SCHEDULE to the Master Agreement dated as of January 31, 2007 between
Rate
Swap Schedule
SCHEDULE
to
the
dated
as of January
31, 2007
between
|
COUNTERPARTY
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and
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SUPPLEMENTAL
INTEREST TRUST
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|
Swiss
Re Financial Products Corporation
(“Party
A”)
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Structured
Adjustable Rate Mortgage Loan Trust, Series 2007-1
(“Party
B”)
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Part
1
Termination
Provisions.
(a) “Specified
Entity”
means in
relation to Party A for the purpose of:
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Section
5(a)(v),
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Not
applicable
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Section
5(a)(vi),
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Not
applicable
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Section
5(a)(vii),
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Not
applicable
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Section
5(b)(iv),
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Not
applicable
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and
in
relation to Party B for the purpose of:
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Section
5(a)(v),
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Not
applicable
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Section
5(a)(vi),
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Not
applicable
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Section
5(a)(vii),
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Not
applicable
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Section
5(b)(iv),
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Not
applicable
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(b)
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“Specified
Transaction”
will not apply to Party A or to Party
B.
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(c)
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Certain
Events of Default.
The following Events of Default will apply to the parties as
specified
below, and the definition of “Event of Default” in Section 14 is deemed to
be modified accordingly:
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Section
5(a)(i) (Failure
to Pay or Deliver)
will
apply to Party A and Party B; provided,
however,
that
Section 5(a)(i) is hereby amended by replacing the word “third” with the word
“first.”
Section
5(a)(ii) (Breach
of Agreement)
will
apply to Party A and will not apply to Party B; except that Section 5(a)(ii)
will not apply to Party A with respect to Party A’s failure to comply with Part
5(b)(i), Part 5(b)(ii) or Part 5(b)(iii) herein.
Section
5(a)(iii) (Credit
Support Default)
will
apply to Party A and will not apply to Party B; except that Section 5(a)(iii)(1)
will apply in respect of Party B’s obligations under Paragraph 3(b) of any
Credit Support Document.
Section
5(a)(iv) (Misrepresentation)
will
apply to Party A and will not apply to Party B.
Section
5(a)(v) (Default
under Specified Transaction)
will
not apply to Party A or Party B.
Section
5(a)(vi) (Cross
Default)
will
not apply to Party B and will apply to Party A with a Threshold Amount
equal to
3% of the applicable Relevant Entity’s Shareholders’ Equity.
“Relevant
Entity”
means
Party A and any guarantor under an Eligible Guarantee in respect of all
of Party
A’s present and future obligations under this Agreement.
“Specified
Indebtedness”
will
have the meaning specified in Section 14; except that such term will
not include
insurance contracts entered into in the ordinary course of Party A’s Credit
Support Provider’s insurance business.
“Shareholders’
Equity”
shall
mean the
shareholders’ equity of Party A’s Credit Support Provider, Swiss Reinsurance
Company, determined as of the end of the most recent period for which
financial
statements have been prepared.
Section
5(a)(vii) (Bankruptcy)
will
apply to Party A and Party B; provided
that (i)
clauses (2), (7) and (9) thereof shall not apply to Party B; (ii) clause
(4)
thereof shall not apply to Party B with respect to proceedings or petitions
instituted or presented by Party A or any Affiliate of Party A; (iii)
clause (6)
shall not apply to Party B to the extent that it refers to (a) any appointment
that is contemplated or effected by the Trust Agreement (as defined below)
or
(b) any appointment to which Party B has not become subject; and (iv)
clause (8)
shall not apply to Party B to the extent that clause (8) relates to clauses
(2),
(4), (6) and (7) (except to the extent that such provisions are not disapplied
to Party B).
Section
5(a)(viii) (Merger
without Assumption)
will
apply to Party A and Party B.
Notwithstanding
Sections 5(a)(i) and 5(a)(iii) of this Agreement, any failure by Party
A to
comply with or perform any obligation to be complied with or performed
by Party
A under the Credit Support Document shall not be an Event of Default
unless (A)
(i) the Second
Rating Trigger Requirements
apply
and at
least
30 Local Business Days have elapsed since the last time the Second Rating
Trigger Requirements did not apply and (ii) such
failure is not remedied on or before the third Local Business Day after
notice
of such failure is given to Party A,
or (B)
(i) a Ratings Event has occurred and is continuing and at least 10 Local
Business Days (or 30 calendar days, in the case of Fitch) have elapsed
the since
the date a Ratings Event occurred and (ii) 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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(d)
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Termination
Events.
The following Termination Events will apply to the parties
as specified
below:
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Section
5(b)(i) (Illegality)
will
apply to Party A and Party B.
Section
5(b)(ii) (Tax
Event)
will
apply to Party A and Party B; provided
that
Section
5(b)(ii) shall be amended by deleting the
words
“(x) any action taken by a taxing authority, or brought in a court of
competent
jurisdiction, on or after the date on which a Transaction is entered
into
(regardless of whether such action is taken or brought with respect to
a party
to this Agreement) or (y).”
2
Section
5(b)(iii) (Tax
Event upon Merger)
will
apply to Party A and 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.
Section
5(b)(iv) (Credit
Event upon Merger)
will
not apply to Party A or Party B.
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(e)
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The
“Automatic
Early Termination”
provision of Section 6(a) of this Agreement will not apply
to Party A or
Party B.
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(f)
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The
“Transfer
to Avoid Termination Event”
provision of Section 6(b)(ii) shall be amended
by deleting the
words “or if a Tax Event upon Merger occurs and the Burdened Party
is the
Affected Party.”
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(g)
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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.
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(ii)
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The
Second Method will apply.
