ISDA® International Swap and Derivatives Association, Inc. MASTER AGREEMENT dated as of March 9, 2007
(Multicurrency—Cross
Border)
ISDA®
International
Swap and Derivatives Association, Inc.
dated
as
of March 9, 2007
THE
ROYAL BANK OF SCOTLAND PLC
|
and
|
XXXXX
FARGO BANK, N.A., SOLELY IN ITS CAPACITY AS ADMINISTRATOR (THE “YIELD
MAINTENANCE ADMINISTRATOR”) ON BEHALF OF HARBORVIEW MORTGAGE LOAN TRUST
2007-1
|
("Party A") |
("Party
B")
|
have
entered and/or anticipate entering into one or more transactions (each a
“Transaction”) that are or will be governed by this Master Agreement, which
includes the schedule (the “Schedule”), and the documents and other confirming
evidence (each a “Confirmation”) exchanged between the parties confirming those
Transactions.
Accordingly,
the parties agree as follows:—
1. Interpretation
(a) Definitions.
The
terms
defined in Section 14 and in the Schedule will have the meanings therein
specified for the purpose of this Master Agreement.
(b) Inconsistency.
In
the
event of any inconsistency between the provisions of the Schedule and the
other
provisions of this Master Agreement, the Schedule will prevail. In the event
of
any inconsistency between the provisions of any Confirmation and this Master
Agreement (including the Schedule), such Confirmation will prevail for the
purpose of the relevant Transaction.
(c) Single
Agreement. All
Transactions are entered into in reliance on the fact that this Master Agreement
and all Confirmations form a single agreement between the parties (collectively
referred to as this “Agreement”), and the parties would not otherwise enter into
any Transactions.
2. Obligations
(a) General
Conditions.
(i) Each
party will make each payment or delivery specified in each Confirmation to
be
made by it, subject to the other provisions of this Agreement.
(ii) Payments
under this Agreement will be made on the due date for value on that date
in
the place
of the
account specified in the relevant Confirmation or otherwise pursuant to this
Agreement, in freely transferable funds and in the manner customary for payments
in the required
currency. Where
settlement is by delivery (that is, other than by payment), such delivery
will
be made for receipt on the due date in the manner customary for the relevant
obligation unless otherwise specified in the relevant Confirmation or elsewhere
in this Agreement.
(iii) Each
obligation of each party under Section 2(a)(i) is subject to (1) the condition
precedent that no Event of Default or Potential Event of Default with respect
to
the other party has occurred and is continuing, (2) the condition precedent
that
no Early Termination Date in respect of the relevant Transaction has occurred
or
been effectively designated and (3) each other applicable condition precedent
specified in this Agreement.
1
(b) Change
of Account. Either
party may change its account for receiving a payment or delivery by giving
notice to the other party at least five Local Business Days prior to the
scheduled date for the payment or delivery to which such change applies unless
such other party gives timely notice of
a
reasonable objection
to such
change.
(c) Netting.
If
on any
date amounts would otherwise be payable:—
(i) in
the
same currency; and
(ii) in
respect of the same Transaction,
by
each
party to the other, then, on such date, each party's obligation to make payment
of any such amount will be automatically satisfied and discharged and, if
the
aggregate amount that would otherwise
have been
payable
by one party exceeds the aggregate amount that would otherwise have been
payable
by the other party, replaced by an obligation upon the party by whom the
larger
aggregate amount would have been payable
to pay to the other party the excess of the larger aggregate amount over
the
smaller aggregate amount.
The
parties may elect in respect of two or more Transactions that a net amount
will
be determined in respect of
all
amounts payable on the same date in the same currency in respect of such
Transactions, regardless
of
whether such amounts are payable in respect of the same Transaction. The
election may be made in the Schedule or a Confirmation by specifying that
subparagraph (ii) above will not apply to the Transactions identified as
being
subject to the election, together with the starting date (in which case
subparagraph (ii) above will not, or will cease to, apply to such Transactions
from such date). This election may be made separately for different groups
of
Transactions and will apply separately to each pairing of Offices through
which
the parties make and receive payments or deliveries.
(d) Deduction
or Withholding for Tax.
(i) Gross-Up.
All
payments under this Agreement will be made without any deduction or withholding
for or on account of any Tax unless such deduction or withholding is required
by
any applicable law, as modified by the practice of any relevant governmental
revenue
authority, then
in
effect. If a party is so required to deduct or withhold, then that party
(“X”)
will:—
(1) promptly
notify the other party (“Y”) of such requirement;
(2) pay
to
the relevant authorities the full amount required to be deducted or withheld
(including the full amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly
forward to Y an official receipt (or a certified copy), or other documentation
reasonably acceptable to Y, evidencing such payment to such authorities;
and
(4) if
such
Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which
Y is
otherwise entitled under this Agreement, such additional amount as is
necessary
to ensure that the
net
amount actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed
against
X or Y) will equal the full amount Y would have received had no such deduction
or withholding been required. However, X will not be required to pay any
additional amount to Y to the extent that it would not be required to be
paid
but for:—
(A) the
failure by Y to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d); or
(B) the
failure of a representation made by Y pursuant to Section 3(f) to be accurate
and true unless such failure would not have occurred but for (I) any action
taken by a taxing authority, or brought in a court of competent jurisdiction,
on
or after the date on which a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a party to this Agreement)
or
(II) a Change in Tax Law.
2
(ii) Liability.
If:—
(1) X
is
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, to make any deduction
or withholding in respect of which X
would
not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X
does
not so deduct or withhold; and
(3) a
liability resulting from such Tax is assessed directly against X,
then,
except to the extent Y has satisfied or then satisfies the liability resulting
from such Tax, Y will promptly pay to X the amount of such liability (including
any related liability for interest, but including any related liability for
penalties only if Y has failed to comply with or perform any agreement contained
in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default
Interest; Other Amounts. Prior
to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party that defaults in the performance of
any
payment
obligation will, to the extent permitted by law and subject to
Section 6(c), be required to pay
interest
(before
as well as after judgment) on the overdue amount to the other party on demand
in
the same
currency
as such overdue amount, for the period from (and including) the original
due
date for payment to (but excluding) the date of actual payment, at the Default
Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. If, prior to the occurrence
or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party defaults in the performance of any obligation required to be settled
by
delivery, it will compensate
the other party on demand
if and
to the extent provided for in the relevant Confirmation or elsewhere in this
Agreement.
3. Representations
Each
party represents to the other party (which representations will be
deemed
to be repeated
by each
party on each date on which a Transaction is entered into and, in the
case
of the representations
in
Section 3(f), at all times until the termination of this Agreement)
that:—
(a) Basic
Representations.
(i) Status.
It
is
duly organised and validly existing under the laws of the jurisdiction of
its
organisation or incorporation and, if relevant under such laws, in good
standing;
(ii) Powers.
It
has
the power to execute this Agreement and any other documentation relating
to this
Agreement to which it is a party, to
deliver this Agreement and any other
documentation relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement and any
obligations it has under any Credit Support Document to which it is a party
and
has taken all necessary action to authorise such execution, delivery and
performance;
(iii) No
Violation or Conflict.
Such
execution, delivery and
performance do not
violate
or conflict with any law applicable to it, any provision of its constitutional
documents, any order or judgment of any court or other agency of government
applicable to it or any of its assets or any contractual restriction binding
on
or affecting it or any of its assets;
(iv) Consents.
All
governmental and other consents that are required to have been obtained by
it
with respect to this Agreement or any Credit Support Document to which it
is a
party have been obtained and are in full force and effect and all conditions
of
any such consents have been complied with; and
(v) Obligations
Binding. Its
obligations under
this Agreement and any
Credit
Support Document to which it is a party constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject
to
applicable bankruptcy, reorganisation, insolvency, moratorium or similar
laws
affecting creditors' rights generally and subject, as to enforceability,
to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law)).
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(b) Absence
of Certain Events. No
Event
of Default or Potential Event of Default or, to its knowledge, Termination
Event with respect to it has occurred
and is
continuing and
no
such event
or
circumstance would occur
as
a result of its entering into or performing its
obligations under this Agreement
or any
Credit Support Document to which it is a party.
(c) Absence
of Litigation.
There
is
not pending or, to its knowledge, threatened against it or any of its Affiliates
any action, suit or proceeding
at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator that is
likely
to affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document
to which
it is a party or its ability to perform its obligations under this Agreement
or
such Credit Support Document.
(d) Accuracy
of Specified Information. All
applicable information
that
is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of
the
information, true, accurate and complete in every material respect.
(e) Payer
Tax Representation. Each
representation specified in the Schedule as being made by it for the purpose
of
this Section 3(e) is accurate and true.
(f) Payee
Tax Representations. Each
representation specified in the Schedule as being made by it for the purpose
of
this Section 3(f) is accurate and true.
4. Agreements
Each
party agrees with the other that, so long as either party has or may have
any
obligation under this Agreement or under any Credit Support Document to which
it
is a party:—
(a) Furnish
Specified Information. It
will
deliver to the other party or, in certain cases under subparagraph (iii)
below,
to such government or taxing authority as the other party reasonably
directs:—
(i) any
forms, documents or certificates relating to taxation specified in the Schedule
or any Confirmation;
(ii) any
other
documents specified in the Schedule or any Confirmation; and
(iii) upon
reasonable demand by such other party, any form or document that may be required
or reasonably requested in writing in order to allow such other party or
its
Credit Support Provider to make a payment under this Agreement or any applicable
Credit Support Document without any deduction or withholding for or on account
of any Tax or with such deduction or withholding at a reduced rate (so long
as
the completion, execution or submission of such form or document would not
materially prejudice the legal or commercial position of the party in receipt
of
such demand), with any such form or document to be accurate and completed
in a
manner reasonably satisfactory to such other party and to be executed
and to be delivered with any
reasonably required certification,
in
each
case by the date specified in the Schedule or such Confirmation or, if none
is
specified, as soon as reasonably practicable.
(b) Maintain
Authorisations. It will
use
all reasonable efforts to maintain in full force and effect all consents
of any
governmental or other authority that are required to be obtained by it with
respect to this Agreement
or any Credit Support Document to which
it
is a party and will use
all
reasonable efforts to obtain any that may become necessary in the
future.
(c) Comply
with Laws. It
will
comply in all material respects with all applicable laws and orders to
which
it
may be subject if failure
so to
comply would materially impair its ability to perform its obligations under
this
Agreement or any Credit Support Document to which it is a party.
(d) Tax
Agreement. It
will
give notice of any failure of a representation made by it under Section 3(f)
to
be accurate and true promptly upon learning of such failure.
(e) Payment
of Stamp Tax. Subject
to Section 11, it will pay any Stamp Tax levied or imposed upon it
or in
respect of its execution or performance
of this
Agreement by a jurisdiction in which it is incorporated, organised,
managed and controlled, or considered to have its seat, or in which a branch
or
office through which it is
acting
for the purpose of this Agreement is located
(“Stamp
Tax Jurisdiction”) and will indemnify the
other
party against any Stamp Tax levied or imposed upon
the
other party or in respect of the other party's execution
or performance of this Agreement by any such
Stamp
Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect
to the
other party.
4
5. Events
of Default and Termination Events
(a) Events
of Default. The
occurrence at any time with respect to a party or, if applicable, any Credit
Support
Provider of such party or any Specified
Entity
of such party of any of the following events
constitutes an event of default (an “Event of Default”) with respect to such
party:—
(i) Failure
to Pay or Deliver. Failure
by the party to make, when due, any payment under this Agreement or delivery
under Section 2(a)(i) or 2(e) required to be made by it if such failure is
not
remedied on or before the third Local Business Day after notice of such failure
is given to the party;
(ii) Breach
of Agreement. Failure
by the party to comply with or perform any agreement or obligation (other
than
an obligation to make any payment under this Agreement or delivery under
Section
2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement
or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with
or
performed by the party in accordance with this Agreement if such failure
is not
remedied on or before the thirtieth day after notice of such failure is given
to
the party;
(iii) Credit
Support Default.
(1) Failure
by the party or any Credit Support Provider of such party to comply with
or
perform any agreement or obligation to be complied with or performed by it
in
accordance with any Credit Support Document if such failure is continuing
after
any applicable grace period has elapsed;
(2) the
expiration or termination
of such
Credit Support Document or the failing or
ceasing
of
such
Credit Support Document to be in full force and
effect
for the purpose of this Agreement (in
either case other than in accordance with its terms)
prior
to the satisfaction
of all obligations of
such
party under each Transaction to which
such
Credit Support Document relates without the written consent of the other
party;
or
(3) the
party
or such
Credit Support
Provider
disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges
the validity of, such Credit Support Document;
(iv) Misrepresentation.
A
representation (other than a representation under Section 3(e)
or (f))
made
or
repeated or deemed to have been made or repeated by the party or any Credit
Support
Provider
of such party in this Agreement or any Credit Support Document proves to
have
been
incorrect
or misleading in any
material
respect when made or repeated or deemed to have been
made or
repeated;
(v) Default
under Specified Transaction. The
party, any Credit Support Provider of such party
or
any
applicable Specified Entity of such party (1) defaults under a Specified
Transaction
and,
after giving
effect to any applicable notice requirement or grace period, there occurs
a
liquidation
of, an
acceleration
of obligations under, or an
early
termination of, that Specified Transaction, (2) defaults, after giving effect
to
any applicable notice requirement or grace period, in making any payment
or
delivery due on the last payment, delivery or exchange date of, or any payment
on early termination of, a Specified Transaction (or such default continues
for
at least three Local Business Days if there is no applicable notice requirement
or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in
whole
or in part, a Specified Transaction (or such action is taken by any person
or
entity appointed or empowered to operate it or act on its behalf);
(vi) Cross
Default. If
“Cross
Default” is specified in
the
Schedule as applying to the party, the occurrence
or existence of (1) a default, event of default or other similar condition
or
event
(however described)
in respect of such
party,
any Credit Support Provider of such party or any applicable Specified Entity
of
such party under one or more agreements or instruments relating to Specified
Indebtedness of any of them (individually or collectively) in an aggregate
amount of not less than the
applicable Threshold Amount (as
specified in the Schedule) which has resulted in such Specified Indebtedness
becoming, or becoming capable at such time of being declared, due and payable
under such
agreements or
instruments, before it would
otherwise have been due and payable or (2) a default by such party, such
Credit
Support Provider or such Specified Entity (individually or collectively)
in
making one or more payments on the due date thereof
in an aggregate
amount
of not less than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or
grace
period);
5
(vii) Bankruptcy.
The
party, any Credit Support Provider
of such
party or any applicable Specified Entity of such party:—
(1) is
dissolved (other than pursuant to a consolidation, amalgamation or merger);
(2)
becomes
insolvent
or is unable to
pay
its debts or fails or admits in writing
its
inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a judgment
of
insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency
law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or liquidation,
and, in the case of any such proceeding or petition instituted or presented
against it, such proceeding or petition (A) results in a judgment of insolvency
or bankruptcy or the entry of an order for relief or the making of an order
for
its winding-up or liquidation or (B) is
not
dismissed, discharged, stayed or restrained in each
case
within 30 days of the institution
or presentation thereof; (5) has
a
resolution
passed
for its winding-up, official management or
liquidation (other than pursuant to a consolidation,
amalgamation or merger); (6) seeks or becomes subject to the appointment
of an
administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official
for it
or for all or substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a distress, execution,
attachment, sequestration
or other legal process
levied,
enforced or sued on or against all or substantially all its assets and such
secured party maintains possession, or any such process
is
not dismissed, discharged, stayed or restrained, in each
case
within 30 days thereafter; (8) causes or is subject to any event with respect
to
it which, under the applicable laws of any jurisdiction, has an analogous
effect
to any of the events specified in clauses (1) to (7) (inclusive);
or (9) takes any action in
furtherance of, or indicating its consent
to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger
Without Assumption. The
party
or any Credit Support Provider of such party consolidates or
amalgamates with, or merges with or into,
or
transfers all or substantially all its assets to, another entity and, at
the
time of such consolidation, amalgamation, merger or transfer:—
(1) the
resulting, surviving or transferee entity fails
to
assume all the obligations of such
party or
such Credit Support Provider under this Agreement or any Credit Support Document
to which it or its predecessor was a party by operation of law or pursuant
to an
agreement reasonably satisfactory to the other party to this Agreement;
or
(2) the
benefits of any Credit Support Document fail to extend (without the consent
of
the other party) to the performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.
(b) Termination
Events. The
occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider
of such party or any Specified
Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in
(ii)
below
or
a Tax Event Upon Merger if the event is specified in (iii) below, and, if
specified to be
applicable, a Credit Event Upon
Merger if the event is specified pursuant to (iv) below
or an
Additional Termination Event if the event is specified pursuant to (v)
below:—
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(i) Illegality.
Due
to
the
adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into, or
due to
the promulgation of, or any change in, the interpretation by any court, tribunal
or regulatory authority with competent jurisdiction of any applicable law
after
such date, it becomes unlawful (other than as a result of a breach by the
party
of Section 4(b)) for such party (which will be the Affected
Party):—
(1) to
perform any absolute or contingent obligation to make a payment or delivery
or
to receive a payment or delivery in respect of such Transaction or to comply
with any other material provision of this Agreement relating to such
Transaction; or
(2) to
perform, or for any Credit Support
Provider of such
party to
perform, any contingent or other obligation which the party (or such Credit
Support Provider) has under any Credit Support Document relating to such
Transaction;
(ii) Tax
Event. Due
to
(x) any action
taken by a taxing authority, or brought in a court
of
competent jurisdiction, on or after the date on which a Transaction is entered
into (regardless of whether such action is taken or brought with respect
to a
party to this Agreement) or (y) a Change in Tax Law, the party (which will
be
the Affected Party) will, or there is a substantial likelihood that it will,
on
the next succeeding Scheduled Payment Date (1) be required to pay to the
other
party an additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e))
or (2) receive a payment from which an amount is required to be deducted
or
withheld for or on account of a Tax (except in respect of interest under
Section
2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section
2(d)(i)(4)(A) or (B));
(iii) Tax
Event Upon Merger. The
party
(the “Burdened Party”) on the next succeeding
Scheduled Payment Date will
either (1) be required to pay an additional
amount
in respect of an Indemnifiable Tax
under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) or (2) receive
a
payment from which an amount has been deducted or withheld for or on account
of
any Indemnifiable
Tax in respect of which the other
party is
not required to pay an additional amount (other than by reason of Section
2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating
or
amalgamating with, or merging with or into, or transferring all or substantially
all its assets to, another entity (which will be the Affected Party) where
such
action does not constitute an event described in Section
5(a)(viii);
(iv) Credit
Event Upon Merger. If
“Credit Event Upon Merger” is specified in the Schedule as
applying
to
the
party, such party (“X”), any Credit Support Provider of X or any applicable
Specified Entity
of
X consolidates or amalgamates
with, or merges with or into,
or
transfers all or substantially all its assets to, another entity and such
action
does
not
constitute an event described
in
Section 5(a)(viii) but the creditworthiness
of the resulting, surviving or transferee entity is materially
weaker
than that of X, such Credit Support
Provider or such Specified Entity,
as
the
case may be, immediately prior
to such
action (and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional
Termination Event. If
any
“Additional Termination Event” is specified in the Schedule or any Confirmation
as applying, the occurrence of such event (and, in such event, the Affected
Party or Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event
of Default and Illegality. If
an
event or circumstance which would otherwise constitute or give rise to an
Event
of Default also constitutes an Illegality, it will be treated as an Illegality
and will not constitute an Event of Default.
