DATE: May 30, 2007 TO: Deutsche Bank National Trust Company, not individually, but solely as supplemental interest trustee (the “Supplemental Interest Trustee”) on behalf of the supplemental interest trust (the “Supplemental Interest Trust”) created...
Exhibit
99.2
EXECUTION
COPY
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DATE:
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May
30, 2007
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TO:
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Deutsche
Bank National Trust Company, not individually, but solely as supplemental
interest trustee (the “Supplemental Interest Trustee”) on behalf of the
supplemental interest trust (the “Supplemental Interest Trust”) created
under the Pooling and Servicing Agreement for IndyMac INDX Mortgage
Loan
Trust 2007-FLX4, Mortgage Pass-Through Certificates, Series
2007-FLX4
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ATTENTION:
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Trust
Administration – IN07F4
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TELEPHONE:
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(000)
000-0000
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FACSIMILE:
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(000)
000 0000
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FROM:
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New
York Derivative Client Services
Group
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TELEPHONE:
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(000)
000-0000
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FACSIMILE:
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(000)
000-0000
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SUBJECT:
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Fixed
Income Derivatives
Confirmation
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REFERENCE
NUMBER:
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KQBQV
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The
purpose of this long-form confirmation
(“Confirmation”) is to
confirm the terms and conditions of the current Transaction entered into on
the
Trade Date specified below (the “Transaction”) between Xxxxxx
Xxxxxxx Capital Services Inc. (“Party
A”) and Deutsche Bank National Trust Company, not
individually, but solely as Supplemental Interest Trustee of the Supplemental
Interest Trust created under the Pooling and Servicing Agreement for IndyMac
INDX Mortgage Loan Trust 2007-FLX4, Mortgage Pass-Through Certificates, Series
2007-FLX4 (“Party B”) created under the Pooling and Servicing
Agreement, dated as of May 1, 2007, among IndyMac MBS, Inc., as Servicer,
IndyMac Bank, F.S.B., as Seller and Servicer, and Deutsche Bank National Trust
Company, as Trustee, Swap Trustee, and Supplemental Interest
Trustee (the “Pooling and Servicing
Agreement”). This Confirmation evidences a complete and
binding agreement between you and us to enter into the Transaction on the terms
set forth below and replaces any previous agreement between us with respect
to
the subject matter hereof. This Confirmation constitutes a
“Confirmation” and also constitutes a
“Schedule” as referred to in the ISDA Master Agreement,
and
Paragraph 13 of a Credit Support Annex to the Schedule.
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1.
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This
Confirmation shall supplement, form a part of, and be subject to
an
agreement in the form of the ISDA Master Agreement (Multicurrency
- Cross
Border) as published and copyrighted in 1992 by the International
Swaps
and Derivatives Association, Inc. (the “ISDA Master
Agreement”), as if Party A and Party B had executed an agreement
in such form on the date hereof, with a Schedule as set forth in
Item 3 of
this Confirmation, and an ISDA Credit Support Annex (Bilateral Form
- ISDA
Agreements Subject to New York Law Only version) as published and
copyrighted in 1994 by the International Swaps and Derivatives
Association, Inc., with Paragraph 13 thereof as set forth in Annex
A
hereto (the “Credit Support Annex”). For the
avoidance of doubt, the Transaction described herein shall be the
sole
Transaction governed by such ISDA Master Agreement. In the
event of any inconsistency among any of the following documents,
the
relevant document first listed shall govern: (i) this Confirmation,
exclusive of the provisions set forth in Item 3 hereof and Annex
A hereto;
(ii) the provisions set forth in Item 3 hereof, which are incorporated
by
reference into the Schedule; (iii) the Credit Support Annex; (iv)
the
Definitions; and (v) the ISDA Master
Agreement.
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Each
reference herein to a “Section” (unless specifically referencing the Pooling and
Servicing Agreement) or to a “Section” “of this Agreement” will be construed as
a reference to a Section of the ISDA Master Agreement; each herein reference
to
a “Part” will be construed as a reference to the provisions herein deemed
incorporated in a Schedule to the ISDA Master Agreement; each reference herein
to a “Paragraph” will be construed as a reference to a Paragraph of the Credit
Support Annex.
REFERENCE
NUMBER: KQBQV
Page 2 of
24
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2.
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The
terms of the particular Transaction to which this Confirmation relates
are
as follows:
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Type
of Transaction:
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Interest
Rate Corridor
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Notional
Amount:
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With
respect to any Calculation Period, the amount set forth for such
period on
Schedule I attached hereto.
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Trade
Date:
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May
25, 2007
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Effective
Date:
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May
30, 2007
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Termination
Date:
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April
25, 2008
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Fixed
Amounts:
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Fixed
Rate Payer:
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Party
B
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Fixed
Amount Payer
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Payment
Date:
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May
30, 2007
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Fixed
Amount:
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USD
$50,000 (Party A hereby acknowledges receipt of payment in full of
this
amount)
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Floating
Amounts:
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Floating
Amount:
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To
be determined in accordance with the following
formula:
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Greater
of (i) (Floating Rate Option minus Strike Rate) * Notional Amount * Floating
Rate Day Count Fraction, and (ii) zero.
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Floating
Rate Payer:
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Party
A
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Strike
Rate:
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With
respect to any Calculation Period, the rate set forth for such period
on
Schedule I attached hereto.
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Floating
Rate Payer
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Payment
Dates:
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Early
Payment – For each Calculation Period, the first Business Day prior to
each Floating Rate Payer Period End
Date.
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Floating
Rate Payer
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Period
End Date(s):
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The
25th of each month in each year from (and including) June 25, 2007
to (and
including) the Termination Date with no adjustment to Period End
Dates. The initial Calculation Period will accrue from and
including the Effective Date to but excluding June 25, 2007 and the
final
Calculation Period will accrue from and including March 25, 2008
to but
excluding the Termination Date.
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Floating
Rate Option:
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USD-LIBOR-BBA,
provided, however, that if the Floating Rate determined from such
Floating
Rate Option for any Calculation Period is greater than 10.223% per
annum
for such Calculation Period, then the Floating Rate for such Calculation
Period shall be deemed to be equal to 10.223% per
annum.
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Designated
Maturity:
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1
Month
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Page 3 of
24
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Floating
Rate Day
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Count
Fraction:
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30/360
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Reset
Dates:
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The
first day of each Calculation
Period.
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Compounding:
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Inapplicable
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Business
Days:
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New
York and Los Angeles
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Calculation
Agent:
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Party
A
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Page 4 of
24
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3.
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Provisions
Deemed Incorporated in a Schedule to the ISDA Master
Agreement:
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Part
1.
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Termination
Provisions.
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For
the purposes of this Agreement:-
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(a)
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“Specified
Entity” will not apply to Party A or Party B for any
purpose.
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(b)
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“Specified
Transaction” will have the meaning specified in Section
14.
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(c)
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Events
of Default.
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The
statement below that an Event of Default will apply to a specific party means
that upon the occurrence of such an Event of Default with respect to such party,
the other party shall have the rights of a Non-defaulting Party under Section
6
of this Agreement; conversely, the statement below that such event will not
apply to a specific party means that the other party shall not have such
rights.
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(i)
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The
“Failure to Pay or Deliver” provisions of Section 5(a)(i)
will apply to Party A and will apply to Party B; provided, however,
that
notwithstanding anything to the contrary in Section 5(a)(i), any
failure
by Party A to comply with or perform any obligation to be complied
with or
performed by Party A under the Credit Support Annex shall not constitute
an Event of Default under Section 5(a)(i) unless (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or more Local
Business Days and (B) such failure is not remedied on or before the
third
Local Business Day after notice of such failure is given to Party
A.
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(ii)
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The
“Breach of Agreement” provisions of Section 5(a)(ii) will
apply to Party A and will not apply to Party
B.
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(iii)
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The
“Credit Support Default” provisions of Section 5(a)(iii)
will apply to Party A and will not apply to Party B except that Section
5(a)(iii)(1) will apply to Party B solely in respect of Party B’s
obligations under Paragraph 3(b) of the Credit Support Annex; provided,
however, that notwithstanding anything to the contrary in Section
5(a)(iii)(1), any failure by Party A to comply with or perform any
obligation to be complied with or performed by Party A under the
Credit
Support Annex shall not constitute an Event of Default under Section
5(a)(iii) unless (A) a Required Ratings Downgrade Event has occurred
and
been continuing for 30 or more Local Business Days and (B) such failure
is
not remedied on or before the third Local Business Day after notice
of
such failure is given to Party A.
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(iv)
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The
“Misrepresentation” provisions of Section 5(a)(iv) will
apply to Party A and will not apply to Party
B.
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(v)
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The
“Default under Specified Transaction” provisions of
Section 5(a)(v) will apply to Party A and will not apply to Party
B.
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(vi)
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The
“Cross Default” provisions of Section 5(a)(vi) will apply
to Party A and will not apply to Party B. For purposes of
Section 5(a)(vi), solely with respect to Party
A:
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“Specified
Indebtedness” will have the meaning specified in Section 14, except that such
term shall not include obligations in respect of deposits received in the
ordinary course of Party A’s banking business.
“Threshold
Amount” means with respect to Party A an amount equal to three percent (3%) of
the Shareholders’ Equity of Party A or, if applicable, the Eligible
Guarantor.
“Shareholders’
Equity” means with respect to an entity, at any time, the sum (as shown in the
most recent annual audited financial statements of such entity) of (i) its
capital stock (including preferred stock) outstanding, taken at par value,
(ii)
its capital surplus and (iii) its retained earnings, minus (iv) treasury stock,
each to be determined in accordance with generally accepted accounting
principles.
Page 5 of
24
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(vii)
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The
“Bankruptcy” provisions of Section 5(a)(vii) will apply
to Party A and will apply to Party B except that the provisions of
Section
5(a)(vii)(2), (6) (to the extent that such provisions refer to any
appointment contemplated or effected by the Pooling and Servicing
Agreement or any appointment to which Party B has not become subject),
(7)
and (9) will not apply to Party B; provided that, with respect to
Party B
only, Section 5(a)(vii)(4) is hereby amended by adding after the
words
“against it” the words “(excluding any proceeding or petition instituted
or presented by Party A or its Affiliates)”, and Section 5(a)(vii)(8) is
hereby amended by deleting the words “to (7) inclusive” and inserting lieu
thereof “, (3), (4) as amended, (5), (6) as amended, or
(7)”.
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(viii)
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The
“Merger Without Assumption” provisions of Section
5(a)(viii) will apply to Party A and will apply to Party
B.
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(d)
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Termination
Events.
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The
statement below that a Termination Event will apply to a specific party means
that upon the occurrence of such a Termination Event, if such specific party
is
the Affected Party with respect to a Tax Event, the Burdened Party with respect
to a Tax Event Upon Merger (except as noted below) or the non-Affected Party
with respect to a Credit Event Upon Merger, as the case may be, such specific
party shall have the right to designate an Early Termination Date in accordance
with Section 6 of this Agreement; conversely, the statement below that such
an
event will not apply to a specific party means that such party shall not have
such right; provided, however, with respect to “Illegality” the statement that
such event will apply to a specific party means that upon the occurrence of
such
a Termination Event with respect to such party, either party shall have the
right to designate an Early Termination Date in accordance with Section 6 of
this Agreement.
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(i)
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The
“Illegality” provisions of Section 5(b)(i) will apply to
Party A and will apply to Party B.
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(ii)
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The
“Tax Event” provisions of Section 5(b)(ii) will apply to
Party A and to Party B.
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(iii)
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The
“Tax Event Upon Merger” provisions of Section 5(b)(iii)
will apply to Party A and will apply to Party B, provided that Party
A
shall not be entitled to designate an Early Termination Date by reason
of
a Tax Event upon Merger in respect of which it is the Affected
Party.
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(iv)
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The
“Credit Event Upon Merger” provisions of Section 5(b)(iv)
will not apply to Party A and will not apply to Party
B.
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(e)
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The
“Automatic Early Termination” provision of Section 6(a)
will not apply to Party A and will not apply to Party
B.