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(h)
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“Termination
Currency”
means United States Dollars.
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(i)
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Timing
of Party B Termination Payment.
If an amount calculated as being due in respect of an Early
Termination
Date under Section 6(e) of this Agreement is an amount to
be paid by Party
B to Party A then, notwithstanding the provisions of Section
6(d)(ii) of
this Agreement, such amount will be payable on the Business
Day
immediately preceding the first Distribution Date following
the date on
which the payment would have been payable as determined in
accordance with
Section 6(d)(ii); provided
that if the date on which the payment would have been payable
as
determined in accordance with Section 6(d)(ii) is a Distribution
Date,
then the payment will be payable on the date determined in
accordance with
Section 6(d)(ii).
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(j)
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Additional
Termination Events.
The following Additional Termination Events will apply, in
each case with
respect to Party A as the sole Affected Party (unless otherwise
provided
below):
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(i) First
Rating Trigger Collateral.
The
First Rating Trigger Requirements apply and Party A has failed to use
commercially reasonable efforts, as soon as reasonably practicable,
to either
(i) furnish an Eligible Guarantee of Party A’s obligations under this Agreement
from a guarantor that maintains the First Trigger Required Ratings
or (ii)
obtain an Eligible Replacement pursuant to Part 5(f) herein that assumes
the
obligations of Party A under this Agreement (through a novation or other
assignment and assumption agreement in form and substance reasonably
satisfactory to Party B) or replaces the outstanding Transactions hereunder
with transactions on identical terms or (iii) to comply with or perform
any
obligation to be complied with or performed by Party A in accordance
with the
Credit Support Document and the Second Rating Trigger Requirements
do not
apply.
(ii) Second
Rating Trigger Replacement.
(A)
Party A has failed to comply with the Second Trigger Conditions (pursuant
to
Part 5(b)(i)) and 30 or more Local Business Days have elapsed since
the last
time the Second Rating Trigger Requirements did not apply and (B)(i)
at least
one Eligible Replacement has made a Firm Offer to be the transferee
of a
transfer to be made in accordance with Part 5(f)(ii) below and/or (ii)
at least
one entity with the First Trigger Required Ratings and/or the Second
Trigger
Required Ratings has made a Firm Offer to provide an Eligible Guarantee
in
respect of all of Party A’s present and future obligations under this
Agreement.
3
The
“First
Rating Trigger Requirements”
apply
when no Relevant Entity has credit ratings at least equal to the First
Trigger
Required Ratings.
The
“Second
Rating Trigger Requirements”
apply
when no Relevant Entity has credit ratings at least equal to the Second
Trigger
Required Ratings.
“Firm
Offer”
means an
offer which, when made, remains capable of becoming legally binding
upon
acceptance.
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(iii)
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Ratings
Event.
Party A fails to comply with the downgrade provisions as
set forth in Part
5(b)(ii) or 5(b)(iii), as applicable, after giving effect
to all relevant
time frames or cure periods specified therein.
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(k)
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The
following Additional Termination Events will apply, in each
case with
respect to Party B as the sole Affected Party (unless otherwise
provided
below):
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(i) Party
B
or the Trust Fund (as defined in the Trust Agreement, dated as of January
1,
2007, among Structured Asset Securities Corporation, as depositor,
Aurora Loan
Services LLC, as master servicer and Xxxxx Fargo Bank, N.A., as trustee
(the
“Trust
Agreement”))
is
terminated.
(ii) The
Trust
Agreement is amended or modified without the prior written consent
of Party A
where such consent is required under the terms of the Trust Agreement;
provided,
however,
that it
shall not be an Additional Termination Event where such amendment or
modification involves the appointment of any successor trustee, master
servicer
or servicer pursuant to the terms of the Trust Agreement.
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(iii)
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The
Class Principal Amounts of the rated Certificates are reduced
to
zero.
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(iv)
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Notice
of the Master Servicer’s or, the NIMS Insurer’s intention to exercise its
option to purchase the Mortgage Loans pursuant to Section
7.01 of the
Trust Agreement is given by the Trustee to Certificateholders
pursuant to
Section 7.02 of the Trust Agreement; provided
that the Early Termination Date may not be earlier than the
date on which
the Certificates are redeemed pursuant to Section 7.02 of
the Trust
Agreement.
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Notwithstanding
anything in Section 6 of this
Agreement to the contrary, any amounts due as result of the occurrence
of an
Additional Termination Event described in Part 1(k)(i) and Part 1(k)(iv) of
this Schedule may be calculated prior to the Early Termination Date
and shall be
payable on the Early Termination Date.
4
Part
2
Representations.
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(a)
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Payer
Tax Representations.
For the purpose of Section 3(e) of this Agreement, Party
A and Party B
will make the following representations:
None.
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(b)
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Gross
Up.
Section 2(d)(i)(4) shall not apply to Party B as X, and Section
2(d)(ii)
shall not apply to Party B as Y, in each case such that Party
B shall not
be required to pay any additional amounts referred to
therein.
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(c)
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Indemnifiable
Tax.
The definition of “Indemnifiable Tax” in Section 14 is deleted in its
entirety and replaced with the
following:
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“Indemnifiable
Tax”
means,
in relation to payments by Party A, any Tax and, in relation to payments
by
Party B, no Tax.
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(d)
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Payee
Representations.
For the purpose of Section 3(f) of this Agreement, Party
A and Party B
make the representations specified below, if
any:
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(i) Party
A
makes the following representation(s):
Party
A
represents that is a corporation organized under the laws of the State
of
Delaware.
(ii) Party
B
makes the following representation(s):
None.
5
Part
3
Agreement
to Deliver Documents.