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6. Early
Termination
(a) Right
to Terminate Following Event of Default. If
at any
time an Event of Default with respect to a party (the “Defaulting Party”) has
occurred and is then continuing, the other party (the “Non-defaulting Party”)
may, by
not
more than 20 days notice to
the
Defaulting Party specifying the relevant
Event of
Default, designate a day not earlier than the day such notice is effective
as an
Early Termination Date in respect of all outstanding Transactions. If, however,
“Automatic Early Termination” is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately
upon the occurrence with respect to such party of an Event of Default specified
in Section
5(a)(vii)(l), (3), (5),
(6)
or,
to the extent analogous thereto, (8), and as of the time immediately preceding
the institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with
respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto,
(8).
(b) Right
to Terminate Following Termination Event.
(i) Notice.
If
a
Termination Event occurs, an Affected Party will, promptly upon becoming
aware
of it,
notify
the other party, specifying the nature of that Termination Event
and
each Affected
Transaction and
will
also give such other information about
that Termination Event as the
other
party may reasonably
require.
(ii) Transfer
to Avoid Termination Event. If
either
an Illegality under Section 5(b)(i)(l) or
a Tax
Event occurs and there is only one Affected Party, or if a Tax Event Upon
Merger
occurs and the Burdened Party is the Affected Party, the Affected Party will,
as
a condition to its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such party to
incur
a loss, excluding
immaterial, incidental expenses)
to
transfer within 20 days after it gives notice under Section 6(b)(i) all its
rights and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such Termination
Event ceases to exist.
If
the
Affected Party is not able to make such a transfer it will give notice to
the
other party to that effect
within such 20 day period, whereupon the other party may effect such a transfer
within
30 days
after the notice is given under Section 6(b)(i).
Any
such
transfer by a party under this Section 6(b)(ii) will be subject to and
conditional upon the prior written consent of the other party, which consent
will not be withheld if such other party's policies in effect at such time
would
permit it to enter into transactions with the transferee on the terms
proposed.
(iii) Two
Affected Parties. If
an
Illegality under Section 5(b)(i)( 1) or
a Tax
Event occurs and there are
two
Affected Parties, each party will use
all
reasonable efforts to reach agreement within 30 days after notice thereof
is
given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to
Terminate. If:—
(1) a
transfer under
Section 6(b)(ii) or an agreement
under
Section 6(b)(iii), as the case may be, has not been effected with respect
to all
Affected Transactions within 30 days after an Affected Party gives notice
under
Section 6(b)(i); or
(2) an
Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional
Termination Event
occurs, or a Tax Event
Upon
Merger occurs and the Burdened Party is not the Affected Party,
either
party in the case of an Illegality, the
Burdened Party in the
case of
a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or
an
Additional Termination Event if there is more than one Affected Party, or
the
party which is not the Affected Party in the case of a Credit Event Upon
Merger
or an Additional Termination Event if there is only one Affected Party may,
by
not more than 20 days notice to
the
other party and provided that the relevant
Termination Event is then continuing,
designate a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.
8
(c) Effect
of Designation.
(i) If
notice
designating an Early Termination Date is given under Section 6(a) or (b),
the
Early Termination Date will occur on the date so designated, whether or not
the
relevant Event of Default or Termination Event is then continuing.
(ii) Upon
the
occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 2(e) in respect of the
Terminated Transactions will be required
to be made, but without prejudice to the
other
provisions of this Agreement. The amount, if any,
payable
in respect of an Early Termination Date shall
be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement.
On
or as
soon as reasonably practicable following the occurrence of an Early Termination
Date, each
party will make the calculations on its
part,
if any, contemplated by Section 6(e)
and
will provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including
all relevant quotations and specifying any amount
payable under Section 6(e)) and (2)
giving
details
of the relevant account to which any
amount payable to it is to be paid. In the
absence
of written confirmation
from the source of a quotation obtained in determining a Market Quotation,
the
records
of the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) Payment
Date. An
amount
calculated as being due in respect of any Early Termination Date under
Section 6(e) will be payable on the day that notice of the amount payable
is
effective (in the case of an Early Termination Date which is designated or
occurs as a result of an Event of Default) and on
the
day which is two Local Business Days after the day on
which
notice of the amount payable is effective (in the
case
of an Early Termination Date which
is
designated as a result of a Termination Event). Such amount will be paid
together with (to the extent permitted under applicable law) interest thereon
(before as well
as
after judgment) in the Termination Currency,
from
(and including) the relevant Early Termination Date to (but excluding) the
date
such amount is paid, at the Applicable Rate. Such interest will be calculated
on
the basis of daily compounding and the actual number of days
elapsed.
(e) Payments
on Early Termination. If
an
Early Termination Date occurs, the following provisions shall
apply based on the parties' election in the Schedule of a payment measure,
either “Market Quotation” or “Loss”, and a payment method, either the “First
Method” or the “Second Method”. If the parties fail to designate a
payment
measure or payment method in the Schedule, it will be
deemed
that “Market Quotation” or the “Second Method”, as
the
case may be, shall apply. The amount,
if any,
payable in respect of an Early Termination Date and determined pursuant to
this
Section will be subject to any Set-off.
(i) Events
of Default. If
the
Early Termination Date results from an Event of Default:—
(1) First
Method and Market Quotation.
If
the
First Method and Market Quotation
apply,
the Defaulting Party will
pay
to the Non-defaulting Party the excess, if a positive number, of
(A) the
sum of the Settlement Amount (determined by the Non-defaulting Party) in
respect
of the Terminated
Transactions and the Termination Currency Equivalent of the Unpaid
Amounts owing
to
the Non-defaulting Party over (B) the Termination Currency Equivalent of
the
Unpaid Amounts owing to the Defaulting Party.
(2) First
Method and Loss. If
the
First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss in respect of
this
Agreement.
(3) Second
Method and Market Quotation. If
the
Second Method and Market Quotation apply,
an
amount will be payable equal to (A) the sum of the Settlement Amount (determined
by
the
Non-defaulting
Party) in
respect of the Terminated Transactions and the Termination
Currency
Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party less
(B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a
positive number, the Defaulting Party will pay it to the Non-defaulting Party;
if it is a
negative
number, the Non-defaulting
Party will pay the absolute value of that amount to
the
Defaulting Party.
9
(4) Second
Method and Loss.
If
the
Second Method and Loss apply, an amount will be payable
equal to the Non-defaulting Party's Loss in respect of this Agreement. If
that
amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party;
if it
is a negative number, the Non-defaulting
Party will pay the absolute value of that amount
to the
Defaulting Party.
(ii) Termination
Events. If
the
Early Termination Date results from a Termination Event:—
(1) One
Affected Party.
If
there
is one Affected Party, the amount payable will
be
determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that,
in
either case, references to the Defaulting Party and
to the
Non-defaulting Party will be deemed to be references to the Affected Party
and
the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions
are
being terminated, Loss shall be calculated in respect of all Terminated
Transactions.
(2) Two
Affected Parties. If
there
are two Affected Parties:—
(A) if
Market
Quotation applies, each party will determine a Settlement Amount in respect
of
the Terminated Transactions, and an amount will be payable equal to (I) the
sum
of (a) one-half of the difference between the Settlement Amount of the party
with the higher Settlement Amount (“X”) and the Settlement Amount of the party
with the lower Settlement Amount (“Y”) and (b) the Termination Currency
Equivalent of the Unpaid
Amounts owing to X less (II) the Termination Currency Equivalent
of the
Unpaid Amounts owing to Y; and
(B) if
Loss
applies, each party will determine its
Loss
in respect of this Agreement
(or, if
fewer than all the Transactions are being terminated, in respect of all
Terminated Transactions)
and an amount will be payable equal to one-half
of the
difference between the Loss
of
the party with the higher Loss (“X”) and
the Loss
of the party with the lower Loss (“Y”).
If
the
amount payable is a positive number, Y will pay it to X; if it is a negative
number, X will pay the absolute value of that amount to Y.
(iii) Adjustment
for Bankruptcy. In
circumstances where an Early Termination Date occurs because “Automatic Early
Termination” applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate and
permitted by law to reflect any payments
or deliveries made by one
party to
the other under this Agreement (and retained by such other party) during
the
period from the relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) Pre-Estimate.
The
parties
agree that if Market Quotation
applies
an amount recoverable under this Section 6(e) is a reasonable pre-estimate
of
loss and not a penalty. Such amount is payable for the loss of bargain and
the
loss of protection against future risks and except as otherwise provided
in this
Agreement neither party will be entitled to recover any additional damages
as a
consequence of such losses.
10
7. Transfer
Subject
to Section 6(b)(ii), neither this Agreement nor any interest or obligation
in or
under this
Agreement may be
transferred (whether by way of security or otherwise) by either party
without
the
prior written consent of the other party, except that: —
(a) a
party
may make such a transfer of this Agreement pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of all or substantially
all its assets to, another entity (but without prejudice to any other right
or
remedy under this Agreement); and
(b) a
party
may make such a transfer of all or any part of its interest in
any
amount payable
to it
from a Defaulting Party under Section 6(e).
Any
purported transfer that is not in compliance with this Section will be
void.
8. Contractual
Currency
(a) Payment
in the Contractual Currency. Each
payment under this Agreement will be made in the relevant currency
specified in this Agreement for that payment (the “Contractual
Currency”).
To
the extent permitted by applicable law, any obligation to make payments under
this Agreement in the Contractual Currency will not be discharged or satisfied
by any tender in any currency other than the Contractual Currency, except
to
the
extent such tender results in the actual receipt
by the
party to which payment is owed, acting in a reasonable manner and
in
good faith in converting the currency
so
tendered into the Contractual Currency, of
the
full amount in the Contractual Currency of all amounts
payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable
in respect of this Agreement, the party required
to make
the payment will, to the extent permitted
by applicable law, immediately pay such additional amount
in the
Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason
the
amount in the Contractual Currency so received exceeds the amount
in
the Contractual Currency payable
in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.
(b) Judgments.
To
the
extent permitted by applicable law, if any judgment or order expressed in
a
currency other than the
Contractual Currency is rendered (i) for the payment
of any
amount owing in respect of this Agreement, (ii) for the payment of any amount
relating to any early termination in respect of this Agreement or (iii) in
respect
of a judgment or order of another court for the
payment
of any amount described in (i) or (ii) above, the party seeking recovery,
after
recovery in full of the aggregate amount to which such party is entitled
pursuant to the judgment or order, will be entitled to receive immediately
from
the other party the amount of any shortfall of the Contractual Currency received
by such party as a consequence of sums paid in such other currency and will
refund promptly to the other party any excess of the Contractual Currency
received by such party as a consequence of sums paid in such other currency
if
such shortfall or such excess arises or results from any variation between
the
rate of exchange at which the Contractual Currency is converted into
the
currency of the judgment or order for
the
purposes of such judgment or order and the rate of exchange at which such
party
is able, acting in a reasonable manner and in good faith in converting the
currency received
into the Contractual Currency, to purchase
the
Contractual Currency with the amount of the currency of the judgment or order
actually received by such party. The term “rate of exchange” includes,
without
limitation, any premiums and costs
of
exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate
Indemnities. To
the
extent permitted by applicable law, these indemnities constitute separate
and
independent obligations from the other obligations in this Agreement, will
be
enforceable as separate and independent causes of action, will apply
notwithstanding any indulgence granted by the party to which any payment
is owed
and will not be affected by judgment being obtained or claim or proof being
made
for any other sums payable in respect of this Agreement.
(d) Evidence
of Loss. For
the
purpose of this Section 8, it will be sufficient for a party to demonstrate
that
it would have suffered a loss had an actual exchange or purchase been
made.
11
9. Miscellaneous
(a) Entire
Agreement. This
Agreement constitutes the entire agreement and understanding
of the
parties with respect to its subject matter and supersedes all oral communication
and prior writings with respect thereto.
(b) Amendments.
No
amendment, modification or waiver in respect of this Agreement will be effective
unless in writing (including a writing evidenced by a facsimile transmission)
and executed by each of the parties or confirmed by an exchange of telexes
or
electronic messages on an electronic messaging system.
(c) Survival
of Obligations. Without
prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties
under this Agreement will survive the termination of any
Transaction.
(d) Remedies
Cumulative. Except
as
provided in this Agreement, the rights, powers, remedies and privileges provided
in this Agreement are cumulative and not exclusive of any rights, powers,
remedies and privileges provided by law.
(e) Counterparts
and Confirmations.
(i) This
Agreement (and each amendment, modification and waiver in respect of it)
may be
executed and delivered in counterparts (including by facsimile transmission),
each of which will be deemed an original.
(ii) The
parties intend that they are legally
bound by the terms of each Transaction
from the
moment they agree to those terms
(whether orally or otherwise).
A
Confirmation shall be entered into as soon as practicable and may be executed
and delivered in counterparts (including by facsimile transmission) or be
created by an exchange of telexes or by an exchange of electronic messages
on an
electronic
messaging system,
which
in
each
case will be sufficient
for all
purposes to evidence a binding supplement to this Agreement. The parties
will
specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a
Confirmation.
(f) No
Waiver of Rights.
A
failure
or delay in exercising any right,
power
or privilege in respect of this Agreement will not
be
presumed to operate
as a
waiver, and a single or partial exercise of any right, power or privilege
will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or
privilege.
(g) Headings.
The
headings used in this Agreement are for convenience of reference only and
are
not to affect the construction of or to be taken into consideration in
interpreting this Agreement.
10. Offices;
Multibranch Parties
(a) If
Section 10(a) is specified in the Schedule as applying, each party that enters
into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking
office
or jurisdiction
of incorporation or organisation
of such
party, the obligations of such party
are
the same as if it had entered into the Transaction through its head
or home
office. This representation
will be deemed to be repeated by such party on each date on which a Transaction
is entered
into.
(b) Neither
party may change the Office through which it makes and receives payments
or
deliveries for the purpose of a Transaction without the prior written consent
of
the other party.
(c) If
a
party is specified as a Multibranch Party in the Schedule, such Multibranch
Party may make and receive payments or deliveries under
any
Transaction through any Office listed
in the
Schedule, and the Office through which it makes and receives payments or
deliveries with respect to a Transaction will be specified in the relevant
Confirmation.
11. Expenses
A
Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees
and
Stamp Tax, incurred by such other party by reason of
the
enforcement and protection of its rights under this Agreement or
any
Credit Support Document to
which
the Defaulting
Party is a party or by reason of the early
termination of any Transaction, including, but not limited to, costs of
collection.
12
12. Notices
(a) Effectiveness. Any
notice or other
communication in respect of this Agreement
may be
given in any manner set forth
below (except that a notice or other communication
under
Section 5 or 6 may not be given by facsimile transmission or electronic
messaging system) to the address or number or in accordance with the electronic
messaging system details provided (see the Schedule) and will be deemed
effective as indicated:—
(i) if
in
writing and delivered in person or by courier, on the date it is
delivered;
(ii) if
sent
by telex, on the date the recipient's answerback is received;
(iii) if
sent
by facsimile transmission, on the date that transmission is received by a
responsible employee of the recipient in legible form (it being agreed that
the
burden of proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile machine);
(iv) if
sent
by certified or registered mail (airmail, if overseas) or the equivalent
(return
receipt requested), on the date that mail is delivered or its delivery is
attempted; or
(v) if
sent
by electronic messaging system, on the date that electronic message is received,
unless
the
date
of that delivery (or attempted delivery) or that receipt,
as
applicable, is not a Local Business Day or that communication
is delivered (or attempted)
or
received, as applicable, after the close of business on a Local Business
Day,
in
which case that communication
shall be
deemed given and effective on the first following day that is a Local Business
Day.
(b) Change
of Addresses.
Either
party may by notice to the other change the address, telex or facsimile number
or electronic messaging
system details at which notices
or other
communications are to be given to it.
13. Governing
Law and Jurisdiction
(a) Governing
Law. This
Agreement will be governed by and construed in accordance with the law specified
in the Schedule.
(b) Jurisdiction.
With
respect to any suit, action or proceedings relating to this Agreement
(“Proceedings”), each party irrevocably:—
(i) submits
to the jurisdiction
of the English courts, if this Agreement
is
expressed to be governed by English law, or to the non-exclusive jurisdiction
of
the courts of the State of New York and the United States District Court
located
in the Borough of Manhattan in New York City, if this Agreement is expressed
to
be governed by the laws of the State of New York; and
(ii) waives
any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have any
jurisdiction over such party.
Nothing
in this Agreement precludes either party from bringing Proceedings in any
other
jurisdiction (outside, if this Agreement is expressed to be governed by English
law, the Contracting States, as defined in
Section 1(3) of the Civil Jurisdiction and Judgments Xxx 0000 or any
modification, extension
or
reenactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service
of Process. Each
party
irrevocably appoints the Process Agent
(if any)
specified opposite its name in the Schedule
to receive, for it and on its behalf, service of process
in any
Proceedings. If for any reason
any party's Process Agent is unable to act as such, such party will promptly
notify the other party and within 30 days appoint a substitute process agent
acceptable to the other party. The parties irrevocably consent to service
of
process given in the manner provided for notices in Section 12. Nothing in
this
Agreement will affect the right of either party to serve process in any other
manner permitted by law.