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(f)
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Payments
on Early Termination. For the purpose of Section 6(e)
of this Agreement:
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(i)
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Market
Quotation will apply, provided, however, that, in the event of a
Derivative Provider Trigger Event, the following provisions will
apply:
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(A)
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The
definition of Market Quotation in Section 14 shall be deleted in
its
entirety and replaced with the
following:
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“Market
Quotation” means, with respect to one or more Terminated
Transactions, a Firm Offer which is (1) made by a Reference Market-maker that
is
an Eligible Replacement, (2) for an amount that would be paid to Party B
(expressed as a negative number) or by Party B (expressed as a positive number)
in consideration of an agreement between Party B and such Reference Market-maker
to enter into a Replacement Transaction, and (3) made on the basis that Unpaid
Amounts in respect of the Terminated Transaction or group of Transactions are
to
be excluded but, without limitation, any payment or delivery that would, but
for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is
to
be included.
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(B)
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The
definition of Settlement Amount shall be deleted in its entirety
and
replaced with the following:
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Page 6 of
24
“Settlement
Amount” means, with respect to any Early Termination Date, an
amount (as determined by Party B) equal to:
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(a)
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If
a Market Quotation for the relevant Terminated Transaction or group
of
Terminated Transactions is accepted by Party B so as to become legally
binding on or before the day falling ten Local Business Days after
the day
on which the Early Termination Date is designated, or such later
day as
Party B may specify in writing to Party A, but in either case no
later
than the Early Termination Date (such day, the “Latest
Settlement Amount Determination Day”), the Termination Currency Equivalent
of the amount (whether positive or negative) of such Market
Quotation;
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(b)
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If,
on the Latest Settlement Amount Determination Day, no Market Quotation
for
the relevant Terminated Transaction or group of Terminated Transactions
has been accepted by Party B so as to become legally binding and
one or
more Market Quotations from Approved Replacements have been made
and
remain capable of becoming legally binding upon acceptance, the Settlement
Amount shall equal the Termination Currency Equivalent of the amount
(whether positive or negative) of the lowest of such Market Quotations
(for the avoidance of doubt, the lowest of such Market Quotations
shall be
the lowest Market Quotation of such Market Quotations expressed as
a
positive number or, if any of such Market Quotations is expressed
as a
negative number, the Market Quotation expressed as a negative number
with
the largest absolute value); or
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(c)
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If,
on the Latest Settlement Amount Determination Day, no Market Quotation
for
the relevant Terminated Transaction or group of Terminated Transactions
is
accepted by Party B so as to become legally binding and no Market
Quotation from an Approved Replacement remains capable of becoming
legally
binding upon acceptance, the Settlement Amount shall equal Party
B’s Loss
(whether positive or negative and without reference to any Unpaid
Amounts)
for the relevant Terminated Transaction or group of Terminated
Transactions.
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(C)
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If
Party B requests Party A in writing to obtain Market Quotations,
Party A
shall use its reasonable efforts to do so before the Latest Settlement
Amount Determination Day.
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(D)
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If
the Settlement Amount is a negative number, Section 6(e)(i)(3) shall
be
deleted in its entirety and replaced with the
following:
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“(3)
Second Method and Market Quotation. If the Second Method and Market
Quotation apply, (I) Party B shall pay to Party A an amount equal to the
absolute value of the Settlement Amount in respect of the Terminated
Transactions, (II) Party B shall pay to Party A the Termination Currency
Equivalent of the Unpaid Amounts owing to Party A and (III) Party A shall pay
to
Party B the Termination Currency Equivalent of the Unpaid Amounts owing to
Party
B; provided, however, that (x) the amounts payable under the immediately
preceding clauses (II) and (III) shall be subject to netting in accordance
with
Section 2(c) of this Agreement and (y) notwithstanding any other provision
of
this Agreement, any amount payable by Party A under the immediately preceding
clause (III) shall not be netted-off against any amount payable by Party B
under
the immediately preceding clause (I).”
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(E)
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At
any time on or before the Latest Settlement Amount Determination
Day at
which two or more Market Quotations from Approved Replacements remain
capable of becoming legally binding upon acceptance, Party B shall
be
entitled to accept only the lowest of such Market Quotations (for
the
avoidance of doubt, the lowest of such Market Quotations shall be
the
lowest Market Quotation of such Market Quotations expressed as a
positive
number or, if any of such Market Quotations is expressed as a negative
number, the Market Quotation expressed as a negative number with
the
largest absolute value).
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(ii)
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The
Second Method will apply.
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Page 7 of
24
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(g)
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“Termination
Currency” means USD.
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(h)
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Additional
Termination Events. Additional Termination Events will
apply as provided in Part 5(c).
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Page 8 of
24
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Part
2.
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Tax
Matters.
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(a)
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Tax
Representations.
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(i)
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Payer
Representations. For the purpose of Section 3(e) of
this Agreement:
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Party
A
makes the following representation:
It
is not
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax from any payment (other
than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be
made
by it to the other party under this Agreement. In making this
representation, it may rely on: the accuracy of any representations made by
the
other party pursuant to Section 3(f) of this Agreement; (ii) the satisfaction
of
the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and
the accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement; and (iii) the
satisfaction of the agreement of the other party contained in Section 4(d)
of
this Agreement, provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party does not deliver
a
form or document under Section 4(a)(iii) by reason of material prejudice to
its
legal or commercial position.
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(ii)
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Payee
Representations. For the purpose of Section 3(f) of
this Agreement:
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(A)
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Party
A makes the following
representation(s):
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It
is a
U.S. corporation organized under the laws of the State of Delaware.
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(B)
|
Party
B makes the following
representation(s):
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None.
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(b)
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Tax
Provisions.
|
|
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(i)
|
Gross
Up. Section 2(d)(i)(4) shall not apply to Party B as
X, and Section 2(d)(ii) shall not apply to Party B as Y, in each
case such
that Party B shall not be required to pay any additional amounts
referred
to therein.
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(ii)
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Indemnifiable
Tax. Notwithstanding anything to the contrary in the
definition of “Indemnifiable Tax” in Section 14,
“Indemnifiable Tax” means, in relation to
payments by Party B, no Tax.
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Page 9 of
24
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Part
3.
|
Agreement
to Deliver Documents.
|
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(a)
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For
the purpose of Section 4(a)(i), tax forms, documents, or certificates
to
be delivered are:
|
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Party
required to deliver document
|
Form/Document/
Certificate
|
Date
by which to
be
delivered
|
|
Party
A
|
An
original properly completed and executed United States Internal Revenue
Service Form W-9 (or any successor thereto) with respect to any payments
received or to be received by Party A that eliminates U.S. federal
withholding and backup withholding Tax on payments to Party A under
this
Agreement.
|
(i)
upon execution of this Agreement, (ii) on or before the first payment
date
under this Agreement, including any Credit Support Document, (iii)
promptly upon the reasonable demand by Party B, (iv) prior to the
expiration or obsolescence of any previously delivered form, and
(v)
promptly upon the information on any such previously delivered form
becoming inaccurate or incorrect.
|
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Party
B
|
(i)
A correct, complete and duly executed IRS Form W-9 (if the beneficial
interest in Party B is held by a single owner for federal income
tax
purposes, in the name of the sole owner and if the beneficial interest
in
Party B is held by more than a single owner for federal income tax
purposes, in the name of the Supplemental Interest Trust) (or any
successor thereto) that eliminates U.S. federal withholding and backup
withholding tax on payments under this Agreement, (ii) if requested
by
Party A, a correct, complete and duly executed Form W-8IMY, and (iii)
a complete and executed IRS Form X-0, X-0XXX, X-0XXX, or W-8IMY (with
attachments) (as appropriate) from each Certificateholder that is
not an
“exempt recipient” as that term is defined in Treasury regulations section
1.6049-4(c)(ii), that eliminates U.S. federal withholding and backup
withholding tax on payments under this Agreement.
|
In
each case (a) upon enterting into this Agreement, (b) in the case of
a W-8ECI, W-8IMY, and W-8BEN that does not include a U.S. taxparyer
identification number in line 6, before December 31 of each third
succeeding calendar year, (c) promptly upon reasonable demand by
Party A, (d) promptly upon the ownership of beneficial interest in
the Supplemental Interest Trust changing between being held by a
single
owner to being held by more than a single owner to being held by
a single
owner for federal tax purposes, and (e) promptly upon actual knowledge
that any such Form previously provided by Party B has become obsolete
or
incorrect.
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Page 10 of
24
|
(b)
|
For
the purpose of Section 4(a)(ii), other documents to be delivered
are:
|
|
Party
required to deliver document
|
Form/Document/Certificate
|
Date
by which tobe
delivered
|
Covered
by Section 3(d) Representation
|
|
Party
A and Party
B
|
Any
documents required by the receiving party to evidence the authority
of the
delivering party or its Credit Support Provider, if any, for it to
execute
and deliver the Agreement, this Confirmation, and any Credit Support
Documents to which it is a party, and to evidence the authority of
the
delivering party or its Credit Support Provider to perform its obligations
under the Agreement, this Confirmation and any Credit Support Document,
as
the case may be
|
Upon
the execution and delivery of this Agreement
|
Yes
|
|
Party
A and Party
B
|
A
certificate of an authorized officer of the party, as to the incumbency
and authority of the respective officers of the party signing the
Agreement, this Confirmation, and any relevant Credit Support Document,
as
the case may be
|
Upon
the execution and delivery of this Agreement
|
Yes
|
|
|
|||
|
Party
A
|
Annual
Report of Party A containing consolidated financial statements certified
by independent certified public accountants and prepared in accordance
with generally accepted accounting principles in the country in which
Party A is organized
|
Promptly
upon becoming publicly available
|
Yes
|
|
Party
A
|
Quarterly
Financial Statements of Party A containing unaudited, consolidated
financial statements of Party A’s fiscal quarter prepared in accordance
with generally accepted accounting principles in the country in which
Party A is organized
|
Promptly
upon becoming publicly available
|
Yes
|
|
Party
A and Party
B
|
An
opinion of counsel to each party in a form reasonably satisfactory
to the
other party
|
Upon
the execution and delivery of this Agreement
|
No
|
|
Party
A
|
A
guarantee of Xxxxxx Xxxxxxx
|
Upon
the execution and delivery of this Agreement
|
No
|
|
Party
B
|
Final
and complete copy of the Prospectus Supplement and Pooling and Servicing
Agreement
|
With
respect to the Prospectus Supplement, upon the execution and delivery
of
this Agreement, and with respect to the Pooling and Servicing Agreement,
upon execution of the final form of the Pooling and Servicing
Agreement.
|
No
|
Page 11 of
24
|
Part
4.
|
Miscellaneous.
|
|
(a)
|
Address
for Notices: For the purposes of Section 12(a) of
this Agreement:
|
Address
for notices or communications to Party A:
Address:
XXXXXX
XXXXXXX CAPITAL SERVICES INC.
Transaction
Management Group
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Attention:
CHIEF LEGAL OFFICER
Facsimile:
001 212 507 4622
With
a
copy to:
XXXXXX
XXXXXXX
Credit
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Facsimile
No: (000) 000-0000
(For
all
purposes)
Address
for notices or communications to Party B:
INDYMAC
MORTGAGE LOAN TRUST 2007-FLX4
c/o
Deutsche Bank National Trust Company
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
Attention:
Trust Administration – IN07F4
Facsimile:
(000) 000-0000
Phone: (000)
000 0000
(For
all
purposes)
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(b)
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Process
Agent. For the purpose of Section
13(c):
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Party
A
appoints as its Process Agent: Not applicable.
Party
B
appoints as its Process Agent: Not applicable.
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(c)
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Offices. The
provisions of Section 10(a) will apply to this
Agreement.
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(d)
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Multibranch
Party. For the purpose of Section 10(c) of this
Agreement:
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Party
A
is not a Multibranch Party.
Party
B
is not a Multibranch Party.
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(e)
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Calculation
Agent. The Calculation Agent is Party A; provided,
however, that if an Event of Default shall have occurred with respect
to
Party A, Party B 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.