For
the
purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to
deliver the following documents, as applicable:
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(a)
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Tax
forms, documents or certificates to be delivered
are:—
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Party
A and Party B
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Subject
to Section 4(a)(iii), any document required or reasonably
requested to
allow the other party to make payments under this Agreement
without any
deduction or withholding on account of any Tax.
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(i)
promptly upon reasonable demand by Party B and (ii) promptly
upon learning
that any such Form previously provided by Party A has become
obsolete or
incorrect.
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(b)
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Other
documents to be delivered are:—
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Covered
by §3(d) Representation
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Party
B
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Certified
copy of the Board of Directors resolution (or equivalent
authorizing
documentation) which sets forth the authority of each signatory
to this
Agreement and each Credit Support Document (if any) signing
on its behalf
and the authority of such party to enter into Transactions
contemplated
and performance of its obligations hereunder.
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Concurrently
with the execution and delivery of this Agreement.
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Yes
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Party
A and Party B
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Incumbency
Certificate (or, if available the current authorized signature
book or
equivalent authorizing documentation) specifying the names,
titles,
authority and specimen signatures of the persons authorized
to execute
this Agreement which sets forth the specimen signatures of
each signatory
to this Agreement, each Confirmation and each Credit Support
Document (if
any) signing on its behalf.
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Concurrently
with the execution and delivery of this Agreement unless
previously
delivered and still in full force and effect.
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Yes
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6
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Covered
by §3(d) Representation
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Party
A and Party B
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An
executed copy of the Disclosure Agreement relating to the
Preliminary
Prospectus Supplement or Free Writing Prospectus, as applicable
(each as
defined in the Trust Agreement).
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On
the date of such Preliminary Prospectus Supplement
or
Free Writing Prospectus, as applicable.
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Yes
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Party
A and B
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An
executed copy of the Disclosure Agreement relating to the
Prospectus
Supplement (as defined in the Trust Agreement).
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On
the date of such Prospectus Supplement.
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Yes
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Party
A and B
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An
opinion of counsel to such party reasonably satisfactory
in form and
substance to the other party, and, in the case of Party B,
opinions of
counsel relating to the Trust Agreement and other deal documents
reasonably satisfactory in form and substance to Party A.
|
Concurrently
with the execution and delivery of the Confirmation unless
previously
delivered and still in full force and effect.
|
No
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Party
A
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A
copy of the guaranty provided by the Credit Support Provider,
if
applicable.
|
Concurrently
with the execution and delivery of the Confirmation unless
previously
delivered and still in full force and effect.
|
Yes
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|
Party
A
|
An
opinion of counsel to such party relating to the enforceability
of the
guaranty reasonably satisfactory in form and substance to
Party B, if
applicable.
|
Concurrently
with the execution and delivery of the Confirmation unless
previously
delivered and still in full force and effect.
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No
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|
Party
B
|
An
executed copy of the Trust Agreement and other deal documents
related to
this Transaction.
|
Within
30 days after the date of this Agreement.
|
No
|
|
Party
B
|
Each
material amendment, supplement or waiver of the Trust Agreement,
as
proposed from time to time, or any other amendment or modification
of the
Trust Agreement that requires the written consent of Party
A under the
terms of the Trust Agreement.
|
Promptly
upon learning of any proposed amendment, supplement or
waiver.
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No
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7
Part
4
Miscellaneous.
|
(a)
|
Addresses
for Notices.
For the purposes of Section 12(a) of this
Agreement:
|
(i) Addresses
for notices or communications to Party A: -
Swiss
Re Financial Products Corporation
00
Xxxx
00xx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Head of Operations
Facsimile
No.: (000) 000-0000
With
a copy to:
Swiss
Re Financial Products Corporation
00
Xxxx
00xx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Legal Department
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
(ii) Addresses
for notices or communications to Party B:
Xxxxx
Fargo Bank, N.A.
0000
Xxx
Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 00000
Attention:
Client Service Manager - SARM 2007-1
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
With
a copy to:
Aurora
Loan Services LLC, as Master Servicer
00000
Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx,
Xxxxxxxx 00000
Attention:
Master Servicing
Facsimile
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
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(b)
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Process
Agent.
For the purposes of Section 13(c) of this
Agreement:
|
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 not apply to this
Agreement.
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(d)
|
Multibranch
Party.
For the purpose of Section 10(c) of this
Agreement:
|
8
Party
A
is not a Multibranch Party.
Party
B
is not a Multibranch Party.
|
(e)
|
Calculation
Agent.
The Calculation Agent is Party A.
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(f)
|
Credit
Support Document.
Credit Support Document means the credit support annex entered
into
between Party A and Party B in relation to this Agreement,
and with
respect to Party A, any Eligible Guarantee, if applicable.
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(g)
|
Credit
Support Provider.
Credit Support Provider means in relation to Party A, (1)
Party A in its
capacity as a party to the Credit Support Document and (2)
the guarantor
under any Eligible Guarantee, and in relation to Party B,
Party B in its
capacity as a party to the Credit Support
Document.
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(h)
|
|
(i)
|
Netting
of Payments.
Subparagraph (ii) of Section 2(c) of this Agreement will
apply to all
Transactions (in each case starting from the date of this
Agreement).
|
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(j)
|
“Affiliate”
will have the meaning specified in Section 14 of this Agreement;
provided
that Party B shall be deemed to have no
Affiliates.
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(k)
|
Jurisdiction.
Section 13(b) is hereby amended by: (i) deleting in the second
line of
subparagraph (i) thereof the word “non-”: and (ii) deleting the final
paragraph thereof.
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(l)
|
Waiver
of Jury Trial.