13
(d) Waiver
of Immunities. Each
party irrevocably waives, to the fullest extent permitted by applicable law,
with respect to itself
and its
revenues and assets (irrespective of their use or
intended
use), all immunity on the grounds of
sovereignty or other similar grounds from
(i)
suit, (ii) jurisdiction of any court, (iii) relief by way of injunction,
order
for
specific performance or for recovery of property,
(iv)
attachment of its assets (whether before or after judgment) and (v) execution
or
enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any Proceedings in the courts of any jurisdiction
and
irrevocably agrees, to the extent permitted
by applicable law, that it will
not
claim any such immunity in any Proceedings.
14. Definitions
As
used
in this Agreement:—
“Additional
Termination Event” has
the
meaning specified in Section 5(b).
“Affected
Party” has
the
meaning specified in Section 5(b).
“Affected
Transactions” means
(a)
with respect to any Termination Event consisting of an Illegality, Tax Event
or
Tax Event Upon Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all
Transactions.
“Affiliate”
means,
subject to the Schedule, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly
or
indirectly, the person or any entity directly or indirectly
under common control with the person. For this
purpose,
“control” of any entity or person means ownership of a majority of the voting
power of the entity or person.
“Applicable
Rate” means:—
(a) in
respect of obligations payable or deliverable (or which would have been but
for
Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in
respect of an obligation
to pay an amount under Section 6(e) of
either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in
respect of
all
other obligations payable or deliverable
(or
which would have been but for Section 2(a)(iii)) by a Non-defaulting Party,
the
Non-default Rate; and
(d) in
all
other cases, the Termination Rate.
“Burdened
Party” has
the
meaning specified in Section 5(b).
“Change
in Tax Law” means
the
enactment,
promulgation, execution or ratification of,
or any
change in or amendment to, any law (or
in the
application or official interpretation
of any
law) that occurs on or after the date on which the relevant Transaction is
entered into.
“consent”
includes
a consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control consent.
“Credit
Event Upon Merger” has
the
meaning specified in Section 5(b).
“Credit
Support Document” means
any
agreement or instrument that is specified as such
in this
Agreement.
“Credit
Support Provider” has
the
meaning specified in the Schedule.
“Default
Rate” means
a
rate per annum equal to the cost (without proof or evidence of any actual
cost)
to the
relevant payee (as certified by it) if it were to fund or of funding the
relevant amount plus 1% per
annum.
14
“Defaulting
Party” has
the
meaning specified in Section 6(a).
“Early
Termination Date” means
the
date determined in accordance with Section 6(a) or 6(b)(iv).
“Event
of Default” has
the
meaning specified in Section 5(a) and,
if
applicable, in the Schedule.
“Illegality”
has
the
meaning specified in Section 5(b).
“Indemnifiable
Tax” means
any
Tax other than a Tax that would not be imposed in respect of a payment under
this Agreement but for a present or former connection between the jurisdiction
of the government or taxation authority
imposing such Tax and the recipient of such payment or a person
related
to such recipient (including, without limitation, a connection arising from
such
recipient or related person being or having been a citizen or resident of
such
jurisdiction, or being or having been organised, present or engaged in a
trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such
jurisdiction, but excluding a connection arising solely from such
recipient or related person having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement or a
Credit
Support Document).
“law” includes
any treaty, law, rule
or
regulation (as modified, in the case of tax matters,
by the
practice of
any
relevant governmental revenue authority) and
“lawful”
and
“unlawful”
will
be
construed
accordingly.
“Local
Business Day” means,
subject to the Schedule, a day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency deposits) (a)
in
relation to any obligation under Section 2(a)(i), in
the
place(s) specified in the relevant Confirmation
or, if
not so specified, as otherwise agreed by
the
parties in writing or determined pursuant
to
provisions contained, or incorporated by reference, in this Agreement, (b)
in
relation
to any other payment, in the place where
the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section
5(a)(i),
in
the
city specified in the address for notice provided by the recipient and, in
the
case of a notice contemplated by Section 2(b), in the place where the
relevant
new account is to
be
located and (d) in relation
to
Section 5(a)(v)(2),
in the
relevant locations for performance with respect to such Specified
Transaction.
“Loss”
means,
with respect to this Agreement or one or more Terminated Transactions, as
the
case may be, and a party, the Termination Currency Equivalent of an amount
that
party reasonably determines in good faith to be its
total
losses and costs (or
gain,
in which case expressed
as a
negative number) in connection
with this Agreement
or
that
Terminated Transaction or group of Terminated Transactions, as the case may
be,
including any loss of bargain, cost of funding or, at the election of such
party
but without duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and
costs
(or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable
condition precedent) on or before the relevant
Early Termination Date and not made, except, so as to avoid duplication,
if
Section 6(e)(i)(1)
or (3)
or 6(e)(ii)(2)(A) applies. Loss
does
not include a party's legal fees and out-of-pocket
expenses referred to under Section
11. A party will determine its Loss as of the relevant Early Termination
Date,
or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable.
A
party may (but need not)
determine its Loss
by
reference to quotations of relevant rates or prices from
one or
more leading dealers in the relevant markets.
“Market
Quotation” means,
with respect to one or more Terminated Transactions and a party making the
determination, an amount determined on the basis of quotations from Reference
Market-makers. Each quotation will be for an amount, if any, that would be
paid
to such party (expressed as a negative number) or by such
party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the “Replacement
Transaction”) that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by
the
parties under Section 2(a)(i) in respect of such
Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant
Early
Termination Date, have been
required after that date. For
this
purpose, Unpaid Amounts in respect of the Terminated
Transaction or group of Terminated Transactions are to be excluded but, without
limitation, any payment or delivery that would, but for the relevant Early
Termination Date, have been required (assuming satisfaction of each applicable
condition precedent) after that Early Termination Date is to be included.
The
Replacement Transaction would be
subject to such documentation as such party and the Reference
Market-maker may, in good faith, agree. The
party
making the determination (or its agent) will request each
Reference Market maker to provide its quotation to the extent reasonably
practicable as of the same day and time (without regard to different time
zones)
on or as soon as reasonably practicable after the relevant Early Termination
Date. The day and
time
as of which those quotations are to be obtained
will be
selected in good faith by the party obliged to
make a
determination under Section 6(e), and,
if each
party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean
of the
quotations, without
regard to the quotations having the highest and lowest values.
If
exactly three such quotations are provided, the Market Quotation will be
the
quotation remaining after disregarding the highest and lowest quotations.
For
this purpose, if more than one quotation has the same highest value or
lowest
value, then one of such quotations shall be disregarded.
If
fewer than three quotations are
provided, it
will
be deemed that the Market Quotation in respect
of such
Terminated Transaction or
group of
Terminated Transactions cannot be determined.
15
“Non-default
Rate” means
a
rate
per
annum equal to the cost (without proof or evidence
of any
actual cost) to the Non-defaulting Party (as certified by it) if it were
to fund
the relevant amount.
“Non-defaulting
Party” has
the
meaning specified in Section 6(a).
“Office”
means
a
branch or office of a party, which may be such party's head or home
office.
“Potential
Event of Default” means
any
event
which, with the giving of notice or
the
lapse of time or both, would constitute an Event of Default.
“Reference
Market-makers” means
four leading dealers in the relevant market selected by the party determining
a
Market Quotation in good faith (a) from among dealers of the highest credit
standing which satisfy all the criteria that such party applies generally
at the
time in deciding whether to offer or to make an extension of credit and
(b)
to the extent practicable, from among such dealers
having
an office in the same city.
“Relevant
Jurisdiction” means,
with respect to a party, the jurisdictions (a) in which the party is
incorporated,
organised, managed and controlled or considered to have
its
seat, (b) where an Office through which the party is acting for purposes
of this
Agreement is located, (c) in which the party executes
this Agreement and (d) in relation to any payment, from or through which
such
payment is
made.
“Scheduled
Payment Date” means
a
date on which a payment or delivery is to be
made
under Section 2(a)(i) with respect to a Transaction.
“Set-off”
means
set-off, offset, combination of accounts, right of retention or withholding
or
similar right or requirement to
which
the payer of an amount
under Section 6 is entitled
or
subject (whether arising under this Agreement, another contract, applicable
law
or otherwise) that is exercised by, or imposed on, such payer.
“Settlement
Amount” means,
with respect to a party and any Early Termination Date, the sum
of:—
(a) the
Termination Currency
Equivalent of the Market Quotations (whether
positive or negative) for
each
Terminated Transaction
or group of Terminated Transactions for which
a Market
Quotation is determined;
and
(b) such
party's Loss (whether positive or negative and without reference to any Unpaid
Amounts) for each Terminated Transaction
or group of Terminated Transactions for which a Market
Quotation cannot be determined or would not (in the reasonable belief of
the
party making the determination) produce a commercially reasonable
result.
“Specified
Entity” has
the
meaning specified in the Schedule.
16
“Specified
Indebtedness” means,
subject to the Schedule, any obligation (whether present or future, contingent
or otherwise, as principal or surety or otherwise) in respect of borrowed
money.
“Specified
Transaction” means,
subject
to the Schedule, (a) any transaction (including
an agreement
with
respect thereto)
now
existing
or hereafter entered into between one party to this Agreement (or any Credit
Support Provider
of such party or any applicable Specified Entity of such party) and the other
party to this Agreement (or
any
Credit Support Provider of such
other party or
any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond
option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency
rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination
of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant
confirmation.
“Stamp
Tax” means
any
stamp, registration, documentation or similar tax.
“Tax”
means
any
present
or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority
in respect of any payment under this Agreement other than a stamp, registration,
documentation
or
similar tax.
“Tax
Event” has
the
meaning specified in Section 5(b).
“Tax
Event Upon Merger” has
the
meaning specified in Section 5(b).
“Terminated
Transactions” means
with respect to any Early Termination Date (a) if resulting from a Termination
Event, all Affected Transactions and (b) if resulting from
an Event
of Default, all Transactions (in either case) in
effect
immediately before the effectiveness of the notice
designating that Early Termination Date (or, if “Automatic Early Termination”
applies, immediately before that Early Termination Date).
“Termination
Currency” has
the
meaning specified in the Schedule.
“Termination
Currency Equivalent” means,
in
respect of any amount denominated in the Termination Currency, such Termination
Currency amount and, in respect of any amount denominated
in a
currency other than the
Termination Currency (the “Other Currency”), the amount in
the
Termination Currency determined by the party making the relevant determination
as being required to purchase such amount of such Other Currency as at the
relevant Early
Termination Date, or, if the relevant Market Quotation
or Loss
(as the case may be), is determined as of a
later
date, that later date, with the
Termination Currency at the rate equal to the spot exchange rate of the foreign
exchange agent (selected as provided below) for the purchase of such Other
Currency with the Termination Currency at or about 11:00 a.m. (in the city
in
which such foreign exchange agent is located) on such date as would be customary
for the determination of such a rate for the purchase of such Other Currency
for
value on the relevant Early Termination Date or that later date. The foreign
exchange agent will, if only one party is obliged to make a determination
under
Section 6(e), be selected in good faith by that party and otherwise will
be
agreed by the parties.
“Termination
Event” means
an
Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be
applicable, a Credit Event Upon Merger or an Additional Termination
Event.
“Termination
Rate” means
a
rate per annum equal to the arithmetic mean of the cost (without proof or
evidence of any actual cost) to each party (as certified by such party) if
it
were to fund or of funding such amounts.
“Unpaid
Amounts” owing
to
any
party
means, with respect to an Early Termination
Date,
the aggregate of (a) in respect of all Terminated
Transactions, the amounts
that
became payable (or that would have become payable but for Section 2(a)(iii))
to
such party under Section 2(a)(i) on or prior to such Early Termination Date
and
which remain unpaid as at such Early Termination Date and (b) in respect
of each
Terminated Transaction,
for each obligation under Section 2(a)(i) which was (or would have been but
for
Section 2(a) (iii))
required to be settled by delivery to such party on or prior to such
Early
Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market value
of
that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in
each
case together with (to the extent permitted
under applicable law) interest, in
the
currency of
such
amounts, from (and including) the date such amounts or
obligations were or would have been
required
to have been
paid
or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b)
above
shall be reasonably determined by the party
obliged to make the determination
under
Section 6(e) or, if each party is so obliged, it shall be the average of
the
Termination Currency Equivalents of the fair market values reasonably determined
by both parties.
17
IN
WITNESS WHEREOF the parties have executed this document on the respective
dates
specified below with effect from the date specified on the first page of
this
document.
THE
ROYAL BANK OF SCOTLAND PLC
By:
Greenwich Capital Markets, Inc., its agent
|
HARBORVIEW
MORTGAGE LOAN TRUST 2007-1
|
||
By:
Xxxxx Fargo Bank, N.A., solely in its capacity as Yield Maintenance
Administrator on behalf of
HARBORVIEW
MORTGAGE LOAN TRUST 2007-1
|
|||
By: /s/ Xxxxx X. Xxxxxx | By: /s/ Xxxxxx X. Xxxxxxx | ||
Name: Xxxxx X. Xxxxxx
|
Name: Xxxxxx X. Xxxxxxx
|
||
Title: Managing
Director
|
Title: Assistant Vice President | ||
Date: March 9, 2007 |
Date:
March 9, 2007
|
18
SCHEDULE
TO
THE
DATED
AS OF
March
9, 2007
between
THE
ROYAL BANK OF SCOTLAND PLC
Established
as a bank under the laws of Scotland
(“Party
A”)
and
XXXXX
FARGO BANK, N.A., solely as administrator (the “Yield Maintenance
Administrator”) with respect to HarborView Mortgage Loan Trust Mortgage Loan
Pass-Through Certificates, Series 2007-1, a New York common law trust (the
“Trust”) (“Party
B”)
Part
1 Termination
Provisions.
(a) |
“Specified
Entity”
means (i) in relation to Party A for all purposes of the Agreement:
None;
|
and
(ii)
in relation to Party B for all purposes of the Agreement: None.
(b) |
The
“Breach
of Agreement”
provisions of Section 5(a)(ii) of the Agreement will be inapplicable
to
Party B.
|
(c) |
The
“Credit
Support Default”
provisions of Section 5(a)(iii) of the Agreement will apply to
Party A and
only Section 5(a)(iii)(1) will be applicable to Party B solely
with
respect to return of excess collateral to Party A under Paragraph
3(b) of
the Credit Support Annex to this Agreement. Notwithstanding Sections
5(a)(i) and 5(a)(iii), any failure by Party A to comply with
or perform
any obligation to be complied with or performed by Party A under
the
Credit Support Annex to this Agreement shall not be an Event
of Default
unless (A) a Second Rating Trigger Event with respect to Xxxxx’x has
occurred and at least 30 Local Business Days have elapsed since
the Second
Rating Trigger Event has occurred 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.
|
(d) |
The
“Misrepresentation”
provisions of Section 5(a)(iv) of the Agreement will be inapplicable
to
Party B.
|
(e) |
The
“Default
Under Specified Transaction”
provisions of Section 5(a)(v) of the Agreement will be inapplicable
to
Party A and Party B.
|
(f) |
The
“Cross
Default”
provisions of Section 5(a)(vi) of the Agreement will apply to
Party A with
a Threshold Amount of 3% of the shareholder’s equity of Party A.
|
19
The
“Cross
Default”
provisions of Section 5(a)(vi) of the Agreement will be inapplicable to
Party
B.
(g) |
The
“Bankruptcy”
provision of Section 5(a)(vii) of the Agreement will be applicable
to
Party A and to Party B, subject to the following modifications
with
respect to Party B:
|
(i) |
Section
5(a)(vii)(2), (7) and (9) shall not
apply;
|
(ii) |
Section
5(a)(vii)(4) shall not apply to the extent that it refers to
proceedings
or petitions instituted or presented by Party A or its affiliates;
|
(iii) |
The
phrase “seeks or” in Section 5(a)(vii)(6) shall be deemed deleted;
and
|
(iv) |
Section
5(a)(vii)(8) shall apply only to the extent that a relevant event
has an
effect that is analogous to an effect described in Section 5(a)(vii)(1)
through (7) (as amended in this Part 1(g)) that applies to Party
B.
|
(h) |
The
“Tax
Event upon Merger”
provisions of Section 5(b)(iii) shall not apply to the extent
that Party A
is both the Burdened Party and the Affected
Party.
|
(i) |
The
“Credit
Event Upon Merger”
provisions of Section 5(b)(iv) of the Agreement will be inapplicable
to
Party A and Party B.
|
(j) |
The
“Automatic
Early Termination”
provision of Section 6(a) of the Agreement will be inapplicable
to Party A
and Party B.
|
(k) |
Payments
on Early Termination.
|
(i) |
For
the purpose of Section 6(e) of the
Agreement:
|
(A) |
Market
Quotation will apply; and
|
(B) |
The
Second Method will apply.
|
(ii) |
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 (A) to (G) below shall
apply:
|
(A) |
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, an offer which, when
made,
is capable of becoming legally binding upon acceptance (any such offer,
a
“Firm
Offer”)
which
is (1) made by a Reference Market-maker that is an Eligible Replacement,
(2) for
an amount that would be paid to Party B (expressed as a negative number)
or by
Party B (expressed as a positive number) in consideration of an agreement
between Party B and such Reference Market-maker to enter into a transaction
(the
“Replacement
Transaction”)
that
would have the effect of preserving for such party the economic equivalent
of
any payment or delivery (whether the underlying obligation was absolute
or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transactions
or group of Terminated Transactions that would, but for the occurrence
of the
relevant Early Termination Date, have been required after that date, (3)
made on
the basis that Unpaid Amounts in respect of the Terminated Transaction
or group
of Transactions are to be excluded but, without limitation, any payment
or
delivery that would, but for the relevant Early Termination Date, have
been
required (assuming satisfaction of each applicable condition precedent)
after
that Early Termination Date is to be included and (4) made in respect of
a
Replacement Transaction with commercial terms substantially the same as
those of
this Agreement (save for the exclusion of provisions relating to Transactions
that are not Terminated Transactions).”