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(f)
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Credit
Support Document.
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Page 12 of
24
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Party
A:
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The
Credit Support Annex, and any guarantee in support of Party A’s
obligations under this Agreement.
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Party
B:
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The
Credit Support Annex, solely in respect of Party B’s obligations under
Paragraph 3(b) of the Credit Support
Annex.
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(g)
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Credit
Support Provider.
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Party
A:
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The
guarantor under any guarantee in support of Party A’s obligations under
this Agreement.
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Party
B:
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None.
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(h)
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(i)
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Netting
of Payments. The parties agree that subparagraph (ii)
of Section 2(c) will apply to each Transaction
hereunder.
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(j)
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Affiliate. “Affiliate”
shall have the meaning assigned thereto in Section 14; provided,
however,
that Party B shall be deemed to have no Affiliates for purposes of
this
Agreement, including for purposes of Section 6(b)(ii); provided further
that Xxxxxx Xxxxxxx Derivative Products Inc. shall be deemed not
to be an
Affiliate of Party A for purposes of Section 3(c) or Section
6(d)(ii).
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Page 13 of
24
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Part
5.
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Other
Provisions.
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(a)
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Definitions.
Unless otherwise specified in a Confirmation, this Agreement
and
each Transaction under this Agreement are subject to the 2000 ISDA
Definitions as published and copyrighted in 2000 by the International
Swaps and Derivatives Association, Inc. (the
“Definitions”), and will be governed in all relevant
respects by the provisions set forth in the Definitions, without
regard to
any amendment to the Definitions subsequent to the date
hereof. The provisions of the Definitions are hereby
incorporated by reference in and shall be deemed a part of this Agreement,
except that (i) references in the Definitions to a “Swap Transaction”
shall be deemed references to a “Transaction” for purposes of this
Agreement, and (ii) references to a “Transaction” in this Agreement shall
be deemed references to a “Swap Transaction” for purposes of the
Definitions. Each term capitalized but not defined in this Agreement
shall
have the meaning assigned thereto in the Pooling and Servicing
Agreement.
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(b)
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Amendments
to ISDA Master Agreement.
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(i)
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Single
Agreement. Section 1(c) is hereby amended by the
adding the words “including, for the avoidance of doubt, the Credit
Support Annex” after the words “Master
Agreement”.
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(ii)
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Conditions
Precedent. Section
2(a)(iii) is hereby amended by adding the following at the end
thereof:
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Notwithstanding
anything to the contrary in Section 2(a)(iii)(1), if an Event of Default with
respect to Party B or Potential Event of Default with respect to Party B has
occurred and been continuing for more than 30 Local Business Days and no Early
Termination Date in respect of the Affected Transactions has occurred or been
effectively designated by Party A, the obligations of Party A under Section
2(a)(i) shall cease to be subject to the condition precedent set forth in
Section 2(a)(iii)(1) with respect to such specific occurrence of such Event
of
Default or such Potential Event of Default (the “Specific
Event”); provided, however, for the avoidance of doubt, the obligations
of Party A under Section 2(a)(i) shall be subject to the condition precedent
set
forth in Section 2(a)(iii)(1) (subject to the foregoing) with respect to any
subsequent occurrence of the same Event of Default with respect to Party B
or
Potential Event of Default with respect to Party B after the Specific Event
has
ceased to be continuing and with respect to any occurrence of any other Event
of
Default with respect to Party B or Potential Event of Default with respect
to
Party B that occurs subsequent to the Specific Event.
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(iii)
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Change
of Account. Section 2(b) is hereby amended by the
addition of the following after the word “delivery” in the first line
thereof:
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“to
another account in the same legal and tax jurisdiction as the original
account”.
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(iv)
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Representations. Section
3 is hereby amended by adding at the end thereof the following subsection
(g):
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“(g)
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Relationship
Between Parties.
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(1)
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Nonreliance. (i)
It is not relying on any statement or representation of the other
party
regarding the Transaction (whether written or oral), other than the
representations expressly made in this Agreement or the Confirmation
in
respect of that Transaction and (ii) it has consulted with its own
legal,
regulatory, tax, business, investment, financial and accounting advisors
to the extent it has deemed necessary, and it has made its own investment,
hedging and trading decisions based upon its own judgment and upon
any
advice from such advisors as it has deemed necessary and not upon
any view
expressed by the other party.
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(2)
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Evaluation
and Understanding. (i) It has the capacity to evaluate
(internally or through independent professional advice) the Transaction
and has made its own decision to enter into the Transaction and (ii)
It
understands the terms, conditions and risks of the Transaction and
is
willing and able to accept those terms and conditions and to assume
those
risks, financially and otherwise.
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Page 14 of
24
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(3)
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Purpose. It
is entering into the Transaction for the purposes of managing its
borrowings or investments, hedging its underlying assets or liabilities
or
in connection with a line of
business.
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(4)
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Status
of Parties. The other party is not acting as an agent,
fiduciary or advisor for it in respect of the
Transaction.
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(5)
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Eligible
Contract Participant. It is an “eligible swap participant” as
such term is defined in, Section 35.1(b)(2) of the regulations (17
C.F.R.
35) promulgated under, and an “eligible contract participant” as defined
in Section 1(a)(12) of the Commodity Exchange Act, as
amended.”
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(v)
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Transfer
to Avoid Termination Event. Section 6(b)(ii) is hereby
amended by (i) deleting the words “or if a Tax Event Upon Merger occurs
and the Burdened Party is the Affected Party,” and (ii) by deleting the
words “to transfer” and inserting the words “to effect a Permitted
Transfer” in lieu thereof.
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(vi)
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Jurisdiction. Section
13(b) is hereby amended by: (i) deleting in the second line of
subparagraph (i) thereof the word "non-", (ii) deleting “; and” from the
end of subparagraph (i) and inserting “.” in lieu thereof, and (iii)
deleting the final paragraph
thereof.
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(vii)
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Local
Business Day. The definition of Local Business Day in
Section 14 is hereby amended by the addition of the words “or any Credit
Support Document” after “Section 2(a)(i)” and the addition of the words
“or Credit Support Document” after
“Confirmation”.
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(c)
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Additional
Termination Events. The following Additional
Termination Events will apply:
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(i)
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First
Rating Trigger Collateral. If (A) it is not the case
that a Moody’s Second Trigger Ratings Event has occurred and been
continuing for 30 or more Local Business Days and (B) Party A has
failed
to comply with or perform any obligation to be complied with or performed
by Party A in accordance with the Credit Support Annex, then an Additional
Termination Event shall have occurred with respect to Party A and
Party A
shall be the sole Affected Party with respect to such Additional
Termination Event.
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(ii)
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Second
Rating Trigger Replacement. If (A) a Required Ratings
Downgrade Event has occurred and been continuing for 30 or more Local
Business Days and (B) (i) at least one Eligible Replacement has made
a
Firm Offer to be the transferee of all of Party A’s rights and obligations
under this Agreement (and such Firm Offer remains an offer that will
become legally binding upon such Eligible Replacement upon acceptance
by
the offeree) and/or (ii) an Eligible Guarantor has made a Firm Offer
to
provide an Eligible Guarantee (and such Firm Offer remains an offer
that
will become legally binding upon such Eligible Guarantor immediately
upon
acceptance by the offeree), then an Additional Termination Event
shall
have occurred with respect to Party A and Party A shall be the sole
Affected Party with respect to such Additional Termination
Event.
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(iii)
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Optional
Termination of Securitization. An Additional
Termination Event shall occur upon the notice to Certificateholders
of an
Optional Termination becoming unrescindable in accordance with the
Pooling
and Servicing Agreement. Party B shall be the sole Affected Party
with
respect to such Additional Termination Event; provided, however,
that
notwithstanding anything to the contrary in Section 6(b)(iv), only
Party B
may designate an Early Termination Date in respect of this Additional
Termination Event.
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(d)
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Required
Ratings Downgrade Event. In the event that no Relevant
Entity has credit ratings at least equal to the Required Ratings
Threshold, then Party A shall, as soon as reasonably practicable
and so
long as a Required Ratings Downgrade Event is in effect, at its own
expense, using commercially reasonable efforts, procure either (A)
a
Permitted Transfer or (B) an Eligible
Guarantee.
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Page 15 of
24
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(e)
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Item
1115 Agreement. Party A and Party B hereby agree that
Section 5(b)(i) of the Item 1115 Agreement, dated as of February
27, 2006
(the “Item 1115 Agreement”), among IndyMac Bank, F.S.B.,
IndyMac MBS, Inc., and Party A, shall be incorporated by reference
into
this Agreement so that Party B shall be an express third party beneficiary
of the Item 1115 Agreement. A copy of the Item 1115 Agreement is
annexed
hereto at Annex B.
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(f)
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Transfers.
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(i)
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Section
7 is hereby amended to read in its entirety as
follows:
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“Except
with respect to any Permitted Transfer pursuant to Section 6(b)(ii), Part 5(d),
the Item 1115 Agreement, or the succeeding sentence 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 the Agreement or any Transaction unless (a) the prior written consent
of
the other party is obtained, and (b) the Rating Agency Condition has been
satisfied with respect to S&P. At any time at which no Relevant
Entity has credit ratings at least equal to the Approved Ratings Threshold,
Party A may make a Permitted Transfer.”
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(ii)
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If
an Eligible Replacement has made a Firm Offer (which remains an offer
that
will become legally binding upon acceptance by Party B) to be
the transferee pursuant to a Permitted Transfer, Party B shall, at
Party
A’s written request and at Party A’s expense, take any reasonable steps
required to be taken by Party B to effect such
transfer.
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(g)
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Limited-Recourse. Party
A acknowledges and agrees that, notwithstanding any provision in
this
Agreement to the contrary, the obligations of Party B hereunder are
limited recourse obligations of Party B, payable solely from the
Supplemental Interest Trust and the proceeds thereof and that Party
A will
not have any recourse to any of the directors, officers, agents,
employees, shareholders or affiliates of the Party B with respect
to any
claims, losses, damages, liabilities, indemnities or other obligations
in
connection with any transactions contemplated hereby;
provided that, for the avoidance of doubt, if Party B fails
to pay
any amount, which would but for the provisions of this Part 5(g),
have
been due, such an event will constitute an Event of Default pursuant
to
Section 5(a)(i) (Failure to Pay or Deliver). In the event that
the Supplemental Interest Trust and the proceeds thereof should be
insufficient to satisfy all claims outstanding and following the
realization of the account held by the Supplemental Interest Trust
and the
proceeds thereof, any claims against or obligations of Party B under
the
ISDA Master Agreement or any other confirmation thereunder still
outstanding shall be extinguished and thereafter not
revive. The Supplemental Interest 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 in the account
held by
the Supplemental Interest Trust from the Trust created pursuant to
the
Pooling and Servicing Agreement. This provision will survive
the termination of this Agreement.
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(h)
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Rating
Agency Notifications. Notwithstanding any other
provision of this Agreement, no Early Termination Date shall be
effectively designated hereunder by Party B and no transfer of any
rights
or obligations under this Agreement shall be made by either party
unless
each Swap Rating Agency has been given prior written notice of such
designation or transfer.
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(i)
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No
Set-off. Except as expressly provided for in Section
2(c), Section 6 or Part 1(f)(i)(D) hereof, and notwithstanding any
other
provision of this Agreement or any other existing or future agreement,
each party irrevocably waives any and all rights it may have to set
off,
net, recoup or otherwise withhold or suspend or condition payment
or
performance of any obligation between it and the other party hereunder
against any obligation between it and the other party under any other
agreements. Section 6(e) shall be amended by deleting the
following sentence: “The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be
subject
to any Set-off.”.
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(j)
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Amendment. Notwithstanding
any provision to the contrary in this Agreement, no amendment of
either
this Agreement or any Transaction under this Agreement shall be permitted
by either party unless each of the Swap Rating Agencies has been
provided
prior written notice of the same and such amendment satisfies the
Rating
Agency Condition with respect to
S&P.
