherwise unsupported long-term senior debt obligations of such Relevant Entity are rated
"A3" or below by Moody's or (y) the unsecured, unguaranteed and otherwise unsupported
short-term debt obligations of such Relevant Entity are rated "P-2" or below by Moody's, or
(ii) no short-term rating is available from Moody's and the unsecured, unguaranteed and
otherwise unsupported long-term senior debt obligations of such Relevant Entity are rated
"A2" or below by Moody's (such event, a Moody's Collateralization Event); or
(B) Reserved;
(C) with respect to each Relevant Entity, if such entity is a bank, broker/dealer,
insurance company, structured investment vehicle or derivative product company (any such
entity, a Financial Institution), so long as Standard & Poor's Rating Services, a division
of The XxXxxx-Xxxx Companies, Inc. (S&P) is currently rating the Certificates and either
(i) the unsecured, unguaranteed and otherwise unsupported short-term debt obligations of
such Relevant Entity are rated "A-2" by S&P or (ii) if such Relevant Entity does not have a
short-term rating from S&P, the unsecured, unguaranteed and otherwise unsupported long-term
senior debt obligations of Party A are rated "A" or below by S&P (such event, an S&P
Collateralization Event).
Relevant Entity means (a) Party A, (b) any guarantor under an Eligible Guarantee in respect
of all of Party A's present and future obligations under this Agreement or (c) any rated
bank, broker/dealer or insurance company that is the parent of Party A if S&P determines
that Party A is core or strategically important to such parent entity.
(2) Without prejudice to Party A's obligations under the Credit Support Annex, during any period in
which a Collateralization Event is occurring, Party A shall, at its own expense, post
collateral according to the terms of the 1994 ISDA Credit Support Annex to this Schedule,
including Paragraph 13 thereof (the Credit Support Annex). To avoid the obligation to post
collateral in accordance with the CSA, Party A may, at any time, (i) furnish an Eligible
Guarantee (as defined below) of Party A's obligations under this Agreement from a guarantor
that satisfies the Hedge Counterparty Ratings Requirement (as defined herein), (ii) obtain a
substitute counterparty (and provide prior written notice to each Rating Agency with respect
thereto) that (a) is reasonably acceptable to Party B, (b) satisfies the Hedge Counterparty
Ratings Requirement and (c) assumes the obligations of Party A under this Agreement (through an
assignment and assumption agreement in form and substance reasonably satisfactory to Party B)
or replaces the outstanding Transactions hereunder with transactions on identical terms, except
that Party A shall be replaced as counterparty, provided that such substitute counterparty, as
of the date of such assumption or replacement, must not, as a result thereof, be required to
withhold or deduct on account of tax under the Agreement or the new transactions, as
applicable, and such assumption or replacement must not lead to a termination event or event of
default occurring in respect of the new transactions, as applicable, provided further, that (in
the case of an S&P Collateralization Event) satisfaction of the Rating Agency Condition in
relation to S&P shall be required for any transfer of any Transactions under this Part
5(b)(2)(ii) unless such transfer is in connection with the assignment and assumption of this
Agreement by such substitute counterparty without modification of its terms, other than the
following terms: party name, dates relevant to the effective date of such transfer, tax
representations (provided that the representations in Part 2(a) are not modified) and any other
representations regarding the status of the substitute counterparty of the type included in
Section (c) of this Part 5 and notice information (in which case, Party A shall provide written
notice to S&P with respect thereto) or (iii) in the case of an S&P Collateralization Event,
perform any other action which satisfies the Rating Agency Condition in relation to S&P.
Eligible Guarantee means an unconditional and irrevocable guarantee that is provided by a
guarantor as principal debtor rather than surety and that is directly enforceable by Party B,
the form and substance of which guarantee are subject to the Rating Agency Condition with
respect to each relevant Rating Agency other than Moody's, and either: (A) a law firm has given
a legal opinion confirming that none of the guarantor's payments to Party B under such
guarantee will be subject to deduction or withholding for Tax and such opinion has been
delivered to Moody's, (B) such guarantee provides that, in the event that any of such
guarantor's payments to Party B are subject to deduction or 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 tax) will equal the full amount Party B
would have received had no such deduction or withholding been required or (C) in the event that
any payment under such guarantee is made net of deduction or withholding for Tax, Party A is
required, under Section 2(a)(i), to make such additional payment as is necessary to ensure that
the net amount actually received by Party B from the guarantor and Party A will equal the full
amount Party B would have received had no such deduction or withholding been required.
An entity shall satisfy the Hedge Counterparty Ratings Requirement if (a) either (i) if the
entity is a Financial Institution, the unsecured, unguaranteed and otherwise unsupported
short-term debt obligations of the entity are rated at least "A-2" by S&P or, if the entity
does not have a short-term unsecured and unsubordinated debt rating from S&P, the unsecured,
unguaranteed and otherwise unsupported long-term senior debt obligations of the entity are
rated at least "BBB+" by S&P, or (ii) if such entity is not a Financial Institution, a
short-term unsecured and unsubordinated debt rating of "A-1" from S&P, or, if such entity does
not have a short-term unsecured and unsubordinated debt rating from S&P, a long-term unsecured
and unsubordinated debt rating or counterparty rating of "A+" from S&P; and (b) either (i) the
unsecured, unguaranteed and otherwise unsupported long-term senior debt obligations of such
entity are rated at least "A3" by Moody's and the unsecured, unguaranteed and otherwise
unsupported short-term debt obligations of such entity are rated at least "P-2" by Moody's (if
such entity has both a long-term and short-term rating from Moody's) or (ii) if such entity
does not have a short-term debt rating from Moody's, the unsecured, unguaranteed and otherwise
unsupported long-term senior debt obligations of such entity are rated at least "A3" by
Moody's. For the purpose of this definition, no direct or indirect recourse against one or more
shareholders of the entity (or against any Person in control of, or controlled by, or under
common control with, any such shareholder) shall be deemed to constitute a guarantee, security
or support of the obligations of the entity.
Rating Agency shall mean each of S&P and Xxxxx'x.
Rating Agency Condition means, with respect to any particular proposed act or omission to act
hereunder and each Rating Agency specified in connection with such proposed act or omission,
that the party acting or failing to act must consult with each of the specified Rating Agencies
and receive from each such Rating Agency a prior written confirmation that the proposed action
or inaction would not cause a downgrade or withdrawal of the then-current rating of any
Relevant Securities.
(3) It shall be a ratings event (Ratings Event) if at any time after the date hereof (A) so long as
S&P is currently rating the Certificates and either (i) if the Relevant Entity is a Financial
Institution, the unsecured, unguaranteed and otherwise unsupported long-term senior debt
obligations of each Relevant Entity are rated "BBB" or below by S&P or, (ii) the unsecured,
unguaranteed and otherwise unsupported short-term debt obligations of each Relevant Entity are
rated "A-3" or below by S&P (ii) if the Relevant Entity is not a Financial Institution, the
unsecured and unsubordinated short-term debt obligations of each Relevant Entity are rated
"A-2" or below from S&P, or, if such entity does not have a short-term unsecured and
unsubordinated debt rating from S&P, the long-term unsecured and unsubordinated debt
obligations are rated "A" or below by S&P or (iii) if at any time after the date hereof S&P
withdraws all of each Relevant Entity's ratings and no longer rates any Relevant Entity (such
event, an S&P Ratings Event), (B) so long as Xxxxx'x is currently rating the Certificates and
either (i) the unsecured, unguaranteed and otherwise unsupported long-term senior debt
obligations of each Relevant Entity are unrated or rated "Baa1" or below by Moody's (or such
rating is withdrawn) or (ii) the unsecured, unguaranteed and otherwise unsupported short-term
debt obligations of each Relevant Entity are unrated or rated "P-3" or below by Moody's (or
such rating is withdrawn) (such event, a Moody's Ratings Event).
(4) Following a Ratings Event, Party A shall take the following actions:
(a) in the case of an S&P Ratings Event, Party A, at its sole expense, shall (i) within 60
calendar days, subject to extension upon satisfaction of the Rating Agency Condition in
relation to S&P, of the Ratings Event, either (x) obtain a substitute counterparty (and
provide written notice to each Rating Agency with respect thereto), that (A) satisfies the
Hedge Counterparty Ratings Requirement and (B) assumes the obligations of Party A under
this Agreement (through an assignment and assumption agreement in form and substance
reasonably satisfactory to Party B) or replaces the outstanding Transactions hereunder with
transactions on identical terms, except that Party A shall be replaced as counterparty,
provided that such substitute counterparty, as of the date of such assumption or
replacement, must not, as a result thereof, be required to withhold or deduct on account of
tax under the Agreement or the new transactions, as applicable, and such assumption or
replacement must not lead to a termination event or event of default occurring in respect
of the new transactions, as applicable; provided further that satisfaction of the Rating
Agency Condition in relation to S&P shall be required within such 60 calendar days or
longer period, as applicable, for any transfer of any Transaction under this clause
(a)(i)(x) unless such transfer is in connection with the assignment and assumption of this
Agreement without modification of its terms by such counterparty, other than the following
terms: party name, dates relevant to the effective date of such transfer, tax
representations (provided that the representations in Part 2(a) are not modified) and any
other representations regarding the status of the substitute counterparty of the type
included in Section (c) of this Part 5 and notice information (in which case, Party A shall
provide prior written notice to S&P and the Supplemental Interest Trust Trustee with
respect thereto), (y) furnish an Eligible Guarantee of Party A's obligations under this
Agreement from a guarantor that satisfies paragraph (a) of the definition of Hedge
Counterparty Ratings Requirement or (z) perform any other action which satisfies the Rating
Agency Condition in relation to S&P and (ii) post collateral according to the terms of the
Credit Support Annex; and
(b) in the case of a Moody's Ratings Event, Party A, at its sole expense, shall use
commercially reasonable efforts to (i), as soon as reasonably practicable, (A) furnish an
Eligible Guarantee of Party A's obligations under this Agreement from a guarantor that
satisfies paragraph (b) of the definition of Hedge Counterparty Ratings Requirement or (B)
obtain a substitute counterparty (and provide prior written notice to each Rating Agency
with respect thereto) that (1) is reasonably acceptable to Party B, (2) satisfies the
paragraph (b) of the definition of Hedge Counterparty Ratings Requirement and (3) assumes
the obligations of Party A under this Agreement (through an assignment and assumption
agreement in form and substance reasonably satisfactory to Party B) or replaces the
outstanding Transactions hereunder with transactions on substantially the same terms,
including rating triggers, credit support documentation and other provisions of this
Agreement, except that Party A shall be replaced as counterparty, provided that such
substitute counterparty, as of the date of such assumption or replacement, must not, as a
result thereof, be required to withhold or deduct on account of tax under the Agreement or
the new transactions, as applicable, and such assumption or replacement must not lead to a
termination event or event of default occurring in respect of the new transactions, as
applicable and (ii) post collateral according to the terms of the Credit Support Annex.
Party A's failure to post collateral pursuant to Part 5(b)(4)(b)(ii) shall constitute an
Event of Default with Party A as the sole Affected Party. Party A's failure to act in a
commercially reasonable manner pursuant to Part 5(b)(4)(b)(i) shall constitute a Breach of
Agreement under Section 5(a)(ii).