Each party waives, to the fullest extent permitted by applicable
law, any
right it may have to a trial by jury in respect of any suit,
action or
proceeding relating to this Agreement or any Credit Support
Document. Each
party certifies (i) that no representative, agent or attorney
of the other
party or any Credit Support Provider has represented, expressly
or
otherwise, that such other party would not, in the event
of such a suit,
action or proceeding, seek to enforce the foregoing waiver
and (ii)
acknowledges that it and the other party have been induced
to enter into
this Agreement and provide for any Credit Support Document,
as applicable,
by, among other things, the mutual waivers and certifications
in this
Section.
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|
(m)
|
Consent
to Recording.
Each party consents to the recording of the telephone conversations
of
trading and marketing personnel of the parties and their
Affiliates in
connection with this Agreement or any potential
transaction.
|
|
(n)
|
Severability.
If any term, provision, covenant, or condition of this Agreement,
or the
application thereof to any party or circumstance, shall be
held to be
illegal, invalid or unenforceable (in whole or in part) for
any reason,
the remaining terms, provisions, covenants and conditions
hereof shall
continue in full force and effect as if this Agreement had
been executed
with the illegal, invalid or unenforceable portion eliminated,
so long as
this Agreement as so modified continues to express, without
material
change, the original intentions of the parties as to the
subject matter of
this Agreement and the deletion of such portion of this Agreement
will not
substantially impair the respective benefits or expectations
of the
parties to this Agreement.
|
9
|
(o)
|
Single
Agreement.
Section 1(c) shall be amended by adding the words “, the credit support
annex entered into between Party A and Party B in relation
to this
Agreement” after the words “Master Agreement”; provided,
that Section 5(a)(ii) shall not apply to the Credit Support
Document.
|
|
(p)
|
Local
Business Day.
The definition of Local Business Day in Section 14 of this
Agreement shall
be 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.”
|
10
Part
5
Other
Provisions.
|
(a)
|
Definitions.
This Agreement, including each Confirmation and each Swap
Transaction, is
subject to the 2000 ISDA Definitions, as amended, supplemented,
updated,
and superseded from time to time (the “Definitions”),
as published by the International Swaps and Derivatives Association,
Inc.
(“ISDA”)
and will be governed in all respects by the Definitions (except
that
references to “Swap Transactions” shall be deemed to be references to
“Transactions”). The Definitions are incorporated by reference in, and
made part of, this Agreement and each Confirmation as if
set forth in full
in this Agreement and such Confirmations. In the event of
any
inconsistency between the provisions of this Agreement and
the
Definitions, this Agreement will prevail (and, in the event
of any
inconsistency between any Confirmation and the Definitions,
the
Confirmation will control). Any reference in a Confirmation
to any
Definitions which are amended or supplemented in this Schedule
shall be
deemed to be a reference to such Definitions as so amended
or
supplemented, unless the Confirmation states, by specific
reference to any
such amendment or supplement, that such amendment or supplement
will not
apply in respect of the Transaction to which such Confirmation
relates.
|
|
(b)
|
Downgrade
Provisions.
|
(i)
Second
Trigger Conditions.
So long
as the Second Rating Trigger Requirements apply, Party A shall, at its own
expense, use commercially reasonable efforts, as soon as reasonably
practicable,
to either (i) furnish an Eligible Guarantee of Party A’s obligations under this
Agreement from a guarantor that maintains the First Trigger Required
Ratings or
(ii) obtain an Eligible Replacement pursuant to Part 5(f) below that
assumes the
obligations of Party A under this Agreement (through a novation or other
assignment and assumption agreement in form and substance reasonably
satisfactory to Party B) or replaces the outstanding Transactions hereunder
with transactions on identical terms. In addition, Party A shall comply
with or
perform any obligation to be complied with or performed by Party A
in accordance
with the Credit Support Annex.
(ii) Collateralization
Event.
It
shall be a collateralization event (“Collateralization
Event”)
if at
any time after the date hereof, the Relevant Entity shall fail to maintain
the
Hedge Counterparty Ratings Requirement. For the avoidance of doubt,
the parties
hereby acknowledge and agree that notwithstanding the occurrence of
a
Collateralization Event, this Agreement and each Transaction hereunder
shall
continue to be a Swap Agreement for purposes of the Trust Agreement.
Within 30
calendar days from the date a Collateralization Event has occurred
and so long
as such Collateralization Event is continuing, Party A shall, at its sole
expense, either (i) post collateral in an amount required to be posted
pursuant
to terms of the Credit Support Document (such amount which is the greater
of
amounts required to be posted by Xxxxx’x, S&P and Fitch), (ii)
upon
satisfaction of the Rating Agency Condition, furnish an Eligible Guarantee
of
Party A’s obligations under this Agreement from a guarantor that satisfies
the
Hedge Counterparty Ratings Requirement or (iii) obtain
an
Eligible Replacement that (x) upon satisfaction of the Rating Agency
Condition,
assumes the obligations of Party A under this Agreement (through an
assignment and assumption agreement in form and substance reasonably
satisfactory to Party B) or (y) having provided prior written notice to
S&P and Fitch, replaces the outstanding Transactions hereunder with
transactions on identical terms; provided
that
such Eligible
Replacement,
as of
the date of such assumption or replacement, will not, as a result thereof,
be
required to withhold or deduct on account of tax under the Agreement
or the new
Transactions, as applicable, and such assumption or replacement will
not lead to
a Termination Event or Event of Default occurring under the Agreement
or new
Transactions, as applicable.
11
|
(iii)
|
Ratings
Event.