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Page 16 of
24
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(k)
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Notice
of Certain Events or Circumstances. Each Party agrees,
upon learning of the occurrence or existence of any event or condition
that constitutes (or that with the giving of notice or passage of
time or
both would constitute) an Event of Default or Termination Event with
respect to such party, promptly to give the other Party and to each
Swap
Rating Agency notice of such event or condition; provided that failure
to
provide notice of such event or condition pursuant to this Part 5(k)
shall
not constitute an Event of Default or a Termination
Event.
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(l)
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Proceedings. No
Relevant Entity shall institute against, or cause any other person
to
institute against, or join any other person in instituting against
Party
B, the Supplemental Interest Trust, or the trust formed pursuant
to the
Pooling and Servicing Agreement, in any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other proceedings
under any federal or state bankruptcy or similar law for a period
of one
year (or, if longer, the applicable preference period) and one day
following payment in full of the Certificates and any Notes; provided,
however, that this shall not restrict or prohibit Party A from
joining in any bankruptcy, reorganization, arrangement, insolvency,
moratorium or liquidation proceedings or other analogous proceedings
previously commenced under applicable laws. This provision will
survive the termination of this
Agreement.
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(m)
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Supplemental
Interest Trustee Liability Limitations. It is
expressly understood and agreed by the parties hereto that (a) this
Agreement is executed by Deutsche Bank National Trust Company (“DBNTC”)
not in its individual capacity, but solely as Supplemental Interest
Trustee under the Pooling and Servicing Agreement in the exercise
of the
powers and authority conferred and invested in it thereunder; (b)
DBNTC
has been directed pursuant to the Pooling and Servicing Agreement
to enter
into this Agreement and to perform its obligations hereunder; (c)
each of
the representations, undertakings and agreements herein made on behalf
of
the Supplemental Interest Trust is made and intended not as personal
representations of the DBNTC but is made and intended for the purpose
of
binding only the Supplemental Interest Trust; (d) except as expressly
required by the terms of the Pooling and Servicing Agreement, nothing
herein contained shall be construed as creating any liability on
DBNTC,
individually or personally, to perform any covenant either expressed
or
implied contained herein, all such liability, if any, being expressly
waived by the parties who are signatories to this Agreement and by
any
person claiming by, through or under such parties, and (e) under
no
circumstances shall DBNTC in its individual capacity
be personally liable for any payments hereunder or for the breach
or
failure of any obligation, representation, warranty or covenant made
or
undertaken under this Agreement.
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(n)
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Severability. If
any term, provision, covenant, or condition of this Agreement, or
the
application thereof to any party or circumstance, shall be held to
be
invalid or unenforceable (in whole or in part) in any respect, the
remaining terms, provisions, covenants, and conditions hereof shall
continue in full force and effect as if this Agreement had been executed
with the invalid or unenforceable portion eliminated, so long as
this
Agreement as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter of
this
Agreement and the deletion of such portion of this Agreement will
not
substantially impair the respective benefits or expectations of the
parties; provided, however, that this severability provision shall
not be
applicable if any provision of Section 2, 5, 6, or 13 (or any definition
or provision in Section 14 to the extent it relates to, or is used
in or
in connection with any such Section) shall be so held to be invalid
or
unenforceable.
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The
parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid
or
enforceable term, provision, covenant or condition, the economic effect of
which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.
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(o)
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Escrow
Payments. If (whether by reason of the time difference
between the cities in which payments are to be made or otherwise)
it is
not possible for simultaneous payments to be made on any date on
which
both parties are required to make payments hereunder, either Party
may at
its option and in its sole discretion notify the other Party that
payments
on that date are to be made in escrow. In this case deposit of
the payment due earlier on that date shall be made by 2:00 pm (local
time
at the place for the earlier payment) on that date with an escrow
agent
selected by the notifying party, accompanied by irrevocable payment
instructions (i) to release the deposited payment to the intended
recipient upon receipt by the escrow agent of the required deposit
of any
corresponding payment payable by the other party on the same date
accompanied by irrevocable payment instructions to the same effect
or (ii)
if the required deposit of the corresponding payment is not made
on that
same date, to return the payment deposited to the party that paid
it into
escrow. The party that elects to have payments made in escrow
shall pay all costs of the escrow
arrangements.
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Page 17
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24
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(p)
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Consent
to Recording. Each party hereto consents to the
monitoring or recording, at any time and from time to time, by the
other
party of any and all communications between trading, marketing, and
operations personnel of the parties and their Affiliates, waives
any
further notice of such monitoring or recording, and agrees to notify
such
personnel of such monitoring or
recording.
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(q)
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Waiver
of Jury Trial. Each party waives 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.
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(r)
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Form
of ISDA Master Agreement. Party A and Party B hereby
agree that the text of the body of the ISDA Master Agreement is intended
to be the printed form of the ISDA Master Agreement (Multicurrency
–
Crossborder) as published and copyrighted in 1992 by the International
Swaps and Derivatives Association,
Inc.
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(s)
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Payment
Instructions. Party A hereby agrees that, unless
notified in writing by Party B of other payment instructions, any
and all
amounts payable by Party A to Party B under this Agreement shall
be paid
to the account specified in Item 4 of this Confirmation,
below.
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(t)
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Additional
representations.
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(i)
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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. The Supplemental
Interest Trustee represents to Party A on the date on which the
Supplemental Interest Trustee executes this Agreement that it is
executing
the Agreement in its capacity as Supplemental Interest
Trustee.
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(u)
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Acknowledgements.
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(i)
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Substantial
financial transactions. Each party hereto is hereby
advised and acknowledges as of the date hereof that the other party
has
engaged in (or refrained from engaging in) substantial financial
transactions and has taken (or refrained from taking) other material
actions in reliance upon the entry by the parties into the Transaction
being entered into on the terms and conditions set forth herein and
in the
Pooling and Servicing Agreement relating to such Transaction, as
applicable. This paragraph shall be deemed repeated on the trade
date of
each Transaction.
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(ii)
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Bankruptcy
Code. Subject to Part 5(l), without limiting the
applicability if any, of any other provision of the U.S. Bankruptcy
Code
as amended (the “Bankruptcy Code”) (including without limitation Sections
362, 546, 556, and 560 thereof and the applicable definitions in
Section
101 thereof), the parties acknowledge and agree that all Transactions
entered into hereunder will constitute “forward contracts” or “swap
agreements” as defined in Section 101 of the Bankruptcy Code or “commodity
contracts” as defined in Section 761 of the Bankruptcy Code, that the
rights of the parties under Section 6 of this Agreement will constitute
contractual rights to liquidate Transactions, that any margin or
collateral provided under any margin, collateral, security, pledge,
or
similar agreement related hereto will constitute a “margin payment” as
defined in Section 101 of the Bankruptcy Code, and that the parties
are
entities entitled to the rights under, and protections afforded by,
Sections 362, 546, 556, and 560 of the Bankruptcy
Code.
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(iii)
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In
order to comply with laws, rules, regulations and executive orders
in
effect from time to time applicable to banking institutions and relating
to the funding of terrorist activities and money laundering (“Applicable
Law”), Deutsche Bank National Trust Company is required to obtain, verify
and record certain information relating to individuals and entities
which
maintain a business relationship with Deutsche Bank National Trust
Company. Accordingly, each of the parties agrees to provide to
Deutsche Bank National Trust Company upon its request from time to
time
such identifying information and documentation solely with respect
to such
party as reasonably may be available for such party in order to enable
Deutsche Bank National Trust Company to comply with Applicable
Law.
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Page 18 of
24
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(v)
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Limitation
on Events of Default. Notwithstanding the provisions
of Sections 5 and 6, if at any time and so long as Party B has satisfied
in full all its payment obligations under Section 2(a)(i) in respect
of
this Transaction and has at the time no future payment obligations,
whether absolute or contingent, under such Section in respect of
this
Transaction, then unless Party A is required pursuant to appropriate
proceedings to return to Party B or otherwise returns to Party B
upon
demand of Party B any portion of any such payment in respect of this
Transaction, (a) the occurrence of an event described in Section
5(a) with
respect to Party B shall not constitute an Event of Default or Potential
Event of Default with respect to Party B as Defaulting Party in respect
of
this Transaction and (b) Party A shall be entitled to designate an
Early
Termination Date pursuant to Section 6 in respect of this Transaction
only
as a result of the occurrence of a Termination Event set forth in
either
Section 5(b)(i) or 5(b)(ii) with respect to Party A as the Affected
Party,
or Section 5(b)(iii) with respect to Party A as the Burdened
Party. Party A acknowledges and agrees that Party B’s only
payment obligation under Section 2(a)(i) in respect of this Transaction
is
to pay the related Fixed Amount on the related Fixed Amount Payer
Payment
Date.
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(w)
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Additional
Definitions.
|
As
used
in this Agreement, the following terms shall have the meanings set forth below,
unless the context clearly requires otherwise:
“Approved
Ratings Threshold” means each of the S&P Approved Ratings
Threshold and the Moody’s First Trigger Ratings Threshold.
“Approved
Replacement” means, with respect to a Market Quotation, an entity
making such Market Quotation, which entity would satisfy conditions (a), (b),
(c) and (d) of the definition of Permitted Transfer (as determined by Party
B in
its sole discretion, acting in a commercially reasonable manner) if such entity
were a Transferee, as defined in the definition of Permitted
Transfer.
“Derivative
Provider Trigger Event” means (i) an Event of Default with respect
to which Party A is a Defaulting Party, (ii) a Termination Event with respect
to
which Party A is the sole Affected Party or (iii) an Additional Termination
Event with respect to which Party A is the sole Affected Party.
“Eligible
Guarantee” means an unconditional and irrevocable guarantee of all
present and future obligations (for the avoidance of doubt, not limited to
payment obligations) of Party A (or an Eligible Replacement) to Party B under
this Agreement that is provided by an Eligible Guarantor as principal debtor
rather than surety and that is directly enforceable by Party B, the form and
substance of which guarantee are subject to the Rating Agency Condition with
respect to S&P, and either (A) a law firm has given a legal opinion
confirming that none of the guarantor’s payments to Party B under such guarantee
will be subject to Tax collected by withholding or (B) such guarantee provides
that, in the event that any of such guarantor’s payments to Party B are subject
to Tax collected by withholding, such guarantor is required to pay such
additional amount as is necessary to ensure that the net amount actually
received by Party B (free and clear of any Tax collected by withholding) will
equal the full amount Party B would have received had no such withholding been
required.
“Eligible
Guarantor” means an entity that (A) has credit ratings from
S&P at least equal to the the S&P Approved Ratings Threshold,
and (B) has credit ratings from Moody’s at least equal to the Moody’s Second
Trigger Ratings Threshold, provided, for the avoidance of doubt, that an
Eligible Guarantee of an Eligible Guarantor with credit ratings below the
Moody’s First Trigger Ratings Threshold will not cause a Collateral Event (as
defined in the Credit Support Annex) not to occur or continue with respect
to
Moody’s.
“Eligible
Replacement” means an entity (A) (i) (a) that has credit ratings
from S&P at least equal to the S&P Approved Ratings Threshold, and (b)
has credit ratings from Moody’s at least equal to the Moody’s Second Trigger
Ratings Threshold, provided, for the avoidance of doubt, that an Eligible
Replacement with credit ratings below the Moody’s First Trigger Ratings
Threshold will not cause a Collateral Event (as defined in the Credit Support
Annex) not to occur or continue with respect to Moody’s, or (ii) the present and
future obligations (for the avoidance of doubt, not limited to payment
obligations) of which entity to Party B under this Agreement are guaranteed
pursuant to an Eligible Guarantee and (B) that has executed an Item 1115
Agreement with Depositor.