(c) Section 3(a) of this Agreement is hereby amended to include the following additional
representations after paragraph 3(a)(v):
(vi) Eligible Contract Participant. It is an "eligible contract participant" as such term is
defined in Section 35.1 (b) (2) of the regulations (17 C.F.R. 35) promulgated under and as defined
in section 1a(12) of the U.S. Commodity Exchange Act, as amended.
(vii) Individual Negotiation. This Agreement and each Transaction hereunder is subject to
individual negotiation by the parties.
(viii) Relationship between Party A and Party B. Other than as provided in Part 5(f), each of Party
A and Party B will be deemed to represent to the other on the date on which it enters into a
Transaction or an amendment thereof that (absent a written agreement between Party A and Party B
that expressly imposes affirmative obligations to the contrary for that Transaction):
(1) Capacity. Party A represents to Party B on the date on which Party A enters into this
Agreement that it is entering into the Agreement and the Transaction as principal and not as
agent of any person. Party B represents to Party A on the date on which Party B enters into
this Agreement it is entering into the Agreement and the Transaction in its capacity as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust created under
the Pooling and Servicing Agreement in respect of the Adjustable Rate Mortgage Trust 2007-2.
(2) Non-Reliance. Party A is acting for its own account and with respect to Party B, the
Supplemental Interest Trust Trustee has been directed under the Pooling and Servicing Agreement
to execute this Agreement solely as Supplemental Interest Trust Trustee on behalf of the
Supplemental Interest Trust created under the Pooling and Servicing Agreement in respect of the
Adjustable Rate Mortgage Trust 2007-2. Each of Party A and the Supplemental Interest Trust has
made its own independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon advice from
such advisors as it has deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation to enter into that
Transaction; it being understood that information and explanations related to the terms and
conditions of a Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. No communication (written or oral) received from the other party
shall be deemed to be an assurance or guarantee as to the expected results of that Transaction.
(3) Evaluation and Understanding. It is capable of evaluating and understanding (on its
own behalf or through independent professional advice), and understands and accepts, the terms,
conditions and risks of this Agreement and each Transaction hereunder. It is also capable of
assuming, and assumes, all financial and other risks of this Agreement and each Transaction
hereunder.
(4) Status of Parties. The other party is not acting as a fiduciary or an advisor for it
in respect of that Transaction.
(d) Section 4 is hereby amended by adding the following new agreement:
Actions Affecting Representations. Party B agrees not to take any action during the term of this
Agreement or any Transaction hereunder that renders or could render any of the representations and
warranties in this Agreement untrue, incorrect, or incomplete, and, if any event or condition
occurs that renders or could render any such representation untrue, incorrect, or incomplete, Party
B will immediately give written notice thereof to Party A upon obtaining actual knowledge of such
action.
(e) Transfer.
(i) Section 7 is hereby amended to read in its entirety as follows:
"Except as stated under Section 6(b)(ii), provided that to the extent Party A makes a transfer
pursuant to Section 6(b)(ii) it will provide a prior written notice to the Rating Agencies of
such transfer, neither Party A nor Party B is permitted to assign, novate or transfer (whether
by way of security or otherwise) as a whole or in part any of its rights, obligations or
interests under this Agreement or any Transaction without the prior written consent of the
other party; provided, however, that (i) Party A may make such a transfer of this Agreement
pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of
substantially all of its assets to, another entity, or an incorporation, reincorporation or
reconstitution, and (ii) Party A may transfer this Agreement to any Person that is an office,
branch or affiliate of Party A (any such Person, office, branch or affiliate, a Transferee) on
at least five Business Days' prior written notice to Party B; provided that, with respect to
clause (ii), (A) as of the date of such transfer the Transferee will not be required to
withhold or deduct on account of a Tax from any payments under this Agreement unless the
Transferee will be required to make payments of additional amounts pursuant to Section
2(d)(i)(4) of this Agreement in respect of such Tax; (B) a Termination Event or Event of
Default does not occur under this Agreement as a result of such transfer; (C) such notice is
accompanied by a written instrument pursuant to which the Transferee acquires and assumes the
rights and obligations of Party A so transferred; and (D) Party A will be responsible for any
costs or expenses incurred in connection with such transfer. Notwithstanding the foregoing, no
transfer shall be made unless the transferring party obtains a written acknowledgment from each
of the Rating Agencies other than Moody's that, notwithstanding such transfer, the then-current
ratings of the Certificates will not be reduced or withdrawn, provided, however, that this
provision shall not apply to any transfer that is made pursuant to the provisions of Part 5(b)
of this Agreement.
Except as specified otherwise in the documentation evidencing a transfer, a transfer of all the
obligations of Party A made in compliance with this Section 7 will constitute an acceptance and
assumption of such obligations (and any related interests so transferred) by the Transferee, a
novation of the transferee in place of Party A with respect to such obligations (and any
related interests so transferred), and a release and discharge by Party B of Party A from, and
an agreement by Party B not to make any claim for payment, liability, or otherwise against
Party A with respect to, such obligations from and after the effective date of the transfer.
In addition, Party A may transfer this Agreement without the prior written consent of Party B
but with prior written notice to S&P and the Supplemental Interest Trust Trustee, to an
Affiliate of Party A that (i) satisfies the Hedge Counterparty Rating Requirements or that has
furnished a guarantee, subject to Rating Agency Condition in relation to S&P, of the
obligations under this Agreement from a guarantor that satisfies the Hedge Counterparty Rating
Requirements and (ii) as of the date of such transfer such Affiliate will not be required to
withhold or deduct on account of a Tax from any payments under this Agreement unless such
Affiliate will be required to make payments of additional amounts pursuant to Section
2(d)(i)(4) of this Agreement in respect of such Tax; provided that satisfaction of the Rating
Agency Condition in relation to S&P will be required unless such transfer is in connection with
the assignment and assumption of this Agreement by such an Affiliate without modification of
its terms, other than the following terms: party name, dates relevant to the effective date of
such transfer, tax representations (provided that the representations in Part 2(a) are not
modified) and any other representations regarding the status of such an Affiliate the
substitute counterparty of the type included in Section (c) of this Section 7 and notice
information (in which case, Party A shall provide written notice to S&P with respect thereto).
Party B will execute such documentation as is reasonably deemed necessary by Party A for the
effectuation of any transfer under this Section 7."
(ii) If an Eligible Replacement has made a Firm Offer (which means an offer that will become
legally binding upon acceptance by Party B) to be the transferee pursuant to a transfer under
Part 5(b), Party B shall, at Party A's written request and at Party A's expense, take any
reasonable steps required to be taken by Party B to effect such transfer.
(f) Supplemental Interest Trust Trustee Capacity. It is expressly understood and agreed by the parties
hereto that (i) this Agreement is executed and delivered by Xxxxx Fargo Bank, N.A. (the
"Supplemental Interest Trust Trustee") not in its individual or corporate capacity but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust created under the
Pooling and Servicing Agreement for the Adjustable Rate Mortgage Trust 2007-2 (the "Supplemental
Interest Trust"), in the exercise of the powers and authority conferred and vested in it under the
PSA, (ii) each of the representations, undertakings and agreements herein made on the part of the
Supplemental Interest Trust is made and intended not as personal representations, undertakings and
agreements by the Supplemental Interest Trust Trustee but is made and intended for the purpose of
binding only the Supplemental Interest Trust, (iii) nothing herein contained shall be construed as
creating any liability on the part of the Supplemental Interest Trust Trustee, individually or
personally, to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any Person claiming by,
through or under the parties hereto and (iv) under no circumstances shall the Supplemental Interest
Trust Trustee be personally liable for the payment of any indebtedness or expenses of the
Supplemental Interest Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Supplemental Interest Trust under
this Agreement or any other related documents as to all of which recourse shall be had solely to
the assets of the Supplemental Interest Trust in accordance with the terms of the PSA.
(g) Proceedings. No Relevant Entity shall institute against, or cause any other person to institute
against, or join any other person in instituting against Party B or the trust or supplemental
interest trust created pursuant to the PSA any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings under any federal or state bankruptcy, dissolution
or similar law, for a period of one year and one day, or if longer the applicable preference period
then in effect, following payment in full of the Certificates. Nothing shall preclude, or be
deemed to stop, a Relevant Entity (i) from taking any action prior to the expiration of the
aforementioned one year and one day period, or if longer the applicable preference period then in
effect, in (A) any case or proceeding voluntarily filed or commenced by Party B or the trust, as
applicable or (B) any involuntary insolvency proceeding filed or commenced by a Person other than
Party A, (ii) from commencing against Party B or any of the Mortgage Loans any legal action which
is not a bankruptcy, reorganization, arrangement, insolvency, moratorium, liquidation or similar
proceeding or (iii) from taking any action (not otherwise mentioned in this paragraph) which will
prevent an impairment of any right afforded to it under the PSA as a third party beneficiary. This
provision shall survive termination of this Agreement.
(h) Change of Account. Section 2(b) of this Agreement is hereby amended by the addition of the
following after the word "delivery" in the first line thereof:-
"to another account in the same legal and tax jurisdiction as the original account"
(i) Pooling and Servicing Agreement. Party B, will provide at least ten days' prior written notice to
Party A of any proposed amendment or modification to the PSA (to the extent that such party has
actual knowledge of such amendment or modification) and Party B will obtain the prior written
consent of Party A (such consent not to be unreasonably withheld) to any such amendment or
modification: (x) where such consent is required under the terms of the PSA; or (y) if such
amendment or modification would: (i) adversely affect any of Party A's rights or obligations under
this Agreement, as determined by Party A; or (ii) modify the obligations of, or impact the ability
of, Party B to fully perform any of Party B's obligations under this Agreement.
(j) No Set-off. Except as expressly provided for in Section 2(c), Section 6 hereof, Part 5(y)(vi)
below or paragraphs 8(a) or 8(b) of the Credit Support Annex, and notwithstanding any other
provision of this Agreement or any other existing or future agreement, each party irrevocably
waives any and all rights it may have to set off, net, recoup or otherwise withhold or suspend or
condition payment or performance of any obligation between it and the other party hereunder against
any obligation between it and the other party under any other agreements. Section 6(e) shall be
amended by deleting the following sentence: "The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to any Set-off.".
(k) Notice of Certain Events or Circumstances. Each party agrees, upon learning of the occurrence or
existence of any event or condition that constitutes (or that with the giving of notice or passage
of time or both would constitute) an Event of Default or Termination Event with respect to such
party, promptly to give the other party notice of such event or condition (or, in lieu of giving
notice of such event or condition in the case of an event or condition that with the giving of
notice or passage of time or both would constitute an Event of Default or Termination Event with
respect to the party, to cause such event or condition to cease to exist before becoming an Event of
Default or Termination Event); provided that failure to provide notice of such event or condition
pursuant to this Part 5(k) shall not constitute an Event of Default or a Termination Event.