It shall be a ratings event (“Ratings
Event”)
if at any time after the date hereof, the Relevant Entity
shall fail to
satisfy the Hedge Counterparty Ratings Threshold or the Relevant
Entity is
no longer rated by S&P. Within 30 calendar days (or, in the case of a
failure to meet the requirements of subparagraph (a) of the
definition of
“Hedge Counterparty Ratings Threshold”, within 10 Local Business Days)
from the date a Ratings Event has occurred and so long as
such Ratings
Event is continuing, Party A shall, at its sole expense, (i) obtain
an Eligible Replacement that (x) upon satisfaction of the
Rating Agency
Condition, assumes the obligations of Party A under this Agreement
(through an assignment and assumption agreement in form and
substance
reasonably satisfactory to Party B) or (y) having provided prior
written notice to S&P and Fitch, replaces the outstanding Transactions
hereunder with transactions on identical terms; provided
that such Eligible Replacement, as of the date of such assumption
or
replacement, will not, as a result thereof, be required to
withhold or
deduct on account of tax under the Agreement or the new Transactions,
as
applicable, and such assumption or replacement will not lead
to a
Termination Event or Event of Default occurring under the
Agreement or new
Transactions, as applicable, or (ii) upon satisfaction of
the Rating
Agency Condition, furnish an Eligible Guarantee of Party
A’s obligations
under this Agreement from a guarantor that satisfies the
Hedge
Counterparty Ratings Requirement.
In addition, immediately upon the occurrence of a Ratings
Event, Party A
shall be required to post collateral in an amount required
to be posted
pursuant to terms of the Credit Support Document (such amount
which is the
greater of amounts required to be posted by Xxxxx’x, S&P and
Fitch).
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|
(iv)
|
Definitions.
|
|
(A)
|
“Eligible
Guarantee”
means an unconditional and irrevocable guarantee that is
provided by a
guarantor as principal debtor rather than surety and is
directly
enforceable by Party B, where either (A) a law firm has
given a legal
opinion confirming that none of the guarantor’s payments to Party B under
such guarantee will be subject to withholding for Tax or
(B) such
guarantee provides that, in the event that any of such
guarantor’s
payments to Party B are subject to withholding for Tax,
such guarantor is
required to pay such additional amount as is necessary
to ensure that the
net amount actually received by Party B (free and clear
of any withholding
tax) will equal the full amount Party B would have received
had no such
withholding been required.
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|
(B)
|
“Eligible
Replacement”
means a Transferee (as defined in Part 5(f)(ii) herein)
(i) (A) with the
First Trigger Required Ratings and/or the Second Trigger
Required Ratings
or (B) whose present and future obligations owing to Party
B are
guaranteed pursuant to an Eligible Guarantee provided by
a guarantor with
the First Trigger Required Ratings and (ii) with the ratings
specified in
the definition of Hedge Counterparty Ratings Requirement
below;
provided
that no entity shall be an Eligible Replacement unless
(A) a legal opinion
is given by a law firm confirming that none of such entity’s payments to
Party B under this Agreement or its replacement (as applicable)
will be
subject to deduction or withholding for Tax or (B) in the
event that any
of such entity’s payments to Party B are subject to withholding for Tax,
such Eligible Replacement is required to pay such additional
amount as is
necessary to ensure that the net amount actually received
by Party B (free
and clear of any withholding tax) will equal the full amount
Party B would
have received had no such withholding been
required.
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|
(C)
|
“First
Trigger Required Ratings”
means with respect to an entity, either (i) where the entity
is the
subject of a Moody’s Short-term Rating, such entity’s Moody’s Short-term
Rating is “Prime-1” and the entity’s long-term, unsecured and
unsubordinated debt or counterparty obligations are rated
“A2” or above by
Moody’s or (ii) where the entity is not the subject of a Moody’s
Short-term Rating, its long-term, unsecured and unsubordinated
debt or
counterparty obligations are rated “A1” or above by
Moody’s.
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12
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(D)
|
“Hedge
Counterparty Ratings Threshold”
means, with respect to S&P, (a) the unsecured, long-term senior debt
obligations of Party A (or its Credit Support Provider) are rated at
least “BBB-” by S&P, and with respect to Fitch (if Party A is rated by
Fitch), (b) either (i) the unsecured, senior debt obligations
or financial
strength ratings of Party A (or its Credit Support Provider), are
rated at least “BBB+” by Fitch or (ii) the unsecured, short-term debt
obligations (if any) of Party A are rated at least “F2” by Fitch. For
the avoidance of all doubts, the parties hereby acknowledge
and agree that
notwithstanding the occurrence of a Ratings Event, this
Agreement and each
Transaction hereunder shall continue to be a Swap Agreement
for purposes
of the Trust Agreement.
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|
(E)
|
“Hedge
Counterparty Ratings Requirement”
means (a) either (i) the unsecured, short-term debt obligations
of the
counterparty (or its Credit Support Provider) are rated
at least “A-1” by
S&P or (ii) if the counterparty does not have a short-term
rating from
S&P, the unsecured, long-term senior debt obligations of
the
counterparty (or its Credit Support Provider) are rated
at least “A+” by
S&P, and (b) (if rated by Fitch) either (i) the unsecured,
long-term
senior debt obligations of such counterparty (or its Credit
Support
Provider) are rated at least “A” by Fitch or (ii) the unsecured,
short-term debt obligations of such counterparty (or its
Credit Support
Provider) are rated at least “F1” by Fitch. For the purpose of this
definition, no direct or indirect recourse against one
or more
shareholders of the counterparty (or against any Person
in control of, or
controlled by, or under common control with, any such shareholder)
shall
be deemed to constitute a guarantee, security or support
of the
obligations of the counterparty.
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|
(F)
|
“Moody’s”
means Xxxxx'x Investors Service,
Inc.