Page 19
of
24
“Firm
Offer” means (A) with respect to an Eligible Replacement, a
quotation from such Eligible Replacement (i) in an amount equal to the actual
amount payable by or to Party B in consideration of an agreement between Party
B
and such Eligible Replacement to replace Party A as the counterparty to this
Agreement by way of novation or, if such novation is not possible, an agreement
between Party B and such Eligible Replacement to enter into a Replacement
Transaction (assuming that all Transactions hereunder become Terminated
Transactions), and (ii) that constitutes an offer by such Eligible Replacement
to replace Party A as the counterparty to this Agreement or enter a Replacement
Transaction that will become legally binding upon such Eligible Replacement
upon
acceptance by Party B, and (B) with respect to an Eligible Guarantor, an offer
by such Eligible Guarantor to provide an Eligible Guarantee that will become
legally binding upon such Eligible Guarantor upon acceptance by the
offeree.
“Moody’s”
means Xxxxx’x Investors Service, Inc., or any successor thereto.
“Moody’s
First Trigger Ratings Event”means
that
no Relevant Entity has credit ratings from Moody’s at least equal to the
Moody’s First Trigger Ratings Threshold.
“Moody’s
First Trigger Ratings Threshold” means, with respect to Party A,
the guarantor under an Eligible Guarantee or an Eligible Replacement, (i) if
such entity has a short-term unsecured and unsubordinated debt rating from
Moody’s, a long-term unsecured and unsubordinated debt rating or counterparty
rating from Moody’s of “A2” and a short-term unsecured and unsubordinated debt
rating from Moody’s of “Prime-1”, or (ii) if such entity does not have a
short-term unsecured and unsubordinated debt rating or counterparty rating
from
Moody’s, a long-term unsecured and unsubordinated debt rating or counterparty
rating from Moody’s of “A1”.
“Moody’s
Second Trigger Ratings Event”means
that
no Relevant Entity has credit ratings from Moody’s at least equal to the
Moody’s Second Trigger Ratings Threshold.
“Moody’s
Second Trigger Ratings Threshold” means,
with respect to Party A, the guarantor under an Eligible Guarantee or an
Eligible Replacement, (i) if such entity has a short-term unsecured and
unsubordinated debt rating from Moody’s, a long-term unsecured and
unsubordinated debt rating or counterparty rating from Moody’s of “A3” and a
short-term unsecured and unsubordinated debt rating from Moody’s of “Prime-2”,
or (ii) if such entity does not have a short-term unsecured and unsubordinated
debt rating from Moody’s, a long-term unsecured and unsubordinated debt rating
or counterparty rating from Moody’s of “A3”.
“Permitted
Transfer” means a transfer by novation by Party A pursuant to
Section 6(b)(ii), Part 5(d), the Item 1115 Agreement, or the second sentence
of
Section 7 (as amended herein) to a transferee (the
“Transferee”) of all, but not less than all, of Party A’s
rights, liabilities, duties and obligations under this Agreement, with respect
to which transfer each of the following conditions is satisfied: (a)
the Transferee is an Eligible Replacement; (b) Party A and the Transferee are
both “dealers in notional principal contracts” within the meaning of Treasury
regulations section 1.1001-4; (c) as of the date of such transfer the Transferee
would not be required to withhold or deduct on account of Tax from any payments
under this Agreement or would be required to gross up for such Tax under Section
2(d)(i)(4); (d) an Event of Default or Termination Event would not occur as
a
result of such transfer; (e) pursuant to a written instrument (the
“Transfer Agreement”), the Transferee acquires and assumes all
rights and obligations of Party A under the Agreement and the relevant
Transaction; (f) Party B shall have determined, in its sole discretion, acting
in a commercially reasonable manner, that such Transfer Agreement is effective
to transfer to the Transferee all, but not less than all, of Party A’s rights
and obligations under the Agreement and all relevant Transactions; (g) Party
A
will be responsible for any costs or expenses incurred in connection with such
transfer (including any replacement cost of entering into a replacement
transaction); (h) either (A) Moody’s has been given prior written notice of such
transfer and the Rating Agency Condition is satisfied with respect to S&P,
or (B) each Swap Rating Agency has been given prior written notice of such
transfer and such transfer is in connection with the assignment and assumption
of this Agreement without modification of its terms, other than party names,
dates relevant to the effective date of such transfer, tax representations
(provided that the representations in Part 2(a)(i) are not modified) and any
other representations regarding the status of the substitute counterparty of
the
type included in Part 5(b)(iv), notice information and account details; and
(i)
such transfer otherwise complies with the terms of the Pooling and Servicing
Agreement.
Page 20 of
24
“Rating
Agency Condition” means, with respect to any particular proposed
act or omission to act hereunder and each Swap Rating Agency specified in
connection with such proposed act or omission, that the party acting or failing
to act must consult with each of the specified Swap Rating Agencies and receive
from each such Swap Rating Agency a prior written confirmation that the proposed
action or inaction would not cause a downgrade or withdrawal of the then-current
rating of any Certificates or Notes.
“Relevant
Entity” means Party A and, to the extent applicable, a guarantor
under an Eligible Guarantee.
“Replacement
Transaction” means, with respect to any Terminated Transaction or
group of Terminated Transactions, a transaction or group of transactions that
(i) would have the effect of preserving for Party B the economic equivalent
of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that Date, and (ii)
has terms which are substantially the same as this Agreement, including, without
limitation, rating triggers, Regulation AB compliance, and credit support
documentation, save for the exclusion of provisions relating to Transactions
that are not Terminated Transaction, as determined by Party B in its sole
discretion, acting in a commercially reasonable manner.
“Required
Ratings Downgrade Event” means that no Relevant Entity has credit
ratings at least equal to the Required Ratings Threshold.
“Required
Ratings Threshold” means each of the S&P Required Ratings
Threshold and the Moody’s Second Trigger Ratings Threshold.
“S&P”
means Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor thereto.
“S&P
Approved Ratings Threshold” means, with respect to Party A, the
guarantor under an Eligible Guarantee or an Eligible Replacement, a short-term
unsecured and unsubordinated debt rating from S&P of “A-1”, or, if such
entity does not have a short-term unsecured and unsubordinated debt rating
from
S&P, a long-term unsecured and unsubordinated debt rating or counterparty
rating from S&P of “A+”.
“S&P
Required Ratings Threshold” means, with respect to Party A, the
guarantor under an Eligible Guarantee or an Eligible Replacement, a long-term
unsecured and unsubordinated debt rating or counterparty rating from S&P of
“BBB+”.
“Swap
Rating Agencies” means, with respect to any date of determination,
each of S&P and Moody’s, to the extent that each such rating
agency is then providing a rating for any of the Mortgage Pass-Through
Certificates, Series 2007-FLX4 (the “Certificates”) or any notes
backed by the Certificates (the “Notes”).
[Remainder
of this page intentionally left blank.]
Page 21 of
24
|
4.
|
Account
Details and Settlement Information:
|
|
Payments
to Party
A:
|
Citibank,
New York
|
ABA
No.: 021 000 089
Account
No.: 4072-4601
Account
Name: Xxxxxx Xxxxxxx Capital Services Inc.
|
Payments
to Party B:
|
Deutsche
Bank
|
ABA
No.: 000000000
Account
No: 00000000
Acct
Name: NYLTD Funds Control – Stars West
This
Agreement may be executed in several counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
We
are
very pleased to have executed this Transaction with you and we look forward
to
completing other transactions with you in the near future.
Very
truly yours,
XXXXXX
XXXXXXX CAPITAL SERVICES INC.
By: /s/
Xxxxx X.
Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Vice President
Party
B,
acting through its duly authorized signatory, hereby agrees to, accepts and
confirms the terms of the foregoing as of the date hereof.
DEUTSCHE
BANK NATIONAL TRUST COMPANY, not individually, but solely as
Supplemental Interest Trustee on behalf of the Supplemental Interest Trust
created under the Pooling and Servicing Agreement for IndyMac INDX Mortgage
Loan
Trust 2007-FLX4, Mortgage Pass-Through Certificates, Series
2007-FLX4
By: /s/
Xxxxxx Xxxxx
Name: Xxxxxx
Xxxxx
Title:
Associate
REFERENCE
NUMBER: KQBQV
Page 23 of
24
SCHEDULE
I
|
From
and including
|
To
but excluding
|
Notional
Amount
(USD)
|
Strike
Rate (%)
|
|
Effective
Date
|
6/25/2007
|
507,020,000
|
7.061
|
|
6/25/2007
|
7/25/2007
|
503,597,370
|
6.083
|
|
7/25/2007
|
8/25/2007
|
500,195,746
|
5.878
|
|
8/25/2007
|
9/25/2007
|
496,820,618
|
5.878
|
|
9/25/2007
|
10/25/2007
|
493,471,763
|
6.083
|
|
10/25/2007
|
11/25/2007
|
490,148,963
|
5.878
|
|
11/25/2007
|
12/25/2007
|
486,851,999
|
6.083
|
|
12/25/2007
|
1/25/2008
|
483,580,657
|
5.878
|
|
1/25/2008
|
2/25/2008
|
480,334,721
|
5.878
|
|
2/25/2008
|
3/25/2008
|
477,113,981
|
6.302
|
|
3/25/2008
|
Termination
Date
|
473,918,225
|
5.878
|
REFERENCE
NUMBER: KQBQV
Page 24 of
24
Annex
A
Paragraph
13 of the Credit Support Annex
EXECUTION
COPY
ANNEX
A
ISDA®
CREDIT
SUPPORT ANNEX
to
the
Schedule to the
ISDA
Master Agreement
dated
as
of May 30, 2007 between
Xxxxxx
Xxxxxxx Capital Services Inc. (hereinafter referred to as “Party
A” or “Pledgor”)
and
Deutsche
Bank National Trust Company, not individually, but solely as supplemental
interest trustee (the “Supplemental Interest Trustee”) on behalf of the
supplemental interest trust (the “Supplemental Interest Trust”)
created under the Pooling and Servicing Agreement for IndyMac INDX Mortgage
Loan
Trust 2007-FLX4,
Mortgage
Pass Through Certificates, Series 2004-FLX4
(hereinafter
referred to as “Party B” or “Secured
Party”).
For
the
avoidance of doubt, and notwithstanding anything to the contrary that may be
contained in the Agreement, this Credit Support Annex shall relate solely to
the
Transaction documented in the Confirmation dated May 30, 2007, between Party
A
and Party B, MSCS Reference Number KQBQV
Paragraph
13. Elections and Variables.
|
(a)
|
Security
Interest for “Obligations”. The term
“Obligations” as used in this
Annex includes the following additional
obligations:
|
With
respect to Party A: not applicable.
With
respect to Party B: not applicable.
|
(b)
|
Credit
Support Obligations.
|
|
|
(i)
|
Delivery
Amount, Return Amount and Credit Support
Amount.
|
|
|
(A)
|
“Delivery
Amount” has the meaning specified in
Paragraph 3(a) as amended (I) by deleting the words “upon a demand made by
the Secured Party on or promptly following a Valuation Date” and inserting
in lieu thereof the words “not later than the close of business on each
Valuation Date” and (II) by deleting in its entirety the sentence
beginning “Unless otherwise specified in Paragraph 13” and ending “(ii)
the Value as of that Valuation Date of all Posted Credit Support
held by
the Secured Party.” and inserting in lieu thereof the
following:
|
The
“Delivery Amount” applicable to the
Pledgor for any Valuation Date will equal the greatest of
|
|
(1)
|
the
amount by which (a) the S&P Credit Support Amount for such Valuation
Date exceeds (b) the S&P Value as of such Valuation Date of all Posted
Credit Support held by the Secured
Party,
|
MSCS
REFERENCE
NUMBER: KQBQV
2
|
|
(2)
|
the
amount by which (a) the Xxxxx’x First Trigger Credit Support Amount for
such Valuation Date exceeds (b) the Xxxxx’x First Trigger Value as of such
Valuation Date of all Posted Credit Support held by the Secured Party,
and
|
|
|
(3)
|
the
amount by which (a) the Xxxxx’x Second Trigger Credit Support Amount for
such Valuation Date exceeds (b) the Xxxxx’x Second Trigger Value as of
such Valuation Date of all Posted Credit Support held by the Secured
Party.