(l) Regarding Party A. Party B acknowledges and agrees that Party A has had and will have no
involvement in and, accordingly Party A accepts no responsibility for: (i) the establishment,
structure, or choice of assets of Party B; (ii) the selection of any person performing services for
or acting on behalf of Party B; (iii) the selection of Party A as the counterparty (other than Party
A's submission of a bid in connection therewith); (iv) the terms of the Certificates; (v) the
preparation of or passing on the disclosure and other information contained in any offering circular
for the Certificates, the PSA, or any other agreements or documents used by Party B or any other
party in connection with the marketing and sale of the Certificates (other than information provided
in writing by Party A for purposes of the disclosure document relating to the Certificates); (vi)
the ongoing operations and administration of Party B, including the furnishing of any information to
Party B which is not specifically required under this Agreement; or (vii) any other aspect of Party
B's existence.
(m) Rating Agency Approval on Amendment. In addition to the requirements of Section 9, this Agreement
will not be amended unless Party B shall have obtained satisfaction of the Rating Agency Approval
Condition with respect to each Rating Agency.
(n) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the second line of subparagraph
(i) thereof the word "non-": and (ii) deleting the final paragraph thereof.
(o) Limited Recourse. Notwithstanding any provision herein or in the ISDA Master Agreement to the
contrary, the obligations of Party B hereunder are limited recourse obligations of Party B, payable
solely from the Supplemental Interest Trust assets, in accordance with the terms of the PSA. In the
event that the Supplemental Interest Trust assets should be insufficient to satisfy all claims
outstanding and following the realization of the Supplemental Interest Trust assets, any claims
against or obligations of Party B under the ISDA Master Agreement or any other confirmation
thereunder still outstanding shall be extinguished and thereafter not revive. The Supplemental
Interest Trust Trustee shall not have liability for any failure or delay in making a payment
hereunder to Party A due to any failure or delay in receiving amounts from the Supplemental Interest
Trust created pursuant to the PSA.
(p) Reserved.
(q) Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any suit, action or proceeding relating to this
Agreement or any Credit Support Document. Each party certifies (i) that no representative, agent
or attorney of the other party or any Credit Support Provider has represented, expressly or
otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek
to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced
to enter into this Agreement and provide for any Credit Support Document, as applicable, by, among
other things, the mutual waivers and certifications in this Section.
(r) Consent to Recording. Each party (i) consents to the recording of the telephone conversations of
trading and marketing personnel of the parties and their Affiliates in connection with this
Agreement or any potential transaction and (ii) if applicable, agrees to obtain any necessary
consent of, and give notice of such recording to, such personnel of it and its Affiliates.
(s) Severability. If any term, provision, covenant, or condition of this Agreement, or the application
thereof to any party or circumstance, shall be held to be illegal, invalid or unenforceable (in
whole or in part) for any reason, the remaining terms, provisions, covenants and conditions hereof
shall continue in full force and effect as if this Agreement had been executed with the illegal,
invalid or unenforceable portion eliminated, so long as this Agreement as so modified continues to
express, without material change, the original intentions of the parties as to the subject matter
of this Agreement and the deletion of such portion of this Agreement will not substantially impair
the respective benefits or expectations of the parties to this Agreement.
(t) Escrow Payments. If (whether by reason of the time difference between the cities in which payments
or deliveries are to be made or otherwise) it is not possible for simultaneous payments or
deliveries to be made on any date on which both parties are required to make payments or deliveries
hereunder, either party may at its option and in its sole discretion notify the other party (Section
2(b) of this Agreement notwithstanding) that payments or deliveries on that date are to be made in
escrow (such party being the Appointing Party). In this case, deposit of the payment or delivery
due earlier on that date will be made by 2:00 pm (local time at the place for the earlier payment or
delivery) on that date with an escrow agent selected by the Appointing Party, accompanied by
irrevocable payment or delivery instructions (i) to release the deposited payment or delivery to the
intended recipient upon receipt by the escrow agent of the required deposit of the corresponding
payment or delivery from the other party on the same date accompanied by irrevocable payment or
delivery instructions to the same effect, or (ii) if the required deposit of the corresponding
payment or delivery is not made on that same date, to return the payment or delivery deposited to
the party that paid or delivered it into escrow. The Appointing Party will pay all costs of the
escrow arrangements. The Appointing Party will bear the risk of any failure of the bank it
nominates to be its escrow agent to fully and promptly perform the obligations of such escrow agent
as contemplated in this Part 5(t) Any amounts payable or deliveries to be made under this Agreement
by the Appointing Party which are not received by the other party hereto on the due date will remain
due and payable or to be made by the Appointing Party as of such date (assuming timely payment or
delivery on the due date of amounts payable or deliveries to be made by the other party hereto).
Any amounts or deliveries due from the other party, which have been paid or delivered to the escrow
agent in accordance with this Part 5(t) (and any instructions in connection therewith given to the
other party by the Appointing Party) shall be treated as having been paid or delivered by such other
party and received by the Appointing Party as of the date on which they were paid or delivered to
the Appointing Party's escrow agent. The Appointing Party shall cause the escrow arrangements to
provide that the other party shall be entitled to interest on any payment due to be deposited first
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 to the other party 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 under this paragraph in a timely fashion..
(u) Compliance with Regulation AB.
(i) Party A agrees and acknowledges that Depositor ("Depositor") is required under Regulation AB
under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended
(the "Exchange Act") ("Regulation AB"), to disclose certain information regarding Party A or its
group of affiliated entities, if applicable, depending on the aggregate "significance percentage"
under this Agreement and any other derivative contracts between Party A or its group of affiliated
entities, if applicable, and Party B, as calculated from time to time in accordance with Item 1115
of Regulation AB.
(ii)It shall be a swap disclosure event ("Swap Disclosure Event") if, on any Business Day during
the term of the Transaction hereunder, Depositor requests (in writing) from Party A the applicable
financial information described in Item 1115 of Regulation AB (such request to be based on a
reasonable determination by Depositor, in good faith, that such information is required under
Regulation AB as a result of the aggregate "significance percentage" exceeding 10%) (the "Swap
Financial Disclosure").
(iii) Upon the occurrence of a Swap Disclosure Event, Party A, at its own expense, shall (a)
provide to Depositor the Swap Financial Disclosure, (b) secure another entity to replace Party A as
party to this Agreement on terms substantially similar to this Agreement and subject to prior
notification to the Rating Agencies, provided, that satisfaction of the Rating Agency Condition in
relation to S&P shall be required for any transfer of any Transactions under this clause (iii)
unless such transfer is in connection with the assignment and assumption of this Agreement by such
substitute counterparty without modification of its terms, other than the following terms: party
name, dates relevant to the effective date of such transfer, tax representations (provided that the
representations in Part 2(a) are not modified) and any other representations regarding the status of
the substitute counterparty of the type included in Section (c) of this Part 5 and notice
information (in which case, Party A shall provide written notice to S&P with respect thereto), which
entity (or a guarantor therefor) meets or exceeds the Hedge Counterparty Ratings Requirement and
which entity is able to comply with the financial information disclosure requirements of Item 1115
of Regulation AB or (c) obtain a guaranty of the Party A's obligations under this Agreement from an
affiliate of the Party A that is able to comply with the financial information disclosure
requirements of Item 1115 of Regulation AB, such that disclosure provided in respect of the
affiliate will satisfy any disclosure requirements applicable with respect to the Counterparty, and
cause such affiliate to provide Swap Financial Disclosure. If permitted by Regulation AB, any
required Swap Financial Disclosure may be provided by incorporation by reference from reports filed
pursuant to the Exchange Act.
(v) Third Party Beneficiary.
Depositor shall be an express third party beneficiary of this Agreement as if a party hereto to the
extent of the Depositor's rights explicitly specified herein.
(w) Credit Support Default. Section 5(a)(iii)(1) of this Agreement is hereby deleted and replaced with
the following:
"(1) The occurrence of an Event of Default under any Credit Support Document if such Event of
Default is continuing after any applicable grace period has elapsed;"
(x) Tax. 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.
(y) Calculations. Notwithstanding Section 6 of this Agreement, so long as Party A is (A) the sole
Affected Party (other than pursuant to an Illegality or Tax Event) or (B) the Defaulting Party in
respect of any Event of Default, Market Quotation and paragraphs (i) to (vii) below will apply:
(i) 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 may be solicited by either Party A or Party B) 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 (which agreement includes an indemnification agreement reasonably
acceptable to the Depositor) to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for Party B the economic equivalent of any payment or
delivery (whether the underlying obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) by the parties under this Agreement 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 terms that are, in all material
respects, no less beneficial for Party B than those of this Agreement (save for the exclusion
of provisions relating to Transactions that are not Terminated Transactions), as determined
by Party B."
(ii) In determining whether or not a Firm Offer satisfies the condition in sub-paragraph (4) of
Market Quotation, Party B shall act in a commercially reasonable manner.
(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:
(1) if, on or prior to such Early Termination Date, a Market Quotation for the relevant
Terminated Transaction or group of Terminated Transactions is accepted by Party B or the
Depositor (on its behalf) so as to become legally binding, the Termination Currency
Equivalent of the amount (whether positive or negative) of such Market Quotation;
(2) if, on such Early Termination Date, no Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions has been accepted by Party B or the Depositor
(on its behalf) so as to become legally binding and one or more Market Quotations have been
communicated to Party B or the Depositor (on its behalf) and remain capable of becoming
legally binding upon acceptance by Party B or the Depositor (on its behalf), the Termination
Currency Equivalent of the amount (whether positive or negative) of the lowest of such Market
Quotations (for the avoidance of doubt, (i) a Market Quotation expressed as a negative number
is lower than a Market Quotation expressed as a positive number and (ii) the lower of two
Market Quotations expressed as negative numbers is the one with the largest absolute value);
or
(3) if, on such Early Termination Date, no Market Quotation for the relevant Terminated
Transaction or group of Terminated Transactions is accepted by Party B or the Depositor (on
its behalf) so as to become legally binding and no Market Quotations have been communicated
to Party B or the Depositor (on its behalf) and remain capable of becoming legally binding
upon acceptance by Party B or the Depositor (on its behalf), 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) At any time on or before the Early Termination Date at which two or more Market Quotations
have been communicated to Party B or the Depositor (on its behalf) and remain capable of becoming
legally binding upon acceptance by Party B or the Depositor (on its behalf), Party B or the
Depositor (on its behalf) shall be entitled to accept only the lowest of such Market Quotations
(for the avoidance of doubt, (i) a Market Quotation expressed as a negative number is lower than a
Market Quotation expressed as a positive number and (ii) the lower of two Market Quotations
expressed as negative numbers is the one with the largest absolute value).
(v) If Party B or the Depositor (on its behalf) requests Party A in writing to obtain Market
Quotations, Party A shall use reasonable efforts to do so before the Early Termination Date.
(vi) 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 against any amount payable by Party B under (1)."
(vii) For purposes of this Part 5(y),
"Eligible Replacement" means an entity (A) satisfying the Hedge Counterparty Ratings Requirement
or (B) whose present and future obligations owing to Party B are guaranteed pursuant to a
guarantee provided by a guarantor satisfying the Hedge Counterparty Ratings Requirements.
"Firm Offer" means an offer which, when made, was capable of becoming legally binding upon
acceptance.
(z) Rating Agency Notifications. Notwithstanding any other provision of this Agreement, this Agreement
shall not be amended, no Early Termination Date shall be effectively designated by Party B, and no
transfer of any rights or obligations under this Agreement shall be made (other than a transfer of
all of Party A's rights and obligations with respect to this Agreement in accordance with Part 5(e)
above) unless each Rating Agency has been given prior written notice of such amendment, designation
or transfer.