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|
(G)
|
“Moody’s
Short-term Rating”
means a rating assigned by Moody’s under its short-term rating scale in
respect of an entity’s short-term, unsecured and unsubordinated debt
obligations.
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|
(H)
|
“Rating
Agency Condition”
shall mean first receiving prior written confirmation from
S&P and
Fitch that their then-current ratings of the rated Certificates
will not
be downgraded or withdrawn by such Rating
Agency.
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(I)
|
“Second
Trigger Required Ratings”
means with respect to an entity (A) either where the entity
is the subject
of a Moody’s Short-term Rating, such entity’s Moody’s Short-term Rating is
“Prime-2” or above and its long-term, unsecured and unsubordinated
debt or
counterparty obligations are rated “A3” or above by Moody’s, and (B) where
such entity is not the subject of a Moody’s Short-term Rating, if the
entity’s long-term, unsecured and unsubordinated debt or counterparty
obligations are rated “A3” or above by
Xxxxx’x.
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|
(c)
|
Additional
Representations.
Section 3(a) of this Agreement is hereby amended to include
the following
additional representations after paragraph
3(a)(v):
|
(i) Eligible
Contract Participant.
It is
an “eligible contract participant” as defined in the U.S. Commodity Exchange
Act.
(ii) Individual
Negotiation.
This
Agreement and each Transaction hereunder is subject to individual negotiation
by
the parties.
|
(iii)
|
Relationship
between Party A and Party B.
Each of Party A and Party B will be deemed to represent to
the other on
the date on which it enters into a Transaction or an amendment
thereof
that (absent a written agreement between Party A and Party
B that
expressly imposes affirmative obligations to the contrary
for that
Transaction):
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13
|
(A)
|
Principal.
Party A is acting as principal and not as agent when entering
into this
Agreement and each Transaction. Party B is acting not in
its individual
capacity but solely as Trustee on behalf of the Supplemental
Interest
Trust.
|
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(B)
|
Non-Reliance.
Party A is acting for its own account and it has made its
own independent
decisions to enter into that Transaction and as to whether
that
Transaction is appropriate or proper for it based upon
its own judgment
and upon advice from such advisors as it has deemed necessary.
Party B is
acting not in its individual capacity but solely as Trustee
on behalf of
the Supplemental Interest Trust. It is not relying on any
communication
(written or oral) of the other party as investment advice
or as a
recommendation to enter into that Transaction; it being
understood that
information and explanations related to the terms and conditions
of a
Transaction shall not be considered investment advice or
a recommendation
to enter into that Transaction. No communication (written
or oral)
received from the other party shall be deemed to be an
assurance or
guarantee as to the expected results of that
Transaction.
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(C)
|
Evaluation
and Understanding.
It is capable of evaluating and understanding (on its own
behalf or
through independent professional advice), and understands
and accepts, the
terms, conditions and risks of this Agreement and each
Transaction
hereunder. It is also capable of assuming, and assumes,
all financial and
other risks of this Agreement and each Transaction
hereunder.
|
|
(D)
|
Status
of Parties.
The other party is not acting as a fiduciary or an advisor
for it in
respect of that Transaction.
|
|
(d)
|
Section
4 is hereby amended by adding the following new agreement:
|
Actions
Affecting Representations.
Party B
agrees not to take any action during the term of this Agreement or
any
Transaction hereunder that renders or could render any of the representations
and warranties in this Agreement untrue, incorrect, or incomplete,
and if any
event or condition occurs that renders or could render any such representation
untrue, incorrect, or incomplete, Party B will immediately give written
notice
thereof to Party A.
|
(e)
|
Section
1(c).
For purposes of Section 1(c) of the Agreement, the Transaction
evidenced
by Confirmation with Reference ID: 1247682, dated January
31, 2007,
between Party A and Party B, as amended from time to time,
shall be the
sole Transaction under the Agreement.
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|
(f)
|
Transfer.
|
(i) Section
7
of this Agreement shall not apply to Party A and, subject to Section
6(b)(ii)
(provided
that to
the extent Party A makes a transfer pursuant to Section 6(b)(ii) it
will provide
a prior written notice to the Rating Agencies of such transfer) and
Part
5(f)(ii) below, Party A may not transfer (whether by way of security
or
otherwise) any interest or obligation in or under this Agreement without
first
satisfying the Rating Agency Condition and without the prior written
consent of
Party B.
(ii) Subject
to Part 5(o) below, Party A may (at its own cost) transfer all or substantially
all of its rights and obligations with respect to this Agreement to
any other
entity (a “Transferee”)
that
is an Eligible Replacement through a novation or other assignment and
assumption
agreement or similar agreement in form and substance reasonably satisfactory
to
Party B; provided
that (A)
Party B shall determine in its sole discretion, acting in a commercially
reasonable manner, whether or not a transfer relates to all or substantially
all
of Party A’s rights and obligations under this Agreement; (B) as of the date of
such transfer the Transferee will not be required to withhold or deduct
on
account of a Tax from any payments under this Agreement unless the
Transferee
will be required to make payments of additional amounts pursuant to
Section
2(d)(i)(4) of this Agreement in respect of such Tax; (C) a Termination
Event or
Event of Default does not occur under this Agreement as a result of
such
transfer; and (D) Party A satisfies the Rating Agency Condition. Following
such
transfer, all references to Party A shall be deemed to be references
to the
Transferee.