20
(B) |
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:
(1)
If a
Market Quotation for the relevant Terminated Transaction or group of Terminated
Transactions is selected by Party A and accepted by Party B so as to become
legally binding on or before the day falling ten Local Business Days after
the
day on which the Early Termination Date is designated (or such later day
as
Party B may specify in writing to Party A, which in any event will not
be later
than the Early Termination Date) (such day, the “Latest
Settlement Amount Determination Day”),
the
Termination Currency Equivalent of the amount (whether positive or negative)
of
such Market Quotation;
(2)
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 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
(3)
If no
Market Quotation for the relevant Terminated Transaction or group of Terminated
Transactions has been selected by Party A and accepted by Party B so as
to
become legally binding on or before the Latest Settlement Amount Determination
Day, Party B’s Loss (whether positive or negative and without reference to any
Unpaid Amounts) for the relevant Terminated Transaction or group of Terminated
Transactions.”
(C) |
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).
|
(D) |
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 (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).
|
21
(E) |
Party
B undertakes to use its reasonable efforts to obtain at least
one Market
Quotation before the Latest Settlement Amount Determination Day.
Party B
will be deemed to have discharged its obligations under the preceding
sentence if it requests Party A to obtain Market Quotations,
where such
request is made in writing within two Local Business Days after
the day on
which the Early Termination Date is designated. 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.
|
(F) |
Any
amount calculated as being due in respect of an Early Termination
Date
will be payable in accordance with Section 6(d)(ii), provided
that if such payment is owed to Party B, it will be payable on
the day
that notice of the amount payable is given to Party
A.
|
(G) |
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).
(l) |
“Termination
Currency”
means United States Dollars.
|
(m) |
Additional
Termination Events. Each
of the following shall be an Additional Termination Event:
|
(i) |
First
Rating Trigger Event. A
First Rating Trigger Event (as defined in Part 5(i)) has occurred,
and
Party A has not, within the period of time prescribed, complied
with Part
5(i)(ii) below. For purposes of this Additional Termination Event,
Party A
shall be the sole Affected Party.
|
(ii) |
S&P
Second Rating Trigger Event.
A
Second Rating Trigger Event (as defined in Part 5(i)) with respect
to
S&P has occurred, and Party A has not, within 10 Business Days
after
such event, complied with the requirements of Part 5(i)(iii)
below. For
purposes of this Additional Termination Event, Party A shall
be the sole
Affected Party.
|
(iii) |
Xxxxx’x
Second Rating Trigger Event.
(A) A Second Rating Trigger Event with respect to Xxxxx’x has occurred,
and 30 or more Local Business Days have elapsed and (B) (i) at
least one
Eligible Replacement (as defined in Part 5(g)) has made a Firm
Offer to be
the transferee of a transfer to be made in accordance with Part
5(g)(iii)
below and/or (ii) at least one entity with the Acceptable Ratings
(as
defined in Part 5(g)) 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. For purposes of this Additional Termination
Event,
Party A shall be the sole Affected Party.
|
22
(iv) |
Acceleration
or Redemption of Certificates. The
Certificates are accelerated, redeemed in whole or redeemed in
part, in
each case, if applicable, for any reason, pursuant to the Pooling
and
Servicing Agreement, provided, such acceleration or redemption
is no
longer capable of being revoked. For purposes of this Additional
Termination Event, Party B shall be the sole Affected
Party.
|
(v) |
Modification
of Pooling and Servicing Agreement.
The Pooling and Servicing Agreement is modified without the prior
written
consent of Party A, where such consent is required under the
terms of the
Pooling and Servicing Agreement, where such modification has
a material
adverse effect on Party A’s rights under this Agreement or the Pooling and
Servicing Agreement. For purposes of this Additional Termination
Event,
Party B shall be the sole Affected
Party.
|
(vi) |
Exercise
of Purchase Option.
The Yield Maintenance Administrator notifies the Holders of the
Certificates of the Terminator’s intent to exercise its option to purchase
the Mortgage Loans pursuant to the Pooling and Servicing Agreement.
For
purposes of this Additional Termination Event, Party B shall
be the sole
Affected Party.
|
(vii) |
Regulation
AB.
(A) The Depositor still has a reporting obligation with respect
to this
Transaction pursuant to Regulation AB and (B) Party A has not,
within 30
days after receipt of a Hedge Disclosure Request complied with
the
provisions set forth in Part 5(k)(iv) below (provided that if
the
significance percentage reaches 10% or 20%, as applicable, after
a Hedge
Disclosure Request has been made to Party A, Party A must comply
with the
provisions set forth in Part 5(k)(iv) below within 10 days of
Party A
being informed of the significance percentage reaching 10% or
20%, as
applicable) or has not, thereafter, complied with the provisions
set forth
in Part 5(k)(v) below. For purposes of this Additional Termination
Event,
Party A shall be the sole Affected
Party.
|
Part
2 Tax
Representations.
(a) |
Payer
Representations For
the purpose of Section 3(e) of the Agreement, Party A will make
the
following representation and Party B will not make the following
representation:
|
It
is not
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax from any payment
(other
than interest under Section 2(e), 6(d)(ii) or 6(e) of the Agreement) to
be made
by it to the other party under this Agreement. In making this representation,
it
may rely on (i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of the Agreement, (ii) the satisfaction of the
agreement contained in Section 4(a)(i) or 4(a)(iii) of the 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 the Agreement and (iii) the satisfaction
of
the agreement of the other party contained in Section 4(d) of the 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) of the Agreement by reason of material prejudice to its legal
or
commercial position.
(b) |
Payee
Representations.
For the purpose of Section 3(f) of the Agreement:
|
(i) |
Party
A represents that:
|
(A) |
Party
A is a tax resident of the United
Kingdom;
|
23
(B) |
Party
A is a "foreign person" within the meaning of the applicable
U.S. Treasury
Regulations concerning information reporting and backup withholding
tax
(as in effect on January 1, 2001), unless Party A provides written
notice
to Party B that it is no longer a foreign person;
|
(C) |
in
respect of each Transaction Party A enters into through an office
or
discretionary agent in the United States or which otherwise is
allocated
(in whole or part) for United States federal income tax purposes
to such
United States trade or business, each payment received or to
be received
by Party A under such Transaction (or portion thereof, if applicable)
will
be effectively connected with its conduct of a trade or business
in the
United States; and
|
(D) |
in
respect of all other Transactions or portions thereof, no such
payment
received or to be received by Party A in connection with this
Agreement is
attributable to a trade or business carried on by it through
a permanent
establishment in the United States.
|
(ii) |
Party
B represents that:
|
(A) |
it
is the Yield Maintenance Administrator for the Trust;
and
|
(B) |
it
is a national banking association and not a foreign corporation
for United
States tax purposes; and
|
(c) |
Definition
of “Indemnifiable Tax”. Notwithstanding
the definition of “Indemnifiable Tax” in Section 14 of the Agreement, in
relation to payments by Party A, any Tax shall be an Indemnifiable
Tax
and, in relation to payments by Party B, no Tax shall be an Indemnifiable
Tax.
|
(d) |
No
gross-up by Party B.
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.
|
Part
3 Agreement
to Deliver Documents.
For
the
purpose of Sections 4(a)(i) and (ii) of the Agreement, Party A and Party
B agree
to deliver the following documents, as applicable:
(a) |
Tax
forms, documents or certificates to be delivered
are:
|
Party
Required to Deliver Document
|
Form/Document/Certificate
|
Date
by Which to be Delivered
|
||
Party
A
|
Any
form or document required or reasonably requested to allow the
other party
to make payments under the Agreement without any deduction or
withholding
for or on account of any Tax, or with such deduction or withholding
at a
reduced rate.
|
Upon
reasonable request.
|
24
Party
Required to Deliver Document
|
Form/Document/Certificate
|
Date
by Which to be Delivered
|
||
Party
B
|
Any
form or document required or reasonably requested to allow the
other party
to make payments under the Agreement without any deduction or
withholding
for or on account of any Tax, or with such deduction or withholding
at a
reduced rate.
|
(i)
Concurrently with the execution and delivery of this Confirmation,
and
(ii) anytime when the document last delivered is incorrect or
out-of-date.
|
(b) |
Other
documents to be delivered and covered by the Section 3(d) representation
are:
|
Party
required to deliver
|
Form/Document/or
Certificate
|
Date
by which to be delivered
|
Covered
by Section 3(d) representation
|
|||
Party
A and Party B
|
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 the
Confirmation which sets forth the specimen signatures of each
signatory to
the Confirmation signing on its behalf.
|
Concurrently
with the execution and delivery of this Agreement unless previously
delivered and still in full force and effect.
|
Yes
|
|||
Party
B
|
The
Pooling and Servicing Agreement.
|
Concurrently
with the execution and delivery of the Agreement.
|
No
|
|||
Party
A and Party B
|
Legal
opinion(s) with respect to such party relating to the enforceability
of
the party’s obligations under this Agreement.
|
Concurrently
with the execution and delivery of the Agreement.
|
No
|
25
Part
4 Miscellaneous.
(a) |
Addresses
for Notices. For
the purposes of Section 12(a) of the
Agreement:
|
(i)
Notices or communications shall, with respect to a particular Transaction,
be
sent to the address, telex number or facsimile number reflected in the
Confirmation of that Transaction. In addition (or in the event the Confirmation
for a Transaction does not provide relevant Addresses/information for notice),
with respect to notices provided pursuant to Section 5 and 6 of this Agreement,
notice shall be provided to:
Address
for notices or communications to Party A:-
The
Royal
Bank of Scotland plc, Financial Markets
Attention:
Caps Administration
000
Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
Tel.:
000
0000 0000
Fax.:
000
0000 0000
With
a
copy to:
Address: |
Greenwich
Capital Markets, Inc.
000
Xxxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
|
Attention: |
Legal
Department - Derivatives Documentation
|
Phone No.: | 000-000-0000/6467 |
Facsimile No.: | 000-000-0000/4247 |
Address
for notices or communications to Party
B:-
|
Xxxxx
Fargo Bank, N.A.
0000
Xxx
Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 00000
Attention:
Client Manager - HVMLT 2007-1
Phone:
000-000-0000
Fax:
000-000-0000
(b) |
Notice
by Facsimile Transmission.
|
Section
12(a) of the Agreement is amended by adding in the third line thereof after
the
phrase “messaging system” and before the “)” the words “; provided,
however,
any
such notice or other communication may be given by facsimile transmission
(it
being agreed that the burden of proving receipt will be on the sender and
will
not be met by a transmission report generated by the sender’s facsimile
machine)”.
Section
12(a)(ii) of the Agreement is deleted in its entirety.
(c) |
Process
Agent. For
the purpose of Section 13(c) of the
Agreement:
|
Party
A
appoints
as its
Process Agent: none
Party
B
appoints as its Process Agent: none
(d) |
Offices.
With
respect to Party A, the provisions of Section 10(a) of the Agreement
will
apply.
|
(e) |
Multibranch
Party. For
the purpose of Section 10(c) of the
Agreement:
|
Party
A
is a Multibranch Party and may act through its London and New York Offices
only.
Party
B
is not a Multibranch Party.
(f) |
Calculation
Agent. The
Calculation Agent is Party A.
|
26
(g) |
Credit
Support Document. Details
of any Credit Support Document for Party A and Party B: With
respect to
Party A, the ISDA Credit Support Annex (New York law), dated
as of the
date hereof, between Party A and Party B, and such other collateralization
agreement or credit arrangement provided for under the terms
of any
Confirmation and Transaction evidenced thereby, together with
any document
or agreement that by its terms secures or otherwise supports
the parties’
obligations under a Transaction heretofore or hereafter entered
into
between the parties. With respect to Party B, such credit support
document
is solely in respect of Party B’s obligations under Paragraph 3(b) of the
Credit Support Annex.
|
(h) |
Credit
Support Provider.
|
Credit
Support Provider means in relation to Party A: Initially, none, provided
however
that a party providing an Eligible Guarantee, if any, shall be the Credit
Support Provider in relation to Party A.
Credit
Support Provider means in relation to Party B: none.
(i) |
(j) |
Netting
of Payments. Subparagraph
(ii) of Section 2(c) of the Agreement will apply to the Transaction
evidenced by the Confirmation.
|
(k) |
Affiliates.
Party
B shall be deemed to not have any Affiliates for purposes of
this
Transaction.
|
Part
5 Other
Provisions.
(a) |
Additional
Representation. Section
3(a) of the Agreement shall be amended to include the following
additional
representations after paragraph
3(a)(v):
|
(vi)Principal.
It is
acting as principal and not as agent when entering into the
Transaction.
(vii)
Non-Reliance.
It is
acting for its own account and it has made its own independent decisions
to
enter into the Transaction and as to whether the Transaction is appropriate
or
proper for it based upon its own judgment and upon advice from such advisors
as
it has deemed necessary. It is not relying on any communication (written
or
oral) of the other party as investment advice or as a recommendation to
enter
into the Transaction; it being understood that information and explanations
related to the terms and conditions of the Transaction shall not be considered
investment advice or a recommendation to enter into the 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 the
Transaction.
(viii)
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 the Agreement and that Transaction. It is also
capable
of assuming, and assumes, the financial and other risks of the Agreement
and
that Transaction.
(ix)
Status
of Parties.
The
other party is not acting as an agent, fiduciary or advisor for it in respect
of
that Transaction.
27
(x)
Eligible
Contract Participant, etc.
It is an
“eligible contract participant” as defined in Section 1a(12) of the U.S.
Commodity Exchange Act (7 U.S.C. 1a), as amended by the Commodity Futures
Modernization Act of 2000 and the Transaction evidenced hereby has been
the
subject of individual negotiations and is intended to be exempt from, or
otherwise not subject to regulation thereunder.
(b) |
Waiver
of Right to Trial by Jury. Each
party hereby irrevocably waives any and all rights to trial by
jury in any
legal proceeding arising out of or relating to this Agreement
or any
Transaction hereunder.
|
(c) |
Absence
of Litigation.
In Section 3(c) of the Agreement the words “or any of its Affiliates”
shall be deleted.
|
(d) |
Fully-paid
Party Protected.
Notwithstanding the terms of Sections 5 and 6 of the Agreement,
if Party B
has satisfied its payment and delivery obligations under Section
2(a)(i)
of the Agreement, 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 such payment or delivery, (a)
the
occurrence of an event described in Section 5(a) (other than
the failure
by Party B under Section 5(a)(iii) to return excess collateral
to Party A
under Paragraph 3(b) of the Credit Support Annex) of the Agreement
with
respect to Party B shall not constitute an Event of Default or
Potential
Event of Default with respect to Party B as the Defaulting Party
and (b)
Party A shall be entitled to designate an Early Termination Date
pursuant
to Section 6 of the Agreement only as a result of (1) a Termination
Event
set forth in either Section 5(b)(i) or Section 5(b)(ii) of the
Agreement
with respect to Party A as the Affected Party, (2) a Termination
Event set
forth in Section 5(b)(iii) of the Agreement with respect to Party
A as the
Burdened Party or (3) an Event of Default set forth in Section
5(a)(iii)
with respect to Party B as the Defaulting Party where Party B
failed to
return excess collateral to Party A under Paragraph 3(b) of the
Credit
Support Annex . For purposes of the Transaction to which this
Confirmation
relates, Party B’s only obligations under Section 2(a)(i) of the Agreement
is to pay the Fixed Amount on the Fixed Rate Payer Payment Date
and to
return excess collateral to Party A under Paragraph 3(b) of the
Credit
Support Annex .
|
(e) |
Limitation
of Liability.
|
It
is
expressly understood and agreed by the parties hereto that (a) this Agreement
is
executed and delivered by Xxxxx Fargo Bank, N.A., as the Yield Maintenance
Administrator of the Trust, in the exercise of the powers and authority
conferred upon and vested in it under the Pooling and Servicing Agreement
dated
as of February 1, 2007, by and among Greenwich Capital Acceptance, Inc.
(the
“Depositor”),
Greenwich Capital Financial Products, Inc., as seller, and Xxxxx Fargo
Bank,
N.A., as trustee, (the “Pooling and Servicing Agreement”) and pursuant to
instructions set forth therein, and that the Yield Maintenance Administrator
shall perform its duties and obligations hereunder in accordance with the
standard of care set forth in the Pooling and Servicing Agreement, (b)
each of
the representations, undertakings and agreements herein is made and intended
not
as a personal representation, undertaking or agreement of the Yield Maintenance
Administrator but is made and intended for the purpose of binding only
the
Trust, and (c) under no circumstances shall the Yield Maintenance Administrator
be personally liable for the payment of any indebtedness or expenses of
the
Trust or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust herein; provided that
nothing in this paragraph shall relieve the Yield Maintenance Administrator
from
performing its duties and obligations hereunder in accordance with the
standard
of care set forth in the Pooling and Servicing Agreement.
28
(f) |
Proceedings.
Party
A shall not institute against or cause any other person to institute
against, or join any other person in instituting against Party
B any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state
bankruptcy,
dissolution or similar law, for a period of one year and one
day (or, if
longer, the applicable preference period) following indefeasible
payment
in full of the Certificates, provided
that nothing herein shall preclude, or be deemed to estop Party
A from
taking any action in any case or proceeding voluntarily filed
or commenced
by or on behalf of Party B or in any involuntary case or proceeding
after
it has been commenced. This provision will survive the termination
of this
Agreement.
|
(g) |
Recording
of Conversations. Each
party (i) consents to the recording of the telephone conversations
of
trading and marketing personnel of the parties and (ii) agrees
to obtain
any necessary consent of, and give notice of such recording to,
such
personnel of it.
|
(h) |
No
Set-off. Notwithstanding
any 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. The provisions for Set-off set forth in Section 6(e)
of the
Agreement shall not apply for purposes of this
Transaction.
|
(i) |
Rating
Agency Downgrade.
|
(i) |
For
purposes of this Part 5(i), the following definitions
apply:
|
An
entity
has “Acceptable
Ratings”
if (x)
its short-term unsecured and unsubordinated debt is rated at least “A-1” by
S&P (or, if Party A does not have a short-term unsecured and unsubordinated
debt rating from S&P, its long-term unsecured and unsubordinated debt is
rated at least “A+” by S&P), and (y) Party A’s long-term unsecured and
unsubordinated debt is rated at least “A3” and Party A’s short-term unsecured
and unsubordinated debt is rated at least “Prime-2” (or if Party A does not have
a short-term unsecured and unsubordinated debt rating from Moody’s, its
long-term unsecured and unsubordinated debt is rated at least
“A3”).