|
|
|
(B)
|
“Return
Amount” has the meaning specified in Paragraph 3(b) as
amended by deleting in its entirety the sentence beginning “Unless
otherwise specified in Paragraph 13” and ending “(ii) the Credit Support
Amount.” and inserting in lieu thereof the
following:
|
The
“Return Amount” applicable to the Secured Party for
any Valuation Date will equal the least of
|
|
(1)
|
the
amount by which (a) the S&P Value as of such Valuation Date of all
Posted Credit Support held by the Secured Party exceeds (b) the S&P
Credit Support Amount for such Valuation
Date,
|
|
|
(2)
|
the
amount by which (a) the Xxxxx’x First Trigger Value as of such Valuation
Date of all Posted Credit Support held by the Secured Party exceeds
(b)
the Xxxxx’x First Trigger Credit Support Amount for such Valuation Date,
and
|
|
|
(3)
|
the
amount by which (a) the Xxxxx’x Second Trigger Value as of such Valuation
Date of all Posted Credit Support held by the Secured Party exceeds
(b)
the Xxxxx’x Second Trigger Credit Support Amount for such Valuation
Date.
|
|
|
(C)
|
“Credit
Support Amount” shall not apply. For purposes of
calculating any Delivery Amount or Return Amount for any Valuation
Date,
reference shall be made to the S&P Credit Support Amount, the Xxxxx’x
First Trigger Credit Support Amount, or the Xxxxx’x Second Trigger Credit
Support Amount, in each case for such Valuation Date, as
provided in Paragraphs 13(b)(i)(A) and 13(b)(i)(B),
above.
|
|
|
(ii)
|
Eligible
Collateral.
|
On
any
date, the following items will qualify as “Eligible
Collateral” (for the avoidance of doubt, all Eligible Collateral
to be denominated in USD):
MSCS
REFERENCE
NUMBER: KQBQV
3
|
Collateral
|
S&P
Valuation Percentage |
Xxxxx’x
First Trigger Valuation Percentage |
Xxxxx’x
Second Trigger Valuation Percentage |
||||||||||
|
(A)
|
Cash
|
100%
|
100%
|
100%
|
|||||||||
|
(B)
|
Fixed-rate
negotiable debt obligations issued by the U.S. Treasury Department
having
a remaining maturity on such date of not more than one
year
|
98.5%
|
100%
|
100%
|
|||||||||
|
(C)
|
Fixed-rate
negotiable debt obligations issued by the U.S. Treasury Department
having
a remaining maturity on such date of more than one year but
not more than
ten years
|
89.9%
|
100%
|
94%
|
|||||||||
|
(D)
|
Fixed-rate
negotiable debt obligations issued by the U.S. Treasury Department
having
a remaining maturity on such date of more than ten years
|
83.9%
|
100%
|
87%
|
|||||||||
|
|
(iii)
|
Other
Eligible Support.
|
The
following items will qualify as “Other Eligible
Support” for the party specified:
Not
applicable.
|
|
(iv)
|
Threshold.
|
|
|
(A)
|
“Independent
Amount” means zero with respect to Party A and Party
B.
|
|
|
(B)
|
“Threshold”
means, with respect to Party A and any Valuation Date, zero if (i)
a
Collateral Event has occurred and has been continuing (x) for at
least 30
days or (y) since this Annex was executed, or (ii) a Required Ratings
Downgrade Event has occurred and is continuing; otherwise,
infinity.
|
“Threshold”
means, with respect to Party B and any Valuation Date, infinity.
|
|
(C)
|
“Minimum
Transfer Amount” means USD 100,000 with respect to Party A
and Party B; provided, however, that if the aggregate Cerificate
Principal
Balance of any Certificates and the aggregate principal balance of
any
Notes rated by S&P is at the time of any transfer less 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 10,000.
|
MSCS
REFERENCE
NUMBER: KQBQV
4
|
(c)
|
Valuation
and Timing.
|
|
|
(i)
|
“Valuation
Agent” means Party A; provided, however, that if an Event
of
Default shall have occurred with respect to which Party A is the
Defaulting Party, Party B shall have the right to designate as Valuation
Agent an independent party, reasonably acceptable to Party A, the
cost for
which shall be borne by Party A. All calculations by the
Valuation Agent must be made in accordance with standard market practice,
including, in the event of a dispute as to the Value of any Eligible
Credit Support or Posted Credit Support, by making reference to quotations
received by the Valuation Agent from one or more Pricing
Sources.
|
|
|
(ii)
|
“Valuation
Date” means the first Local Business Day in each week on
which any of the S&P Credit Support Amount, the Xxxxx’x First Trigger
Credit Support Amount or the Xxxxx’x Second Trigger Credit Support Amount
is greater than zero.
|
|
|
(iii)
|
“Valuation
Time” means the close of business in the city of the
Valuation Agent on the Local Business Day immediately preceding the
Valuation Date or date of calculation, as applicable; provided
that the calculations of Value and Exposure will be made as of
approximately the same time on the same date. The Valuation
Agent will notify each party (or the other party, if the Valuation
Agent
is a party) of its calculations not later than the Notification Time
on
the applicable Valuation Date (or in the case of Paragraph 6(d),
the Local
Business Day following the day on which such relevant calculations
are
performed).”
|
|
|
(iv)
|
“Notification
Time” means 11:00 a.m., New York time, on a Local Business
Day.
|
|
|
(v)
|
External
Verification. Notwithstanding anything to the
contrary in the definitions of Valuation Agent or Valuation Date,
at any
time at which Party A (or, to the extent applicable, its Credit Support
Provider) does not have a long-term unsubordinated and unsecured
debt
rating of at least “BBB+” from S&P, the Valuation Agent shall (A)
calculate the Secured Party’s Exposure and the S&P Value of Posted
Credit Support on each Valuation Date based on internal marks and
(B)
verify such calculations with external marks monthly by obtaining
on the
last Local Business Day of each calendar month two external marks
for each
Transaction to which this Annex relates and for all Posted Credit
Support;
such verification of the Secured Party’s Exposure shall be based on the
higher of the two external marks. Each external xxxx in respect
of a Transaction shall be obtained from an independent Reference
Market-maker that would be eligible and willing to enter into such
Transaction in the absence of the current derivative provider, provided
that an external xxxx xxx not be obtained from the same Reference
Market-maker more than four times in any 12-month period. The
Valuation Agent shall obtain these external marks directly or through
an
independent third party, in either case at no cost to Party
B. The Valuation Agent shall calculate on each Valuation Date
(for purposes of this paragraph, the last Local Business Day in each
calendar month referred to above shall be considered a Valuation
Date) the
Secured Party’s Exposure based on the greater of the Valuation Agent’s
internal marks and the external marks received. If the S&P
Value on any such Valuation Date of all Posted Credit Support then
held by
the Secured Party is less than the S&P Credit Support Amount on such
Valuation Date (in each case as determined pursuant to this paragraph),
Party A shall, within three Local Business Days of such Valuation
Date,
Transfer to the Secured Party Eligible Credit Support having an S&P
Value as of the date of Transfer at least equal to such
deficiency.
|
|
|
(vi)
|
Notice
to S&P. At any time at which Party A (or, to
the extent applicable, its Credit Support Provider) does not have
a
long-term unsubordinated and unsecured debt rating of at least “BBB+” from
S&P, the Valuation Agent shall provide to S&P not later than the
Notification Time on the Local Business Day following each Valuation
Date
its calculations of the Secured Party’s Exposure and the S&P Value of
any Eligible Credit Support or Posted Credit Support for that Valuation
Date. The Valuation Agent shall also provide to S&P any
external marks received pursuant to the preceding
paragraph.
|
MSCS
REFERENCE
NUMBER: KQBQV
5
|
(d)
|
Conditions
Precedent and Secured Party’s Rights and
Remedies. The following Termination Events will
be a “Specified Condition” for the party
specified (that party being the Affected Party if the Termination
Event
occurs with respect to that party): With respect to Party
A: None; With respect to Party B:
None.
|
|
(e)
|
Substitution.
|
|
|
(i)
|
“Substitution
Date” has the meaning specified in Paragraph
4(d)(ii).
|
|
|
(ii)
|
Consent. If
specified here as applicable, then the Pledgor must obtain the Secured
Party’s consent for any substitution pursuant to Paragraph
4(d): Inapplicable.
|
|
(f)
|
Dispute
Resolution.
|
|
|
(i)
|
“Resolution
Time” means 1:00 p.m. New York time on the Local Business
Day following the date on which the notice of the dispute is given
under
Paragraph 5.
|
|
|
(ii)
|
Value. Notwithstanding
anything to the contrary in Paragraph 12, for the purpose of Paragraphs
5(i)(C) and 5(ii), the S&P Value, Xxxxx’x First Trigger Value, and
Xxxxx’x Second Trigger Value, on any date, of Eligible Collateral other
than Cash will be calculated as
follows:
|
For
Eligible Collateral in the form of securities listed in Paragraph 13(b)(ii):
the
sum of (A) the product of (1)(x) the bid price at the Valuation Time for such
securities on the principal national securities exchange on which such
securities are listed, or (y) if such securities are not listed on a national
securities exchange, the bid price for such securities quoted at the Valuation
Time by any principal market maker for such securities selected by the Valuation
Agent, or (z) if no such bid price is listed or quoted for such date, the bid
price listed or quoted (as the case may be) at the Valuation Time for the day
next preceding such date on which such prices were available and (2) the
applicable Valuation Percentage for such Eligible Collateral, and (B) the
accrued interest on such securities (except to the extent Transferred to the
Pledgor pursuant to Paragraph 6(d)(ii) or included in the applicable price
referred to in the immediately preceding clause (A)) as of such
date.
|
|
(iii)
|
Alternative. The
provisions of Paragraph 5 will
apply.
|
|
(g)
|
Holding
and Using Posted
Collateral.
|
|
|
(i)
|
Eligibility
to Hold Posted Collateral; Custodians. Party
B (or any
Custodian) will be entitled to hold Posted Collateral pursuant to
Paragraph 6(b).
|
Party
B
may appoint as Custodian (A) the entity then serving as Trustee or (B) any
entity other than the entity then serving as Trustee if such other entity (or,
to the extent applicable, its parent company or credit support provider) shall
then have a short-term unsecured and unsubordinated debt rating from S&P of
at least “A-1.”
Initially,
the Custodian for Party B is: Swap
Trustee.
|
|
(ii)
|
Use
of Posted Collateral. The
provisions of
Paragraph 6(c)(i) will not apply to Party B, but the provisions of
Paragraph 6(c)(ii) will apply to Party
B.
|
MSCS
REFERENCE
NUMBER: KQBQV
6
|
(h)
|
Distributions
and Interest Amount.
|
|
|
(i)
|
Interest
Rate. The “Interest
Rate” will be the actual interest rate earned on Posted
Collateral in the form of Cash that is held by Party B or its
Custodian. Posted Collateral in the form of Cash shall be
invested in such overnight (or redeemable within two Local Business
Days
of demand) Permitted Investments rated at least (x) AAAm or AAAm-G
by
S&P and (y) Prime-1 by Xxxxx’x or Aaa by Xxxxx’x, as directed by Party
A (unless (x) an Event of Default or an Additional Termination Event
has
occurred with respect to which Party A is the defaulting or sole
Affected
Party or (y) an Early Termination Date has been designated, in which
case
such Posted Collateral shall be held uninvested). Gains and
losses incurred in respect of any investment of Posted Collateral
in the
form of Cash in Permitted Investments as directed by Party A shall
be for
the account of Party A.
|
|
|
(ii)
|
Transfer
of Interest Amount. The Transfer of the Interest Amount will
be made on the second Local Business Day following the end of each
calendar month and on any other Local Business Day on which Posted
Collateral in the form of Cash is Transferred to the Pledgor pursuant
to
Paragraph 3(b); provided, however, that the obligation of Party B
to
Transfer any Interest Amount to Party A shall be limited to the extent
that Party B has earned and received such funds and such funds are
available to Party B.
|
|
|
(iii)
|
Alternative
to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
|
|
(i)
|
Additional
Representation(s). There are no additional
representations by either party.
|
|
(j)
|
Other
Eligible Support and Other Posted
Support.
|
|
|
(i)
|
“Value”
with respect to Other Eligible Support and Other Posted Support means:
not
applicable.
|
|
|
(ii)
|
“Transfer”
with respect to Other Eligible Support and Other Posted Support means:
not
applicable.
|
|
(k)
|
Demands
and Notices.All demands, specifications and notices under
this Annex will be made pursuant to the Notices Section of this Agreement,
except that any demand, specification or notice shall be given to
or made
at the following addresses, or at such other address as the relevant
party
may from time to time designate by giving notice (in accordance with
the
terms of this paragraph) to the other
party:
|
If
to Party A,
XXXXXX
XXXXXXX CAPITAL SERVICES INC.