14
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(iii)
|
If
an entity has made a Firm Offer to be the transferee of a
transfer to be
made in accordance with Part 5(f)(ii) above, Party B shall
(at Party A’s
cost) at Party A’s written request, take any reasonable steps required to
be taken by it to effect such
transfer.
|
|
(iv)
|
Except
as specified otherwise in the documentation evidencing a
transfer, a
transfer of all the obligations of Party A made in compliance
with this
Part 5(f) will constitute an acceptance and assumption of
such obligations
(and any related interests so transferred) by the Transferee,
a novation
of the transferee in place of Party A with respect to such
obligations
(and any related interests so transferred), and a release
and discharge by
Party B of Party A from, and an agreement by Party B not
to make any claim
for payment, liability, or otherwise against Party A with
respect to, such
obligations from and after the effective date of the
transfer.
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|
(g)
|
Trustee
Capacity. It
is expressly understood and agreed by the parties hereto
that (i) this
Agreement is executed and delivered by Trustee not individually
or
personally but solely as trustee of Supplemental Interest
Trust, in the
exercise of the powers and authority conferred and vested
in it, (ii) each
of the representations, undertakings and agreements herein
made on the
part of Supplemental Interest Trust is made and intended
not as personal
representations, undertakings and agreements by Trustee but
is made and
intended for the purpose of binding only Supplemental Interest
Trust,
(iii) nothing herein contained shall be construed as creating
any
liability on the part of Trustee, individually or personally,
to perform
any covenant either expressed or implied contained herein,
all such
liability, if any, being expressly waived by the parties
hereto and by any
Person claiming by, through or under the parties hereto and
(iv) under no
circumstances shall Trustee be personally liable for the
payment of any
indebtedness or expenses of the Trust or be liable for the
breach or
failure of any obligation, representation, warranty or covenant
made or
undertaken by Supplemental Interest Trust under this
Agreement.
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|
(h)
|
Proceedings.
Without impairing any right afforded to it under the Trust
Agreement as a
third party beneficiary, Party A shall not institute against
or cause any
other person to institute against, or join any other person
in instituting
against Trust Fund any bankruptcy, reorganization, arrangement,
insolvency
or liquidation proceedings, or other proceedings under any
federal or
state bankruptcy, dissolution or similar law, for a period
of one year and
one day following indefeasible payment in full of the
Certificates.
Nothing shall preclude, or be deemed to stop, Party A (i)
from taking any
action prior to the expiration of the aforementioned one
year and one day
period, or if longer the applicable preference period then
in effect, in
(A) any case or proceeding voluntarily filed or commenced
by Party B or
(B) any involuntary insolvency proceeding filed or commenced
by a Person
other than Party A, or (ii) from commencing against Party
B or any of the
Collateral any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium, liquidation or similar
proceeding.
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|
(i)
|
Change
of Account.
Section 2(b) of this Agreement is hereby amended by the addition
of the
words “to another account in the same legal and tax jurisdiction
as the
original account” following the word “delivery” in the first line
thereof.
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15
|
(j)
|
Item
1115 Agreement.
Party A and Party B hereby agree that the terms of that certain
Disclosure
Agreement dated as of January 31, 2007 (the “Item
1115 Agreement”)
among Structured Asset Securities Corporation, Party A, Xxxxxx
Brothers
Holdings Inc., Xxxxxx Brothers Inc. and Party B shall be
incorporated by
reference into this Agreement and Party B shall be an express
beneficiary
of the Item 1115 Agreement.
|
|
(k)
|
Trust
Agreement.
|
|
(i)
|
Capitalized
terms used in this Agreement that are not defined herein
and are defined
in the Trust Agreement shall have the respective meanings
assigned to them
in the Trust Agreement.
|
(ii) Party
B
will provide at least ten days prior written notice to Party A of any
proposed
amendment or modification to the Trust Agreement.
|
(l)
|
No
Set-off.
|
|
(i)
|
All
payments under this Agreement shall be made without set-off
or
counterclaim, except as expressly provided for in Section
2(c), Section 6
or Part 5(q)(vi) below and paragraphs 8(a) and 8(b) of the
Credit Support
Document.
|
(ii) Section
6(e) shall be amended by the deletion of 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.”
|
(m)
|
Notice
of Certain Events or Circumstances.
Each party agrees, upon learning of the occurrence or existence
of any
event or condition that constitutes (or that with the giving
of notice or
passage of time or both would constitute) an Event of Default
or
Termination Event with respect to such party, promptly to
give the other
party notice of such event or condition (or, in lieu of giving
notice of
such event or condition in the case of an event or condition
that with the
giving of notice or passage of time or both would constitute
an Event of
Default or Termination Event with respect to the party, to
cause such
event or condition to cease to exist before becoming an Event
of Default
or Termination Event); provided
that failure to provide notice of such event or condition
pursuant to this
Part 5(m) shall not constitute an Event of Default or a Termination
Event.
Each party agrees to provide to the other party any other
notice
reasonably expected to be provided to facilitate compliance
with the terms
of this Agreement and the Credit Support
Document.
|
|
(n)
|
Regarding
Party A. Party
B acknowledges and agrees that Party A has had and will have
no
involvement in and, accordingly Party A accepts no responsibility
for: (i)
the establishment, structure, or choice of assets of Party
B; (ii) the
selection of any person performing services for or acting
on behalf of
Party B; (iii) the selection of Party A as the Counterparty;
(iv) the
terms of the Certificates; (v) other than as provided in
the Disclosure
Agreements, the preparation of or passing on the disclosure
and other
information contained in any offering circular or offering
document for
the Certificates, the Trust Agreement, or any other agreements
or
documents used by Party B or any other party in connection
with the
marketing and sale of the Certificates; (vi) the ongoing
operations and
administration of Party B, including the furnishing of any
information to
Party B which is not specifically required under this Agreement
or the
Disclosure Agreements; or (vii) any other aspect of Party
B’s
existence.
|
|
(o)
|
Amendments.