(aa) Applicable Rating Agency. Rating triggers and other Rating Agency-related provisions herein apply
only for so long as that particular Rating Agency is rating the certificates.
(bb) Timing of Payments by Party B upon Early Termination. Notwithstanding anything to the contrary in
Section 6(d)(ii), to the extent that all or a portion (in either case, the "Unfunded Amount") of
any amount that is calculated as being due in respect of any Early Termination Date under Section
6(e) from Party B to Party A will be paid by Party B from amounts other than any upfront payment
paid to Party B by an Eligible Replacement that has entered a Replacement Transaction with Party B,
then such Unfunded Amount shall be due on the next subsequent Distribution Date following the date
on which the payment would have been payable as determined in accordance with Section 6(d)(ii), and
on any subsequent Distribution Dates until paid in full (or if such Early Termination Date is the
final Distribution Date, on such final Distribution Date); provided, however, that if the date on
which the payment would have been payable as determined in accordance with Section 6(d)(ii) is a
Distribution Date, such payment will be payable on such Distribution Date.
(cc) 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 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" and a "swap participant" as defined in the
Code;
(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;
(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/or "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/or "payment" within the
meaning of Sections 362, 560 and 561 of the Code.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties have executed this document by their duly authorized officers with
effect from the date so specified on the first page hereof.
XXXXX FARGO BANK, N.A., not in its individual or corporate capacity
but solely as Supplemental Interest Trust Trustee on behalf of the
Supplemental Interest Trust created under the Pooling and Servicing
CREDIT SUISSE INTERNATIONAL Agreement for the Adjustable Rate Mortgage Trust 2007-2
By:________________________________________________ By: _________________________________________________
Name: Name:
Title: Title:
By:________________________________________________
Name:
Title:
CREDIT SUISSE INTERNATIONAL
One Cabot Square, Telephone 000 0000 0000
Xxxxxx X00 0XX xxx.xxxxxx-xxxxxx.xxx
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
One Cabot Square, Telephone 000 0000 0000
Xxxxxx X00 0XX xxx.xxxx.xxx
Facsimile Cover Sheet
To: Xxxxx Fargo Bank, N.A., not in its individual or corporate capacity but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
created under the Pooling and Servicing Agreement for the Adjustable Rate Mortgage
Trust 2007-2
Attention: Xxxxxxxx Xxxxx, CSIN Marketer
Fax number: To be hand delivered by Xxxxxxxx Xxxxx
Date: 30 May 2007
Pages (including cover page): 8
Our Reference No: External ID: 53229255N3 / Risk ID: 447812594
Credit Suisse International has entered into a transaction with you as attached. Please find attached a letter
agreement (the "Confirmation") which confirms the terms and conditions of the above transaction.
If you agree with the terms specified therein, please arrange for the Confirmation to be signed by your
authorised signatories and return a signed copy to this office to the facsimile listed below.
For Interest Rate Products: For Equity Derivatives:
Telephone Numbers: (000) 000-0000 Telephone numbers: (000) 000-0000 /
Facsimile number: (000) 000-0000 (000) 000-0000 / (000) 000-0000
Email: xxxx.xxx-xxx-xxxxxx-xx@xxxxxx-xxxxxx.xxx Facsimile number: (000) 000-0000
For Credit Derivatives:
Telephone Numbers: (000) 000-0000
Facsimile number: (000) 000-0000
Email: xxxx.xxx-xxx-xxxxxx-xx@xxxxxx-xxxxxx.xxx
We are delighted to have entered into this transaction with you.
CONFIDENTIALITY NOTICE: This facsimile is intended only for the use of the individual or entity to which it is
addressed and may contain information which is privileged and confidential. If the reader of this message is not
the intended recipient or an employee or agent responsible for delivering the message to the intended recipient,
you are hereby notified that any dissemination, distribution or copying of this communication is strictly
prohibited. If you have received this communication in error, please notify us immediately by telephone and
return the original message to us by mail. Thank you.
CREDIT SUISSE INTERNATIONAL
One Cabot Square, Telephone 000 0000 0000
Xxxxxx X00 0XX xxx.xxxxxx-xxxxxx.xxx
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
One Cabot Square, Telephone 000 0000 0000
Xxxxxx X00 0XX xxx.xxxx.xxx
30 May 2007
Xxxxx Fargo Bank, N.A., not in its individual or corporate capacity but solely as Supplemental Interest Trust
Trustee on behalf of the Supplemental Interest Trust created under the Pooling and Servicing Agreement for the
Adjustable Rate Mortgage Trust 2007-2
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Client Manager - CSFB ARMT 2007-2
Fax: 000-000-0000
External ID: 53229255N3
___________________________________________________________________________
Dear Sirs,
The purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the
Transaction entered into between us on the Trade Date specified below (the "Transaction"). This Confirmation
constitutes a "Confirmation" as referred to in the Agreement specified below.
In this Confirmation "CSIN" means Credit Suisse International and "Counterparty" means Xxxxx Fargo Bank,
N.A., not in its individual or corporate capacity but solely as Supplemental Interest Trust Trustee on behalf of
the Supplemental Interest Trust created under the Pooling and Servicing Agreement for the Adjustable Rate
Mortgage Trust 2007-2.
1. The definitions and provisions contained in the 2000 ISDA Definitions (as published by the International
Swaps and Derivatives Association, Inc.) are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation, this Confirmation will
govern. References herein to a "Transaction" shall be deemed to be references to a "Swap Transaction"
for the purposes of the 2000 ISDA Definitions.
This Confirmation supplements, forms part of, and is subject to, the 1992 ISDA Master Agreement dated as
of 30 May 2007 as amended and supplemented from time to time (the "Agreement"), between you and us. All
provisions contained in the Agreement govern this Confirmation except as expressly modified below.
CSIN and Counterparty each represents to the other that it has entered into this Swap Transaction in
reliance upon such tax, accounting, regulatory, legal, and financial advice as it deems necessary and
not upon any view expressed by the other.
2 The terms of the particular Transaction to which this Confirmation relates are as follows:
Transaction Type: Interest Rate Swap
Notional Amount: USD 466,545,000.00 subject to amortization as set out in
the Additional Terms
Trade Date: 21 May 2007
Effective Date: 30 May 2007
Termination Date: 25 March 2012
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Period End Dates: The 25th day of each month, commencing on 25 June 2007,
and ending on the Termination Date, in each case subject
to No Adjustment.
Fixed Rate Payer
Payment Dates: One Business Day prior to the Fixed Rate Payer Period End
Date.
Initial Fixed Rate Payer
Calculation Period: From and including 30 May 2007 up to but excluding 25 June
2007.
Fixed Rate: 5.196% per annum.
Fixed Rate
Day Count Fraction: 30/360
Floating Amounts
Floating Rate Payer: CSIN
Floating Rate Payer
Period End Dates: The 25th day of each month, commencing on 25 June 2007,
and ending on the Termination Date, in each case subject
to adjustment in accordance with the Following Business
Day Convention.
Floating Rate Payer
Payment Dates: One Business Day prior to the Fixed Rate Payer Period End
Date.
Initial Floating Rate
Payer Calculation Period: From and including 30 May 2007 up to but excluding 25 June
2007.
Floating Rate Option: USD-LIBOR-BBA, provided, however, that in respect of the
Initial Floating Rate Payer Calculation Period, Linear
Interpolation shall apply based upon a Designated Maturity
of 2 weeks and a Designated Maturity of 1 month.
Designated Maturity: 1 month (except as noted above)
Spread: None
Floating Rate
Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period, commencing on 30
May 2007.
Compounding: Inapplicable
Business Day: New York
Calculation Agent: CSIN
3. Account Details:
Payments to CSIN: As advised separately in writing
Payments to Counterparty: Xxxxx Fargo Bank, N.A.
ABA: 000000000
Account Name: SAS Clearing
Account Number: 0000000000
FFC: 53141201, CSFB ARMT 07-2 Supplemental Interest Account
For the purpose of facilitating this Transaction, an Affiliate of CSIN, which is organized in the United
States of America (the "Agent"), has acted as agent for CSIN. The Agent is not a principal with respect
to this Transaction and shall have no responsibility or liability to the parties as a principal with
respect to this Transaction.
Credit Suisse International is authorised and regulated by the Financial Services Authority and has
entered into this transaction as principal. The time at which the above transaction was executed will
be notified to Counterparty on request.
ADDITIONAL TERMS
_________________________________________________________________________________________________________
Calculation Period up to but excluding the Period End Date Notional (USD):
subject to adjustment in accordance with the Following
Business Day Convention with respect to Floating Rate Payer
Period End Dates occurring on:
_________________________________________________________________________________________________________
25-Jun-07 466,545,000.00
_________________________________________________________________________________________________________
25-Jul-07 455,133,494.61
_________________________________________________________________________________________________________
25-Aug-07 442,686,878.82
_________________________________________________________________________________________________________
25-Sep-07 429,460,243.40
_________________________________________________________________________________________________________
25-Oct-07 415,503,270.33
_________________________________________________________________________________________________________
25-Nov-07 400,870,852.63
_________________________________________________________________________________________________________
25-Dec-07 385,623,454.35
_________________________________________________________________________________________________________
25-Jan-08 369,869,380.13
_________________________________________________________________________________________________________
25-Feb-08 353,681,891.67
_________________________________________________________________________________________________________
25-Mar-08 337,121,753.84
_________________________________________________________________________________________________________
25-Apr-08 320,593,377.96
_________________________________________________________________________________________________________
25-May-08 305,166,709.86
_________________________________________________________________________________________________________
25-Jun-08 290,730,213.30
_________________________________________________________________________________________________________
25-Jul-08 277,180,753.02
_________________________________________________________________________________________________________
25-Aug-08 264,475,367.10
_________________________________________________________________________________________________________
25-Sep-08 252,551,805.10
_________________________________________________________________________________________________________
25-Oct-08 241,370,564.83
_________________________________________________________________________________________________________
25-Nov-08 230,940,833.74
_________________________________________________________________________________________________________
25-Dec-08 221,149,152.12
_________________________________________________________________________________________________________
25-Jan-09 211,781,326.31
_________________________________________________________________________________________________________
25-Feb-09 202,862,119.33
_________________________________________________________________________________________________________
25-Mar-09 194,337,200.14
_________________________________________________________________________________________________________
25-Apr-09 186,192,352.07
_________________________________________________________________________________________________________
25-May-09 178,407,602.98
_________________________________________________________________________________________________________
25-Jun-09 170,963,232.97
_________________________________________________________________________________________________________
25-Jul-09 163,813,661.45
_________________________________________________________________________________________________________
25-Aug-09 156,998,833.03
_________________________________________________________________________________________________________
25-Sep-09 150,472,055.62
_________________________________________________________________________________________________________
25-Oct-09 144,219,987.35
_________________________________________________________________________________________________________
25-Nov-09 138,231,367.04
_________________________________________________________________________________________________________
25-Dec-09 132,493,643.43
_________________________________________________________________________________________________________
25-Jan-10 126,996,098.58
_________________________________________________________________________________________________________
25-Feb-10 121,726,781.61
_________________________________________________________________________________________________________
25-Mar-10 116,533,875.96
_________________________________________________________________________________________________________
25-Apr-10 111,378,225.42
_________________________________________________________________________________________________________
25-May-10 106,428,063.57
_________________________________________________________________________________________________________
25-Jun-10 101,778,715.48
_________________________________________________________________________________________________________
25-Jul-10 97,313,849.73
_________________________________________________________________________________________________________
25-Aug-10 93,054,845.51
_________________________________________________________________________________________________________
25-Sep-10 88,978,350.60
_________________________________________________________________________________________________________
25-Oct-10 85,081,724.42
_________________________________________________________________________________________________________
25-Nov-10 81,351,214.35
_________________________________________________________________________________________________________
25-Dec-10 77,778,555.34
_________________________________________________________________________________________________________
25-Jan-11 74,356,742.01
_________________________________________________________________________________________________________
25-Feb-11 71,079,128.47
_________________________________________________________________________________________________________
25-Mar-11 67,939,631.93
_________________________________________________________________________________________________________
25-Apr-11 64,935,918.25
_________________________________________________________________________________________________________
25-May-11 62,058,201.70
_________________________________________________________________________________________________________
25-Jun-11 59,300,398.68
_________________________________________________________________________________________________________
25-Jul-11 56,657,274.87
_________________________________________________________________________________________________________
25-Aug-11 54,123,700.91
_________________________________________________________________________________________________________
25-Sep-11 51,694,938.33
_________________________________________________________________________________________________________
25-Oct-11 49,369,343.45
_________________________________________________________________________________________________________
25-Nov-11 47,140,211.75
_________________________________________________________________________________________________________
25-Dec-11 45,002,743.29
_________________________________________________________________________________________________________
25-Jan-12 42,952,827.10
_________________________________________________________________________________________________________
25-Feb-12 40,899,091.93
_________________________________________________________________________________________________________
25-Mar-12 38,431,106.84
_________________________________________________________________________________________________________
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this
Confirmation enclosed for that purpose and returning it to us.