0000
Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
FID Collateral Manager
Facsimile:
000-000-0000
Telephone:
000-000-0000
Email:
xxxxxxxxx@xxxxxxxxxxxxx.xxx
If
to
Party B or Party B’s Custodian,
INDYMAC
MORTGAGE LOAN TRUST 2007-FLX4
c/o
Deutsche Bank National Trust Company
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
Attention:
Trust Administration – IN07F4
Facsimile:
(000) 000-0000
Telephone: (000)
000 0000
MSCS
REFERENCE
NUMBER: KQBQV
7
|
(l)
|
Address
for Transfers. Each Transfer hereunder shall be
made to the address specified below or to an address specified in
writing
from time to time by the party to which such Transfer will be
made.
|
If
to
Party A,
Cash:
CITIBANK, New York
ABA
No.:
021 000 089
Account
No.: 3053-9883 (Ref. MSCS Collateral) with respect to
Xxxxxx
Xxxxxxx Capital Services, Inc.
Treasury
Securities
And
Agency Notes:
Bank
of
New York, New York
ABA
No.:
000000000
Account
No.: Xxxxxx Xxxxxxx
If
to
Party B,
Deutsche
Bank
ABA
No.: 000000000
Account
No: 00000000
Account
Name: NYLTD Funds Control – Stars West
|
(m)
|
Other
Provisions.
|
|
|
(i)
|
Collateral
Account. Party B shall open and maintain a
segregated account, which shall be an Eligible Account, and hold,
record
and identify all Posted Collateral in such segregated
account.
|
|
|
(ii)
|
Agreement
as to Single Secured Party and Single Pledgor. Party A and
Party B hereby agree that, notwithstanding anything to the contrary
in
this Annex, (a) the term “Secured Party” as used in this Annex means only
Party B, (b) the term “Pledgor” as used in this Annex means only Party A,
(c) only Party A makes the pledge and grant in Paragraph 2, the
acknowledgement in the final sentence of Paragraph 8(a) and the
representations in Paragraph 9.
|
|
|
(iii)
|
Calculation
of Value. Paragraph 4(c) is hereby amended by
deleting the word “Value” and inserting in lieu thereof “S&P Value,
Xxxxx’x First Trigger Value, Xxxxx’x Second Trigger
Value”. Paragraph 4(d)(ii) is hereby amended by (A) deleting
the words “a Value” and inserting in lieu thereof “an S&P Value,
Xxxxx’x First Trigger Value, and Xxxxx’x Second Trigger Value” and (B)
deleting the words “the Value” and inserting in lieu thereof “S&P
Value, Xxxxx’x First Trigger Value, and Xxxxx’x Second Trigger
Value”. Paragraph 5 (flush language) is hereby amended by
deleting the word “Value” and inserting in lieu thereof “S&P Value,
Xxxxx’x First Trigger Value, or Xxxxx’x Second Trigger
Value”. Paragraph 5(i) (flush language) is hereby amended by
deleting the word “Value” and inserting in lieu thereof “S&P Value,
Xxxxx’x First Trigger Value, and Xxxxx’x Second Trigger
Value”. Paragraph 5(i)(C) is hereby amended by deleting the
word “the Value, if” and inserting in lieu thereof “any one or more of the
S&P Value, Xxxxx’x First Trigger Value, or Xxxxx’x Second Trigger
Value, as may be”. Paragraph 5(ii) is hereby amended by (1)
deleting the first instance of the words “the Value” and inserting in lieu
thereof “any one or more of the S&P Value, Xxxxx’x First Trigger
Value, or Xxxxx’x Second Trigger Value” and (2) deleting the second
instance of the words “the Value” and inserting in lieu thereof “such
disputed S&P Value, Xxxxx’x First Trigger Value, or Xxxxx’x Second
Trigger Value”. Each of Paragraph 8(b)(iv)(B) and Paragraph
11(a) is hereby amended by deleting the word “Value” and inserting in lieu
thereof “least of the S&P Value, Xxxxx’x First Trigger Value, and
Xxxxx’x Second Trigger Value”.
|
MSCS
REFERENCE
NUMBER: KQBQV
8
|
|
(iv)
|
Form
of Annex. Party A and Party B hereby
agree that the text of Paragraphs 1 through 12, inclusive, of this
Annex
is intended to be the printed form of ISDA Credit Support Annex (Bilateral
Form - ISDA Agreements Subject to New York Law Only version) as published
and copyrighted in 1994 by the International Swaps and Derivatives
Association, Inc.
|
|
|
(v)
|
Events
of Default. Paragraph 7 will not apply to cause
any Event of Default to exist with respect to Party B except that
Paragraph 7(i) will apply to Party B solely in respect of Party B’s
obligations under Paragraph 3(b) of the Credit Support
Annex. Notwithstanding anything to the contrary in Paragraph 7,
any failure by Party A to comply with or perform any obligation to
be
complied with or performed by Party A under the Credit Support Annex
shall
only be an Event of Default if (A) a Required
Ratings
Downgrade Event has occurred and been continuing for 30 or more Local
Business Days, and (B) such failure is not remedied on or before
the third
Local Business Day after notice of such failure is given to Party
A.
|
|
|
(vi)
|
Expenses. Notwithstanding
anything to the contrary in Paragraph 10, the Pledgor will be responsible
for, and will reimburse the Secured Party for, all transfer and other
taxes and other costs involved in any Transfer of Eligible
Collateral.
|
|
|
(vii)
|
Withholding. Paragraph
6(d)(ii) is hereby amended by inserting immediately after “the Interest
Amount” in the fourth line thereof the words “less any
applicable withholding taxes.”
|
|
|
(viii)
|
Additional
Definitions. As used in this
Annex:
|
“Collateral
Event” means that no Relevant Entity has credit
ratings at least equal to the Approved Ratings Threshold.
“DV01”
means, with respect to a Transaction and any date of determination, the
estimated change in the Secured Party’s Transaction Exposure with respect to
such Transaction that would result from a one basis point change in the relevant
swap curve on such date, as determined by the Valuation Agent in good faith
and
in a commercially reasonable manner. The Valuation Agent shall, upon
request of Party B, provide to Party B a statement showing in reasonable detail
such calculation.
“Exposure”
has the meaning specified in Paragraph 12, except that after the word
“Agreement” the words “(assuming, for this purpose only, that Part 1(f) of the
Schedule is deleted)” shall be inserted.
“Local
Business Day” means, for purposes of this Annex: any day on which
(A) commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in New York and the location of Party
A,
Party B and any Custodian, and (B) in relation to a Transfer of Eligible
Collateral, any day on which the clearance system agreed between the parties
for
the delivery of Eligible Collateral is open for acceptance and execution of
settlement instructions (or in the case of a Transfer of Cash or other Eligible
Collateral for which delivery is contemplated by other means a day on which
commercial banks are open for business (including dealings in foreign exchange
and foreign deposits) in New York and the location of Party A, Party B and
any
Custodian.
“Xxxxx’x
First Trigger Credit Support Amount” means,
for any Valuation Date, the excess, if any, of
MSCS
REFERENCE
NUMBER: KQBQV
9
|
|
(I)
|
(A)
|
for
any Valuation Date on which (I) a Xxxxx’x First Trigger Ratings Event has
occurred and has been continuing (x) for at least 30 Local Business
Days
or (y) since this Annex was executed and (II) it is not the case
that a
Xxxxx’x Second Trigger Ratings Event has occurred and been continuing for
at least 30 Local Business Days, an amount equal to the greater of
(a)
zero and (b) the sum of (i) the Secured Party’s Exposure for such
Valuation Date and (ii) the sum, for each Transaction to which this
Annex
relates, of the lesser of
|
(1)
the
lesser of (x) the product of the Xxxxx’x First Trigger DV01 Multiplier and DV01
for such Transaction and such Valuation Date and (y) the product of (i) Xxxxx’x
First Trigger Notional Amount Multiplier, (ii) the Scale Factor, if any, for
such Transaction, or, if no Scale Factor is applicable for such Transaction,
one, and (iii) the Notional Amount for such Transaction for the Calculation
Period for such Transaction (each as defined in the related Confirmation) which
includes such Valuation Date; or
(2)
the
product of (i) the applicable Xxxxx’x First Trigger Factor set forth in Table 1,
(ii) the Scale Factor, if any, for such Transaction, or, if no Scale Factor
is
applicable for such Transaction, one, and (iii) the Notional Amount for such
Transaction for the Calculation Period for such Transaction (each as defined
in
the related Confirmation) which includes such Valuation Date; or
|
(B)
|
for
any other Valuation Date, zero,
over
|
|
|
(II)
|
the
Threshold for Party A such Valuation
Date.
|
“Xxxxx’x
First Trigger DV01 Multiplier” means 25.
“Xxxxx’x
First Trigger Value” means, on any date and with respect to any
Eligible Collateral other than Cash, the bid price obtained by the Valuation
Agent multiplied by the Xxxxx’x First Trigger Valuation Percentage for such
Eligible Collateral set forth in Paragraph 13(b)(ii).
“Xxxxx’x
First Trigger Notional Amount Multiplier” means 4%.
“Xxxxx’x
Second Trigger Credit Support Amount” means, for any Valuation
Date, the excess, if any, of
|
|
(I)
|
(A)
|
for
any Valuation Date on which it is the case that a Xxxxx’x Second Trigger
Ratings Event has occurred and been continuing for at least 30 Local
Business Days, an amount equal to the greatest of (a) zero, (b) the
aggregate amount of the Next Payments for all Next Payment Dates,
and (c)
the sum of (x) the Secured Party’s Exposure for such Valuation Date and
(y) the sum, for each Transaction to which this Annex relates,
of
|
(1)
if
such Transaction is not a Transaction-Specific Hedge, the lesser of
(A)
the
lesser of (i) the product of the Xxxxx’x Second Trigger DV01 Multiplier and DV01
for such Transaction and such Valuation Date and (ii) the product of (1) the
Xxxxx’x Second Trigger Notional Amount Multiplier, (2) the Scale Factor, if any,
for such Transaction, or, if no Scale Factor is applicable for such Transaction,
one, and (3) the Notional Amount for such Transaction for the Calculation Period
of such Transaction (each as defined in the related Confirmation) which includes
such Valuation Date; or
MSCS
REFERENCE
NUMBER: KQBQV
10
(B)
the
product of (i) the applicable Xxxxx’x Second Trigger Factor set forth in Table
2, (ii) the Scale Factor, if any, for such Transaction, or, if no Scale Factor
is applicable for such Transaction, one, and (iii) the Notional Amount for
such
Transaction for the Calculation Period for such Transaction (each as defined
in
the related Confirmation) which includes such Valuation
Date; or
(2)
if
such Transaction is a Transaction-Specific Hedge, the lesser of
(A)
the
lesser of (i) the product of the Xxxxx’x Second Trigger Transaction-Specific
Hedge DV01 Multiplier and DV01 for such Transaction and such Valuation Date
and
(ii) the product of (1) the Xxxxx’x Second Trigger Transaction-Specific Hedge
Notional Amount Multiplier, (2) the Scale Factor, if any, for such Transaction,
or, if no Scale Factor is applicable for such Transaction, one, and (3) the
Notional Amount for such Transaction for the Calculation Period for such
Transaction (each as defined in the related Confirmation) which includes such
Valuation Date; or
(B)
the
product of (i) the applicable Xxxxx’x Second Trigger Factor set forth in Table
3, (ii) the Scale Factor, if any, for such Transaction, or, if no Scale Factor
is applicable for such Transaction, one, and (iii) the Notional Amount for
such
Transaction for the Calculation Period for such Transaction (each as defined
in
the related Confirmation) which includes such Valuation Date; or
|
|
(B)
|
for
any other Valuation Date, zero,
over
|
|
|
(II)
|
the
Threshold for Party A for such Valuation
Date.
|
“Xxxxx’x
Second Trigger DV01 Multiplier” means 60.