This Agreement will not be amended unless the Rating Agency
Condition is
satisfied. Notwithstanding
any other provision of this Agreement, this Agreement shall
not be
amended, no Early Termination Date shall be effectively designated
by
Party B, and no transfer of any rights or obligations under
this Agreement
shall be made unless each Rating Agency has been given prior
written
notice of such amendment, designation or
transfer.
|
16
|
(p)
|
Non-Petition
and Limited Recourse.
The liability of Party B under this Agreement is limited
in recourse to
the assets of the Trust Fund, and to distributions of interest
proceeds
and principal proceeds thereon applied in accordance with
the terms of the
Trust Agreement. Upon application of and exhaustion of all
of the assets
of the Trust Fund (and proceeds thereof) in accordance with
the Trust
Agreement, Party A shall not be entitled to take any further
steps against
Party B to recover any sums due but still unpaid hereunder
or thereunder,
all claims in respect of which shall be extinguished. Notwithstanding
the
foregoing or anything herein to the contrary, Party A shall
not be
precluded from declaring an Event of Default or from exercising
any other
right or remedy as set forth in this Agreement or the Trust
Agreement.
|
|
(q)
|
Calculations.
Notwithstanding Section 6 of this Agreement, so long as Party
A is (A) the
sole Affected Party in respect of an Additional Termination
Event or a Tax
Event Upon Merger or (B) the Defaulting Party in respect
of any Event of
Default, paragraphs (i) to (vi) below shall apply:
|
(i) The
definition of “Market
Quotation”
shall be
deleted in its entirety and replaced with the following:
“Market
Quotation” means,
with respect to one or more Terminated Transactions, a Firm Offer which
is (1)
made by a Reference Market-maker that is an Eligible Replacement, (2)
for an
amount that would be paid to Party B (expressed as a negative number)
or by
Party B (expressed as a positive number) in consideration of an agreement
between Party B and such Reference Market-maker to enter into a transaction
(the
“Replacement
Transaction”)
that
would have the effect of preserving for such party the economic equivalent
of
any payment or delivery (whether the underlying obligation was absolute
or
contingent and assuming the satisfaction of each applicable condition
precedent)
by the parties under Section 2(a)(i) in respect of such Terminated
Transactions
or group of Terminated Transactions that would, but for the occurrence
of the
relevant Early Termination Date, have been required after that Date,
(3) made on
the basis that Unpaid Amounts in respect of the Terminated Transaction
or group
of Transactions are to be excluded but, without limitation, any payment
or
delivery that would, but for the relevant Early Termination Date, have
been
required (assuming satisfaction of each applicable condition precedent)
after
that Early Termination Date is to be included and (4) made in respect
of a
Replacement Transaction with terms substantially the same as those
of this
Agreement (save for the exclusion of provisions relating to Transactions
that
are not Terminated Transactions).
(ii) The
definition of“Settlement
Amount” shall
be
deleted in its entirety and replaced with the following:
“Settlement
Amount” means,
with respect to any Early Termination Date, an amount (as determined
by Party B)
equal to the Termination Currency Equivalent of the amount (whether
positive or
negative) of any Market Quotation for the relevant Terminated Transaction
or
group of Terminated Transactions that is accepted by Party B so as
to become
legally binding; provided
that:
(A) If,
on
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”),
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 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
negative number shall equal the largest absolute value such that, for
example,
negative 3 shall be lower than negative 2); or
17
|
(B)
|
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
Quotations have been made and remain 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.
|
|
(iii)
|
For
the purpose of clause (4) of the definition of Market Quotation,
Party B
shall determine in its sole discretion, acting in a commercially
reasonable manner, whether a Firm Offer is made in respect
of a
Replacement Transaction with commercial terms substantially
the same as
those of this Agreement (save for the exclusion of provisions
relating to
Transactions that are not Terminated Transactions); provided,
however,
that notwithstanding the provisions of this Part 5(r), nothing
in this
Agreement shall preclude Party A from obtaining Market
Quotations.
|
|
(iv)
|
At
any time on or before the Latest Settlement Amount Determination
Day at
which two or more Market Quotations remain capable of becoming
legally
binding upon acceptance, Party B shall be entitled to accept
only the
lowest of such Market Quotations.
|
(v) 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.
|
(vi)
|
If
the Settlement Amount is a negative number, Section 6(e)(i)(3)
of this
Agreement shall be deleted in its entirety and replaced with
the
following:
|
Second
Method and Market Quotation. If
Second
Method and Market Quotation apply, (1) Party B shall pay to Party A
an amount
equal to the absolute value of the Settlement Amount in respect of
the
Terminated Transactions, (2) Party B shall pay to Party A the Termination
Currency Equivalent of the Unpaid Amounts owing to Party A and (3)
Party A shall
pay to Party B the Termination Currency Equivalent of the Unpaid Amounts
owing
to Party B; provided
that,
(i) the amounts payable under (2) and (3) shall be subject to netting
in
accordance with Section 2(c) of this Agreement and (ii) notwithstanding
any
other provision of this Agreement, any amount payable by Party A under
(3) shall
not be netted-off against any amount payable by Party B under (1).
18
IN
WITNESS WHEREOF,
the
parties have executed this document by their duly authorized officers
with
effect from the date specified on the first page hereof.
|
SWISS
RE FINANCIAL PRODUCTS CORPORATION
|
STRUCTURED
ADJUSTABLE RATE MORTGAGE LOAN TRUST, SERIES 2007-1
By:
Xxxxx Fargo Bank, N.A., not in its individual capacity, but
solely as
Trustee
|
|
By:
Name:
Title:
|
By:
Name:
Title:
|
19