“Eligible
Guarantee”
means an
unconditional and irrevocable guarantee that is provided by a guarantor
with
Acceptable Ratings as principal debtor rather than surety and is directly
enforceable by Party B, where either (A) a law firm has given a legal opinion
confirming that none of the guarantor’s payments to Party B under such guarantee
will be subject to withholding for tax or (B) such guarantee provides that,
in
the event that any of such guarantor’s payments to Party B are subject to
withholding for tax, such guarantor is required to pay such additional
amount as
is necessary to ensure that the net amount actually received by Party B
(free
and clear of any withholding tax) will equal the full amount Party B would
have
received had no such withholding been required.
“Eligible
Replacement”
means an
entity (A) with the Acceptable Ratings or (B) whose present and future
obligations owing to Party B are guaranteed pursuant to an Eligible
Guarantee.
29
A
“First
Rating Trigger Event”
shall
occur with respect to Party A (or any applicable Credit Support Provider),
if
(x) its short-term unsecured and unsubordinated debt ceases to be rated
at least
“A-1” by S&P (or, if Party A does not have a short-term unsecured and
unsubordinated debt rating from S&P, its long-term unsecured and
unsubordinated debt ceases to be rated at least “A+” by S&P), or (y)(a) its
long-term unsecured and unsubordinated debt ceases to be rated at least
“A2” by
Moody’s or its short-term unsecured and unsubordinated debt cease to be rated
at
least “Prime-1” by Moody’s, or (b) if Party A does not have a short-term
unsecured and unsubordinated debt rating from Moody’s, its long-term unsecured
and unsubordinated debt ceases to be rated at least “A1” by
Xxxxx’x.
“Rating
Agency Condition”
means,
with respect to any particular proposed act or omission to act hereunder,
that
the party acting or failing to act must consult with each of the Rating
Agencies
then providing a rating of the Certificates and receive from each such
Rating
Agency a prior written confirmation that the proposed action or inaction
would
not cause a downgrade or withdrawal of the then-current rating of the
Certificates.
A
“Second
Rating Trigger Event”
shall
occur with respect to Party A (or any applicable credit support provider),
if
(A) Party A’s long-term unsecured and unsubordinated debt ceases to be
rated at least “BBB-” or Party A’s short-term unsecured and unsubordinated debt
ceases to be rated at least “A-3” or is withdrawn by S&P or (B) Party A’s
long-term unsecured and unsubordinated debt ceases to be rated at least
“A3” or
Party A’s short-term unsecured and unsubordinated debt ceases to be rated at
least “Prime-2” (or if Party A does not have a short-term unsecured and
unsubordinated debt rating from Moody’s, its long-term unsecured and
unsubordinated debt ceases to be rated at least “A3”).
(ii) |
If
a First Rating Trigger Event occurs with respect to Party A (or
any
applicable Credit Support Provider), then (unless, within 30
days of such
First Rating Trigger Event, each of Standard and Poor’s, a Division of
XxXxxx-Xxxx Companies, Inc. (“S&P”)
and Xxxxx’x Investors Service, Inc. (“Moody’s”)
(each a “Rating
Agency”)
has reconfirmed its rating of the Certificates which was in effect
immediately prior to such First Rating Trigger Event) Party A
shall,
within (30) days of such First Rating Trigger Event, at its own
expense,
(A) obtain an Eligible Guarantee in respect of all of Party A’s present
and future obligations under this Agreement, subject to the Rating
Agency
Condition with respect to S&P only, (B) transfer all or substantially
all of its rights and obligations with respect to this Agreement
to an
Eligible Replacement (provided that Party B shall determine in
its sole
discretion, acting in a commercially reasonable manner, whether
or not a
transfer relates to all or substantially all of Party A’s rights and
obligations under this Agreement), subject to the Rating Agency
Condition
with respect to S&P only or (C) post collateral in accordance with the
Credit Support Annex to this Agreement, subject to the Rating
Agency
Condition in respect of S&P only.
|
(iii) |
If
a Second Rating Trigger Event occurs with respect to Party A
(or any
applicable Credit Support Provider), then, within 10 Business
Days of such
Second Rating Trigger Event with respect to S&P, Party A will at its
own cost use commercially reasonable efforts to, as soon as reasonably
practicable, either (A) obtain an Eligible Guarantee in respect
of all of
Party A’s present and future obligations under this Agreement, subject
to
the Rating Agency Condition with respect to S&P only, or (B)
transfer
all or substantially all of its rights and obligations with respect
to
this Agreement to an Eligible Replacement (provided that Party
B shall
determine in its sole discretion, acting in a commercially reasonable
manner, whether or not a transfer relates to all or substantially
all of
Party A’s rights and obligations under this Agreement), subject to the
Rating Agency Condition with respect to S&P
only.
|
30
(j) |
Transfers.
|
(i) Section
7
is hereby amended to read in its entirety as follows:
“Subject
to Section 6(b)(ii), Part 5(i) and Part 5(k), 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 without (a) the prior written consent
of
the other party and (b) satisfaction of the Rating Agency Condition with
respect
to S&P.”
(ii) 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.
“Permitted
Transfer”
means
a
transfer by novation by Party A 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
that is a
recognized dealer in interest rate swaps and caps organized under the laws
of
the United States of America or a jurisdiction located in the United States
of
America (or another jurisdiction reasonably acceptable to Party B), (b)
as of
the date of such transfer neither Party B nor the Transferee would 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),
(c) an
Event of Default or Termination Event would not occur as a result of such
transfer, (d) Party B has consented in writing to the transfer, such consent
not
to be unreasonably withheld, (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 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, notice information and account details; and (i)
such
transfer otherwise complies with the terms of the Pooling and Servicing
Agreement.
(k) |
Compliance
with Regulation AB
|
(i) Party
A
acknowledges that for so long as there are reporting obligations with respect
to
this Transaction under Regulation AB (“Regulation
AB”)
under
the Securities Act of 1933, as amended, and the Securities Exchange Act
of 1934,
as amended (the “1934
Act”),
the
Depositor is required under Regulation AB, to disclose certain information set
forth in Regulation AB regarding Party A or its group of affiliated entities,
if
applicable, depending on the aggregate “significance percentage” of this
Agreement and any other derivative contracts between Party A or its group
of
affiliated entities, if applicable, and Party B, as calculated from time
to time
in accordance with Item 1115 of Regulation AB.
31
(ii) Subject
to the provisions of clause (iii) below, and so long as there are reporting
obligations with respect to this Transaction under Regulation AB, if the
Depositor determines, reasonably and in good faith, that the aggregate
significance percentage of this Agreement has increased to nine (9) percent,
then the Depositor may request from Party A (such request, a “Hedge Disclosure
Request”) on a Business Day after the date of such determination the same
information set forth in Item 1115(b) of Regulation AB (such requested
information, subject to the last sentence of this paragraph, the “Hedge
Financial Disclosure”) that would have been required if the significance
percentage had in fact increased to ten (10) percent. The Depositor or
any of
its agents shall provide Party A with the calculations and any other information
reasonably requested by Party A with respect to the Depositor’s determination
that led to the Hedge Disclosure Request. The parties hereto further agree
that
the Hedge Financial Disclosure provided to meet the Hedge Disclosure Request
may
be, solely at Party A’s option, either the information set forth in Item
1115(b)(1) or Item 1115(b)(2) of Regulation AB.
(iii) So
long
as there are reporting obligations with respect to this Transaction under
Regulation AB, if the Depositor determines, reasonably and in good faith,
that
the aggregate significance percentage of this Agreement has increased to
nineteen (19) percent, then the Depositor may make a Hedge Disclosure Request
to
Party A on a Business Day after the date of such determination for Hedge
Financial Disclosure that would have been required if the significance
percentage had in fact increased to twenty (20) percent (and, accordingly,
consists of the information set forth in Item 1115(b)(2) of Regulation
AB). The
Depositor or any of its agents shall provide Party A with the calculations
and
any other information reasonably requested by Party A with respect to the
Depositor’s determination that led to the Hedge Disclosure Request.
(iv) Upon
the
occurrence of a Hedge Disclosure Request, Party A, at its own expense,
shall (a)
provide the Depositor with the Hedge Financial Disclosure, (b) subject
to Rating
Agency Condition, secure another entity to replace Party A as party to
this
Agreement on terms substantially similar to this Agreement which entity
is able
to provide the Hedge Financial Disclosure or (c) subject to Rating Agency
Condition, obtain a guaranty of Party A’s obligations under this Agreement from
an affiliate of Party A that is able to provide the Hedge Financial Disclosure,
such that disclosure provided in respect of the affiliate will satisfy
any
disclosure requirements applicable to Party A, and cause such affiliate
to
provide Hedge Financial Disclosure. For purposes of clause (b) above, the
parties agree that National Westminster Bank Plc (“NatWest”)
shall
be an acceptable replacement for Party A, so long as NatWest satisfies
the
conditions specified in such clause (b). If permitted by Regulation AB,
any
required Hedge Financial Disclosure may be provided by incorporation by
reference from reports filed pursuant to the 1934 Act.
(v) Party
A
agrees that, if it responds to a Hedge Disclosure Request by providing
Hedge
Financial Disclosure, then, for so long as the Depositor has reporting
obligations under the 1934 Act with respect to this Transaction, it will
provide
any updates to Hedge Financial Disclosure within 5 Business Days following
the
availability thereof. If permitted by Regulation AB, any such update may
be
provided by incorporation by reference from reports filed pursuant to the
1934
Act.
32
(l) |
Amendment.
Notwithstanding any provision to the contrary in this Agreement,
no
amendment, modification, or waiver of either this Agreement or
any
Transaction under this Agreement shall be permitted by either
party unless
each of the Rating Agencies has been provided prior written notice
of the
same and S&P confirms in writing (including by facsimile transmission)
that it will not downgrade, withdraw or otherwise modify its
then-current
ratings of the Certificates.
|
(m) |
Severability.
If
any term, provision, covenant, or condition of the Agreement,
or the
application thereof to any other party or circumstance, shall
be held
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 the Agreement has been
executed
with the invalid or unenforceable provision portion eliminated,
so long as
the Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject
matter of
the Agreement and the deletion of such portion of the Agreement
will not
substantially impair the respective benefits or expectations
of the
parties. The parties shall endeavor to engage in good faith negotiations
to replace any invalid or unenforceable term, provision, covenant
or
conditions 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.
|
(n) |
Counterparts.
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.
|
(o) |
USA
PATRIOT Act Notice.
Party A hereby notifies Party B that pursuant to the requirements
of the
USA PATRIOT ACT (Title III of Pub. L. 107-56 (signed into law
October 26,
2001)) (the “Act”),
it is required to obtain, verify and record information that
identifies
Party B, which information includes the name and address of Party
B and
other information that will allow Party A to identify Party B
in
accordance with the Act.
|
(p) |
Agency
Role of Greenwich Capital Markets, Inc.
In
connection with this Agreement, Greenwich Capital Markets, Inc.
has acted
as agent on behalf of Party A. Greenwich Capital Markets, Inc.
has not
guaranteed and is not otherwise responsible for the obligations
of Party A
under this Agreement.
|
(q) |
Non-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 Assets
and the proceeds thereof, in accordance with the terms of the
Pooling and
Servicing Agreement. In the event that the Assets and the proceeds
thereof, should be insufficient to satisfy all claims outstanding
and
following the realization of the Assets and the proceeds thereof,
any
claims against or obligations of Party B under this Agreement
still
outstanding shall be extinguished and thereafter not revive.
This
provision shall survive the termination of this
Agreement.
|
(r) |
Third
Party Beneficiary.
The Depositor shall be an express third party beneficiary of
this
Agreement with respect to Party A’s undertakings under Part 5(k) only.
|
33
(s) |
Defined
Terms.
Terms capitalized but not defined herein or in the Definitions
incorporated herein shall have the respective meanings attributed
to them
in the Pooling and Servicing
Agreement.
|
[Signature
Page Immediately Follows]
34
IN
WITNESS WHEREOF, Party A and Party B have caused this Schedule to be duly
executed as its act and deed as of the date first written above.
THE
ROYAL BANK OF SCOTLAND PLC
By:
Greenwich Capital Markets, Inc.,
As
Its Agent
|
XXXXX
FARGO BANK, N.A., solely in its capacity as Yield Maintenance
Administrator on behalf of HarborView Mortgage Loan Trust Mortgage
Loan
Pass-Through Certificates, Series 2007-1
|
|
By
/s/ Xxxxx X. Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Managing Director
|
By
/s/ Xxxxxx X. Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Assistant Vice President
|
35
EXECUTION
(Bilateral
Form)
|
(ISDA
Agreements
Subject to New York Law Only)
|
ISDA®
International
Swaps and Derivatives Association, Inc.
CREDIT
SUPPORT ANNEX
to
the
Schedule to the Master Agreement
dated
as
of March 9, 2007
between
The
Royal Bank of Scotland plc
|
and
|
Xxxxx
Fargo Bank, National Association, solely as yield maintenance
administrator on behalf of HarborView Mortgage Loan Trust Mortgage
Loan
Pass-Through Certificates, Series 2007-1
|
(“Party
A”)
|
(“Party
B”)
|
This
Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under
this
Agreement with respect to each party.
Accordingly,
the parties agree as follows:
Paragraph
1. Interpretation
(a) Definitions
and Inconsistency.
Capitalized terms not otherwise defined herein or elsewhere in this Agreement
have the meanings specified pursuant to Paragraph 12, and all references
in this
Annex to Paragraphs are to Paragraphs of this Annex. In the event of
any
inconsistency between this Annex and the other provisions of this Schedule,
this
Annex will prevail, and in the event of any inconsistency between Paragraph
13
and the other provisions of this Annex, Paragraph 13 will prevail.
(b) Secured
Party and Pledgor.
All
references in this Annex to the “Secured Party” will be to either party when
acting in that capacity and all corresponding references to the “Pledgor” will
be to the other party when acting in that capacity; provided, however,
that if
Other Posted Support is held by a party to this Annex, all references
herein to
that party as the Secured Party with respect to that Other Posted Support
will
be to that party as the beneficiary thereof and will not subject that
support or
that party as the beneficiary thereof to provisions of law generally
relating to
security interests and secured parties.
Paragraph
2. Security Interest
Each
party, as the Pledgor, hereby pledges to the other party, as the Secured
Party,
as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off
against
all Posted Collateral Transferred to or received by the Secured Party
hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral,
the
security interest and lien granted hereunder on that Posted Collateral
will be
released immediately and, to the extent possible, without any further
action by
either party.
Paragraph
3. Credit Support Obligations
(a) Delivery
Amount.
Subject
to Paragraphs 4 and 5, upon a demand made by the Secured Party on or
promptly
following a Valuation Date, if the Delivery Amount for that Valuation
Date
equals or exceeds the Pledgor’s Minimum Transfer Amount, then the Pledgor will
Transfer to the Secured Party Eligible Credit Support having a Value
as of the
date of Transfer at least equal to the applicable Delivery Amount (rounded
pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13,
the
“Delivery
Amount”
applicable to the Pledgor for any Valuation Date will equal the amount
by
which:
(i) the
Credit Support Amount
exceeds
(ii) the
Value
as of that Valuation Date of all Posted Credit Support held by the Secured
Party.
(b) Return
Amount.
Subject
to Paragraphs 4 and 5, upon a demand made by the Pledgor on or promptly
following a Valuation Date, if the Return Amount for that Valuation Date
equals
or exceeds the Secured Party’s Minimum Transfer Amount, then the Secured Party
will Transfer to the Pledgor Posted Credit Support specified by the Pledgor
in
that demand having a Value as of the date of Transfer as close as practicable
to
the applicable Return Amount (rounded pursuant to Paragraph 13). Unless
otherwise specified in Paragraph 13, the “Return
Amount”
applicable to the Secured Party for any Valuation Date will equal the
amount by
which:
(i) the
Value
as of that Valuation Date of all Posted Credit Support held by the Secured
Party
exceeds
(ii) the
Credit Support Amount.
“Credit
Support Amount”
means,
unless otherwise specified in Paragraph 13, for any Valuation Date (i)
the
Secured Party’s Exposure for that Valuation Date plus (ii) the aggregate of all
Independent Amounts applicable to the Pledgor, if any, minus (iii) all
Independent Amounts applicable to the Secured Party, if any, minus (iv)
the
Pledgor’s Threshold; provided, however, that the Credit Support Amount will be
deemed to be zero whenever the calculation of Credit Support Amount yields
a
number less than zero.
2
Paragraph
4. Conditions Precedent, Transfer Timing, Calculations and
Substitutions
(a) Conditions
Precedent.
Each
Transfer obligation of the Pledgor under Paragraphs 3 and 5 and of the
Secured
Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is subject to the conditions
precedent that:
(i) no
Event
of Default, Potential Event of Default or Specified Condition has occurred
and
is continuing with respect to the other party; and
(ii) no
Early
Termination Date for which any unsatisfied payment obligations exist
has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the other party.
(b) Transfer
Timing.
Subject
to Paragraphs 4(a) and 5 and unless otherwise specified, if a demand
for the
Transfer of Eligible Credit Support or Posted Credit Support is made
by the
Notification Time, then the relevant Transfer will be made not later
than the
close of business on the next Local Business Day; if a demand is made
after the
Notification Time, then the relevant Transfer will be made not later
than the
close of business on the second Local Business Day thereafter.
(c) Calculations.
All
calculations of Value and Exposure for purposes of Paragraphs 3 and 6(d)
will be
made by the Valuation Agent as of the Valuation Time. The Valuation Agent
will
notify each party (or the other party, if the Valuation Agent is a party)
of its
calculations not later than the Notification Time on the Local Business
Day
following the applicable Valuation Date (or in the case of Paragraph
6(d),
following the date of calculation).
Substitutions.