“Xxxxx’x
Second Trigger Notional Amount Multiplier” means 9%.
“Xxxxx’x
Second Trigger Transaction-Specific Hedge DV01 Multiplier” means
75.
“Xxxxx’x
Second Trigger Transaction-Specific Hedge Notional Amount
Multiplier” means 11%.
“Xxxxx’x
Second Trigger Value” means, on any date and with respect to any
Eligible Collateral other than Cash, the bid price obtained by the Valuation
Agent multiplied by the Xxxxx’x Second Trigger Valuation Percentage for such
Eligible Collateral set forth in Paragraph 13(b)(ii).
“Next
Payment” means, in respect of each Next Payment Date, the greater
of (i) the amount of any payments due to be made by Party A under Section 2(a)
on such Next Payment Date less any payments due to be made by Party B under
Section 2(a) on such Next Payment Date (in each case, after giving effect to
any
applicable netting under Section 2(c)) and (ii) zero.
“Next
Payment Date” means each date on which the next scheduled payment
under any Transaction is due to be paid.
MSCS
REFERENCE
NUMBER: KQBQV
11
“Pricing
Sources” means the sources of financial information commonly known
as Bloomberg, Bridge Information Services, Data Resources Inc., Interactive
Data
Services, International Securities Market Association, Xxxxxxx Xxxxx Securities
Pricing Service, Xxxxxx Data Corporation, Reuters, Wood Gundy, Trepp Pricing,
XX
Xxxxx, S&P and Telerate.
“Remaining
Weighted Average Maturity” means, with respect to a
Transaction, the expected weighted average maturity for such Transaction as
determined by the Valuation Agent.
“S&P
Approved Ratings Downgrade Event” means that no Relevant Entity
has credit ratings at least equal to the S&P Approved Ratings
Threshold.
“S&P
Credit Support Amount” means, for any Valuation Date, the excess,
if any, of
|
|
(I)
|
(A)
|
for
any Valuation Date on which (i) a S&P Approved Ratings Downgrade Event
has occurred and been continuing for at least 30 days, or (ii) a
S&P
Required Ratings Downgrade Event has occurred and is continuing,
an amount
equal to the sum of (1) 100.0% of the Secured Party’s Exposure for such
Valuation Date and (2) the sum, for each Transaction to which this
Annex
relates, of the product of (i) the Volatility Buffer for such Transaction,
(ii) the Scale Factor, if any, for such Transaction, or, if no Scale
Factor is applicable for such Transaction, one, and (iii) the Notional
Amount of such Transaction for the Calculation Period of such Transaction
(each as defined in the related Confirmation) which includes such
Valuation Date, or
|
|
|
(B)
|
for
any other Valuation Date, zero,
over
|
|
|
(II)
|
the
Threshold for Party A for such Valuation
Date.
|
“S&P
Required Ratings Downgrade Event” means that no Relevant Entity
has credit ratings at least equal to the S&P Required Ratings
Threshold.
“S&P
Value” means, on any date and with respect to any Eligible
Collateral other than Cash, the product of (A) the bid price obtained by the
Valuation Agent for such Eligible Collateral and (B) the S&P Valuation
Percentage for such Eligible Collateral set forth in paragraph
13(b)(ii).
“Transaction
Exposure” means, for any Transaction, Exposure determined as if
such Transaction were the only Transaction between the Secured Party and the
Pledgor.
“Transaction-Specific
Hedge” means any Transaction that is (i) an interest rate swap in
respect of which (x) the notional amount of the interest rate swap is “balance
guaranteed” or (y) the notional amount of the interest rate swap for any
Calculation Period (as defined in the related Confirmation) otherwise is not
a
specific dollar amount that is fixed at the inception of the Transaction, (ii)
an interest rate cap, (iii) an interest rate floor or (iv) an interest rate
swaption.
“Valuation
Percentage” shall mean, for purposes of determining the S&P
Value, Xxxxx’x First Trigger Value, or Xxxxx’x Second Trigger Value with respect
to any Eligible Collateral or Posted Collateral, the applicable
S&P Valuation Percentage, Xxxxx’x First Trigger Valuation Percentage, or
Xxxxx’x Second Trigger Valuation Percentage for such Eligible Collateral or
Posted Collateral, respectively, in each case as set forth in Paragraph
13(b)(ii).
MSCS
REFERENCE
NUMBER: KQBQV
12
“Value”
shall mean, in respect of any date, the related S&P Value, the related
Xxxxx’x First Trigger Value, and the related Xxxxx’x Second Trigger
Value.
“Volatility
Buffer” means, for any Transaction, the related percentage set
forth in the following table.
|
The
higher of the S&P
credit
rating of (i) Party A
and
(ii) the Credit Support
Provider
of Party A, if
applicable
|
Remaining
Weighted
Average
Maturity
of
such
Transaction
up
to 3 years
|
Remaining
Weighted
Average
Maturity
of
such
Transaction
up
to 5 years
|
Remaining
Weighted
Average
Maturity
of
such
Transaction
up
to 10 years
|
Remaining
Weighted
Average
Maturity
of
such
Transaction
up
to 30 years
|
||||||||||||
|
“A-2”
or higher
|
2.75%
|
3.25%
|
4.00%
|
4.75%
|
||||||||||||
|
“A-3”
|
3.25%
|
4.00%
|
5.00%
|
6.25%
|
||||||||||||
|
“BB+”
or lower
|
3.50%
|
4.50%
|
6.75%
|
7.50%
|
||||||||||||
[Remainder
of this page intentionally left blank]
MSCS
REFERENCE
NUMBER: KQBQV
13
Table
1
Xxxxx’x
First Trigger Factor
|
Remaining
Weighted
Average Life of
Hedge in Years
|
Weekly
Collateral
Posting
|
|
1
or less
|
0.25%
|
|
More
than 1 but not more than 2
|
0.50%
|
|
More
than 2 but not more than 3
|
0.70%
|
|
More
than 3 but not more than 4
|
1.00%
|
|
More
than 4 but not more than 5
|
1.20%
|
|
More
than 5 but not more than 6
|
1.40%
|
|
More
than 6 but not more than 7
|
1.60%
|
|
More
than 7 but not more than 8
|
1.80%
|
|
More
than 8 but not more than 9
|
2.00%
|
|
More
than 9 but not more than 10
|
2.20%
|
|
More
than 10 but not more than 11
|
2.30%
|
|
More
than 11 but not more than 12
|
2.50%
|
|
More
than 12 but not more than 13
|
2.70%
|
|
More
than 13 but not more than 14
|
2.80%
|
|
More
than 14 but not more than 15
|
3.00%
|
|
More
than 15 but not more than 16
|
3.20%
|
|
More
than 16 but not more than 17
|
3.30%
|
|
More
than 17 but not more than 18
|
3.50%
|
|
More
than 18 but not more than 19
|
3.60%
|
|
More
than 19 but not more than 20
|
3.70%
|
|
More
than 20 but not more than 21
|
3.90%
|
|
More
than 21 but not more than 22
|
4.00%
|
|
More
than 22 but not more than 23
|
4.00%
|
|
More
than 23 but not more than 24
|
4.00%
|
|
More
than 24 but not more than 25
|
4.00%
|
|
More
than 25 but not more than 26
|
4.00%
|
|
More
than 26 but not more than 27
|
4.00%
|
|
More
than 27 but not more than 28
|
4.00%
|
|
More
than 28 but not more than 29
|
4.00%
|
|
More
than 29
|
4.00%
|
MSCS
REFERENCE
NUMBER: KQBQV
14
Table
2
Xxxxx’x
Second Trigger Factor for Interest Rate Swaps with Fixed Notional
Amounts
|
Remaining
Weighted
Average Life of
Hedge in Years
|
Weekly
Collateral
Posting
|
|
1
or less
|
0.60%
|
|
More
than 1 but not more than 2
|
1.20%
|
|
More
than 2 but not more than 3
|
1.70%
|
|
More
than 3 but not more than 4
|
2.30%
|
|
More
than 4 but not more than 5
|
2.80%
|
|
More
than 5 but not more than 6
|
3.30%
|
|
More
than 6 but not more than 7
|
3.80%
|
|
More
than 7 but not more than 8
|
4.30%
|
|
More
than 8 but not more than 9
|
4.80%
|
|
More
than 9 but not more than 10
|
5.30%
|
|
More
than 10 but not more than 11
|
5.60%
|
|
More
than 11 but not more than 12
|
6.00%
|
|
More
than 12 but not more than 13
|
6.40%
|
|
More
than 13 but not more than 14
|
6.80%
|
|
More
than 14 but not more than 15
|
7.20%
|
|
More
than 15 but not more than 16
|
7.60%
|
|
More
than 16 but not more than 17
|
7.90%
|
|
More
than 17 but not more than 18
|
8.30%
|
|
More
than 18 but not more than 19
|
8.60%
|
|
More
than 19 but not more than 20
|
9.00%
|
|
More
than 20 but not more than 21
|
9.00%
|
|
More
than 21 but not more than 22
|
9.00%
|
|
More
than 22 but not more than 23
|
9.00%
|
|
More
than 23 but not more than 24
|
9.00%
|
|
More
than 24 but not more than 25
|
9.00%
|
|
More
than 25 but not more than 26
|
9.00%
|
|
More
than 26 but not more than 27
|
9.00%
|
|
More
than 27 but not more than 28
|
9.00%
|
|
More
than 28 but not more than 29
|
9.00%
|
|
More
than 29
|
9.00%
|
MSCS
REFERENCE
NUMBER: KQBQV
15
Table
3
Xxxxx’x
Second Trigger Factor for Transaction-Specific Xxxxxx
|
Remaining
Weighted
Average Life 2 of
Hedge in Years
|
Weekly
Collateral
Posting
|
|
1
or less
|
0.75%
|
|
More
than 1 but not more than 2
|
1.50%
|
|
More
than 2 but not more than 3
|
2.20%
|
|
More
than 3 but not more than 4
|
2.90%
|
|
More
than 4 but not more than 5
|
3.60%
|
|
More
than 5 but not more than 6
|
4.20%
|
|
More
than 6 but not more than 7
|
4.80%
|
|
More
than 7 but not more than 8
|
5.40%
|
|
More
than 8 but not more than 9
|
6.00%
|
|
More
than 9 but not more than 10
|
6.60%
|
|
More
than 10 but not more than 11
|
7.00%
|
|
More
than 11 but not more than 12
|
7.50%
|
|
More
than 12 but not more than 13
|
8.00%
|
|
More
than 13 but not more than 14
|
8.50%
|
|
More
than 14 but not more than 15
|
9.00%
|
|
More
than 15 but not more than 16
|
9.50%
|
|
More
than 16 but not more than 17
|
9.90%
|
|
More
than 17 but not more than 18
|
10.40%
|
|
More
than 18 but not more than 19
|
10.80%
|
|
More
than 19 but not more than 20
|
11.00%
|
|
More
than 20 but not more than 21
|
11.00%
|
|
More
than 21 but not more than 22
|
11.00%
|
|
More
than 22 but not more than 23
|
11.00%
|
|
More
than 23 but not more than 24
|
11.00%
|
|
More
than 24 but not more than 25
|
11.00%
|
|
More
than 25 but not more than 26
|
11.00%
|
|
More
than 26 but not more than 27
|
11.00%
|
|
More
than 27 but not more than 28
|
11.00%
|
|
More
than 28 but not more than 29
|
11.00%
|
|
More
than 29
|
11.00%
|
MSCS
REFERENCE
NUMBER: KQBQV
Annex
B
Item
1115 Agreement
REFERENCE
NUMBER: KQBQV