Yours faithfully,
Credit Suisse International
By:_____________________________
Name:
Title:
Confirmed as of the date first written above:
Xxxxx Fargo Bank, N.A., not in its individual or corporate capacity but solely as Supplemental Interest Trust
Trustee on behalf of the Supplemental Interest Trust created under the Pooling and Servicing Agreement for the
Adjustable Rate Mortgage Trust 2007-2
By:________________________________
Name:
Title:
Our Reference No: External ID: 53229255N3 / Risk ID: 447812594
Elections and Variables
to the ISDA Credit Support Annex
dated as of May 30, 2007
between
XXXXX FARGO BANK, N.A., not in its individual or corporate capacity but solely
CREDIT SUISSE INTERNATIONAL and as Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust created under the Pooling and Servicing Agreement for the Adjustable Rate
Mortgage Trust 2007-2
_______________________________________ _________________________________________
("Party A") ("Party B")
Paragraph 13.
(a) Security Interest for "Obligations".
The term "Obligations" as used in this Annex includes the following additional obligations:
With respect to Party A: None.
With respect to Party B: None.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph 3(a), except that:
(I) the words "upon a demand made by the Secured Party on or promptly
following a Valuation Date" shall be deleted and replaced with the
words "not later than the close of business on each Valuation Date";
(II) the sentence beginning "Unless otherwise specified in Paragraph 13"
and ending "(ii) the Value as of that Valuation Date of all Posted
Credit Support held by the Secured Party," shall be deleted in its
entirety and replaced with the following:
The "Delivery Amount" applicable to the Pledgor for any Valuation
Date will equal the greatest of:
(1) the amount by which (a) the Xxxxx'x Credit Support Amount
for such Valuation Date exceeds (b) the Xxxxx'x Value, as
of such Valuation Date, of all Posted Credit Support held
by the Secured Party, and
(2) the amount by which (a) the S&P Credit Support Amount for
such Valuation Date exceeds (b) the S&P Value, as of such
Valuation Date, of all Posted Credit Support held by the
Secured Party."; and
(III) if, on any Valuation Date, the Delivery Amount equals or exceeds the
Pledgor's Minimum Transfer Amount, the Pledgor will transfer to the
Secured Party sufficient Eligible Credit Support to ensure that,
immediately following such transfer, the Delivery Amount shall be
zero.
(B) "Return Amount" has the meaning specified in Paragraph 3(b), except that:
(I) the sentence beginning "Unless otherwise specified in Paragraph 13"
and ending "(ii) the Credit Support Amount." shall be deleted in its
entirety and replaced with the following:
"The "Return Amount" applicable to the Secured Party for any
Valuation Date will equal the least of:
(1) the amount by which (a) the Moody's Value, as of such
Valuation Date, of all Posted Credit Support held by the
Secured Party exceeds (b) the Xxxxx'x Credit Support Amount
for such Valuation Date, and
(2) the amount by which (a) the S&P Value, as of such Valuation
Date, of all Posted Credit Support held by the Secured
Party exceeds (b) the S&P Credit Support Amount for such
Valuation Date."; and
(II) in no event shall the Secured Party be required to transfer any
Posted Credit Support under Paragraph 3(b) if, immediately following
such transfer, the Delivery Amount would be greater than zero.
(C) Paragraph 4(b) is hereby amended by the insertion of the words "(i) in
respect of a Transfer pursuant to Paragraph 3(b)," immediately prior to the words "if
a demand for" and the insertion of the words "; and (ii) in respect of a Transfer
pursuant to Paragraph 3(a), the relevant Transfer will be made not later than the
close of business on the Local Business Day following the Valuation Date" immediately
prior to the period.
(D) The term "Credit Support Amount" shall not apply.
(E) Xxxxx'x Credit Support Amount means, for any Valuation Date:
(i) if the Moody's Threshold for such Valuation Date is zero and either
(a) a Xxxxx'x Rating Event is not continuing or (b) a Xxxxx'x Rating
Event is continuing but less than 30 Local Business Days have
elapsed since the last time that such Xxxxx'x Rating Event first
occurred, an amount in USD equal to the greater of (1) the sum of
(a) the Secured Party's Exposure and (b) the First Trigger
Collateral Amount (as defined below) for each Transaction hereunder
and (2) zero;
(ii) so long as a Moody's Ratings Event has occurred and is continuing
and 30 or more Local Business Days have elapsed since such Xxxxx'x
Rating Event first occurred, an amount in USD equal to the greatest
of (1) the sum of (a) the Secured Party's Exposure and (b) the
Second Trigger Collateral Amount (as defined below) for each
Transaction hereunder, (2) an amount equal to the Floating Amount
payable by Party A pursuant to each Transaction hereunder in respect
of the first Floating Rate Payer Payment Date scheduled to occur on
or after such Valuation Date and (3) zero;
(F) S&P Credit Support Amount means, for any Valuation Date:
(i) if the S&p Threshold for such Valuation Date is zero and either (i)
an S&p Ratings Event is not continuing or (ii) an S&P Ratings Event
is continuing but such S&p Ratings Event was not continuing when
this Annex was executed and less than 10 Local Business Days have
elapsed since such S&P Ratings Event first occurred, an amount equal
to the Secured Party's Exposure;
(ii) if the S&P Threshold for such Valuation Date is zero and either (i)
an S&P Ratings Event has occurred and is continuing and (ii) either
such S&P Ratings Event was continuing when this Annex was executed
or 10 or more Local Business Days have elapsed since such S&P
Ratings Event first occurred, an amount equal to 125% of the Secured
Party's Exposure; or
(iii) if the S&P Threshold is infinity, zero.
(G) Certain Definitions.
First Trigger Collateral Amount means, in respect of each Transaction hereunder on
any date, an amount in USD equal to the Notional Amount of such Transaction on such
date multiplied by the Applicable Percentage set forth in the table in Exhibit A
hereto.
Moody's Value means, on any date and with respect to any Eligible Collateral, the bid
price obtained by the Valuation Agent, the multiplied by the applicable Moody's
Valuation Percentage.
S&P Value means, on any date and with respect to any Eligible Collateral, the bid
price obtained by the Valuation Agent, or in the case of Cash the amount thereof,
multiplied by the applicable S&P Valuation Percentage.
Second Trigger Collateral Amount means, in respect of each Transaction hereunder on
any date, an amount in USD equal to the Notional Amount of such Transaction on such
date multiplied by the Applicable Percentage set forth in the applicable table in
Exhibit B hereto.
(ii) Eligible Collateral. On any date, the following items will qualify as "Eligible
Collateral" for Party A:
(A) Valuation Percentage S&P
_________________________________________________________________________________________________________________________________________
S&P Collateralization S&P Ratings
Instrument Event Event
_________________________________________________________________________________________________________________________________________
(i) Cash 100% 80%
_________________________________________________________________________________________________________________________________________
(ii) Coupon-bearing negotiable debt obligations issued after 18 July 1984 by the U.S. 98.0% 78.4%
Treasury Department having a residual maturity on such date of less than 5 years
_________________________________________________________________________________________________________________________________________
(iii) Coupon-bearing negotiable debt obligations issued after 18 July 1984 by the U.S. 92.6% 74.1%
Treasury Department having a residual maturity on such date equal to or greater
than 5 years but less than or equal to 10 years
_________________________________________________________________________________________________________________________________________
S&P Valuation Percentage means, with respect to a Valuation Date and each instrument
in the above table (i) so long as the S&P Threshold for such Valuation Date is zero
and either (A) an S&P Ratings Event is not continuing or (B) an S&P Ratings Event is
continuing but less than 10 Local Business Days have elapsed since such S&P Ratings
Event first occurred, the corresponding percentage for such instrument in the column
headed "S&P Collateralization Event" or (ii) so long as the S&P Threshold for such
Valuation Date is zero (A) an S&P Ratings Event has occurred and is continuing and
(B) at least 10 Local Business Days have elapsed since such S&P Ratings Event first
occurred, the corresponding percentage in the column headed "S&P Ratings Event."
(B) Valuation Percentage Moody's
Moody's Collateralization Event Xxxxx'x Rating Event
_____________________________________________________________________________________________________________________________
INTRUMENT Daily Weekly Daily Weekly
_____________________________________________________________________________________________________________________________
U.S. Dollar Cash 100% 100% 100% 100%
_____________________________________________________________________________________________________________________________
Fixed-Rate Negotiable treasury Debt Issued by the U.S. Treasury Department
with Remaining Maturity
_____________________________________________________________________________________________________________________________
<1 Year 100% 100% 100% 100%
_____________________________________________________________________________________________________________________________
1 to 2 years 100% 100% 99% 99%
_____________________________________________________________________________________________________________________________
2 to 3 years 100% 100% 98% 98%
_____________________________________________________________________________________________________________________________
3 to 5 years 100% 100% 97% 97%
_____________________________________________________________________________________________________________________________
5 to 7 years 100% 100% 96% 95%
_____________________________________________________________________________________________________________________________
7 to 10 years 100% 100% 94% 94%
_____________________________________________________________________________________________________________________________
10 to 20 years 100% 100% 90% 89%
_____________________________________________________________________________________________________________________________
More than 20 years 100% 100% 88% 87%
_____________________________________________________________________________________________________________________________
Floating-Rate Negotiable treasury Debt Issued by the U.S. Treasury Department
_____________________________________________________________________________________________________________________________
All Maturities 100% 100% 99% 99%
_____________________________________________________________________________________________________________________________
Moody's Valuation Percentage means, with respect to a Valuation Date and each
instrument in the above table (i) so long as the Moody's Threshold for such Valuation
Date is zero and either (A) a Moody's Ratings Event is not continuing or (B) a
Moody's Ratings Event is continuing but less than 30 Local Business Days have elapsed
since such Moody's Ratings Event first occurred, the corresponding percentage for
such instrument in the column headed "Moody's Collateralization Event" or (ii) so
long as (A) a Moody's Ratings Event has occurred and is continuing and (B) at least
30 Local Business Days have elapsed since such Moody's Ratings Event first occurred,
the corresponding percentage in the column headed "Moody's Ratings Event."