(i) Unless
otherwise specified in Paragraph 13, upon notice to the Secured Party
specifying
the items of Posted Credit Support to be exchanged, the Pledgor may,
on any
Local Business Day, Transfer to the Secured Party substitute Eligible
Credit
Support (the “Substitute
Credit Support”);
and
(ii) subject
to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the
items of
Posted Credit Support specified by the Pledgor in its notice not later
than the
Local Business Day following the date on which the Secured Party receives
the
Substitute Credit Support, unless otherwise specified in Paragraph 13
(the
“Substitution
Date”);
provided, however, that the Secured Party will only be obligated to Transfer
Posted Credit Support with a Value as of the date of Transfer of that
Posted
Credit Support equal to the Value as of that date of the Substitute Credit
Support.
Paragraph
5. Dispute Resolution
If
a
party (a “Disputing
Party”)
disputes (I) the Valuation Agent’s calculation of a Delivery Amount or a Return
Amount or (II) the Value of any Transfer of Eligible Credit Support or
Posted
Credit Support, then (1) the Disputing Party will notify the other party
and the
Valuation Agent (if the Valuation Agent is not the other party) not later
than
the close of business on the Local Business Day following (X) the date
that the
demand is made under Paragraph 3 in the case of (I) above or (Y) the
date of
Transfer in the case of (II) above, (2) subject to Paragraph 4(a), the
appropriate party will Transfer the undisputed amount to the other party
not
later than the close of business on the Local Business Day following
(X) the
date that the demand is made under Paragraph 3 in the case of (I) above
or (Y)
the date of Transfer in the case of (II) above, (3) the parties will
consult
with each other in an attempt to resolve the dispute and (4) if they
fail to
resolve the dispute by the Resolution Time, then:
3
(i) In
the
case of a dispute involving a Delivery Amount or Return Amount, unless
otherwise
specified in Paragraph 13, the Valuation Agent will recalculate the Exposure
and
the Value as of the Recalculation Date by:
(A) utilizing
any calculations of Exposure for the Transactions (or Swap Transactions)
that
the parties have agreed are not in dispute;
(B) calculating
the Exposure for the Transactions (or Swap Transactions) in dispute by
seeking
four actual quotations at mid-market from Reference Market-makers for
purposes
of calculating Market Quotation, and taking the arithmetic average of
those
obtained; provided that if four quotations are not available for a particular
Transaction (or Swap Transaction), then fewer than four quotations may
be used
for that Transaction (or Swap Transaction); and if no quotations are
available
for a particular Transaction (or Swap Transaction), then the Valuation
Agent’s
original calculations will be used for that Transaction (or Swap Transaction);
and
(C) utilizing
the procedures specified in Paragraph 13 for calculating the Value, if
disputed,
of Posted Credit Support.
(ii) In
the
case of a dispute involving the Value of any Transfer of Eligible Credit
Support
or Posted Credit Support, the Valuation Agent will recalculate the Value
as of
the date of Transfer pursuant to Paragraph 13.
Following
a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each
party (or the other party, if the Valuation Agent is a party) not later
than the
Notification Time on the Local Business Day following the Resolution
Time. The
appropriate party will, upon demand following that notice by the Valuation
Agent
or a resolution pursuant to (3) above and subject to Paragraphs 4(a)
and 4(b),
make the appropriate Transfer.
Paragraph
6. Holding and Using Posted Collateral
(a) Care
of Posted Collateral.
Without
limiting the Secured Party’s rights under Paragraph 6(c), the Secured Party will
exercise reasonable care to assure the safe custody of all Posted Collateral
to
the extent required by applicable law, and in any event the Secured Party
will
be deemed to have exercised reasonable care if it exercises at least
the same
degree of care as it would exercise with respect to its own property.
Except as
specified in the preceding sentence, the Secured Party will have no duty
with
respect to Posted Collateral, including, without limitation, any duty
to collect
any Distributions, or enforce or preserve any rights pertaining
thereto.
4
(b) Eligibility
to Hold Posted Collateral; Custodians.
(i) General.
Subject
to the satisfaction of any conditions specified in Paragraph 13 for holding
Posted Collateral, the Secured Party will be entitled to hold Posted
Collateral
or to appoint an agent (a “Custodian”) to hold Posted Collateral for the Secured
Party. Upon notice by the Secured Party to the Pledgor of the appointment
of a
Custodian, the Pledgor’s obligations to make any Transfer will be discharged by
making the Transfer to that Custodian. The holding of Posted Collateral
by a
Custodian will be deemed to be the holding of that Posted Collateral
by the
Secured Party for which the Custodian is acting.
(ii) Failure
to Satisfy Conditions.
If the
Secured Party or its Custodian fails to satisfy any conditions for holding
Posted Collateral, then upon a demand made by the Pledgor, the Secured
Party
will, not later than five Local Business Days after the demand, Transfer
or
cause its Custodian to Transfer all Posted Collateral held by it to a
Custodian
that satisfies those conditions or to the Secured Party if it satisfies
those
conditions.
(iii) Liability.
The
Secured Party will be liable for the acts or omissions of its Custodian
to the
same extent that the Secured Party would be liable hereunder for its
own acts or
omissions.
(c) Use
of Posted Collateral.
Unless
otherwise specified in Paragraph 13 and without limiting the rights and
obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and
8, if the
Secured Party is not a Defaulting Party or an Affected Party with respect
to a
Specified Condition and no Early Termination Date has occurred or been
designated as the result of an Event of Default or Specified Condition
with
respect to the Secured Party, then the Secured Party will, notwithstanding
Section 9-207 of the New York Uniform Commercial Code, have the right
to:
(i) sell,
pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose
of,
or otherwise use in its business any Posted Collateral it holds, free
from any
claim or right of any nature whatsoever of the Pledgor, including any
equity or
right of redemption by the Pledgor; and
(ii) register
any Posted Collateral in the name of the Secured Party, its Custodian
or a
nominee for either.
For
purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit
Support pursuant to Paragraphs 3 and 5 and any rights or remedies authorized
under this Agreement, the Secured Party will be deemed to continue to
hold all
Posted Collateral and to receive Distributions made thereon, regardless
of
whether the Secured Party has exercised any rights with respect to any
Posted
Collateral pursuant to (i) or (ii) above.
5
(d) Distributions
and Interest Amount.
(i) Distributions.
Subject
to Paragraph 4(a), if the Secured Party receives or is deemed to receive
Distributions on a Local Business Day, it will Transfer to the Pledgor
not later
than the following Local Business Day any Distributions it receives or
is deemed
to receive to the extent that a Delivery Amount would not be created
or
increased by that Transfer, as calculated by the Valuation Agent (and
the date
of calculation will be deemed to be a Valuation Date for this
purpose).
(ii) Interest
Amount.
Unless
otherwise specified in Paragraph 13 and subject to Paragraph 4(a), in
lieu of
any interest, dividends or other amounts paid or deemed to have been
paid with
respect to Posted Collateral in the form of Cash (all of which may be
retained
by the Secured Party), the Secured Party will Transfer to the Pledgor
at the
times specified in Paragraph 13 the Interest Amount to the extent that
a
Delivery Amount would not be created or increased by that Transfer, as
calculated by the Valuation Agent (and the date of calculation will be
deemed to
be a Valuation Date for this purpose). The Interest Amount or portion
thereof
not Transferred pursuant to this Paragraph will constitute Posted Collateral
in
the form of Cash and will be subject to the security interest granted
under
Paragraph 2.
Paragraph
7. Events of Default
For
purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default
will
exist with respect to a party if:
(i) that
party fails (or fails to cause its Custodian) to make, when due, any
Transfer of
Eligible Collateral, Posted Collateral or the Interest Amount, as applicable,
required to be made by it and that failure continues for two Local Business
Days
after notice of that failure is given to that party;
(ii) that
party fails to comply with any restriction or prohibition specified in
this
Annex with respect to any of the rights specified in Paragraph 6(c) and
that
failure continues for five Local Business Days after notice of that failure
is
given to that party; or
(iii) that
party fails to comply with or perform any agreement or obligation other
than
those specified in Paragraphs 7(i) and 7(ii) and that failure continues
for 30
days after notice of that failure is given to that party.
Paragraph
8. Certain Rights and Remedies
(a) Secured
Party’s Rights and Remedies.
If at
any time (1) an Event of Default or Specified Condition with respect
to the
Pledgor has occurred and is continuing or (2) an Early Termination Date
has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the Pledgor, then, unless the Pledgor has paid
in full
all of its Obligations that are then due, the Secured Party may exercise
one or
more of the following rights and remedies:
6
(i) all
rights and remedies available to a secured party under applicable law
with
respect to Posted Collateral held by the Secured Party;
(ii) any
other
rights and remedies available to the Secured Party under the terms of
Other
Posted Support, if any;
(iii) the
right
to Set-off any amounts payable by the Pledgor with respect to any Obligations
against any Posted Collateral or the Cash equivalent of any Posted Collateral
held by the Secured Party (or any obligation of the Secured Party to
Transfer
that Posted Collateral); and
(iv) the
right
to liquidate any Posted Collateral held by the Secured Party through
one or more
public or private sales or other dispositions with such notice, if any,
as may
be required under applicable law, free from any claim or right of any
nature
whatsoever of the Pledgor, including any equity or right of redemption
by the
Pledgor (with the Secured Party having the right to purchase any or all
of the
Posted Collateral to be sold) and to apply the proceeds (or the Cash
equivalent
thereof) from the liquidation of the Posted Collateral to any amounts
payable by
the Pledgor with respect to any Obligations in that order as the Secured
Party
may elect.
Each
party acknowledges and agrees that Posted Collateral in the form of securities
may decline speedily in value and is of a type customarily sold on a
recognized
market, and, accordingly, the Pledgor is not entitled to prior notice
of any
sale of that Posted Collateral by the Secured Party, except any notice
that is
required under applicable law and cannot be waived.
(b) Pledgor’s
Rights and Remedies.
If at
any time an Early Termination Date has occurred or been designated as
the result
of an Event of Default or Specified Condition with respect to the Secured
Party,
then (except in the case of an Early Termination Date relating to less
than all
Transactions (or Swap Transactions) where the Secured Party has paid
in full all
of its obligations that are then due under Section 6(e) of this
Agreement):
(i) the
Pledgor may exercise all rights and remedies available to a pledgor under
applicable law with respect to Posted Collateral held by the Secured
Party;
(ii) the
Pledgor may exercise any other rights and remedies available to the Pledgor
under the terms of Other Posted Support, if any;
(iii) the
Secured Party will be obligated immediately to Transfer all Posted Collateral
and the Interest Amount to the Pledgor; and
(iv) to
the
extent that Posted Collateral or the Interest Amount is not so Transferred
pursuant to (iii) above, the Pledgor may:
(A) Set-off
any amounts payable by the Pledgor with respect to any Obligations against
any
Posted Collateral or the Cash equivalent of any Posted Collateral held
by the
Secured Party (or any obligation of the Secured Party to Transfer that
Posted
Collateral); and
7
(B) to
the
extent that the Pledgor does not Set-off under (iv)(A) above, withhold
payment
of any remaining amounts payable by the Pledgor with respect to any Obligations,
up to the Value of any remaining Posted Collateral held by the Secured
Party,
until that Posted Collateral is Transferred to the Pledgor.
(c) Deficiencies
and Excess Proceeds.
The
Secured Party will Transfer to the Pledgor any proceeds and Posted Credit
Support remaining after liquidation, Set-off and/or application under
Paragraphs
8(a) and 8(b) after satisfaction in full of all amounts payable by the
Pledgor
with respect to any Obligations; the Pledgor in all events will remain
liable
for any amounts remaining unpaid after any liquidation, Set-off and/or
application under Paragraphs 8(a) and 8(b).
(d) Final
Returns.
When no
amounts are or thereafter may become payable by the Pledgor with respect
to any
Obligations (except for any potential liability under Section 2(d) of
this
Agreement), the Secured Party will Transfer to the Pledgor all Posted
Credit
Support and the Interest Amount, if any.
Paragraph
9. Representations
Each
party represents to the other party (which representations will be deemed
to be
repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it
has
the power to grant a security interest in and lien on any Eligible Collateral
it
Transfers as the Pledgor and has taken all necessary actions to authorize
the
granting of that security interest and lien;
(ii) it
is the
sole owner of or otherwise has the right to Transfer all Eligible Collateral
it
Transfers to the Secured Party hereunder, free and clear of any security
interest, lien, encumbrance or other restrictions other than the security
interest and lien granted under Paragraph 2,
(iii) upon
the
Transfer of any Eligible Collateral to the Secured Party under the terms
of this
Annex, the Secured Party will have a valid and perfected first priority
security
interest therein (assuming that any central clearing corporation or any
third-party financial intermediary or other entity not within the control
of the
Pledgor involved in the Transfer of that Eligible Collateral gives the
notices
and takes the action required of it under applicable law for perfection
of that
interest); and
(iv) the
performance by it of its obligations under this Annex will not result
in the
creation of any security interest, lien or other encumbrance on any Posted
Collateral other than the security interest and lien granted under Paragraph
2.
Paragraph
10. Expenses
(a) General.
Except
as otherwise provided in Paragraphs 10(b) and 10(c), each party will
pay its own
costs and expenses in connection with performing its obligations under
this
Annex and neither party will be liable for any costs and expenses incurred
by
the other party in connection herewith.
8
(b) Posted
Credit Support.
The
Pledgor will promptly pay when due all taxes, assessments or charges
of any
nature that are imposed with respect to Posted Credit Support held by
the
Secured Party upon becoming aware of the same, regardless of whether
any portion
of that Posted Credit Support is subsequently disposed of under Paragraph
6(c),
except for those taxes, assessments and charges that result from the
exercise of
the Secured Party’s rights under Paragraph 6(c).
(c) Liquidation/Application
of Posted Credit Support.
All
reasonable costs and expenses incurred by or on behalf of the Secured
Party or
the Pledgor in connection with the liquidation and/or application of
any Posted
Credit Support under Paragraph 8 will be payable, on demand and pursuant
to the
Expenses Section of this Agreement, by the Defaulting Party or, if there
is no
Defaulting Party, equally by the parties.
Paragraph
11. Miscellaneous
(a) Default
Interest.
A
Secured Party that fails to make, when due, any Transfer of Posted Collateral
or
the Interest Amount will be obligated to pay the Pledgor (to the extent
permitted under applicable law) an amount equal to interest at the Default
Rate
multiplied by the Value of the items of property that were required to
be
Transferred, from (and including) the date that Posted Collateral or
Interest
Amount was required to be Transferred to (but excluding) the date of
Transfer of
that Posted Collateral or Interest Amount. This interest will be calculated
on
the basis of daily compounding and the actual number of days
elapsed.
(b) Further
Assurances.
Promptly
following a demand made by a party, the other party will execute, deliver,
file
and record any financing statement, specific assignment or other document
and
take any other action that may be necessary or desirable and reasonably
requested by that party to create, preserve, perfect or validate any
security
interest or lien granted under Paragraph 2, to enable that party to exercise
or
enforce its rights under this Annex with respect to Posted Credit Support
or an
Interest Amount or to effect or document a release of a security interest
on
Posted Collateral or an Interest Amount.
(c) Further
Protection.
The
Pledgor will promptly give notice to the Secured Party of, and defend
against,
any suit, action, proceeding or lien that involves Posted Credit Support
Transferred by the Pledgor or that could adversely affect the security
interest
and lien granted by it under Paragraph 2, unless that suit, action, proceeding
or lien results from the exercise of the Secured Party’s rights under Paragraph
6(c).
(d) Good
Faith and Commercially Reasonable Manner.
Performance of all obligations under this Annex, including, but not limited
to,
all calculations, valuations and determinations made by either party,
will be
made in good faith and in a commercially reasonable manner.
(e) Demands
and Notices.
All
demands and notices made by a party under this Annex will be made as
specified
in the Notices Section of this Agreement, except as otherwise provided
in
Paragraph 13.
(f) Specifications
of Certain Matters.
Anything
referred to in this Annex as being specified in Paragraph 13 also may
be
specified in one or more Confirmations or other documents and this Annex
will be
construed accordingly.
9
Paragraph
12. Definitions
As
used
in this Annex:
“Cash”
means
the lawful currency of the United States of America. “Credit
Support Amount”
has the
meaning specified in Paragraph 3. “Custodian”
has the
meaning specified in Paragraphs 6(b)(i) and 13. “Delivery
Amount”
has the
meaning specified in Paragraph 3(a). “Disputing
Party”
has the
meaning specified in Paragraph 5.
“Distributions”
means
with respect to Posted Collateral other than Cash, all principal, interest
and
other payments and distributions of cash or other property with respect
thereto,
regardless of whether the Secured Party has disposed of that Posted Collateral
under Paragraph 6(c). Distributions will not include any item of property
acquired by the Secured Party upon any disposition or liquidation of
Posted
Collateral or, with respect to any Posted Collateral in the form of Cash,
any
distributions on that collateral, unless otherwise specified
herein.
“Eligible
Collateral”
means,
with respect to a party, the items, if any, specified as such for that
party in
Paragraph 13.
“Eligible
Credit Support”
means
Eligible Collateral and Other Eligible Support.
“Exposure”
means
for any Valuation Date or other date for which Exposure is calculated
and
subject to Paragraph 5 in the case of a dispute, the amount, if any,
that would
be payable to a party that is the Secured Party by the other party (expressed
as
a positive number) or by a party that is the Secured Party to the other
party
(expressed as a negative number) pursuant to Section 6(e)(ii)(2)(A) of
this
Agreement as if all Transactions (or Swap Transactions) were being terminated
as
of the relevant Valuation Time; provided, however, that Market Quotation
will be
determined by the Valuation Agent using its estimates at mid-market of
the
amounts that would be paid for Replacement Transactions (as that term
is defined
in the definition of “Market Quotation”).
“Independent
Amount”
means,
with respect to a party, the amount specified as such for that party
in
Paragraph 13; if no amount is specified, zero.
“Interest
Amount”
means,
with respect to an Interest Period, the aggregate sum of the amounts
of interest
calculated for each day in that Interest Period on the principal amount
of
Posted Collateral in the form of Cash held by the Secured Party on that
day,
determined by the Secured Party for each such day as follows:
(x)
the
amount of that Cash on that day; multiplied by
(y)
the
Interest Rate in effect for that day; divided by
(z)
360.
“Interest
Period”
means
the period from (and including) the last Local Business Day on which
an Interest
Amount was Transferred (or, if no Interest Amount has yet been Transferred,
the
Local Business Day on which Posted Collateral in the form of Cash was
Transferred to or received by the Secured Party) to (but excluding) the
Local
Business Day on which the current Interest Amount is to be
Transferred.
10
“Interest
Rate”
means
the rate specified in Paragraph 13.
“Local
Business Day”
unless
otherwise specified in Paragraph 13, has the meaning specified in the
Definitions Section of this Agreement, except that references to a payment
in
clause (b) thereof will be deemed to include a Transfer under this
Annex.
“Minimum
Transfer Amount”
means,
with respect to a party, the amount specified as such for that party
in
Paragraph 13; if no amount is specified, zero.
“Notification
Time”
has the
meaning specified in Paragraph 13.
“Obligations”
means,
with respect to a party, all present and future obligations of that party
under
this Agreement and any additional obligations specified for that party
in
Paragraph 13.
“Other
Eligible Support”
means,
with respect to a party, the items, if any, specified as such for that
party in
Paragraph 13.
“Other
Posted Support”
means
all Other Eligible Support Transferred to the Secured Party that remains
in
effect for the benefit of that Secured Party.
“Pledgor”
means
either party, when that party (i) receives a demand for or is required
to
Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has Transferred
Eligible Credit Support under Paragraph 3(a).
“Posted
Collateral”
means
all Eligible Collateral, other property, Distributions, and all proceeds
thereof
that have been Transferred to or received by the Secured Party under
this Annex
and not Transferred to the Pledgor pursuant to Paragraph 3(b), 4(d)(ii)
or
6(d)(i) or released by the Secured Party under Paragraph 8. Any Interest
Amount
or portion thereof not Transferred pursuant to Paragraph 6(d)(ii) will
constitute Posted Collateral in the form of Cash.
“Posted
Credit Support”
means
Posted Collateral and Other Posted Support.
“Recalculation
Date”
means
the Valuation Date that gives rise to the dispute under Paragraph 5;
provided,
however, that if a subsequent Valuation Date occurs under Paragraph 3
prior to
the resolution of the dispute, then the “Recalculation Date” means the most
recent Valuation Date under Paragraph 3.
“Resolution
Time”
has the
meaning specified in Paragraph 13.
“Return
Amount”
has the
meaning specified in Paragraph 3(b).
“Secured
Party”
means
either party, when that party (i) makes a demand for or is entitled to
receive
Eligible Credit Support under Paragraph 3(a) or (ii) holds or is deemed
to hold
Posted Credit Support.
11
“Specified
Condition”
means,
with respect to a party, any event specified as such for that party in
Paragraph
13.
“Substitute
Credit Support”
has the
meaning specified in Paragraph 4(d)(i).
“Substitution
Date”
has the
meaning specified in Paragraph 4(d)(ii).
“Threshold”
means,
with respect to a party, the amount specified as such for that party
in
Paragraph 13; if no amount is specified, zero.
“Transfer” means,
with respect to any Eligible Credit Support, Posted Credit Support or
Interest
Amount, and in accordance with the instructions of the Secured Party,
Pledgor or
Custodian, as applicable:
(i) in
the
case of Cash, payment or delivery by wire transfer into one or more bank
accounts specified by the recipient;
(ii) in
the
case of certificated securities that cannot be paid or delivered by book-entry,
payment or delivery in appropriate physical form to the recipient or
its account
accompanied by any duly executed instruments of transfer, assignments
in blank,
transfer tax stamps and any other documents necessary to constitute a
legally
valid transfer to the recipient;
(iii) in
the
case of securities that can be paid or delivered by book-entry, the giving
of
written instructions to the relevant depository institution or other
entity
specified by the recipient, together with a written copy thereof to the
recipient, sufficient if complied with to result in a legally effective
transfer
of the relevant interest to the recipient; and
(iv) in
the
case of Other Eligible Support or Other Posted Support, as specified
in
Paragraph 13.
“Valuation
Agent”
has the
meaning specified in Paragraph 13.
“Valuation
Date”
means
each date specified in or otherwise determined pursuant to Paragraph
13.
“Valuation
Percentage”
means,
for any item of Eligible Collateral, the percentage specified in Paragraph
13.
“Valuation
time”
has the
meaning specified in Paragraph 13.
“Value”
means
for any Valuation Date or other date for which Value is calculated and
subject
to Paragraph 5 in the case of a dispute, with respect to:
(i) Eligible
Collateral or Posted Collateral that is:
(A) Cash,
the
Amount thereof, and
12
(B) a
security, the bid price obtained by the Valuation Agent multiplied by
the
applicable Valuation Percentage, if any;
(ii) Posted
Collateral that consists of items that are not specified as Eligible
Collateral,
zero; and
(iii) Other
Eligible Support and Other Posted Support, as specified in Paragraph
13.
Paragraph
13. Elections and Variables
(a) Security
Interest for “Obligations”.
The term
“Obligations” as used in this Annex includes 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), except that (I)
the words
“upon a demand made by the Secured Party on or promptly following
a
Valuation Date” shall be deleted and replaced by the words “not later than
the close of business on each Valuation Date” and (II) the sentence
beginning “Unless otherwise specified in Paragraph 13” and ending “(ii)
the Value as of that Valuation Date of all Posted Credit Support
held by
the Secured Party.” shall be deleted and replaced by the
following:
|
(A) “The
“Delivery Amount” applicable to the Pledgor for any Valuation Date will equal
the greatest of
(B) (1)
the
amount by which (a) the S&P Collateral 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,
(C) (2)
the
amount by which (a) the Xxxxx’x First Collateral 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
(D) (3)
the
amount by which (a) the Xxxxx’x Second Collateral 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), except that the
sentence
beginning “Unless otherwise specified in Paragraph 13” and ending “(ii)
the Credit Support Amount.” shall be deleted and replaced by the
following:
|
13
“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 Collateral
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 Collateral 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 Collateral 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
Collateral Amount, the Xxxxx’x First Collateral Amount, or the Xxxxx’x
Second Collateral Amount, in each case for such Valuation Date,
as
provided in Paragraphs 13(b)(i)(A) and 13(b)(i)(B),
above.
|
The
“S&P
Collateral Amount”
means, for any Valuation Date, zero, provided that for so long as a First
Rating
Trigger Event with respect to S&P has occurred and is continuing for at
least 30 days or a Second Rating Trigger Event with respect to S&P has
occurred and is continuing, the S&P Collateral Amount shall equal the sum of
(I) Party B’s Exposure and (II) the sum, for each transaction to which this
Annex relates, of the product
S&P
Volatility Buffer*Hedge Notional, where
“Hedge
Notional” means
the notional amount of the relevant Transaction for the relevant Calculation
Period.
“S&P
Volatility Buffer” means,
for any Transaction, the related percentage set forth in the following
table.
The
higher of the S&P short-term credit rating of (i) Party A and (ii) the
Credit Support Provider of Party A, if applicable
|
Remaining
Weighted Average Maturity
up
to 3 years
|
Remaining
Weighted Average Maturity
up
to 5 years
|
Remaining
Weighted Average Maturity
up
to 10 years
|
Remaining
Weighted Average Maturity
up
to 30 years
|
At
least “A-2”
|
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%
|
14
The
“Xxxxx’x
First Collateral Amount”
means zero, provided that for so long as (A) a First Rating Trigger Event
with
respect to Xxxxx’x has occurred and is continuing and either (i) such event
existed at the time this Annex was executed or assigned by Party A to
another
party or (ii) at least 30 Local Business Days have elapsed since such
event
occurred and (B)(i) no Second Rating Trigger Event with respect to Xxxxx’x has
occurred and is continuing or (ii) less than 30 Local Business Days have
elapsed
since the occurrence of a Second Rating Trigger Event with respect to
Xxxxx’x,
then the Xxxxx’x First Collateral Amount shall equal the sum of (I) Party B’s
Exposure and (ii) the sum, over all Transactions, of
Min
[15*DV01, 2%*Hedge Notional]; and
The
“Xxxxx’x
Second Collateral Amount”
means zero, provided that, for so long as a Second Rating Trigger Event with
respect to Xxxxx’x
has occurred and has been continuing for 30 or more Local Business Days,
then
the Xxxxx’x Second Collateral Amount shall equal
Max
[0,
Next Payment, Party B’s Exposure + Additional Amount], where
Next
Payment = the sum of the net payments due from Party A to Party B (if
any) on
the next payment date for all Transactions.
Additional
Amount = the sum, over all Transactions of
(a)
|
with
respect to each Transaction that is a single currency swap
with a fixed
notional amount for each Calculation Period, Min [50*DV01,
8%* Aggregate
Hedge Notional],
and
|
(b)
|
with
respect to each Transaction that is not a single-currency swap
with a
fixed notional amount for each Calculation Period, Min
[65*DV01, 10%* Aggregate Hedge Notional],
where
|
DV01
=
Party A’s estimate of the change in the mid-market value of Party B’s Exposure
resulting from a one basis point change in the swap curve, and
Aggregate
Hedge Notional = the aggregate of the applicable notional amounts of
all
Transactions for the relevant Calculation Period.
15
(ii)
Eligible Collateral.
The
following items will qualify as “Eligible Collateral” for the party specified
(for the avoidance of doubt, all Eligible Collateral to be denominated
in
USD):
Collateral
Type
|
S&P
Valuation
Percentage
|
Xxxxx’x
Valuation Percentage at First Trigger Rating Event
|
Xxxxx’x
Valuation Percentage at Second Trigger Rating Event
|
|||
(A)
Cash, in the form of USD
|
100%
|
100%
|
100%
|
|||
(B)
Negotiable Debt Obligations (as defined below) issued by the
Government of
the United States of America having a remaining maturity of
not more than
one year.
|
98.9%
|
100%
|
100%
|
|||
(C)
Negotiable Debt Obligations issued by the Government of the
United States
of America having a remaining maturity of more than one but
not more than
two years.
|
98.0%
|
100%
|
99%
|
|||
(D)
Negotiable Debt Obligations issued by the Government of the
United States
of America having a remaining maturity of more than two but
not more than
three years.
|
97.4%
|
100%
|
98%
|
|||
(E)
Negotiable Debt Obligations issued by the Government of the
United States
of America having a remaining maturity of more than three but
not more
than five years.
|
95.5%
|
100%
|
97%
|
|||
(F)
Negotiable Debt Obligations issued by the Government of the
United States
of America having a remaining maturity of more than five but
not more than
seven years.
|
93.7%
|
100%
|
96%
|
|||
(G)
Negotiable Debt Obligations issued by the Government of the
United States
of America having a remaining maturity of more than seven but
not more
than ten years.
|
92.5%
|
100%
|
94%
|
|||
(H)
Negotiable Debt Obligations issued by the Government of the
United States
of America having a remaining maturity of more than ten but
not more than
twenty years.
|
91.1%
|
100%
|
90%
|
|||
(I)
Negotiable Debt Obligations issued by the Government of the
United States
of America having a remaining maturity of more than twenty
years.
|
88.6%
|
100%
|
88%
|
16
As
used
above, the following terms have the indicated meanings:
“Negotiable
Debt Obligation”
means a
debt obligation in a stated principal amount with a non-variable fixed
maturity,
which cannot be redeemed by its issuer before its maturity nor put to
the issuer
for redemption before its maturity. It must bear interest on its stated
principal amount at a non-variable fixed rate until maturity.
(iii)
Other
Eligible Support.
The
following items will qualify as “Other Eligible Support” for the party
specified: Not Applicable.
(iv)
Thresholds.
(A)
|
“Independent
Amount”
means with respect to Party A: Not
Applicable.
|
“Independent
Amount”
means
with respect to Party B: Not Applicable.
(B)
|
“Threshold”
means
with respect to Party A, infinity, provided that for so long
as (1) a
First Rating Trigger Event with respect to Moody's has occurred
and is
continuing and either (i) such
First Rating Trigger Event existed at the time this Annex was
executed or
(ii) at least 30 Local Business days have elapsed since such
First Rating
Trigger Event occurred, or
(2) a First Rating Trigger Event with respect to S&P has occurred and
is continuing for at least 30 days or a Second Rating Trigger
Event with
respect to S&P has occurred and is continuing, the
Threshold with respect to Party A shall be
zero.
|
“Threshold”
means
with respect to Party B, infinity.
(C)
|
“Minimum
Transfer Amount”
means with respect to Party A: USD
100,000, and with respect to Party B: USD 100,000, provided,
that
if
the aggregate principal balance of the Certificates rated
by S&P ceases to be more than USD 50,000,000, the “Minimum
Transfer Amount”
shall be USD 50,000 and provided further that if a Party is
a Defaulting
Party, or the Affected Party under an Additional Termination
Event, the
Minimum Transfer Amount for such party shall be
zero.
|
(D)
|
Rounding.
The Delivery Amount and the Return Amount will be rounded up
and down,
respectively, to the nearest integral multiple of $10,000.
|
(c)
|
(i)
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 (as defined below) 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 Collateral 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.
|
17
(ii)
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.
(d) Valuation
and Timing.
(i)
“Valuation
Agent”
means
Party A.
(ii)
“Valuation
Date”
means:
each Local Business Day.
(iii)
“Valuation
Time”
means the close of business on the Local
Business
Day before the Valuation Date or date of calculation, as applicable;
provided,
however,
that the
calculations of Value and Exposure will be made as of approximately the
same
time on the same date.
(iv)
“Notification
Time”
means
9:00 a.m., New York time, on a Local Business Day.
(d)
|
Conditions
Precedent and Secured Party's Rights and Remedies. For
purposes of Paragraph 8(a), each Termination Event will be
a "Specified
Condition" for the Pledgor, if the Secured Party has designated
an Early
Termination Date in connection with the Termination Event.
For all other
purposes of this Annex, each Termination Event specified below
with
respect to a party will be a "Specified Condition" for that
party (that
party being the Affected Party if the Termination Event occurs
with
respect to that party):
|
Termination
Event
|
Party
A
|
Party
B
|
Illegality
|
[N/A]
|
[N/A]
|
Tax
Event
|
[N/A]
|
[N/A]
|
Tax
Event Upon Merger
|
[N/A]
|
[N/A]
|
Credit
Event Upon Merger
|
[N/A]
|
[N/A]
|
Additional
Termination Event(s)
|
[X]
|
[X]
|
18
(e) Substitution.
(i)
“Substitution
Date”
has the
meaning specified in Paragraph 4(d)(ii).
(ii)
Consent.
The
Pledgor shall obtain the Secured Party’s consent for any substitution pursuant
to Paragraph 4(d). Such consent shall not be unreasonably withheld.
(f) Dispute
Resolution.
(i)
“Resolution
Time”
means
9:00 a.m., New York time, on the Local Business Day following the date
on which
the notice of the dispute is given by the Disputing Party to the other
party.
(ii)
Value.
For the
purposes of Paragraphs 5(i)(c) and 5(ii), the Value of the outstanding
Credit
Support Amount or of any transfer of Eligible Credit Support or Posted
Credit
Support other than Cash (the “Non-Cash Credit Support”) will be calculated as
follows: the product of (A) appropriate Valuation Percentage and (B)
the sum of
(I) the mean of the bid prices quoted on such date by any three principal
market
makers for such Non-Cash Credit Support chosen by the Disputing Party,
or if
three such quotations are not available from principal market makers
for such
date, using two such quotations, or if only one such quotation is obtained
using
such quotation, or if no quotations are available using the mean of such
bid
prices as of the day, next preceding such date, on which one or more
of such
quotations were available, plus (II) the accrued interest on such Non-Cash
Credit Support (except to the extent Transferred to a party pursuant
to this
Agreement or included in the applicable price referred to in subparagraph
(A) of
this Clause) 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 its Custodian will be entitled to hold Posted Collateral pursuant
to
Paragraph 6(b); provided
that the following conditions applicable to it are satisfied:
(A)
|
In
the event that Party B holds Posted Collateral, Party B is
not a
Defaulting Party or an Affected Party under an Additional Termination
Event.
|
(B)
|
Posted
Collateral may be held only in the following jurisdiction:
New York and
Minnesota.
|
(C)
|
In
the event that the Custodian holds Posted Collateral, the long-term
unsubordinated unsecured debt of the Custodian is rated at
least “A+” and
“A-1” by Standard & Poors, a division of The XxXxxx-Xxxx Companies,
Inc. (or any successor thereto) and at least “A1” by Xxxxx’x Investors
Service, Inc. (or any successor
thereto).
|
Initially,
the Custodian for Party B is Xxxxx Fargo Bank, N.A.
(ii)
Use
of Posted Collateral.
The
provisions of Paragraph 6(c)(i) shall not apply.
19
(h) Distributions
and Interest Amount.
(i)
Interest Rate.
The
“Interest Rate” will be the weighted average rate of interest earned by the
Secured Party in respect of Posted Collateral in the form of Cash.
(ii)
Transfer
of Interest Amount.
The
transfer of the Interest Amount will be made on the second Local Business
Day of
each calendar month in respect of the Interest Amount for the preceding
calendar
month, 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.
Not
applicable.
(i) Additional
Representation(s).
Not
applicable.
(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, unless otherwise specified
here:
Party
A:
Global
Collateral Support Unit
The
Royal
Bank of Scotland plc, Financial Markets
000
Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
Facsimile:
44.207 000 0000
Telephone:
44.207 000 0000
With
a
copy to:
000
Xxxxxxxxx Xxxx
Xxxxxxxxx
XX 00000
Attn:
Derivatives
Settlements
Telephone:
000-000-0000 (Xxx Xxxxx)
000-000-0000 (Operations main number)
Facsimile:
000-000-0000
20
Party
B:
Xxxxx
Fargo Bank, N.A. (the “Yield Maintenance Administrator”)
0000
Xxx
Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 00000
Attention:
Client Service Manager - HarborView 2007-1
Tel:
(000) 000-0000
Fax:
(000) 000-0000
(l) Address
for Transfers. All
transfers hereunder will be made to the account or accounts most recently
notified by each party to the other.
(m) Other
Provisions.
(i)
Single
Transferor and Single Transferee. 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.
(ii)
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) Second
Rating
Trigger Event with respect to S&P has occurred and been continuing or (B) a
Second Rating Trigger Event with respect to Moody’s has occurred and been
continuing for 30 or more Local Business Days and such failure is not
remedied
on or before the third Local Business Day after notice of such failure
is given
to Party A.