(iii) Other Eligible Support. None.
(iv) Thresholds.
(A) "Independent Amount" means with respect to Party A: Not applicable.
"Independent Amount" means with respect to Party B: Not applicable.
(B) "Moody's Threshold" means: with respect to Party A and any Valuation Date,
if (I) a Moody's Collateralization Event has occurred and is continuing and
such Collateralization Event has been continuing for at least 30 Local
Business Days or since this Annex was executed or (II) if a Moody's Ratings
Event has occurred and is continuing and 30 or more Local Business Days have
elapsed since such Moody's Ratings Event first occurred, zero; otherwise,
infinity.
"S&P Threshold" means, with respect to Party A and any Valuation Date, if
(I) an S&P Collateralization Event has occurred and is continuing and such
Collateralization Event has been continuing for at least 10 Local Business
Days or since this Annex was executed or (II) if (x) an S&P Ratings Event
has occurred and is continuing and (y) either such S&P Ratings Event was
continuing when this Annex was executed or 10 or more Local Business Days
have elapsed since such S&P Ratings Event first occurred, zero; otherwise,
infinity.
(C) "Minimum Transfer Amount" means USD 100,000 with respect to Party A and
Party B; provided, however, that if the aggregate Certificate Principal
Balance of Certificates rated by S&P ceases to be more than USD 50,000,000,
the "Minimum Transfer Amount" shall be USD 50,000.
(D) Rounding. The Delivery Amount will be rounded up to the nearest integral
multiple of USD 10,000. The Return Amount will be rounded down to the
nearest integral multiple of USD 1,000.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A. Calculations by Party A will be made by reference
to commonly accepted market sources.
(ii) "Valuation Date" means,
(A) in the event that a Collateralization Event other an S&P Collateralization
Event has occurred and is continuing, each Local Business Day which, if
treated as a Valuation Date, would result in a Delivery Amount or a Return
Amount; and
(B) in the event that only an S&P Collateralization Event has occurred and is
continuing, or a Ratings Event has occurred and is continuing, the last
Local Business Day of each calendar week.
(iii) "Valuation Time" means the close of business in the city of the Valuation Agent 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 4:00 p.m., London time, on a Local Business Day.
(d) Conditions Precedent and Secured Party's Rights and Remedies.
No events shall constitute a "Specified Condition."
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. The Pledgor must obtain the Secured Party's prior consent to any
substitution pursuant to Paragraph 4(d) and shall give to the Secured Party not less
than two (2) Local Business Days' notice thereof specifying the items of Posted
Credit Support intended for substitution.
(f) Dispute Resolution.
(i) "Resolution Time" means 4:00 p.m. London time on the Local Business Day following the
date on which the notice of the dispute is given under Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), on any date, the Value of
Eligible Collateral and Posted Collateral will be calculated as follows:
(A) with respect to any Cash; the amount thereof; and
(B) with respect to any Eligible Collateral comprising securities; the sum of
(a)(x) the last bid price on such date for such securities on the principal
national securities exchange on which such securities are listed, multiplied
by the applicable Valuation Percentage or (y) where any such securities are
not listed on a national securities exchange, the bid price for such
securities quoted as at the close of business on such date by any principal
market maker for such securities chosen by the Valuation Agent, multiplied
by the applicable Valuation Percentage or (z) if no such bid price is listed
or quoted for such date, the last bid price listed or quoted (as the case
may be), as of the day next preceding such date on which such prices were
available; multiplied by the applicable Valuation Percentage; plus (b) the
accrued interest on such securities (except to the extent that such interest
shall have been paid to the Pledgor pursuant to Paragraph 6(d)(ii) or
included in the applicable price referred to in subparagraph (a) above) as
of such date.
(iii) Alternative. The provisions of Paragraph 5 will apply provided the obligation of the
appropriate party to deliver the undisputed amount to the other party will not arise
prior to the time that would otherwise have applied to the Transfer pursuant to, or
deemed made, under Paragraph 3 if no dispute had arisen.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians:
The Supplemental Interest Trust Trustee (as defined in the PSA) will be entitled to
hold Posted Collateral pursuant to Paragraph 6(b). If at any time the Supplemental
Interest Trust Trustee does not have a short-term unsecured and unsubordinated debt
rating of "A-1" from S&P, the Trustee must be replaced as custodian by an entity with
a short-term unsecured and unsubordinated debt rating of "A-1" from S&P.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c)(i) will not apply to
Party B. Therefore, Party B will not have any of the rights specified in Paragraph
6(c)(i).
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" will be the annualized rate of return actually
achieved on Posted Collateral in the form of Cash during the relevant Interest Period.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount will be made on any
Local Business Day on which Posted Collateral in the form of Cash is Transferred to
the Pledgor pursuant to Paragraph 3(b), provided that such Interest Amount has been
received prior thereto.
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii) will apply.
(i) Additional Representation(s).
There are no additional representations by either party.
(j) Demands and Notices.
All demands, specifications and notices under this Annex will be made pursuant to the Notices
Section of this Agreement, save that any demand, specification or notice:
(i) shall be given to or made at the following addresses:
If to Party A:
Address: One Xxxxx Xxxxxx
Xxxxxx X00 0XX
Xxxxxxx
Telephone: 00 00 0000 0000
Facsimile: 44 20 7883 7987
Attention: Collateral Management Unit
If to Party B:
As set forth in Part 4(a) of the Schedule;
or at such other address as the relevant party may from time to time designate by giving
notice (in accordance with the terms of this paragraph) to the other party;
(ii) shall (unless otherwise stated in this Annex) be deemed to be effective at the time
such notice is actually received unless such notice is received on a day which is not
a Local Business Day or after the Notification Time on any Local Business Day in
which event such notice shall be deemed to be effective on the next succeeding Local
Business Day.
(k) Address for Transfers.
Party A: To be notified to Party B by Party A at the time of the request for the Transfer.
Party B: To be notified to Party A by Party B at the time of the request for the Transfer.
(l) Other Provisions.
(i) Additional Definitions
As used in this Annex:
"Equivalent Collateral" means, with respect to any security constituting Posted
Collateral, a security of the same issuer and, as applicable, representing or having
the same class, series, maturity, interest rate, principal amount or liquidation
value and such other provisions as are necessary for that security and the security
constituting Posted Collateral to be treated as equivalent in the market for such
securities;
"Local Business Day" means: (i) any day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency deposits) in
London, and (ii) in relation to a Transfer of Eligible Collateral, a day on which the
clearance system agreed between the parties for the delivery of Eligible Collateral
is open for acceptance and execution of settlement instructions (or in the case of a
Transfer of Cash or other Eligible Collateral for which delivery is contemplated by
other means, a day on which commercial banks are open for business (including
dealings for foreign exchange and foreign currency deposits) in New York and such
other places as the parties shall agree); and
"transaction-specific xxxxxx" has the meaning given to such term in "Framework for
De-linking Hedge Counterparty Risks from Global Structured Finance Cashflow
Transactions Moody's Methodology" published by Xxxxx'x Investors Service and dated
May 25, 2006.
(ii) Events of Default
Paragraph 7 shall be deleted and replaced in its entirety by the following paragraph:
"For the purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if that party fails (or fails to cause its Custodian)
to make, when due, any Transfer of Posted Credit Support or the Interest Amount, as
applicable, required to be made by it and that failure continues for two Local
Business Days after the notice of that failure is given to that party, except that
(A) if such failure would constitute an Additional Termination Event under another
provision of this Agreement and (B) no more than 30 Local Business Days have elapsed
since the last time that no Xxxxx'x Rating Event has occurred and was continuing,
then such failure shall be an Additional Termination Event and not an Event of
Default".
..
(iii) Return of Fungible Securities
In lieu of returning to the Pledgor pursuant to Paragraphs 3(b), 4(d), 5 and 8(d) any
Posted Collateral comprising securities the Secured Party may return Equivalent
Collateral.
(iv) Covenants of the Pledgor
So long as the Agreement is in effect, the Pledgor covenants that it will keep the
Posted Collateral free from all security interests or other encumbrances created by
the Pledgor, except the security interest created hereunder and any security
interests or other encumbrances created by the Secured Party; and will not sell,
transfer, assign, deliver or otherwise dispose of, or grant any option with respect
to any Posted Collateral or any interest therein, or create, incur or permit to exist
any pledge, lien, mortgage, hypothecation, security interest, charge, option or any
other encumbrance with respect to any Posted Collateral or any interest therein,
without the prior written consent of the Secured Party.
(v) No Counterclaim
A party's rights to demand and receive the Transfer of Eligible Collateral as
provided hereunder and its rights as Secured Party against the Posted Collateral or
otherwise shall be absolute and subject to no counterclaim, set-off, deduction or
defense in favor of the Pledgor except as contemplated in Sections 2 and 6 of the
Agreement and Paragraph 8 of this Annex.
(vi) Holding Collateral
The Secured Party shall cause any Custodian appointed hereunder to open and maintain
a segregated account (which shall be an Eligible Account, as defined in the PSA) and
to hold, record and identify all the Posted Collateral in such segregated account
and, subject to Paragraph 8(a), such Posted Collateral shall at all times be and
remain the property of the Pledgor and shall at no time constitute the property of,
or be commingled with the property of, the Secured Party or the Custodian.
(vii) Security and Performance
Eligible Collateral Transferred to the Secured Party constitutes security and
performance assurance without which the Secured Party would not otherwise enter into
and continue any and all Transactions.
(viii) Agreement as to Single Secured Party and Pledgor
Party A and Party B agree that, notwithstanding anything to the contrary in the
recital to this Annex, Paragraph 1(b), Paragraph 2 or the definitions in Paragraph
12, (a) the term "Secured Party" as used in this Annex means only Party B, (b) the
term "Pledgor" as used in this Annex means only Party A, (c) only Party A makes the
pledge and grant in Paragraph 2, the acknowledgment in the final sentence of
Paragraph 8(a) and the representations in Paragraph 9 and (d) only Party A will be
required to make Transfers of Eligible Credit Support hereunder.
(ix) External Verification of Xxxx-to-Market Valuations.