(iii)
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.
(iv)
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.
(v)
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.”
(vi)
“Local
Business Day”
means,
for purposes of the Credit Support 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.
21
(vii)
Calculation
of Value.
Paragraph 4(c) is hereby amended by deleting the word “Value” and inserting in
lieu thereof “S&P Value, Moody’s First Trigger Value, Moody’s 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, Moody’s First Trigger Value,
and Moody’s Second Trigger Value” and (B) deleting the words “the Value” and
inserting in lieu thereof “S&P Value, Moody’s First Trigger Value, and
Moody’s Second Trigger Value”. Paragraph 5 (flush language) is hereby amended by
deleting the word “Value” and inserting in lieu thereof “S&P Value, Moody’s
First Trigger Value, or Moody’s Second Trigger Value”. Paragraph 5(i) (flush
language) is hereby amended by deleting the word “Value” and inserting in lieu
thereof “S&P Value, Moody’s First Trigger Value, and Moody’s 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, Moody’s
First Trigger Value, or Moody’s 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,
Moody’s First Trigger Value, or Moody’s Second Trigger Value” and (2) deleting
the second instance of the words “the Value” and inserting in lieu thereof “such
disputed S&P Value, Moody’s First Trigger Value, or Moody’s 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, Moody’s First Trigger Value, and Moody’s Second Trigger Value”.
(viii)
“Moody’s
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 Moody’s First Trigger
Valuation Percentage for such Eligible Collateral set forth in Paragraph
13(b)(ii).
(ix)
“Moody’s
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 Moody’s Second Trigger
Valuation Percentage for such Eligible Collateral set forth in Paragraph
13(b)(ii).
(x)
“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).
[SIGNATURE
PAGE IMMEDIATELY FOLLOWS]
22
THE
ROYAL BANK OF SCOTLAND PLC
By:
Greenwich Capital Markets, Inc., its agent
By
/s/
Xxxxx X. Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Managing
Director
|
Xxxxx
Fargo Bank, National Association, solely in its capacity as
Yield
Maintenance Administrator on behalf of HarborView Mortgage
Loan Trust
2007-1
By
/s/
Xxxxxx X. Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Assistant
Vice President
|
23
![]() |
|
Financial
Markets
000
Xxxxxxxxxxx
Xxxxxx
XX0X 0XX
|
|
March
9, 2007
|
HarborView
Mortgage Loan Trust 2007-1 (“Party
B”)
Xxxxx
Fargo Bank, N.A. (the “Yield Maintenance Administrator”)
0000
Xxx Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 00000
Attention:
Client Service Manager - HarborView 2007-1
Tel:
(000) 000-0000
Fax:
(000) 000-0000
|
|
Greenwich
Capital Markets, Inc.
000
Xxxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxxxxx
Tel:
(000) 000-0000
Fax:
(000) 000-0000
|
|
Re:
|
|
Our
Reference Number:
|
The
purpose of this letter agreement is to confirm the terms and conditions
of the
Transaction entered into between HarborView Mortgage Loan Trust 2007-1,
a New
York common law trust (the “Trust”),
acting through its Yield Maintenance Administrator, Xxxxx Fargo Bank,
N.A. (the
“Yield
Maintenance Administrator”)
and
The Royal Bank of Scotland plc, acting through its agent, Greenwich Capital
Markets, Inc. (each a “party”
and
together “the
parties”)
on the
Trade Date specified below (the “Transaction”)
pursuant to the pooling and servicing agreement (the “Pooling
and Servicing Agreement”),
dated
as of February 1, 2007, among Greenwich Capital Acceptance, Inc., as
depositor,
Greenwich Capital Financial Products, Inc., as seller, and Xxxxx Fargo
Bank,
N.A., as trustee. This letter agreement constitutes a “Confirmation”,
as
referred to in the Master Agreement.
The
definitions and provisions contained in the 2000 ISDA Definitions (the
“Definitions”) as published by the International Swaps and Derivatives
Association, Inc. are incorporated by reference herein. In the event
of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern.
1
For
the
purpose of this Confirmation, all references in the Definitions or
the Agreement
to a “Swap Transaction” shall be deemed to be references to this
Transaction.
1 |
This
Confirmation supplements, forms part of, and is subject to,
ISDA Master
Agreement and Schedule dated as of March 9, 2007 (as the
same may be
amended or supplemented from time to time, the “Agreement”), between Party
A and Party B. All provisions contained in the Agreement
shall govern this
Confirmation except as expressly modified
below.
|
2 |
The
terms of the particular Transaction to which this Confirmation
relates are
as follows:
|
Notional
Amount:
|
With
respect to any Calculation Period, the lesser of (i) the amount
set forth
for such period on Schedule I attached hereto and (ii) the
aggregate class
principal balance of the Senior Certificates and the Subordinate
Certificates (together, the “Certificates”) on the day immediately
preceding the related Distribution Date which occurs in the
calendar month
of the Floating Rate Payer Payment Date for such Calculation
Period
(determined for this purpose without regard to any adjustment
of the
Floating Rate Payer Payment Date or Distribution Date relating
to business
days) (the “Relevant Balance”).
The
Yield Maintenance Administrator shall make available each month
on its
website a statement containing the Relevant Balance at least
five (5)
Business Days prior to the related Floating Rate Payer Payment
Date, and
Party A shall be entitled to rely conclusively upon such statement.
The
Yield Maintenance Administrator’s internet website is located at
xxx.xxxxxxx.xxx and assistance in using the website can be
obtained by
calling (000) 000-0000.
Any
payment by Party A to Party B in excess of the amount due under
this
Transaction on any Floating Rate Payer Payment Date (as a result
of the
Notional Amount for the related Calculation Period being other
than the
amount set forth in Schedule I hereto for such Calculation
Period) shall
be returned by Party B to Party A as soon as Party B becomes
aware of such
overpayment. Other than the return of such overpayment, neither
Party B
nor Party A shall incur any penalty or liability hereunder
with respect to
such overpayment.
|
Trade
Date:
|
March
5, 2007
|
Effective
Date:
|
Xxxxx
0, 0000
|
Xxxxxxxxxxx
Date:
|
June
19, 2015, subject to adjustment in accordance with the Following
Business
Day Convention.
|
|
|
Fixed
Amounts:
|
|
Fixed
Rate Payer:
|
Party
B
|
Fixed
Rate Payer Payment Date:
|
March
9, 2007
|
|
|
Fixed
Amount:
|
USD
3,648,000
|
2
Floating
Amounts:
|
|
|
|
Floating
Rate Payer:
|
Party
A
|
Strike
Rate:
|
For
each Floating Payer Period End Date the percentage set forth
in Schedule I
as the Strike Rate for such Floating Rate Payer Period End
Date.
|
Cap
Ceiling:
|
For
each Floating Payer Period End Date the percentage set forth
in Schedule I
as the Cap Ceiling for such Floating Rate Payer Period End
Date.
|
Floating
Rate Payer Period End Dates:
|
The
19th day of each month of each year commencing June 19, 2009,
through and
including the Termination Date, subject to adjustment in accordance
with
the Following Business Day Convention.
|
Floating
Rate Payer Payment Dates:
|
Early
Payment shall be applicable. The Floating Rate Payer Payment
Dates shall
be one (1) Business Day prior to each Floating Rate Payer Period
End
Date.
|
Floating
Rate Option:
|
USD-LIBOR-BBA.
|
|
|
Designated
Maturity:
|
One
month
|
Spread:
|
|
Floating
Rate Day Count Fraction:
|
Actual/360
|
Reset
Dates:
|
First
day of each Calculation Period
|
Business
Days for payment:
|
New
York
|
Calculation
Agent:
|
Party
A
|
3 |
Account
Details:
|
Account
for payments to Party A:
|
For
the account of:
The
Royal Bank of Scotland Financial Markets Fixed Income and Interest
Rate
Derivative Operations
London
SWIFT XXXXXX0XXXX
with
JPMorgan Chase Bank New York XXXXXX00
XXX
# 000000000
Account
Number 400930153
|
Account
for payments to Party B:
|
Xxxxx
Fargo Bank, NA
San
Francisco, CA
ABA#
000-000-000
Acct#
0000000000
Acct
Name: SAS Clearing
FFC:
50992601 Harborview 2007-1 Cap
Account
|
4 |
Offices:
|
The
Office of Party A for this Transaction is:
|
London
|
The
Office of Party B for this Transaction is:
|
Columbia,
Maryland
|
3
5 |
Agency
Role of Greenwich Capital Markets, Inc. This Transaction has
been entered
into by Greenwich Capital Markets, Inc., as agent for The Royal
Bank of
Scotland plc. Greenwich Capital Markets, Inc. has not guaranteed
and is
not otherwise responsible for the obligations of Party A under
this
Transaction.
|
Please
promptly confirm that the foregoing correctly sets forth the terms of
the
Transaction entered into between us by executing this Confirmation and
returning
it to us by facsimile to:
The
Royal Bank of Scotland plc
Attention:
Derivatives Documentation
Fax:
0000 000 0000 / 6486 Phone: 0000 000 0000
THE
ROYAL BANK OF SCOTLAND PLC
By:
Greenwich Capital Markets, Inc., its agent
By
/s/ Xxxxxxx Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
Vice President
Accepted
and confirmed as of the Trade Date written above:
HARBORVIEW
MORTGAGE LOAN TRUST 2007-1
By:
Xxxxx
Fargo Bank, N.A., solely in its capacity as
Yield
Maintenance Administrator on behalf of
HARBORVIEW
MORTGAGE LOAN TRUST 2007-1
By
/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx
X. Xxxxxxx
Title:
Assistant Vice President
4
SCHEDULE
I
All
dates
subject to adjustment in accordance with the Following Business Day
Convention.
From
and including:
|
|
To
but excluding:
|
|
Notional
Amount (USD):
|
|
Strike
Rate:
|
|
Cap
Ceiling:
|
|||||
05/19/09
|
06/19/09
|
801,290,235.19
|
8.69804
|
8.99000
|
|||||||||
06/19/09
|
07/19/09
|
773,893,095.30
|
8.61422
|
8.99000
|
|||||||||
07/19/09
|
08/19/09
|
747,429,667.36
|
8.52308
|
8.99000
|
|||||||||
08/19/09
|
09/19/09
|
721,868,206.02
|
8.42838
|
8.99000
|
|||||||||
09/19/09
|
10/19/09
|
697,178,043.33
|
8.33003
|
8.99000
|
|||||||||
10/19/09
|
11/19/09
|
673,329,552.20
|
8.22893
|
8.99000
|
|||||||||
11/19/09
|
12/19/09
|
650,294,111.17
|
8.12297
|
8.99000
|
|||||||||
12/19/09
|
01/19/10
|
628,044,070.25
|
8.01405
|
8.99000
|
|||||||||
01/19/10
|
02/19/10
|
606,552,718.08
|
7.90104
|
8.99000
|
|||||||||
02/19/10
|
03/19/10
|
585,794,250.01
|
7.59704
|
8.99000
|
|||||||||
03/19/10
|
04/19/10
|
565,743,737.45
|
7.59594
|
8.99000
|
|||||||||
04/19/10
|
05/19/10
|
546,377,098.12
|
7.58777
|
8.99000
|
|||||||||
05/19/10
|
06/19/10
|
527,671,067.39
|
7.57139
|
8.99000
|
|||||||||
06/19/10
|
07/19/10
|
509,603,170.52
|
7.54667
|
8.99000
|
|||||||||
07/19/10
|
08/19/10
|
492,151,695.93
|
7.51345
|
8.99000
|
|||||||||
08/19/10
|
09/19/10
|
475,295,669.27
|
7.47257
|
8.99000
|
|||||||||
09/19/10
|
10/19/10
|
459,014,828.46
|
7.42288
|
8.99000
|
|||||||||
10/19/10
|
11/19/10
|
443,289,599.54
|
8.11080
|
8.99000
|
|||||||||
11/19/10
|
12/19/10
|
428,101,073.29
|
8.10000
|
8.99000
|
|||||||||
12/19/10
|
01/19/11
|
413,430,982.75
|
8.10000
|
8.99000
|
|||||||||
01/19/11
|
02/19/11
|
399,261,681.41
|
8.10000
|
8.99000
|
|||||||||
02/19/11
|
03/19/11
|
385,576,122.15
|
8.10000
|
8.99000
|
|||||||||
03/19/11
|
04/19/11
|
372,357,836.94
|
8.10000
|
8.99000
|
|||||||||
04/19/11
|
05/19/11
|
359,590,917.19
|
8.10000
|
8.99000
|
|||||||||
05/19/11
|
06/19/11
|
347,259,994.76
|
8.10000
|
8.99000
|
|||||||||
06/19/11
|
07/19/11
|
290,070,700.15
|
4.74152
|
5.58148
|
|||||||||
07/19/11
|
08/19/11
|
279,284,394.63
|
4.72485
|
5.67519
|
|||||||||
08/19/11
|
09/19/11
|
258,995,740.90
|
4.72791
|
5.77764
|
|||||||||
09/19/11
|
10/19/11
|
249,291,931.02
|
4.73070
|
5.88300
|
|||||||||
10/19/11
|
11/19/11
|
239,965,289.46
|
4.73317
|
5.98865
|
|||||||||
11/19/11
|
12/19/11
|
231,001,560.24
|
4.73532
|
6.10424
|
|||||||||
12/19/11
|
01/19/12
|
222,383,693.33
|
4.73725
|
6.21818
|
|||||||||
01/19/12
|
02/19/12
|
213,896,731.10
|
4.73946
|
6.24240
|
|||||||||
02/19/12
|
03/19/12
|
198,388,808.72
|
4.41211
|
6.46835
|
|||||||||
03/19/12
|
04/19/12
|
190,763,940.47
|
4.41523
|
6.58958
|
|||||||||
04/19/12
|
05/19/12
|
183,444,905.68
|
4.41884
|
6.71826
|
|||||||||
05/19/12
|
06/19/12
|
176,419,062.73
|
4.42297
|
6.43755
|
|||||||||
06/19/12
|
07/19/12
|
169,675,300.10
|
4.42766
|
6.55605
|
|||||||||
07/19/12
|
08/19/12
|
163,184,395.69
|
4.43292
|
6.62055
|
|||||||||
08/19/12
|
09/19/12
|
149,992,290.07
|
4.13879
|
6.74610
|
|||||||||
09/19/12
|
10/19/12
|
144,275,559.08
|
4.14530
|
6.86463
|
|||||||||
10/19/12
|
11/19/12
|
138,788,454.02
|
4.15247
|
7.43163
|
|||||||||
11/19/12
|
12/19/12
|
133,521,414.93
|
4.16034
|
7.53628
|
|||||||||
12/19/12
|
01/19/13
|
128,464,303.57
|
4.16867
|
7.65456
|
|||||||||
01/19/13
|
02/19/13
|
123,571,852.57
|
4.17644
|
7.75198
|
|||||||||
02/19/13
|
03/19/13
|
113,482,475.85
|
4.18334
|
7.86451
|
|||||||||
03/19/13
|
04/19/13
|
109,161,034.64
|
4.18932
|
7.96904
|
|||||||||
04/19/13
|
05/19/13
|
105,011,375.48
|
4.19432
|
8.06694
|
5
From
and including:
|
To
but excluding:
|
Notional
Amount (USD):
|
Strike
Rate:
|
Cap
Ceiling:
|
|||||||||
05/19/13
|
06/19/13
|
101,022,331.93
|
4.19827
|
8.16231
|
|||||||||
06/19/13
|
07/19/13
|
97,188,725.22
|
4.20114
|
8.25131
|
|||||||||
07/19/13
|
08/19/13
|
93,491,980.25
|
4.20286
|
8.32477
|
|||||||||
08/19/13
|
09/19/13
|
89,934,680.23
|
4.20337
|
8.39970
|
|||||||||
09/19/13
|
10/19/13
|
86,512,303.94
|
4.20262
|
8.47548
|
|||||||||
10/19/13
|
11/19/13
|
83,219,958.73
|
4.20056
|
8.55658
|
|||||||||
11/19/13
|
12/19/13
|
80,052,687.56
|
4.19712
|
8.63498
|
|||||||||
12/19/13
|
01/19/14
|
77,005,138.15
|
4.19269
|
8.68705
|
|||||||||
01/19/14
|
02/19/14
|
74,051,660.47
|
4.18902
|
8.72499
|
|||||||||
02/19/14
|
03/19/14
|
71,201,823.91
|
4.18658
|
8.78286
|
|||||||||
03/19/14
|
04/19/14
|
68,461,183.31
|
4.18546
|
8.82623
|
|||||||||
04/19/14
|
05/19/14
|
65,825,554.75
|
4.18572
|
8.86667
|
|||||||||
05/19/14
|
06/19/14
|
63,290,868.90
|
4.18743
|
8.89940
|
|||||||||
06/19/14
|
07/19/14
|
60,853,362.33
|
4.19066
|
8.92849
|
|||||||||
07/19/14
|
08/19/14
|
58,506,488.59
|
4.19547
|
8.94190
|
|||||||||
08/19/14
|
09/19/14
|
56,249,692.21
|
4.20193
|
8.96843
|
|||||||||
09/19/14
|
10/19/14
|
54,079,517.11
|
4.21011
|
8.98269
|
|||||||||
10/19/14
|
11/19/14
|
51,992,668.79
|
4.22008
|
8.98625
|
|||||||||
11/19/14
|
12/19/14
|
49,985,959.43
|
4.23190
|
8.96837
|
|||||||||
12/19/14
|
01/19/15
|
48,056,261.30
|
4.24519
|
8.95893
|
|||||||||
01/19/15
|
02/19/15
|
46,199,553.86
|
4.25812
|
8.95215
|
|||||||||
02/19/15
|
03/19/15
|
44,413,760.28
|
4.27018
|
8.93023
|
|||||||||
03/19/15
|
04/19/15
|
42,696,632.16
|
4.28134
|
8.89182
|
|||||||||
04/19/15
|
05/19/15
|
41,045,540.03
|
4.29154
|
8.87795
|
|||||||||
05/19/15
|
06/19/15
|
39,457,954.69
|
4.30074
|
8.83910
|
6