On each Valuation Date occurring while an S&P Collateralization Event is continuing,
Party A shall provide to S&P not later than the Notification Time on the Local
Business Day following such Valuation Date its calculations of Exposure and the S&P
Value of any Eligible Credit Support or Posted Credit Support for that Valuation
Date. Every month after the unsecured, unguaranteed and otherwise unsupported
long-term debt obligations of each Relevant Entity are rated below BBB+ by S&P,
unless otherwise agreed in writing with S&P, Party A will verify its determination of
Exposure of the Transaction and any Posted Credit Support on the next Valuation Date
by seeking quotations from two (2) Reference Market-makers for their determination of
Exposure of the Transaction on such Valuation Date and the Valuation Agent will use
the greater of either (a) its own determination or (b) the highest quotation for a
Reference Market-maker, if applicable, for the next Valuation Date; provided, that
this Paragraph 13(l)(ix) shall only apply to the extent that the Certificates
outstanding at such time (as defined in the PSA) are rated higher by S&P than the S&P
L-T Rating of Party A; and provided further, that Party A shall not seek verification
of its determination of Exposure as described above from the same Reference
Market-maker more than four times in any twelve-month period. Party A shall provide
to S&P copies of such verification details.
(x) Expenses.
Notwithstanding Paragraph 10(a), the Pledgor will be responsible for, and will
reimburse the Secured Party for, all transfer costs involved in the Transfer of
Eligible Collateral from the Pledgor to the Secured Party (or any agent or custodian
for safekeeping of the Secured Party) or from the Secured Party (or any agent or
custodian for safekeeping of the Secured Party ) to the Pledgor pursuant to paragraph
4(d).
(xi) Supplemental Interest Trust Trustee Capacity.
It is expressly understood and agreed by the parties hereto that (i) this Agreement
is executed and delivered by Xxxxx Fargo Bank, N.A. (the Supplemental Interest Trust
Trustee) not in its individual or corporate capacity but solely as Supplemental
Interest Trust Trustee on behalf of the Supplemental Interest Trust created under the
Pooling and Servicing Agreement for the Adjustable Rate Mortgage Trust 2007-2 (the
Trust), in the exercise of the powers and authority conferred and vested in it under
the PSA, (ii) each of the representations, undertakings and agreements herein made on
the part of the Trust is made and intended not as personal representations,
undertakings and agreements by the Supplemental Interest Trust Trustee but is made
and intended for the purpose of binding only the Trust, (iii) nothing herein
contained shall be construed as creating any liability on the part of the
Supplemental Interest Trust Trustee, individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any Person claiming by, through
or under the parties hereto and (iv) under no circumstances shall the Supplemental
Interest Trust Trustee be personally liable for the payment of any indebtedness or
expenses of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Agreement or any other related documents as to all of which recourse shall be had
solely to the assets of the Trust in accordance with the terms of the PSA.
(m) If the Supplemental Interest Trust Trustee shall deliver to the Swap Counterparty the notice
contemplated by Paragraph 7(i) of the Credit Support Annex, as modified herein, in accordance
with Section 4.08(g) of the PSA, it is expressly understood and agreed that the Supplemental
Interest Trust Trustee is not responsible for determining either the amount or the timing of
any such Transfer, and is entitled to rely on the Valuation notice of the amount and timing of
any such Transfer (as provided to it by the Valuation Agent, without any independent duty of
inquiry.
XXXXX FARGO BANK, N.A., not in its individual or corporate capacity but
solely as Supplemental Interest Trust Trustee on behalf of the Supplemental
Interest Trust created under the Pooling and Servicing Agreement for the
CREDIT SUISSE INTERNATIONAL Adjustable Rate Mortgage Trust 2007-2
By:________________________________________________ By:_____________________________________________
Name: Name:
Title: Title:
By:________________________________________________
Name:
Title:
EXHIBIT A
FIRST TRIGGER COLLATERAL AMOUNT APPLICABLE PERCENTAGES
For Transactions that are swaps, caps, floors and transaction-specific xxxxxx:
_____________________________________________________________________________________________________________________________________________________________
Weighted Average Life of Hedge [Single Currency] Xxxxxx Currency Xxxxxx
in Years
_____________________________________________________________________________________________________________________________________________________________
Valuation Dates:
_____________________________________________________________________________________________________________________________________________________________
Daily Weekly Daily Weekly
_____________________________________________________________________________________________________________________________________________________________
1 year or less 0.15% 0.25% 1.10% 2.20%
_____________________________________________________________________________________________________________________________________________________________
2 years or less but more than 1 0.30% 0.50% 1.20% 2.40%
year
_____________________________________________________________________________________________________________________________________________________________
3 years or less but more than 2 0.40% 0.70% 1.30% 2.60%
years
_____________________________________________________________________________________________________________________________________________________________
4 years or less but more than 3 0.60% 1.00% 1.40% 2.80%
years
_____________________________________________________________________________________________________________________________________________________________
5 years or less but more than 4 0.70% 1.20% 1.50% 2.90%
years
_____________________________________________________________________________________________________________________________________________________________
6 years or less but more than 5 0.80% 1.40% 1.60% 3.10%
years
_____________________________________________________________________________________________________________________________________________________________
7 years or less but more than 6 1.00% 1.60% 1.60% 3.30%
years
_____________________________________________________________________________________________________________________________________________________________
8 years or less but more than 7 1.10% 1.80% 1.70% 3.40%
years
_____________________________________________________________________________________________________________________________________________________________
9 years or less but more than 8 1.20% 2.00% 1.80% 3.60%
years
_____________________________________________________________________________________________________________________________________________________________
10 years or less but more than 1.30% 2.20% 1.90% 3.80%
9 years
_____________________________________________________________________________________________________________________________________________________________
11 years or less but more than 1.40% 2.30% 1.90% 3.90%
10 years
_____________________________________________________________________________________________________________________________________________________________
12 years or less but more than 1.50% 2.50% 2.00% 4.00%
11 years
_____________________________________________________________________________________________________________________________________________________________
13 years or less but more than 1.60% 2.70% 2.10% 4.10%
12 years
_____________________________________________________________________________________________________________________________________________________________
14 years or less but more than 1.70% 2.80% 2.10% 4.30%
13 years
_____________________________________________________________________________________________________________________________________________________________
15 years or less but more than 1.80% 3.00% 2.20% 4.40%
14 years
_____________________________________________________________________________________________________________________________________________________________
16 years or less but more than 1.90% 3.20% 2.30% 4.50%
15 years
_____________________________________________________________________________________________________________________________________________________________
17 years or less but more than 2.00% 3.30% 2.30% 4.60%
16 years
_____________________________________________________________________________________________________________________________________________________________
18 years or less but more than 2.00% 3.50% 2.40% 4.80%
17 years
_____________________________________________________________________________________________________________________________________________________________
19 years or less but more than 2.00% 3.60% 2.40% 4.90%
18 years
_____________________________________________________________________________________________________________________________________________________________
20 years or less but more than 2.00% 3.70% 2.50% 5.00%
19 years
_____________________________________________________________________________________________________________________________________________________________
21 years or less but more than 2.00% 3.90% 2.50% 5.00%
20 years
_____________________________________________________________________________________________________________________________________________________________
22 years or less but more than 2.00% 4.00% 2.50% 5.00%
21 years
_____________________________________________________________________________________________________________________________________________________________
23 years or less but more than 2.00% 4.00% 2.50% 5.00%
22 years
_____________________________________________________________________________________________________________________________________________________________
24 years or less but more than 2.00% 4.00% 2.50% 5.00%
23 years
_____________________________________________________________________________________________________________________________________________________________
25 years or less but more than 2.00% 4.00% 2.50% 5.00%
24 years
_____________________________________________________________________________________________________________________________________________________________
26 years or less but more than 2.00% 4.00% 2.50% 5.00%
25 years
_____________________________________________________________________________________________________________________________________________________________
27 years or less but more than 2.00% 4.00% 2.50% 5.00%
26 years
_____________________________________________________________________________________________________________________________________________________________
28 years or less but more than 2.00% 4.00% 2.50% 5.00%
27 years
_____________________________________________________________________________________________________________________________________________________________
29 years or less but more than 2.00% 4.00% 2.50% 5.00%
28 years
_____________________________________________________________________________________________________________________________________________________________
More than 29 years 2.00% 4.00% 2.50% 5.00%
_____________________________________________________________________________________________________________________________________________________________
EXHIBIT B
SECOND TRIGGER COLLATERAL AMOUNT APPLICABLE PERCENTAGES
For Transactions that are swaps (excludes caps, floors and transaction-specific xxxxxx):
_____________________________________________________________________________________________________________________________________________________________
Weighted Average Life of Hedge [Single Currency] Swaps Currency Swaps
in Years
_____________________________________________________________________________________________________________________________________________________________
Valuation Dates:
_____________________________________________________________________________________________________________________________________________________________
Daily Weekly Daily Weekly
_____________________________________________________________________________________________________________________________________________________________
1 year or less 0.50% 0.60% 6.10% 7.25%
_____________________________________________________________________________________________________________________________________________________________
2 years or less but more than 1 1.00% 1.20% 6.30% 7.50%
year
_____________________________________________________________________________________________________________________________________________________________
3 years or less but more than 2 1.50% 1.70% 6.40% 7.70%
years
_____________________________________________________________________________________________________________________________________________________________
4 years or less but more than 3 1.90% 2.30% 6.60% 8.00%
years
_____________________________________________________________________________________________________________________________________________________________
5 years or less but more than 4 2.40% 2.80% 6.70% 8.20%
years
_____________________________________________________________________________________________________________________________________________________________
6 years or less but more than 5 2.80% 3.30% 6.80% 8.40%
years
_____________________________________________________________________________________________________________________________________________________________
7 years or less but more than 6 3.20% 3.80% 7.00% 8.60%
years
_____________________________________________________________________________________________________________________________________________________________
8 years or less but more than 7 3.60% 4.30% 7.10% 8.80%
years
_____________________________________________________________________________________________________________________________________________________________
9 years or less but more than 8 4.00% 4.80% 7.20% 9.00%
years
_____________________________________________________________________________________________________________________________________________________________
10 years or less but more than 4.40% 5.30% 7.30% 9.20%
9 years
_____________________________________________________________________________________________________________________________________________________________
11 years or less but more than 4.70% 5.60% 7.40% 9.30%
10 years
_____________________________________________________________________________________________________________________________________________________________
12 years or less but more than 5.00% 6.00% 7.50% 9.50%
11 years
_____________________________________________________________________________________________________________________________________________________________
13 years or less but more than 5.40% 6.40% 7.60% 9.70%
12 years
_____________________________________________________________________________________________________________________________________________________________
14 years or less but more than 5.70% 6.80% 7.70% 9.80%
13 years
_____________________________________________________________________________________________________________________________________________________________
15 years or less but more than 6.00% 7.20% 7.80% 10.00%
14 years
_____________________________________________________________________________________________________________________________________________________________
16 years or less but more than 6.30% 7.60% 7.90% 10.00%
15 years
_____________________________________________________________________________________________________________________________________________________________
17 years or less but more than 6.60% 7.90% 8.00% 10.00%
16 years
_____________________________________________________________________________________________________________________________________________________________
18 years or less but more than 6.90% 8.30% 8.10% 10.00%
17 years
_____________________________________________________________________________________________________________________________________________________________
19 years or less but more than 7.20% 8.60% 8.20% 10.00%
18 years
_____________________________________________________________________________________________________________________________________________________________
20 years or less but more than 7.50% 9.00% 8.20% 10.00%
19 years
_____________________________________________________________________________________________________________________________________________________________
21 years or less but more than 7.80% 9.00% 8.30% 10.00%
20 years
_____________________________________________________________________________________________________________________________________________________________
22 years or less but more than 8.00% 9.00% 8.40% 10.00%
21 years
_____________________________________________________________________________________________________________________________________________________________
23 years or less but more than 8.00% 9.00% 8.50% 10.00%
22 years
_____________________________________________________________________________________________________________________________________________________________
24 years or less but more than 8.00% 9.00% 8.60% 10.00%
23 years
_____________________________________________________________________________________________________________________________________________________________
25 years or less but more than 8.00% 9.00% 8.60% 10.00%
24 years
_____________________________________________________________________________________________________________________________________________________________
26 years or less but more than 8.00% 9.00% 8.70% 10.00%
25 years
_____________________________________________________________________________________________________________________________________________________________
27 years or less but more than 8.00% 9.00% 8.80% 10.00%
26 years
_____________________________________________________________________________________________________________________________________________________________
28 years or less but more than 8.00% 9.00% 8.80% 10.00%
27 years
_____________________________________________________________________________________________________________________________________________________________
29 years or less but more than 8.00% 9.00% 8.90% 10.00%
28 years
_____________________________________________________________________________________________________________________________________________________________
More than 29 years 8.00% 9.00% 9.00% 10.00%
_____________________________________________________________________________________________________________________________________________________________
For Transactions that are caps, floors, swaptions and transaction-specific xxxxxx:
_____________________________________________________________________________________________________________________________________________________________
Weighted Average Life of Hedge [Single Currency] Xxxxxx Currency Xxxxxx
in Years
_____________________________________________________________________________________________________________________________________________________________
Valuation Dates:
_____________________________________________________________________________________________________________________________________________________________
Daily Weekly Daily Weekly
_____________________________________________________________________________________________________________________________________________________________
1 year or less 0.65% 0.75% 6.30% 7.40%
_____________________________________________________________________________________________________________________________________________________________
1 year or less 0.65% 0.75% 6.30% 7.40%
_____________________________________________________________________________________________________________________________________________________________
2 years or less but more than 1 1.30% 1.50% 6.60% 7.80%
year
_____________________________________________________________________________________________________________________________________________________________
3 years or less but more than 2 1.90% 2.20% 6.90% 8.20%
years
_____________________________________________________________________________________________________________________________________________________________
4 years or less but more than 3 2.50% 2.90% 7.10% 8.50%
years
_____________________________________________________________________________________________________________________________________________________________
5 years or less but more than 4 3.10% 3.60% 7.40% 8.90%
years
_____________________________________________________________________________________________________________________________________________________________
6 years or less but more than 5 3.60% 4.20% 7.70% 9.20%
years
_____________________________________________________________________________________________________________________________________________________________
7 years or less but more than 6 4.20% 4.80% 7.90% 9.60%
years
_____________________________________________________________________________________________________________________________________________________________
8 years or less but more than 7 4.70% 5.40% 8.20% 9.90%
years
_____________________________________________________________________________________________________________________________________________________________
9 years or less but more than 8 5.20% 6.00% 8.40% 10.20%
years
_____________________________________________________________________________________________________________________________________________________________
10 years or less but more than 5.70% 6.60% 8.60% 10.50%
9 years
_____________________________________________________________________________________________________________________________________________________________
11 years or less but more than 6.10% 7.00% 8.80% 10.70%
10 years
_____________________________________________________________________________________________________________________________________________________________
12 years or less but more than 6.50% 7.50% 9.00% 11.00%
11 years
_____________________________________________________________________________________________________________________________________________________________
13 years or less but more than 7.00% 8.00% 9.20% 11.30%
12 years
_____________________________________________________________________________________________________________________________________________________________
14 years or less but more than 7.40% 8.50% 9.40% 11.50%
13 years
_____________________________________________________________________________________________________________________________________________________________
15 years or less but more than 7.80% 9.00% 9.60% 11.80%
14 years
_____________________________________________________________________________________________________________________________________________________________
16 years or less but more than 8.20% 9.50% 9.80% 12.00%
15 years
_____________________________________________________________________________________________________________________________________________________________
17 years or less but more than 8.60% 9.90% 10.00% 12.00%
16 years
_____________________________________________________________________________________________________________________________________________________________
18 years or less but more than 9.00% 10.40% 10.10% 12.00%
17 years
_____________________________________________________________________________________________________________________________________________________________
19 years or less but more than 9.40% 10.80% 10.30% 12.00%
18 years
_____________________________________________________________________________________________________________________________________________________________
20 years or less but more than 9.70% 11.00% 10.50% 12.00%
19 years
_____________________________________________________________________________________________________________________________________________________________
21 years or less but more than 10.00% 11.00% 10.70% 12.00%
20 years
_____________________________________________________________________________________________________________________________________________________________
22 years or less but more than 10.00% 11.00% 10.80% 12.00%
21 years
_____________________________________________________________________________________________________________________________________________________________
23 years or less but more than 10.00% 11.00% 11.00% 12.00%
22 years
_____________________________________________________________________________________________________________________________________________________________
24 years or less but more than 10.00% 11.00% 11.00% 12.00%
23 years
_____________________________________________________________________________________________________________________________________________________________
25 years or less but more than 10.00% 11.00% 11.00% 12.00%
24 years
_____________________________________________________________________________________________________________________________________________________________
26 years or less but more than 10.00% 11.00% 11.00% 12.00%
25 years
_____________________________________________________________________________________________________________________________________________________________
27 years or less but more than 10.00% 11.00% 11.00% 12.00%
26 years
_____________________________________________________________________________________________________________________________________________________________
28 years or less but more than 10.00% 11.00% 11.00% 12.00%
27 years
_____________________________________________________________________________________________________________________________________________________________
29 years or less but more than 10.00% 11.00% 11.00% 12.00%
28 years
_____________________________________________________________________________________________________________________________________________________________
More than 29 years 10.00% 11.00% 11.00% 12.00%
_____________________________________________________________________________________________________________________________________________________________
Facsimile Cover Sheet
To: Xxxxx Fargo Bank, N.A., not in its individual or corporate capacity but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
created under the Pooling and Servicing Agreement for the Adjustable Rate Mortgage
Trust 2007-2
Attention: Xxxxxxxx Xxxxx, CSIN Marketer
Fax number: To be hand delivered by Xxxxxxxx Xxxxx
Date: 30 May 2007
Pages (including cover page): 5
Our Reference No: External ID: 53229255NOV / Risk ID: 447812594
Credit Suisse International has entered into a transaction with you as attached. Please find attached a letter
agreement (the "Confirmation") which confirms the terms and conditions of the above transaction.
If you agree with the terms specified therein, please arrange for the Confirmation to be signed by your
authorised signatories and return a signed copy to this office to the facsimile listed below.
For Interest Rate Products: For Equity Derivatives:
Telephone Numbers: (000) 000-0000 Telephone numbers: (000) 000-0000 / (000) 000-0000 / (000) 000-0000
Facsimile number: (000) 000-0000 Facsimile number: (000) 000-0000
Email: xxxx.xxx-xxx-xxxxxx-xx@xxxxxx-xxxxxx.xxx
For Credit Derivatives:
Telephone Numbers: (000) 000-0000
Facsimile number: (000) 000-0000
Email: xxxx.xxx-xxx-xxxxxx-xx@xxxxxx-xxxxxx.xxx
We are delighted to have entered into this transaction with you.
CONFIDENTIALITY NOTICE: This facsimile is intended only for the use of the individual or entity to which it is
addressed and may contain information which is privileged and confidential. If the reader of this message is not
the intended recipient or an employee or agent responsible for delivering the message to the intended recipient,
you are hereby notified that any dissemination, distribution or copying of this communication is strictly
prohibited. If you have received this communication in error, please notify us immediately by telephone and
return the original message to us by mail. Thank you.
CREDIT SUISSE INTERNATIONAL
One Cabot Square, Telephone 000 0000 0000
Xxxxxx X00 0XX xxx.xxxxxx-xxxxxx.xxx
Novation Confirmation
Date: 30 May 2007
To: Xxxxx Fargo Bank, N.A., not in its individual or corporate capacity but solely as Supplemental Interest
Trust Trustee on behalf of the Supplemental Interest Trust created under the Pooling and Servicing Agreement
for the Adjustable Rate Mortgage Trust 2007-2
To: Credit Suisse Management LLC
From: Credit Suisse International ("CSIN")
Re: Novation Transaction
External ID: 53229255NOV
______________________________________________________________________________
Dear Sir/Madam:
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 (the "Product Definitions"), each 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 Product Definitions and/or (iii) the Novation Agreement and this Novation Confirmation, this Novation
Confirmation will govern. In the event of any inconsistency between the Novation Confirmation and the New
Confirmation, the New Confirmation will govern for the purpose of the New Transaction.
2. The terms of the Novation Transaction to which this Novation Confirmation relates are as
follows:
Novation Date: 30 May 2007
Novated Amount: USD 466,545,000.00, subject to amortization as set out in the
Additional Terms
Transferor: Credit Suisse Management LLC
Transferee: Xxxxx Fargo Bank, N.A., not in its individual or corporate capacity
but solely as Supplemental Interest Trust Trustee on behalf of the
Supplemental Interest Trust created under the Pooling and Servicing
Agreement for the Adjustable Rate Mortgage Trust 2007-2
Remaining Party: CSIN
New Agreement (between Transferee and Remaining Party): 1992 ISDA Master Agreement dated as of
30 May 2007
3. The terms of the Old Transaction to which this Novation Confirmation relates, for
identification purposes, are as follows:
Trade Date of Old Transaction: 21 May 2007
Effective Date of Old Transaction: 30 May 2007
Termination Date of Old Transaction: 25 March 2012
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.
Full First Calculation Period: Applicable
5. Miscellaneous Provisions:
Non-Reliance: Applicable
For the purpose of facilitating this Transaction, an Affiliate of CSIN, which is organized in the United States
of America (the "Agent"), has acted as agent for CSIN. The Agent is not a principal with respect to this
Transaction and shall have no responsibility or liability to the parties as a principal with respect to this
Transaction.
Credit Suisse International is authorized and regulated by the Financial Services Authority and has entered into
this transaction as principal. The time at which the above transaction was executed will be notified to the
parties on request.
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 it to us. 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.
Credit Suisse International
By: ________________________________
Name:
Title:
Credit Suisse Management LLC
By: ________________________________
Name:
Title:
Xxxxx Fargo Bank, N.A., not in its individual or corporate capacity but solely as Supplemental Interest Trust
Trustee on behalf of the Supplemental Interest Trust created under the Pooling and Servicing Agreement for the
Adjustable Rate Mortgage Trust 2007-2
By:________________________________
Name:
Title:
Our Reference No: External ID: 53229255NOV / Risk ID: 447812594
EXHIBIT A
This New Confirmation amends, restates and supersedes in its entirety all Confirmation(s) dated prior to the date
hereof in respect of this New Transaction.
